Putting Your House On The Market
The first step toward
putting your house up for sale is to Contact
is not necessary for us to meet face to face right away
for you to start the process! At
Our philosophy for working with prospective home sellers is actually completely contrary to what Realtors are taught when we are first starting out. Brokers (the people in charge) normally tell agents that they should do everything possible to get you to sign a listing agreement within the first three hours after beginning to discuss the sale of your home.
As you consider selling your home, the best information you can get right now is to know WHERE potential buyers for your home will come from, because this directly imacts the way that we will market your home and explains why we work the way we do. The chart below shows that over 50% of potential home buyers that will look at your property will hear about it from a Realtor. You can see the huge drop-off in the other ways that people find homes to buy.
Many people believe (especially in a hot market) that they can sell their home without hiring an experienced Realtor as a way of saving money. You no doubt see the FOR SALE BY OWNER (FSBO) signs along the highway all the time. They will put up a yard sign (which only works 16% of the time), or hold an open house (which is only 6% successful) or place an advertisement in the newspaper or on FSBO web sites (for a 9% chance at getting a buyer). Added together, all of these tactics that a FSBO seller uses only account for 31% of all potential buyers. Those aren't very good odds. The crazy thing is that most of those buyers will still bring a Realtor with them to act as their Buyer's Agent , which puts the seller at a distinct disadvantage ... he's now selling his home on his own to someone who has experienced help!!
Our agents will be glad to discuss the FSBO option with you and show you how it usually will not save you any money in the long run ... and could actually cost you more than hiring us to market your home for sale.
These numbers are now changing because of the influence of the Internet. The National Association of Realtors now estimates that over 82% of all home buyers and sellers start the process on the Internet ... searching for homes or finding an experienced Realtor to represent them.
Before you list your home for sale, you need to determine the price at which you will offer it for sale. One of the first things that we will do after you Contact Us about selling your home will be to perform a Competative Market Analysis (CMA) of your home to determine it's fair market value. This will give you the value range so that you can decide on the asking price.
When you make the decision to pur your home on the market, we will schedule what is called a listing appointment. At that time, our agent will visit your home and we will complete the listing agreement that will allow us to market your home for sale. You should realize right from the start, though, that when you hire us as your listing agent, you're not really hiring us to SELL your home. You hire us to MARKET your home to qualified buyers.
One of the most frequent complaints that we hear from sellers is that "my Realtor listed the house for sale and then never brought any buyers to see it." You should expect that to be the case! Statistics compiled by the National Association of Realtors have shown that only 2% of successful real estate transactions are with buyers found by the listing agent. The chances that we will be the agent that actually find a buyer for your home are very slim, although it does happen. This is partially due to the complications that "buyer representation" has brought into the transaction. This is not a bad thing, though, and actually works to your advantage as the seller and also in the best interest of the buyer. The goal of a Realtor (whether working for the seller or for the buyer) is to have a successful transaction where both parties are satisfied with the end result.
As a part of completing the listing agreement, it is important for you to understand whos who and how real estate agents and brokers cooperate to sell your house.
The Listing Broker and Listing Agent
When you place your home on the market, you will hire an individual Realtor (hopefully one of our agents) to be the Listing Agent. You also hire DMS Properties, LLC ... Residential Real Estate Services to be the Listing Broker and are able to take advantages of all of the services that the company offers. We will represent you (the seller) through a contract called a listing agreement. In short, the listing agent (also known as the Sales Associate) is associated with the listing broker (the real estate company). The listing broker is paid the listing commission when your house goes to settlement and then splits the commission with the buyer's agent.
The Selling Broker or Selling Agent
In a cooperative sale, your house is listed for sale by one brokerage firm and a buyer is provided by another. The Realtor who finds the buyer receives the selling side of the commission. If the listing broker also produces the buyer, then the listing broker receives both the listing and the selling sides of the commission.
A selling broker may have a signed buyer representation agreement with a buyer and, therefore, represents the buyer and not the seller. If the buyers agent is another agent affiliated with DMS Properties, LLC ... Residential Real Estate Services, then DMS Properties, LLC becomes a disclosed dual agent with the consent of both buyer and seller. This can get very complicated, and we will take the time required to adequately explain it to you ... not only because we want you to understand exactly what's going on, but because it is mandated by Maryland State law. The first documents you will sign will be disclosure statements that outline "Who Real Estate Agents Represent" and the "Consent for Dual Agency." You can read more about this in Understanding the Role of Real Estate Agents.
A Little Homework
Before we actually meet for the listing appointment, both of us will be busy. You, as the potential home seller, should collect a list of documents that weI will need to develop the listing agreement and effectively market your home through the MLS. At the same time, our agent will study recent neighborhood sales of homes comparable to yours, and also comparable homes that are currently for sale. You will receive a copy of the Competative Market Analysis (CMA) document for your records. We are able to either e-mail it to you or load it on our web site so you can read it on-line before we meet.
There's No Place Like Home
At the listing appointment, we will want to inspect the house and yard to become familiar with your property. You have probably enjoyed living in your home and have been pleased with its many unique features and we will want to highlight them as much as possible. Even in a development where all of the homes were built at the same time by the same builder and have the same general floor plans, no two homes are alike!
We will want to tell prospective buyers about the special features of your home and neighborhood, so you should have available any specific about schools, day-care, nearby public transportation, and other desirable community features, as well as features of your home that may not be readily apparent.
It is important for you to remember that prospective buyers will be comparison shopping. Now that so much information is available on the Internet, buyers are keenly aware of subtle differences in houses that are for sale in the area. Realtors can now provide their buyers with lists of all of the houses that are available for sale in a given area. The buyers will review information on-line for up to 100 different homes and decide which 3 or 4 they actually want to see. Most of the buyers that we represent look at twenty or thirty homes on their computer before every getting into the car. Because of this, we will need for you to tell us why your house is special -- from any home remodeling to afternoon winter sunshine.
Demand Sets Price
After we meet to discuss the market conditions and comparable nearby sales and listings, it will be your job to set the listing or asking price for the house. A common definition of market value is: What a ready, willing and able buyer will pay, at a price a seller will accept.
You need to realize that buyers today, thanks to the Internet, are sophisticated. Theyve already been shopping, and when they see your home, theyll be comparing features and financing. Most of them will have a Realtor representing them, too. Theres a rule of thumb that says: A house priced more than 5% over market value discourages offers. Buyers who can afford the price can get more house for their money elsewhere. Buyers who cannot afford the price simply wont look. This is why we say, A house priced right is half sold.
A fair market value will be determined by comparing the property with similar properties which have recently sold and (in some cases) with similar properties currently on the market. Experience in the industry has proven this market analysis approach is more accurate than the replacement cost or potential rental income methods.
Sample "Net Sheet"
Based on the asking price that you set for your house, we will go through a worksheet that estimates the net cash that you can expect to receive from the sale. Simply put, this exercise subtracts anticipated charges that you will pay from the sales price. You will have a copy of the net sheet with you as part of your listing package. We will adjust the "net sheet" once an offer is made and accepted. An itemized list of typical selling costs is shown in Signing the Papers and Transferring Keys.
No sale can be completed without financing. That is why it is generally to your advantage to appeal to the greatest number of home buyers by offering the greatest range of financing options. We will gladly explain to you the basic differences between VA (Veterans Administration), FHA (Federal Housing Administration) and conventional financing, as well as explain discount points.
What Is a Point? A point is one percent of the amount of the buyers mortgage loan. For example, if a loan is $300,000, then one point is equal to $3,000. Lenders charge points to increase the yield on their loans. On all loans, the home buyer and home seller may share the charges by mutual agreement.
Property Profile Folder
To help us prepare a folder of information on the property, you will need to provide a number of documents and information that is specific to the location and jurisdiction. Because the list is long, you can understand why its best to collect the papers before the listing appointment. These materials may include:
Well and Septic Inspection. If the property is on a well and septic system, current inspections by local health authorities are required while the home is occupied. We can arrange for the inspection after contract is ratified.
Lender Appraisal. Lenders usually require an appraisal to ensure that the property is adequate collateral for a loan. A lender will usually insist on ordering its own appraisal for this purpose, but that is the Buyer's responsibility in most cases.
Assessments/Easements. We will need to know if any tax assessments or easements exist on property that must be paid or included in the purchase contract and passed with the property when it is sold.
Property Taxes/Condominium Fees. You will provide a record of property tax or condominium fee payments that have been made. Depending on the specific circumstances, the buyer will reimburse you for some of them on a pro-rata share at settlement.
Inspections. In most cases, lenders of new mortgages require a termite inspection certificate that shows the house is free of infestation by "wood destroying insects." If you do not have a current certificate, then the we will arrange for the termite inspection to be done prior to settlement. Usually, a home inspection will be ordered to check the property for structural, mechanical, electrical and plumbing defects. We are now also required to add forms to any contract for Mold and Radon Inspections. Many buyers so far, choose to waive these tests, which are performed at their expense. You will also provide prospective buyers with a Property Condition Disclosure/Disclaimer Statement that shows various information about the physical condition of the property, such as the presence of fire retardant plywood.
Utilities. You should provide a record of the past 12 months utility bills, including gas, electric, sewer, water, and trash where applicable. Most buyers will want to know history of utility costs, and in some jurisdictions, this is now a requirement.
Helpful Documents. If possible, you should provide us with a copy of the deed, a house location survey, a copy of the condominium bylaws or homeowners association documents, a subdivision plat map, a house floor plan, any previous title search abstracts, a legal description of property (subdivision, section and lot), home warranties on major systems, if still in effect, and a copy of your homeowners insurance policy for endorsement in the purchase contract. All of this information will make the sale of your home much easier.
In anticipation of a buyers offer, you must be ready to supply us with a specific list of any personal property that is included with the real property for sale. Examples of items to convey may include: draperies, drapery rods, remaining heating oil, firewood, washer, dryer, refrigerator, stove, microwave, disposal, swimming pool chemicals, awnings, storm doors and windows, screens, venetian blinds, shutters, window air conditioner, etc. You should tag or remove items which do not convey. There have been many occasions when a buyer sees a home with a "special" lighting fixture or bookshelf and finds out later that it was not part of the sale. This type of confusion can be a deal killer!!
When you are ready to put the house on the market, a listing agreement is filled out, indicating a specific period of time the agreement is in effect (the listing period). Youve now hired a listing broker and a Listing Agent.
Other Listing Agreement Documents
Lockbox Authorization: What is a Lockbox? 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 Realtor. It provides access to the property when you are away, thus assuring full exposure of the property to prospective buyers.
Pay-Off Notice: A form that is part of the listing agreement will notify the current mortgage lender that the property has been listed for sale to alert them that the mortgage will be paid off. It has been my experience that most lenders to not cooperate, so we need to get the information in other ways.
Lead-Based Paint Disclosure Form: This form is now required by Maryland law, but if your home was constructed after January 1, 1978, it is not a potential problem.
Authority to Disclose Existing Offers: Once your property is listed, we will eventually receive offers for it. This form will authorize me to disclose to prospective buyers that there are other offers to be presented. You can also decide that this information should not be disclosed. I'll discuss the pros and cons of each option with you.
Property Condition Disclosure/Disclaimer Statement: You will be required to completed one section of this document that describes the physical condition of your property.