What you need to know about Selling

1. Can I sell my house myself?

   Many people believe they can save a considerable amount of money by selling on their own. They look at the average commission on a house and remember stories of friends or relatives who managed to get through the process with seemingly little trouble. "Other people have sold their own homes," they say — "so why can't I?"

   Approximately 10 percent of American homeowners handle their own sales. But in order to do this, you'll need to realistically assess exactly what's involved. The routine parts of the job involve pricing your house accurately, determining whether or not a buyer is qualified, creating and paying for your own advertising, familiarizing yourself with enough basic real estate regulations to understand (and possibly even prepare) a real estate contract, and coordinating the details of a closing. These are serious responsibilities to take on, and they include the concerns that your house is only on the market when you're home, your marketplace is limited to those you can reach locally, and a mistake may cost you the money you're trying to save.

   The best reason for working with a real estate broker is the enormous amount of information they have at their disposal — information that can help make your house sell faster and easier. Professionals know about market trends, houses in your neighborhood, and the people most likely to buy in such neighborhoods. They also know how to reach the largest number of people who may be interested in your house (both through old-fashioned sales skill and the Internet resources of a reputable real estate company), and are trained in areas like screening potential buyers and negotiating with them. Finally, they're always "on-call," and willing to do the things most of us don't: working on the weekends and answering the phone at all hours.

MARKET CONDITION

1. What makes a house sell?

   This entire book could be devoted to answering this question. But to be as concise as possible, a successful sale requires that you concentrate on six considerations: your sale price, your terms of sale, the condition of your house, its location, its accessibility, and the extent of marketing exposure your house receives. While some of these factors are beyond your control (such as the actual sale price), you can compensate by taking advantage of others (like a new paint job) to make your property as attractive to prospective buyers as possible.

   When is the best time to list a house for sale?

   The "best" time to list your house is actually as soon as you decide to sell it.

   If you want to get the best price for your house, the key is to give yourself as much time as possible to sell it. More time means more potential buyers will probably see the house. This should result in more offers; it also gives you time to consider more options if the market is slow or initial interest is low.

   Is there any seasonality to the market?

   Peak selling seasons vary in different areas of the country, and weather has a lot to do with it. For example, late spring and early fall are the prime listing seasons in many areas because houses tend to "show" better in those months than they do in the heat of summer or the cold of winter. And of course, people like to do their house shopping when the weather is pleasant.

   But keep in mind that there are also more houses on the market during the prime seasons, so you'll have more competition. So while there is seasonality in the real estate market, it's not something that should dominate your decision on when to sell.

   What about market conditions — price trends, interest rates, and the economy in general? Should they have any bearing on when I list?

   Probably not. Even if you're under no pressure to sell, waiting for better market conditions is not likely to increase your profit potential.

   SELLING TIP

   Create a "fact sheet" about your house and neighborhood and distribute it to as many people as possible.

1. How long should it take to sell?

   Average listing times vary from 30 to 180 days, according to market conditions in a particular region, town, or even neighborhood, and of course, price, terms, condition, location, accessibility and exposure play an even greater role. Selling in any market is easier if you keep time on your side. Most professionals will tell you that allowing yourself at least six months will put you in a position to get a better return from their marketing efforts.

   What if I can't sell my old house before I have to move?

   This situation can arise for any number of reasons. For instance, getting the job promotion you've been waiting for may mean having to relocate very quickly. Another example: you finally find your "dream home," and need to get it under contract before it sells to another buyer. Whatever the reason, don't panic. You have some viable alternatives to the worrisome possibility of double mortgage payments.

   If you don't have to sell in order to buy a new home, consider the advantages and disadvantages of renting your old house. If you're being transferred before you've had a chance to decide on the new house, you may be able to obtain a short-term rental of your own while you're becoming familiar with the new area. Either way, a local real estate professional can usually help, by advising you how much you can expect to pay for rent in your new city, or what you need to charge for your current home to both cover your mortgage payments and take care of other costs you'll entail as a landlord.

   Another solution available from some brokers is the guaranteed sale plan, which is detailed in the next question.

   What if I do have to sell my current house first?

   Some brokers offer guaranteed-sale plans, which are essentially a written promise to buy your house at a pre-determined price if it doesn't sell by a certain date. The amount of the guaranteed price varies considerably between brokers.

PRICING

1. How do I price my house?

   Always price your property sensibly.

   It is important to be realistic about your home's value and price it accordingly. To determine the fair market value, a real estate professional can supply information on comparable homes that have sold or gone under contract in your area.

   What is "fair market value," and how do I determine mine?

   Simply put, the fair market value of a house is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase.

   To get an estimate of fair market value, ask for a Comparative Market Analysis (CMA) of your house. The analysis will give you a realistic figure based on the most salient features of the local real estate market. It should provide information about recent sales of similar houses, including how much they sold for and how long it took. The real estate professional's price opinion is very helpful in determining the right asking price.

   What's the difference between fair market value and asking price?

   You can assume that some negotiation will be necessary to reach an agreement with a buyer. The professional who presents you with the results of your CMA will provide all the data that establishes fair market value. Then, based on your own timing and marketplace variables, your real estate professional will be willing to help you establish a competitive pricing strategy. Generally speaking, the owner's asking price — the advertised price of a house when it goes on the market — is set slightly higher than fair market value.

   Who can help me determine the right asking price?

   Real estate sales professionals suggest asking prices based on a wide array of information you may not have at your disposal, including recent listing and selling prices of houses in your neighborhood. If you're not completely confident in their suggestions, you may want to order an appraisal.

   Next, establish clear priorities. If you had to choose, are you more concerned with selling quickly, or getting the best price?

   Someone else — a neighbor, friend or relative — may point out advantages or disadvantages about your house that you hadn't thought about. Third-party views will help you start thinking of your house as a commodity, with positive and negative selling points. Then you should decide on a price that you feel is competitive and consistent with what other houses in your area have sold for.

   How flexible should I be about the asking price?

   Generally, the first three weeks will be the test period of your initial asking price. If you see showings drop off and very few return visits, you may want to consider repositioning your asking price. Most buyers leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and seller.

   While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good sales professional can be of great assistance to you during the negotiating process. In fact, negotiation is one of the valuable skills a real estate professional can offer you. As negotiations proceed — whether in writing, face-to-face, or by phone — your sales professional will inform you of your options in responding to each offer from the buyer, so you can make an educated decision as to how you want to proceed.

HOME IMPROVEMENTS FOR SELLING

1. Should I fix my house up before it goes on the market?

   Unless your house is nearly new, chances are you'll want to do some work to get it ready to market. The type and amount of work depend largely on the price you're asking, the time you have to sell, and the present condition of the house.

   If you're in a hurry to sell, do the "little things" that make your house look better from the outside and show better inside. Read on for several specific ideas for making low-cost improvements.

   What is "curb appeal," and how do I create it?

   "Curb appeal" is a common real estate term for everything prospective buyers can see from the street that might make them want to turn in and take a look. Improving curb appeal is critical to generating traffic. While it does take time, it needn't be difficult or expensive, provided you keep two key words in mind: neat and neutral.

   Neatness sells. New paint, an immaculate lawn, picture-perfect shrubbery, a newly sealed driveway, potted plants at the front door — put them all together, and drive-by shoppers will probably want to see the rest of the house.

   Then, for both the inside and outside of your house, if you're going to repaint, choose neutral colors, and keep clutter and personal knick-knacks, photos, etc. to a minimum. Remember, when a family looks at a house, they're trying to paint a picture of what it would be like as their home. You want to give them as clean a canvas as possible.

   What should I do to make the house show better?

   First, make your house look as clean and spacious as possible. Remember, people may look behind your doors — closet and crawlspace doors, as well as those to the bedrooms and bathrooms. So get rid of all the clutter; rent a storage space if you need to, hold a garage sale or call a local charity.

   After you've cleaned, try to correct any cosmetic flaws you've noticed. Paint rooms that need it, re-grout tile walls and floors, remove or replace any worn-out carpets. Replace dated faucets, light fixtures, and the handles and knobs on your kitchen drawers and cabinets if needed.

   Finally, as with the outside of your house, try to make it easy for prospective buyers to imagine your house as their home. Clear as much from your walls, shelves, and counter tops as you can. Give your prospects plenty of room to dream.

   SHOWING TIP

   Before you list, give your house a bath — most equipment rental shops carry power washers.

1. Should I make any major home improvements?

   Certain home improvements that are useful to almost everyone have proven to add value or speed the sale of houses. These include adding central air conditioning to the heating system; building a deck or patio; finishing the basement; doing some kitchen remodeling (updating colors on cabinets, counter tops, appliances, panels, etc.); and adding new floor and/or wall coverings, especially in bathrooms. On the other hand, improvements that return less than what they cost are generally ones that appeal to personal tastes that not everyone may share, like adding fireplaces, wet bars and swimming pools, or converting the garage into an extra room.

   The challenge that comes with any home improvement designed to help sell your house is recouping your investment. There's always the risk of over-improving your house — that is, putting more money into it than neighborhood prices will support.

   So how much is too much? Professional renovators have found that, no matter how much you improve any given house, you're unlikely to sell it for more than 15 percent above the median price of other houses in the neighborhood, whether you do $1,000 worth of work or $50,000. That's why you might want to ask your sales professional's opinion about the viability of recouping the cost of any major renovation you have in mind before you start the work.

   Should I do the work myself?

   If you have the time and talent, do-it-yourself improvements are the most cost-effective way to go. Painting, wallpapering, replacing cracked trim and old plumbing fixtures — the difference between work done by a competent amateur and a professional is usually time and money. Just make sure you don't tackle something you can't handle — this is no time for "on-the-job training." If you're not experienced, it may be worth calling in a professional.

   Larger jobs involving mechanical systems (heating, electrical, plumbing, etc.), or work that must meet local building codes, are another story. Even if you or the family handyman know exactly what you're doing, it's not a good idea to engage in this type of work unless you're licensed to do so. Your attempts could make you responsible for more than you realize if something you worked on goes wrong after you sell.

   Am I liable for repairs after I sell?

   Yes. If the buyer's inspection reveals major problems with your house's structure or mechanical systems (heating, electrical, plumbing, etc.), the buyer may wish to negotiate the price downward on the basis of anticipated repair costs. So even though the repairs won't be made until after the sale, practically speaking, you'll be paying for them.

   Sometimes, repairs may be required before the transfer of title takes place. This is especially true in sales that involve financing that's insured or guaranteed by the government (FHA/VA loans, for example).

   You may also have heard about lawsuits involving sellers who failed to disclose major problems before the sale — like an addition to the house that wasn't built to code. Most states now maintain very specific disclosure laws that require sellers to disclose any pertinent information related to the condition of the property. For example, most states require sellers to notify buyers about the presence of any lead-based paint. It is important for you to be knowledgeable about your state's disclosure laws.

   These are just a few good reasons to retain a lawyer or sales professional who know as much about the condition of your property as you do. It's also a good idea to get the buyer's written acknowledgment of any major problems when you accept their offer.

HOME WARRANTIES

1. What about home warranties? Are they available to sellers as well as buyers?

   Yes they are, and they're worth investigating. It's our belief that home warranties are one of the best selling points you can add to your house. It's easy to see why. After a buyer has invested substantial funds in a down payment and moving expenses, the last thing they want to worry about is a costly home repair. With a home warranty, they don't have to.

   The warranty offers protection for you and your buyer, covering repair or replacement costs for breakdowns to most major systems and built-in appliances for up to a year after the date of closing. In many states, there is no additional cost to sellers who provide coverage for their buyers, except for a small deductible if you make a claim. And when you consider the peace of mind that comes with knowing 24-hour emergency service is always just a phone call away, it's hard to imagine a better investment.

   SHOWING TIP

   Buyers want kitchens to be spotlessly clean and efficient, with as much counter space as possible.

MARKETING YOUR HOME

1. How do I reach the right potential buyers?

   Today, people are moving farther and more frequently than they used to; it's not unusual for upwardly mobile executives to relocate across the country more than once in a year. The result is that the pool of potential buyers for your house is much larger and spreads far wider than ever before, and the competition to reach them is fierce.

   These developments make it more important than ever to choose the real estate company with the most sophisticated and savvy marketing techniques. Companies with much-visited Web sites, extensive available listings, web tools designed to help consumers buy and sell, and prominent, effective advertising and marketing materials are essential for identifying the right buyers and convincing them that yours is the house for them. The yard sign is just the beginning, but with a knowledgeable sales professional, your selling process can promptly reach a happy ending.

1. What's an MLS and why do I need one?

   A Multiple Listing Service, or MLS, is another resource to help ensure you reach a large number of prospective buyers and dramatically increase the exposure of a property.

   Quite simply, it's a system under which participating brokers agree to share commission on the sale of houses listed by any one of them. So, for example, if you list your house with one broker and another broker actually sells it, they share the commission. The advantage to you is clear; more people have an interest in selling your house.

   Over the years, the MLS concept has grown from a strictly local sales tool into a powerful national marketing system.

   SHOWING TIP

   Remove any attached decorative items — e.g., chandeliers, stained glass, etc. — that you don't intend to sell with the house.

1. How important is advertising?

   Advertising remains an important component in the marketing process. Today, however, this means much more that an ad placed in the local newspaper. Today's real estate brokers have the knowledge and resources to market your home through an array of proven modern methods, including TV, magazines, radio, the Internet and direct mail in addition to traditional print advertising. They are trained to determine where the pool of buyers for your particular property might most likely be found and from that, can best determine the type of advertising that is best for your property

OPEN HOUSE

1. What should I expect from an open house?

   The open house is another valuable part of the marketing process, offering prospective buyers the chance to view houses in a low-pressure, "browsing" atmosphere. With that in mind, you shouldn't expect it to generate a sale, at least not directly. What you should look for is interest expressed and requests for private showings made to your sales professional in the days following the open house.

   Open houses are always valuable. If many prospective buyers attend, it shows you that the property is attractive and saleable. If very few people show up, it can indicate that the price is too high, and cause you to look for ways to improve Curb appeal. Try not to draw your own conclusions — your sales professional will give you a full report on open-house activity and offer a professional assessment of its results.

   Sales professionals often hold an open house for other sales professionals shortly after a house is listed. This event, usually held mid-week when real estate people can give it their full attention, can be as important to your efforts as your listing in the local MLS. The more professionals who see your house, the more prospects you're likely to reach.

   Should I try to avoid being at home when the house is shown?

   You should definitely plan to be out of the house during any open house your sales professional has scheduled; the same goes for first showings to prospective buyers. People often feel uncomfortable speaking candidly and asking questions in front of current owners. You want them to feel as free as possible to picture your house as their "dream home."

   Who actually sells my house — a broker or a sales professional?

   Both. In legal terms, a real estate sales professional is an individual trained and licensed to act for other people looking to buy or sell a piece of property. While that definition applies to both, the broker is permitted to collect fees and/or commission for such work.

   Thus, the sales professional — with whom you have most of your day-to-day contact — works on behalf of, and is compensated by, the broker.

   Will my sales professional be present at the closing?

   If you wish. while the law does not require their presence, both the buying agent and the selling agent may attend the closing. Even though most of the procedures are handled by the lenders, title companies, and in some cases an attorney, you'll find that your sales professional can be a valuable source of information and counsel, especially if any last-minute problems arise.

   Good sales professionals are also extremely helpful in the days immediately prior to the closing. They'll help you prepare by giving you a step-by-step preview of the entire process and what will be expected of you. And they'll make certain you bring all necessary documents and other information.

WORKING WITH A REAL ESTATE PROFESSIONAL

1. What makes a sales professional effective?

   We believe good training and experience make the best sales professionals. But the truth is, not every sales professional is right for every seller. That's why we suggest that you follow this simple formula to help you decide whether a particular sales professional will work well for you

   COMPETENCE + COMFORT = CONFIDENCE

   Competence: When you first meet with a real estate professional, they'll do their best to show you that they have what it takes to sell your house. You can expect to see a portfolio of credentials, past achievements, sales volume and letters of recommendation. Look for evidence that their background is relevant to your needs. The sales professional you choose should also be up-to-date on the current pool of potential buyers for houses like yours; professionals can stay informed of this through real estate company Web sites and industry networking.

   Comfort: The importance of being comfortable with your sales professional as a person cannot be overstated. You're going to be dealing with this individual on a regular basis, maybe for months, during a time that can be emotionally trying for you and your family.

   It takes a unique combination of these two characteristics — competence and comfort — to inspire the confidence a homeowner needs to maintain peace of mind through the process of selling a house.

   How do I find the sales professional who's right for me?

   A good place to start is by talking to friends, neighbors, and relatives — anyone whose recommendation you trust. You can also try responding to sales professionals' local advertising, direct mail, or Web site profiles. If they have the resources and initiative to maintain such a presence in your marketplace, it's a good sign that they may have the sales skill you're looking for.

   Do I have to pay a commission even if I find the buyer?

   That depends on the type of listing you agree to. If you sign an exclusive agency contract, you may sell the house on your own without paying a commission. In an exclusive right-to-sell agreement, you owe a commission even if you find the buyer. Which type you choose may largely depend on which sales professional you work with and how much trust you place in his or her abilities (as well as how much time and expertise you feel you have to devote to finding a buyer and negotiating a contract on your own.)

   What is the advantage of an exclusive right-to-sell?

   Incentive — it lets sales professionals know that their time and effort will not go unrewarded. That's one reason the great majority of residential listings are marketed under exclusive right-to-sell agreements.

   What if my sales professional doesn't produce?

   Besides commission, the most important matter you negotiate at the time of listing your house with a broker is the duration of the listing contract. Terms vary, but listing agreements are seldom for less than three months or greater than one year.

   But what if you find yourself dissatisfied midway through a nine-month contract? While the listing contract is legally binding, some brokers offer homeowners an "out" if they are unhappy with the services they are receiving.

   Why list my house with a Broker?

   Exclusive services that can make selling your house faster and easier, and unparalleled expertise in local and national markets — those are two of the most important reasons.

   Beyond that, we're sincerely interested in helping make the experience of selling your home as smooth and easy as possible. So even if you're not ready to list your house — if you simply have questions about the market in your area, price or mortgage trends, or anything else about real estate as it relates to you — just pick up your phone and call.