If you plan to sell your home in 2006, now is the time toget busy.
This year is proving to be a far more difficult year thanwas record-setting 2005. Most communities are now in a “buyer’smarket,” with more homes listed for sale than there are qualified buyersactively in the marketplace.
Purchase Bob Bruss reports online.
The nationwide volume of home sales is down slightly, butmedian prices are holding steady, according to recent reports from the NationalAssociation of Realtors.
HOW TO GET YOUR HOME SOLD IN 2006. There isstill plenty of time to sell your home this year. But careful planning isrequired.
The first step is to be a “motivated seller” whoreally wants to sell. With a glut of homes now listed for sale in most priceranges, this is not a good time to “test the market.” If you are nota 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 intonear-model home condition. Look at it critically, through a potential buyer’seyes. Most homes need interior and exterior fresh paint (the most profitableimprovement you can make), repairing and cleaning. Pay special attention tosprucing up the kitchen and bathrooms.
But avoid major renovation, which usually doesn’t pay off ina 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 leastthree successful realty agents who sell homes like yours in your area. Even ifyou 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 theirhomes for sale with one of the agents already interviewed.
TEN KEY QUESTIONS TO ASK THREE SUCCESSFUL REALTY SALESAGENTS. After your home is in its best near-model-home condition,it’s time to interview at least three agents who successfully sell homes likeyours to compare their pros and cons. Each invited agent should give youhis/her 30-minute listing presentation. Here are the key questions to ask ifeach agent didn’t already answer them:
1. HOW MUCH CAN YOU GET FOR MY HOME? Pleasenotice 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’sopinion of how much they can get for your home.
Each agent should justify his/her answer by giving you awritten CMA (comparative market analysis). This CMA form (usually a bookletprepared on the agent’s computer) shows (a) recent sales prices of comparablenearby homes, (b) current asking prices of neighborhood homes like yours listedfor sale (your competition), and (c) asking prices of recently expiredcomparable 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 recenthome sales prices to justify their opinions of your home’s market value. Watchout for agents who estimate an unjustifiably high price (called “buyingthe listing”), or too low (called “low balling”).
2. DO YOU HAVE A LIST OF CLIENT REFERENCES? Beforeselecting the best agent to obtain your listing, be sure to phone each agent’srecent home sellers to ask “Were you in any way unhappy with this agentand would you list your home for sale again with the same agent?”
3. WHAT SALES COMMISSION RATE DO YOU CHARGE? Mostagents will tell you their “standard commission” is 6 percent. But beaware sales commissions are negotiable. According to a recent nationwide surveyby Real Trends, the average home sales commission is now 5.1 percent of thehome’s gross sales price.
However, negotiating a low sales commission can be self-defeatingif no sale results. As there is a glut of homes now listed for sale in mostmarkets, if you want your home to stand out from the others so it will be shownfrequently by buyer’s agents, cutting the commission usually results in fewershowings.
Paying an extra 1 percent of the sales price or offering asales bonus vacation trip or plasma TV to the buyer’s agent is often thedifference between a sale and no sale.
If you decide to list with a so-called “discountbroker” or flat-fee agent you will usually receive reduced services, suchas having to host your own weekend open houses or not having your listingplaced in the local MLS (multiple listing service).
4. WHAT IS YOUR MINIMUM LISTING TERM? The bestanswer is “90 days.” However, some agents insist on 120 to 180 daylistings. That’s fine, but be sure to include a written provision, such as”Seller may cancel this listing after 90 days without reason orcost.” That prevents the listing agent from becoming lazy.
Watch out for any agent who says something like “Theaverage days on market for homes in this area is 131 days.” Your instantreply should be “Well, I don’t want just an average listing agent.”
5. HOW LONG HAVE YOU BEEN SELLING HOMES IN THIS AREA? AREYOU A FULL-TIME AGENT? WHAT PROFESSIONAL COURSES HAVE YOU COMPLETED? The bestagents will already have answered these questions in their listingpresentations or in their professional brochure.
But don’t necessarily dismiss a full-time, highly motivatednew agent who has adequate managerial supervision with a highly respectednearby brokerage. A new agent could be much better than an “old pro,”experienced agent with too many listings to give your home sale the attentionit deserves.
6. WHAT IS YOUR MARKETING STRATEGY FOR MY HOME? At aminimum, each agent’s written plan should include immediately putting yourlisting into the local MLS (the most powerful sales tool available to listingagents), showing your home’s photo and information on the agent’s individualand office Web sites, and on www.Realtor.com.According to recent statistics from the National Association of Realtors, morethan 70 percent of today’s home buyers start their search on the Internet.
Depending on the asking price of your home, each marketingplan should include a broker’s tour, newspaper ads, weekend open houses, andads in local home magazines. More expensive homes justify the listing agentusing brochures and mailers to neighboring homeowners who could know ofprospective buyers.
7. WHAT SUGGESTIONS DO YOU HAVE TO MAKE MY HOME MOREMARKETABLE? DO YOU RECOMMEND STAGING IT? Agents hate to answer thisquestion before obtaining the signed listing for fear of insulting the seller.But smart home sellers want to know. Often a minor change, such as replacingthe 1950s outdated shag carpet with a neutral fashionable carpet, can change ahome’s character.
Or maybe the agent will recommend removing yourold-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 BEDEALING WITH YOU OR AN ASSISTANT, AND HOW OFTEN WILL YOU CONTACT ME ABOUT SALESPROGRESS? WHAT PERCENTAGE OF YOUR LISTINGS DOESN’T SELL? Officeassistants are often the sign of a highly successful realty agent. But watchout for a “numbers agent” who takes too many listings, knowing apercentage will sell, and forgetting about the rest. You want to avoid becomingjust another listing to a numbers agent.
9. SHOULD MY FIXER-UPPER HOME BE SOLD “AS IS”? Ofcourse, only ask this question if your home needs considerable repairs that youcan’t afford or don’t want to make before listing it for sale.
I’ve seen listing agents loan funds to sellers in suchsituations to make an otherwise desirable home more attractive to buyers. Ifthe agent recommends marketing your home as a “handyman special,”don’t be offended but realize the buyer is likely to be an investor looking fora below-market purchase price.
10. OTHER THAN YOURSELF, WHO IS THE BEST REAL ESTATE AGENTIN THIS AREA? If the agent evades answering, then ask each agent what heor she thinks of the other agents you are interviewing. Respect each agent’sanswers. Of course, verify any negative information received about a competitoragent.
SUMMARY: Fall is the second-best home sales season. Toassure your home selling success in the current “buyer’s market,” besure to ask each listing agent you interview lots of questions and then listyour home for sale with the best agent for your situation.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News