Seller's Guide
Getting the House Ready to Sell
Disconnect Your EmotionsWhen conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.
You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.
The first step in getting your home ready to sell is to "de-personalize" it.
If there is a new home sales tract near your home, go visit. It doesn't matter what size the homes are. What you will find are some wonderfully (but sparsely) furnished homes that anyone could live in -- with the emphasis on "anyone." They are anonymous. There may be a baseball glove in the boy's room, but no family photos on the walls.
There may be "personality" - but no person.
The reason you want to make your home "anonymous" is because you want buyers to view it as their potential home. When a potential homebuyer sees your family photos hanging on the wall, it puts your own brand on the home and momentarily shatters their illusions about living in the house themselves.
Put away family photos, sports trophies, collectible items, knick-knacks, and souvenirs. Put them in a box. Rent a storage area for a few months and put the box in the storage unit.
Do not just put the box in the attic, basement, garage or a closet. Part of preparing a house for sale is to remove "clutter," and that is the next step in preparing your house for sale.
Uncluttering the House
This is the hardest thing for most people to do because they are emotionally attached to everything in the house. After years of living in the same home, clutter collects in such a way that may not be evident to the homeowner. However, it does affect the way buyers see the home, even if you do not realize it.
Clutter collects on shelves, counter tops, drawers, closets, garages, attics, and basements. You want as much open clear space as possible, so every extra little thing needs to be cleared away.
Take a step back and pretend you are a buyer. Let a friend help point out areas of clutter, as long as you can accept their views without getting defensive. Let your agent help you, too.
| Getting the House Ready to Sell
Do not do anything expensive, such as remodeling. If possible, use savings to pay for any repairs and improvements – do not go charging up credit cards or obtaining new loans. Remember that part of selling a house is also preparing to buy your next home. You do not want to do anything that will affect your credit scores or hurt your ability to qualify for your next mortgage.
When looking at a house, prospective home buyers often do not really know what to do. So they play with things. They flick light switches. They open everything with a handle. They turn on all the faucets and flush all the toilets. Having nice shiny fixtures makes an impression. All your sink fixtures should look shiny and new. If this cannot be accomplished by cleaning, buy new ones. If you don’t buy something fancy, this can be accomplished inexpensively. Make sure all the hot and cold water knobs are easy to turn and that the faucets do not leak. If they do, replace the washers. It sounds like hard work, but it's pretty easy -- even for the inexperienced. Check to make sure you have good water pressure and that there are no stains on any of the porcelain. If you have a difficult stain to remove, one trick is to hire a cleaning crew to go through and clean your home on a one-time basis. They seem to be wonderful at making stains go away. |
Check all of your windows to make sure they open and close easily. If not, a spray of WD40 often helps. Make sure there are no cracked or broken windowpanes. If there are, replace them before you begin showing your home.
Do the same things with the doors – make sure they open and close properly, without creaking. If they do, a shot of WD40 on the hinges usually makes the creak go away. Be sure the doorknobs turn easily, and that they are cleaned and polished to look sharp. As buyers go from room to room, someone opens each door and you want to do everything necessary to create a positive impression.
For those who smoke, you might want to minimize smoking indoors while trying to sell your home. Actually, it is best to move smoking outside. You could also purchase an ozone spray that helps to remove odors without creating a masking odor.
Apologies to pet owners, but pets come with odors. You may have become used to them, but they are immediately noticeable to those with more finely tuned olfactory senses.
For those with cats, be sure to empty kitty litter boxes daily and use plenty of baking soda. For dog owners, keep the dog outdoors as much as possible, even those adorable lovable little dogs. You might also try sprinkling carpet freshener on the carpet on a periodic basis.
When Your Selling Price is too High, Beware!
So you’ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who’ve been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.
Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.
When you interview the third agent’s figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.
A Sales Practice Called "Buying a Listing"
If you’re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?
After all, everyone else does it!
The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing." He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.
Why do some agents "buy" listings this way?
There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home’s value. On the other hand, there are some agents who engage in this sales practice routinely.
What Happens Behind the Scenes
If you start out with too high a price on your home, you may have just added to your stress level -- and selling a home is stressful enough. There will be a lot of "behind the scenes" action taking place that you don’t know about.
Contrary to popular opinion, the listing agent does not usually attempt to sell your home directly to a homebuyer. That would be inefficient.
Listing agents market and promote your home to the hordes of other local agents who do work with homebuyers, dramatically increasing your personal sales force. During the first couple of weeks your home should be a flurry of activity with buyer’s agents coming to preview your home so they can sell it to their clients.
If the price is right.
If you and your agent have overpriced, fewer agents will preview your home. After all, they are Realtors, and it is their job to know local market conditions and home values. If your house is dramatically above market, why waste time? Their time is better spent previewing homes that are priced realistically.
Dropping Your Price...Too Late
If you start out with a high sales price, then drop it later -- your house is "old news." You will never be able to recapture that flurry of initial activity you would have had with a realistic price. Your house could take longer to sell.
Even if you do successfully sell at an above market price to an uninformed buyer, your buyer will need a mortgage. The mortgage lender requires an appraisal. If comparable sales for the last six months and current market conditions do not support your sales price, the house won’t appraise. Your deal falls apart. Of course, you can always attempt to renegotiate the price, but only if the buyer is willing to listen.
Your house could go "back on the market."
Once your home has fallen out of escrow or sits on the market awhile, it is harder to get a good offer. Potential buyers will think you might be getting desperate, so they will make lower offers. By overpricing your home in the beginning, you could actually end up settling for a lower price than you would have normally received.
Your listing contract should specify whether or not the house will be listed with the local MLS (multiple listing service). It is definitely in your interest to have the house listed. This is because your sales force is automatically multiplied by however many agents are members of the local MLS. If your house is not listed, then you only have one agent working for you instead of many.
This is where selling "by owner" generally fails.
Owners see that an agent puts a sign in the yard, prepares brochures, holds open houses, advertises in the paper and on the internet, and they think this is how houses are sold. It is easy to understand why owners believe that, but it just isn't so.
Listing agents do those things for three main reasons. First, because the owners expect them to. Second, because it shows other sellers how much they do to market a home, and it gets more listings. Third, because it brings in clients who want to buy "some" house - though it probably will not be yours.
Practically no one buys the house in the ad or a home they visit during an open house. Think about your own experiences when you bought the house you are now selling. How did you find it? Probably through your agent, who found it in the Multiple Listing Service.
The MLS is a huge network and practically every local agent is a member -- and those agents have clients looking to buy a home. That network is what sells your house.
Listing Commissions and Related Issues
In most areas there is a customary percentage that real estate agents expect to earn as a commission. When completing the listing agreement, you and your agent will negotiate and agree on the amount of the real estate commission.
When you discuss commission with a listing agent, you should keep in mind that there are usually two agents involved in most transactions. Most of the time, only part of the commission goes to the listing agent's company. The other portion goes to the company representing the buyer.
Some commission-related questions you could ask:
Will your property be listed in the Multiple Listing Service? Being listed in the MLS expands your sales force. Every agent is invited to bring potential buyers to your property. This larger supply of buyers effects your pricing power and the ability to sell your home more quickly.
What is the effect on the company representing the buyer? Since part of the commission usually goes to the company representing the buyer, you may want to ask whether that portion of the commission offers the customary amount. As mentioned above, the more agents that show your property, the more pricing power you have and the more quickly your home will sell.
What is the effect on marketing? Very few properties are sold through advertising or open houses, but it does happen. Most often, those ads generate calls from potential buyers or sellers, who end up as clients for real estate agents -- and you want agents to bring potential buyers to your property. Advertising your property to other agents has a higher impact than direct advertising to consumers.
Will you be tied in to other services? A real estate company with bundled services has more income opportunity which may allow them to offer lower prices. However, there are a few companies whose additional services are not priced competitively with opportunities you can find on the open market. You should be sure to ask lots of questions and determine whether you are limited to certain choices or you have the freedom to also explore the open market.