As published in the Savannah Morning News - 7 October 2012
Listing the Home for Sale
We have come a long way in preparing the house for sale! In this Moving Mom series, we have discussed getting the house ready, and now it’s time to put it on the market. Today we will discuss choosing your Realtor® and how to prepare for your meeting.
How do you know which Realtor® is right for you, and do you really need one? Well, I am one, so don’t take this the wrong way…there is a quagmire of steps to go through and knowledge you must have to sell a home in today’s market. Without the skills to navigate these waters, I recommend you absolutely hire a competent Realtor® to guide you through the sale of your home. This is what we do every day, so choosing a Professional is the only way to go.
Most people don’t sell houses often, and laws change. If you are so lucky to know the value of your home, and your next door neighbor bangs on your door to tell you they have always wanted your house (this has happened to me!), then go ahead and hand the transaction to a lawyer to close the sale and break out the champagne! But, alas, most of us are not that lucky!
Choosing a Realtor® is somewhat personal, and should include an interview. Ask some questions about their history and education. There are many opportunities for real estate agents to hone their skills, but getting a license does not teach them the intricacies of negotiating, what happens after you receive a contract, and how to get to closing. They learn the law and then they hit the streets. Hopefully, your Realtor® will have the added training from their company, or from classes, and the skills to successfully get you through the necessary steps to make closing day a reality. All those initials after an agent’s name mean something, and those certifications and designations can represent years of travel, expense, study, and an evident commitment to their profession. So, ask them about their designations and their training. At the end of the day, a relationship of trust and a connection with an agent is important, because for a period of time, this person will become an important part of your life.
Here are some things you need to do to get ready for your Realtor® interviews:
Ask for a Comparative Market Analysis on your home. This is similar to an appraisal, but completed by a real estate agent, usually for free. It is NOT an appraisal, so don’t confuse the two. It is a comprehensive study that takes hours to prepare. We look at all the sales in a neighborhood that have occurred within the last 3 months. If there are not several sales to compare, we can go back 6 months to a year, or expand the search to a similar neighborhood for comparisons. We look at each property, and compare it to yours. We want to see what they have that yours does not, and visa versa. We then adjust the comparables against your property to enable us to compare apples to apples, and arrive at a value range that we think your property falls within. This is not exact science, and even appraisers will give you a price range that can have a large spread.
Alternatively, you can have a formal appraisal done prior to listing the house. Having a recent appraisal in my file is golden, since it gives me ammunition to support the list price on the home. It can be provided to a buyer during negotiations, and if they are paying cash, they may decide they do not need to make their offer subject to an appraisal. We will talk more about this in another article.
Unfortunately, what we find today is that values have declined in the last 5 to 6 years due to short sales, foreclosures and the basic decline of the market. What your home was worth 6 or 7 years ago does not compute today. So, if you truly want to sell and get on with your next adventure, it is important to get realistic about the value of your home, in today’s market. Smart buyers will not pay you what your property was worth years ago, so when I hear, “I’m not going to give it away”, I have to wonder if the seller is really ready to sell. Perceived equity no longer counts. Simply put, those days are over and we are still in a buyer’s market.
I know what you are thinking…how do I make up the perceived loss? If you are down-sizing, you will buy a property with a lower value than it was worth years ago. The new mantra: ”sell low, buy low”. But if you counted on the proceeds as the money you need to enter a retirement community, then it hurts, no doubt about it. We feel your pain, but can’t change the market to make it better. Trust me, if we could, we would not have gone through our own market pain for the last 6 years.
Tip: the Realtor® with the highest suggested list price for your home is not always the right one. Some want the listing, and will tell you what they think you want to hear. Some will be blatantly honest, and risk not getting the listing because it is a low number. Some agents, based on your position, will think it is better to be the 2 or 3 listing agent…when you finally get to the price range that will sell. They know you will spend the next 6 to 12 months lowering your price, and they can wait.
Listings are expensive for Realtors® to carry, with costs associated to marketing, tech assistance, advertising, overhead, open houses, and the general time involved. Taking overpriced listings are generally not something seasoned veterans will do, but new agents want the listings so they can get started in the business. Some agents will take overpriced listings knowing they will have to lower them down the road. Do you have the time to play the game? If not, list it right the first time and get moving. Isn’t that the goal?
What about sales commissions? This subject is a slippery slope, but you should know that Realtors® do not “set” commissions. They are negotiable. What you pay to a listing agent for advertising and working on the sale of your home is between the Broker and you. Unless your agent is the Broker, then the Broker or managing Broker has the last word. You should pay some attention to what the agent representing the buyer will earn when they bring you a buyer that is ready, willing and able to buy your property, at a price and terms acceptable to you. This “share” of the commission is on the listing agreement you will sign, so make sure it is enough to entice an agent to show your property. If your listing agent “shorts” another agent in sharing the commission, sad but true, many will show other properties. With lots of houses to chose from, this can affect the number of showings you will have and ultimately if you will sell your home.
How will your property be marketed? Most people see your property on the internet before they actually step through your door. What they see on line is actually their first showing in today’s market. If your house is staged, the photos should show the condition of the house in a good light. A virtual tour is always a great idea, and so important that some buyers will only look at listings with an attached virtual tour. These tours take a buyer through the rooms of your house, and have loads of photos attached to them that surpass the allowable space for photos in the Multiple Listing Service. Ask you Realtor® how many websites they will utilize to showcase your listing, as this is the most up-to-date way to market your property. Print ads are nice, but online presence is a must if you want to capture national, or even international buyers that may be moving to this area.
Talk about Open Houses. I’m going to go into this subject in more depth next week, but for now, see if the Realtor® does them, and how often.
Talk about Lock Boxes. Do you want to have a computerized lock box on your front door? A lock box makes it convenient for a Realtor® to come show your property, and showing instructions will be in your listing information. You can specify certain hours that are acceptable to you, and ask for a courtesy call first. You can specify minimum notice to show, such as 24 hours or less. Every time you leave your home, you will need to know there is potential for a showing, so be prepared to have it shown at any time to allow for the most showings possible. Remember, the less restriction, the more showings.
The Seller’s Property Disclosure Statement: This is a form prepared by the Georgia Association of Realtors that will be presented to you by your agent at the time of listing your property. There will be many questions, which you will be asked to answer to the best of your knowledge, and your agent cannot complete this form for you. It is a 5 page document, so be prepared to spend some time reading through it and answering questions. Be ready with the following information:
Lead-Based Paint: If your property was built prior to 1978, a Lead-Based Paint disclosure must be included in the listing package. This form is required by law, and you will have an opportunity to check whether you have any knowledge of lead-based paint and/or lead-based paint hazards on your property. The buyer will also have to sign this form prior to closing, acknowledging their receipt of the disclosure. They will have an opportunity, usually 10 days, to have a risk assessment or inspection of the property to determine whether they want to move forward with the purchase.
Exclusions: Assume the buyer will want everything they see that is attached to the interior and exterior of the house, and then work backwards from there. If the chandelier is going with you, then have it removed before you list the house. Replace it with another fixture, or a plate on the ceiling, but don’t leave a hole with exposed wires. That goes for any fixture in the house that you want to take with you. Things that are attached, are supposed to remain attached. List excluded items that will remain until you move (such as matching drapes), so the buyer will know they are not included in the sale of the house. It’s a good idea to patch and paint any holes left after removing something from the walls or ceiling.
Things you should not take: window treatments (blinds, shutters, etc.), bathroom fixtures (towel racks and matching items), built-in book shelves, ceiling fans, anything attached. If you received the bath fixtures for an anniversary present, change them out before you list the house. It never fails: once the house is listed and a buyer has seen it, the one small thing you remove will be the buyer’s favorite thing in the house!
Should you sell the house “As Is”? We have spent a lot of time going through what it takes to get the house ready for sale. If you are unable to do this, or have someone manage it for you, then an “As Is” sale is an option. The point is, presenting your property in tip top shape will increase the value. If you want top dollar, you have to have the great condition that top dollar requires. If you decide to do an “As Is” sale, then your price must reflect the current condition of your property and will have to be lower in order to sell.
Items (if you have them) to have ready for your agent at the listing appointment:
The Multiple Listing Service gives agents an opportunity to upload, or post documents that will be helpful to a potential buyer. Some of the documents will be uploaded, while others will remain in the agent’s file for informational purposes. Most are frequently requested by the potential buyer, buyer’s agent, closing attorney and/or a buyer’s lender.
We have covered the listing appointment, and you are ready to move ahead. Good job!
SAVE THE DATE! I am hosting the free Senior Summit in the Landings on October 15 from 10AM to 5PM. There will be a dozen speakers and subjects designed just for Seniors, so you will want to make your reservations early.