Be realistic. Ask for help. Have patience.
That’s the advice from real-estate professionals wading through today’s tough seller’s market.
If you’re selling a house, don’t skimp on a pro’s services — which can earn you more than it costs — and be prepared to live in a showroom during what could be a bit of a wait for a buyer. “Price your home realistically,” says Rob Wigton, president of the Nevada Association of Realtors, “be patient and know that things will stabilize.”
That said, following is a checklist to use as a guide throughout the sales process, with links to additional resources.
I – Before you list
Consider a real-estate lawyer: Real-estate lawyers can help whether you hire an agent or not. They can refer you to reputable agents, provide required disclosure forms for your state, answer questions throughout the process and ensure you receive payment. Thomas Moens, a real-estate lawyer in Illinois, offers these services for a flat fee of $300.
“While agents are reputable, an attorney’s fee isn’t based on the purchase price or on whether it closes. And we’re ethically obligated to represent only our client,” he says. “It’s pretty cheap insurance to have someone who’s just working for you.”
Decide whether to hire an agent: The long-standing justification for paying an agent’s typical 6% commission is that the agent more than makes up for it with a higher sale price. Today’s difficult selling climate would seem to bolster that argument. For the year ending June 2007, the median price for all agent-assisted sales was $240,000, while the median price for all homes sold by the owners was $180,000, the National Association of Realtors (NAR) reports. Agents have access to great marketing techniques, and also represent and bring over buyers. They also know the legal requirements and have liability insurance, should something go wrong.
But depending on your community and the intricacies of your local real-estate market, going with an agent may not provide a leg up. In a study of the Madison, Wis., market, for sale by owner (FSBO) sellers were able to garner roughly the same price for their homes as real-estate agents, meaning they pocketed more by not paying hefty commissions (read more here). In addition to your local market’s trends, the decision to go it alone likely comes down to your own comfort level and your marketing resources, which includes the amount of time you have to give to the process. If you’re eager to give it a shot, ForSaleByOwner.com is a decent place to start learning the ins and outs.
Not going FSBO? Select an agent: Selling a house is likely to be one of the largest financial transactions of your life. Find a real-estate agent whose experience and commitment you trust. Ask friends and neighbors for referrals then interview several. Some things to ask include:
- What’s your marketing strategy? This is where your agent really makes the difference. Does she list online, in newspapers, magazines? “That’s very, very important,” says Andrea DeHaven, a Realtor with Coldwell Banker Anchor Real Estate. “Some agents just list in the MLS.”
- Will you represent me exclusively in the transaction, or the buyer, as well?
- What are your commissions and fees?
- What’s your impression of my home?
- Can you provide the names and contact information for previous clients?
Read more in “Find a superstar real-estate agent.”
Gather your paperwork: Once you select an agent, he is going to ask you for a lot of information. Gather these documents:
- Prior year’s tax bill, utility bills, water and sewer bills;
- Declarations, covenants or deed restrictions on the property;
- Assessments, surveys and plats;
- Sales and repairs of major appliances and building components;
- Inspections for pests or environmental hazards;
- Lists of items to be included in or excluded from the sale.
An agent will also run through the disclosures you need to make on the property, basically any problems that could potentially make the home less valuable.
“Without knowing those, you can pretty much blow the whole sale,” says Moens, the real-estate lawyer.
You can also find out which disclosure forms are required from your state’s real-estate division. It’s important, because even the most upstanding seller can forget a repair or minor blemish from long ago.
“In Nevada, for instance, if you don’t disclose something, and it’s found that you did have knowledge, you can be subject to triple damages,” says Wigton.
Get an appraisal: You can hire an independent certified appraiser or get a few real-estate agents to prepare comparative market analyses. CMAs will detail similar houses that have sold in your area over the past three months and will drive the agent’s suggested price per square foot for your home.
Online sites such as Zillow and Cyberhomes.com also can provide automated home valuations, though these can differ from what your agent reports. For now, deep local experience still trumps the computer models, so expect to revise your list price based on your agent’s feedback.
“There’s not a lot of subjectivity,” says Wigton. “The seller needs to be realistic and realize that the agent has all the tools needed to get an accurate picture of what the price needs to be to sell.”
Price it right: Buyers today are savvy, says Walter Molony, of the NAR. Eighty-four percent look online before contacting an agent, and two-thirds hire an agent to represent them.
The biggest mistake sellers make is overpricing their homes, he says. Overpricing leads to price reductions and increased time on the market, both of which look bad.
“When your home sits on the market and sits on the market, then your home becomes stale and it looks to buyers like they can negotiate further and the price drops more,” Wigton says. “They say if you set the right price at the beginning, chances are you’ll get pretty close to it.” Read more in “8 tips for pricing your home in a buyer’s market.”
Consider a home inspection: As a seller, it is not your responsibility to conduct a home inspection. But for about $300, you can uncover potential problems and fix them before listing your home.
Prepare your home: Listen to your agent. They all have stories of how homes sold for $10,000 or $20,000 less because of some minor repairs, dirt or clutter that could have been resolved for a couple thousand.
Take a look at other homes on the market. Then proceed with your own preparation, in this order of importance:
- Major fixes: If you’ve become accustomed to the cracks and dents, have a friend or the agent point them out. “If you notice them and the agent notices them, then nine times out of 10 that buyer is going to notice them,” DeHaven says. Read “10 must-do repairs before selling” and use this checklist from the NAR as you walk through your home.
- Start on the outside: Buyers won’t step inside at all if your home is unappealing curbside. “A lot of times you’ll drive up to the neighborhood, there might be weeds growing, some paint peeling, and they’ll say, ‘No, let’s just skip that one,'” Wigton says.
- Paint the interior walls and clean the floors: This is the most important inside spruce-up, agents say. “You make one first impression, and when that buyer walks through you want everything to be as clean and new-feeling as you can,” DeHaven says. Go with uniform, neutral earth tones.
- Declutter: One person’s cherished objects is another person’s junk. All that stuff, every bit of it, is distracting. Trust the eyes of someone who isn’t attached to it, such as your real-estate agent, and be ruthless: Dump it, sell it or store it.
- Depersonalize: “Buyers don’t want to place your family in a home, they want to place their family in a home,” DeHaven says. Personal items also distract buyers from imagining the home’s bare potential.
Consider hiring a home stager: Barb Schwarz, CEO of StagedHomes.com, says 18% of home sellers are now hiring professional stagers, people who spend a day making your home look appealing to buyers. Their fees average $1,800 in the Midwest, $2,800 on the West Coast and $3,800 on the East Coast, and are based on the size of the home and the amount of clutter. (For more details, see this story on staging and view the accompanying slide show of before and after photos.)
II – While your home is on the market
Keep your home show ready: If you’re serious about selling, then your home has to be a sales showroom first and a living area second. Not a neat freak? Follow this simple tip: Keep up on a daily basis.”If you’ve done little things — made the bed, picked up the laundry before you left for work — then you can send the agent through,” DeHaven says.
Be able to clear out: Have a place to go, as well as somewhere for kids and pets. You don’t want to be home when prospective buyers walk through. It can make buyers feel uncomfortable, restrain them from asking questions and even potentially be a turn-off.
Stay in touch with your agent: Ask your agent where and how your home is being listed and for updates on buyer interest. Establish a system early on for when and how your agent will provide updates. Put reminders in your own calendar to check for updates.
III – After the close
Stay focused: “A lot of times, sellers think once you have the contract, oh great, you’re over the hurdle,” says Stephanie Singer, of the NAR. But on average more than 20 steps remain. “It’s like climbing Mount Everest: You made it to the top of the mountain but you still have to come down.”
The NAR lists these 10 last pre-closing steps for sellers:
1. Select an escrow agent.
2. Assemble any condo or homeowners association financial statements and recent reports for the buyer.
3. Order a preliminary title report.
4. Request a satisfaction letter from your present lender.
5. Coordinate the home appraisal and inspections.
6. Arrange final utility readings and payments.
7. Obtain a home warranty policy if you’ve agreed to provide this to the buyer.
8. Create a formal plan for handling repairs. When repairs are made, and who pays, is flexible. However, it’s important that you and the buyer spell out your agreement before closing so no questions arise later. Put money for any outstanding repairs in an escrow account.
9. Have an attorney prepare the deed. (If you’re working with an agent, he will typically work with the attorney on this.)
10. Arrange for payment of transfer taxes. Your agent will make sure that the financial requirements of your county are included in your closing paperwork and discuss possible payment options.
Finally, make sure everyone — and everything — important moves with you:
- Notify the post office, utility and insurance companies, and friends of a forwarding address several weeks in advance.
- Make copies of important records, such as transcripts, employment and financial documents, that you might need immediately or can’t risk losing in the move.
- Find a mover. You can search and reserve a moving van online at Moving.com.