On The Market
Before you put your house on the market, it is
important to understand “who’s who” in the home selling
process.
Agents and Brokers
A listing agent, or sales associate, markets your home. A
selling agent provides the potential buyer. Each agent is
associated with a broker, or real estate company. When a
house is sold in a cooperative sale, the listing broker is directly
paid the listing commission and then splits the commission
with the listing agent. Likewise, the selling commission is split
between the selling broker and selling agent.
Listing Appointment
The first step toward putting your house up for sale is to meet
with a listing agent at your home. At this appointment, the
agent will provide you with information on recent sales and
current listings of comparable homes in your neighborhood. The
agent will also want to tour your home. Be ready to tell
specific details about schools, nearby public transportation,
and other desirable community features, as well as home
features not readily apparent.
Remember, prospective buyers will be comparison shopping
and keenly aware of subtle differences in houses for sale in the
area. Be sure to tell your listing broker why yours is special—
from any home remodeling to afternoon winter sunshine.
Asking Price
After discussing market conditions and comparable sales and
listings with the listing broker, you will set the listing or asking
price for your house. Experience in the industry has proven a
market analysis approach is more accurate than the
“replacement cost” or “potential rental income” methods.
A rule of thumb says, “A house priced more than 5% over
market value discourages offers.” Market value is commonly
defined as, “What a ready, willing and able buyer will pay, at a
price a seller will accept.” Buyers are sophisticated. They’ve
already been shopping, and when they see your home, they
will be comparing features and financing. Buyers who cannot
afford the price simply won’t look. This is why we say, “A
house priced right is half sold.”
Financing Strategy
No sale can be completed without financing. Therefore, it is to
your advantage to appeal to the greatest number of home
buyers by accepting the greatest range of financing plans. The
listing broker will explain the basic differences between
Veterans Administration (VA), Federal Housing Administration
(FHA), and conventional financing, as well as explain “discount
points.”
Personal Property
You must be ready to supply your listing broker with a specific
list of the personal property that is included, or conveyed, in
the sale. These items can include light fixtures, drapery rods,
appliances, firewood, and even swimming pool chemicals. You
should tag or remove items you do not wish to convey.
Listing Agreement
When you are ready to put your house on the market, you will
sign a listing agreement which specifies a length of time, or
listing period, you will work with a listing agent and broker.
Lockboxes
A lockbox is a universal metal container for your house key
that is hung on the front door and can only be opened by
licensed sales associates. It provides access to your home for
potential buyers when you are away.
Showing Instructions
While you are actively getting the house ready to show, your
listing broker is actively spreading the word that the property
is available. Generally speaking, the listing is promoted to two
groups: the real estate community and the buying public.
Many home sellers are surprised to learn that approximately
56% of all buyers come from referrals between brokers and
their vast network of contacts. Approximately 17% of buyers
come from inquiries stimulated by for sale signs in yards. The
remaining 27% of buyers come from a combination of the real
estate company’s reputation and image, open houses, and
advertising or other promotional efforts.
MLS Profile
Your listing broker enters a profile of your house in the Multiple
Listing Service (MLS) computer. MLS is a membership service
available exclusively to brokers belonging to the Association of
REALTORS®. The profile includes everything from location and
price, to house style and showing instructions, and is instantly
available to the entire MLS membership.
Advertising
Yard signs provide additional exposure for your home. These
signs often create high-quality inquiries because buyers
looking in the neighborhood are already interested in the area.
To reach a wider audience, your home will also be advertised
via direct mail cards, ads in major metropolitan and community
newspapers, and ads on the Internet.
Showings
With all this activity, your listing broker and other selling
brokers will bring prospective buyers to see your house.
Brokers will make an appointment with you to show the home
with as much advance notice as possible. This will give you
time to tidy up, light dark areas, perhaps pop something in the
oven, like a spicy cake, bread, or even a pan of cinnamon.
Make every effort to accept all appointments—you never know
when your buyer will walk through the front door. Also, have
the property profile folder available with information including
utility bills, MLS profile, and house location survey.
We have found over the years that a number of tips make
showings a little easier for your broker and the buyers:
If you are home, greet the prospects at the door and
politely excuse yourself. Leave the selling to us. Too many
people present during a showing may make potential buyers
feel like intruders. It is better that you and your family busy
yourselves in one part of the house or outside, rather than
tagging along. The broker knows the buyer’s desires and can
better emphasize your home’s features.
Quiet is
the ideal environment. Noise is distracting, so don’t have the
radio or TV on—the broker and the buyer need to hear each
other.
It is better to keep pets enclosed in the
basement, garage, or back yard. Buyers may be timid around
unfamiliar animals.
Chatting with a potential
buyer may dilute the broker’s ability to present your home’s
best features in the best light. If asked a question, respond
honestly, but diplomatically refer questions to the broker.
Do not discuss price, terms, possession, or other
factors with the potential buyer. Your broker is most qualified
to bring negotiations to a favorable conclusion.
If you are not home, selling brokers may leave
their business cards. Be sure to give the cards to your listing
broker as soon as possible for follow-up.
When
an open house is scheduled, plan to be away for the afternoon.
Make sure to leave word with your broker on how to contact
you.
Should I let anyone in to see the house?
If a prospective buyer calls or comes by unexpectedly without a
broker, get their name and phone number. Do not show the
home. Explain that it is not a convenient time. For your benefit
and protection, call your listing broker so that the buyer can be
qualified and identified prior to showing.
Receiving Offers
A buyer makes an offer by submitting a written and signed
offer to purchase, which will become the sales contract when
endorsed, or ratified, by everyone’s signature.
Contract Presentation
The selling broker registers the offer with their office and
notifies the listing broker of the offer. The listing broker then
arranges a contract presentation appointment with you and, in
some areas, the selling broker. The buyer does not attend the
presentation. Part of the presentation is determining that the
buyer is qualified financially to make the purchase.
Should either the seller or buyer be located out of town, the
contract is presented via telephone and confirmed later by fax.
Multiple Offers
All offers registered will be presented to you in the order
registered. You should hear each offer completely and ask
questions. No action is necessary until all offers are heard. If
more than one offer is accepted or countered, an order of
precedence must be established, such as primary, first backup,
second backup. Be careful not to sell the home
twice.
Contract Decisions
A decision on an offer should be made at presentation, if
possible. You as the home seller have three possible
options:
Accept the offer as written.
Make a counter offer on unacceptable aspects. Counters
are written and initialed in the margin of the contract or in
addendums. A purchase offer with counters is not a ratified
contract until the buyer accepts and initials the counters.
Buyers can withdraw, accept or counter the counter offer.
Reject the offer, if it is totally unacceptable. Ouh
"N right rejection, without a counter, should be the last
resort.
Dealing With Paperworks
Depending on local custom, the listing or selling broker
oversees the contract through to settlement, or closing. A
number of professionals come into the home selling process
during this period, including various inspectors, appraisers, and
attorneys. At this stage, all contract contingencies will be
satisfied and removed. The buyer will select a settlement or a
title company, and the brokers will provide vital information to
those firms.
Termite Inspection
A termite inspection is required by most lenders and is
specified in the contract. If existing coverage is in effect that
might avoid an unnecessary inspection, let your listing broker
know. You are responsible for paying for the inspection,
removing any infestation, and repairing any resulting damage.
Loan Process
Your listing broker will keep you informed about the buyer’s
loan approval progress. Most contracts require the buyer to
make a loan application immediately after the contract is
ratified. The lender will order a home appraisal to confirm the
property is adequate security for the mortgage. The lender will
also verify the buyer’s employment, income, deposits, credit
rating, and debts.
When the lender receives the appraisal and any other
requested information, the mortgage application will be
approved. The lender may specify requirements, such as
repairs, which must be met before approving the loan. A
commitment is then issued to the buyer. Many contracts
require a loan commitment from the lender within a specific
period of time.
After Loan Approval
After the buyer’s loan is approved, the selling and listing
brokers will coordinate a settlement date. Your listing broker
will notify you to confirm the date, place, and time and give
you a checklist of everything you need to bring to settlement.
Your listing broker will also let you know when you should
notify utility companies to transfer accounts.
Walk Through
The time for the buyer to inspect and note defects for
correction by the seller is during the contract negotiation and
prior to signing the sales agreement. The purpose of the walk-
through inspection prior to settlement is to determine if
conditions in the contract are satisfied.
It is up to the buyer to perform the final walk-
through inspection, and you may or may not be present. The
buyer should be accompanied by the selling broker, and
possibly the listing broker. You should make sure utilities are
on so that equipment can be operated.
During the inspection, expect the buyer to
Try all lights and switches.
Turn all faucets on and off.
Run showers and flush toilets.
Turn on the furnace and central air conditioning. In the off
-season, the buyer may hire a professional to certify proper
functionality.
Test all stove burners.
Turn on the oven at bake and broil.
Run some ice cubes through disposal to test the
blades.
Run the dishwasher, washer, and dryer through complete
cycles.
Open and close all windows and doors.
In short, the buyer should try everything, including the keys
and the fireplace flue.
All deficiencies will be noted. If money is escrowed for needed
repairs, the settlement attorney will release the balance of
funds to you once all repairs are complete. If you do not
correct problems prior to settlement, funds may be withheld by
the attorney for repairs.
You should make plans to clean, remove trash, and vacate the
house the day before settlement, or in any case, not later than
settlement day.
