If you plan to sell your home in 2006, now is the time to get busy.
This year is proving to be a far more difficult year than was record-setting 2005. Most communities are now in a “buyer’s market,” with more homes listed for sale than there are qualified buyers actively in the marketplace.
Purchase Bob Bruss reports online.
The nationwide volume of home sales is down slightly, but median prices are holding steady, according to recent reports from the National Association of Realtors.
HOW TO GET YOUR HOME SOLD IN 2006. There is still plenty of time to sell your home this year. But careful planning is required.
The first step is to be a “motivated seller” who really wants to sell. With a glut of homes now listed for sale in most price ranges, this is not a good time to “test the market.” If you are not a serious home seller who will be realistic about your home’s asking price, don’t waste your time in today’s difficult market.
The second step is to get your house or condo into near-model home condition. Look at it critically, through a potential buyer’s eyes. Most homes need interior and exterior fresh paint (the most profitable improvement you can make), repairing and cleaning. Pay special attention to sprucing up the kitchen and bathrooms.
But avoid major renovation, which usually doesn’t pay off in a higher sales price. If you can’t afford minor fix-up, then sell your home “as is” but with the understanding most buyers aren’t interested in “fixer-uppers” except at heavily discounted prices.
The third and very crucial step is to interview at least three successful realty agents who sell homes like yours in your area. Even if you think you can sell your home alone without professional help (called a “for sale by owner” or fizz-bo), the agents you interview won’t mind. They know most do-it-yourself sellers fail and within 30 to 60 days list their homes for sale with one of the agents already interviewed.
TEN KEY QUESTIONS TO ASK THREE SUCCESSFUL REALTY SALES AGENTS. After your home is in its best near-model-home condition, it’s time to interview at least three agents who successfully sell homes like yours to compare their pros and cons. Each invited agent should give you his/her 30-minute listing presentation. Here are the key questions to ask if each agent didn’t already answer them:
1. HOW MUCH CAN YOU GET FOR MY HOME? Please notice the question is not “How much do you think my home is worth?” Today’s home sales market is extremely competitive so you want each agent’s opinion of how much they can get for your home.
Each agent should justify his/her answer by giving you a written CMA (comparative market analysis). This CMA form (usually a booklet prepared on the agent’s computer) shows (a) recent sales prices of comparable nearby homes, (b) current asking prices of neighborhood homes like yours listed for sale (your competition), and (c) asking prices of recently expired comparable listings, which didn’t sell (usually because they were overpriced).
After interviewing three (or more) potential listing agents, you can then compare their CMAs to see if they used the same comparable recent home sales prices to justify their opinions of your home’s market value. Watch out for agents who estimate an unjustifiably high price (called “buying the listing”), or too low (called “low balling”).
2. DO YOU HAVE A LIST OF CLIENT REFERENCES? Before selecting the best agent to obtain your listing, be sure to phone each agent’s recent home sellers to ask “Were you in any way unhappy with this agent and would you list your home for sale again with the same agent?”
3. WHAT SALES COMMISSION RATE DO YOU CHARGE? Most agents will tell you their “standard commission” is 6 percent. But be aware sales commissions are negotiable. According to a recent nationwide survey by Real Trends, the average home sales commission is now 5.1 percent of the home’s gross sales price.
However, negotiating a low sales commission can be self-defeating if no sale results. As there is a glut of homes now listed for sale in most markets, if you want your home to stand out from the others so it will be shown frequently by buyer’s agents, cutting the commission usually results in fewer showings.
Paying an extra 1 percent of the sales price or offering a sales bonus vacation trip or plasma TV to the buyer’s agent is often the difference between a sale and no sale.
If you decide to list with a so-called “discount broker” or flat-fee agent you will usually receive reduced services, such as having to host your own weekend open houses or not having your listing placed in the local MLS (multiple listing service).
4. WHAT IS YOUR MINIMUM LISTING TERM? The best answer is “90 days.” However, some agents insist on 120 to 180 day listings. That’s fine, but be sure to include a written provision, such as “Seller may cancel this listing after 90 days without reason or cost.” That prevents the listing agent from becoming lazy.
Watch out for any agent who says something like “The average days on market for homes in this area is 131 days.” Your instant reply should be “Well, I don’t want just an average listing agent.”
5. HOW LONG HAVE YOU BEEN SELLING HOMES IN THIS AREA? ARE YOU A FULL-TIME AGENT? WHAT PROFESSIONAL COURSES HAVE YOU COMPLETED? The best agents will already have answered these questions in their listing presentations or in their professional brochure.
But don’t necessarily dismiss a full-time, highly motivated new agent who has adequate managerial supervision with a highly respected nearby brokerage. A new agent could be much better than an “old pro,” experienced agent with too many listings to give your home sale the attention it deserves.
6. WHAT IS YOUR MARKETING STRATEGY FOR MY HOME? At a minimum, each agent’s written plan should include immediately putting your listing into the local MLS (the most powerful sales tool available to listing agents), showing your home’s photo and information on the agent’s individual and office Web sites, and on www.Realtor.com. According to recent statistics from the National Association of Realtors, more than 70 percent of today’s home buyers start their search on the Internet.
Depending on the asking price of your home, each marketing plan should include a broker’s tour, newspaper ads, weekend open houses, and ads in local home magazines. More expensive homes justify the listing agent using brochures and mailers to neighboring homeowners who could know of prospective buyers.
7. WHAT SUGGESTIONS DO YOU HAVE TO MAKE MY HOME MORE MARKETABLE? DO YOU RECOMMEND STAGING IT? Agents hate to answer this question before obtaining the signed listing for fear of insulting the seller. But smart home sellers want to know. Often a minor change, such as replacing the 1950s outdated shag carpet with a neutral fashionable carpet, can change a home’s character.
Or maybe the agent will recommend removing your old-fashioned furniture and having a professional designer “stage”your home to make it look up-to-date. Staging a home for sale has become very common among the most successful agents.
8. HOW MANY LISTINGS DO YOU CURRENTLY HAVE? WILL I BE DEALING WITH YOU OR AN ASSISTANT, AND HOW OFTEN WILL YOU CONTACT ME ABOUT SALES PROGRESS? WHAT PERCENTAGE OF YOUR LISTINGS DOESN’T SELL? Office assistants are often the sign of a highly successful realty agent. But watch out for a “numbers agent” who takes too many listings, knowing a percentage will sell, and forgetting about the rest. You want to avoid becoming just another listing to a numbers agent.
9. SHOULD MY FIXER-UPPER HOME BE SOLD “AS IS”? Of course, only ask this question if your home needs considerable repairs that you can’t afford or don’t want to make before listing it for sale.
I’ve seen listing agents loan funds to sellers in such situations to make an otherwise desirable home more attractive to buyers. If the agent recommends marketing your home as a “handyman special,” don’t be offended but realize the buyer is likely to be an investor looking for a below-market purchase price.
10. OTHER THAN YOURSELF, WHO IS THE BEST REAL ESTATE AGENT IN THIS AREA? If the agent evades answering, then ask each agent what he or she thinks of the other agents you are interviewing. Respect each agent’s answers. Of course, verify any negative information received about a competitor agent.
SUMMARY: Fall is the second-best home sales season. To assure your home selling success in the current “buyer’s market,” be sure to ask each listing agent you interview lots of questions and then list your home for sale with the best agent for your situation.
(For more information on Bob Bruss publications, visit his
Real Estate Center).