Movin’’ on up are ya? Deluxe apartment in the sky? Hang on there Weezie and let’s do this right.
Thing No. 1 Get a read on the situation.
Consult the large
real estate sites, like Realtor.com and HomeGain.com to see how similar
homes are priced in your neighborhood. Everybody’s buzzing about zillow.com. They provide “zestimates” on what particular
properties are “worth” (rather than simply what seller’s are asking for
them) as well as the most recent sales and tax data for each property
based on their database of local property sales information.
While interesting, it’s not science and, sadly, while zillow claims to
be within 10% of sale prices, an informal poll among users found these
estimates to swing +/- 30% or more from true market values as estimated
by professionals (Uh-oh.) Just for fun, check out your own property
plus, comparable properties (“comps”) in the neighborhood. Many
newspapers also list the selling and asking prices of recent sales by
zip code, plus how long the houses were on the market. Note the prices
for your neighborhood during the last several months. Check how
sales were running, say, a year ago, so you get an idea of whether the
market is heating up, cooling down, or staying put. This exercise
should give you a sense of what your home is worth.
Thing No. 2 Hire an agent. A good one.
The people who do “For Sale By Owner” are the same
people that defend themselves in trials– gooniebirds. It’s complicated, time-consuming and
probably not worth the money you might save on commissions. Plus, you’ll probably screw
it up. Get yourself a pro. This could very well NOT mean your Aunt Judy who recently
decided to get her realtors license because she “really loves being with people.” Interview
at least three candidates, ask them to provide a marketing plan for your property (where it
will be advertised, how, what their open house strategy is, pricing, commission (5% seems
standard right now). And, check their references. Also, don’t
just pick the agent who suggests the highest sales price –some agents
like to dangle the big money to blow smoke
up your proverbial bum. But, price it too high and it may sit for
months, forcing you to deeply discount (buyers tend to low-ball houses
that sit a long time – see below) Also, don’t necessarily choose the
agent that offers you a discounted sales commission. (The
customary rate is 5-6% of the sales price but this can fluctuate
depending on the market) While we don’t believe that you get what
you pay for in life – otherwise the cable guy would actually show up
and your $50 haircut would actually look remotely similar after you
washed it the next day. But, we do believe that you certainly don’t get what you don’t pay for. Motivate your agent to rock
the house.
When you find someone you like, you’ll have to sign a listing agreement stating that you’ll
work only with this agent for a designated number of months. Many agents prefer
an exclusive listing, meaning you agree to pay a commission regardless of whether the
agent is actually responsible for finding the seller – if you decide to sell it to your Uncle
Andy, he’s still getting the commission. Fair is fair, this is to protect him from having done
all that work for nothing before Uncle Andy blew into town. Do
protect yourself though and don’t agree to a term of more than three
months (one month if it’s a hot market) just in case he turns out to be
a schmo who can’t sell candy to a baby. Good agents (despite what
those dot-commers tell you) actually earn every penny and make you more
money. According to the book “Freakanomics,” experienced real
estate agents actually get more for their own homes when they sell them.
Thing No. 3 Play the price is right.
You may be thinking,
“Let’s list it on the high end and see what happens” (as you rub
the palms of your hands together.) Tsk, tsk, tsk. Good
thing you have us -- that’s a rookie move. Your house gets the
most attention from other agents when it’s first listed. If
priced right, they will show it to their buyers, but they won’t show a
house they know is priced too high. And anyway, pricing your home
too high only makes similar houses look more attractive. Yes, you
can drop your price later, but the longer your home sits on the market,
the more it becomes an old, stale listing and will wind up selling for
less.
Thing No. 4 An open house is not enough.
Think people
are going to walk in and be so awestruck by your fine taste that they
simply MUST have it? Doubt it. What you need is a marketing plan.
Your agent needs to implement this plan, including advertising in
newspapers, online and elsewhere, as well as professional brochures and
signage. By far, the most effective marketing is to other real
estate agents. Staging a preview of your home for other real
estate agents (“a broker’s open”) makes a lot of sense, as every one
that tours your place and likes it becomes another agent in your sales
force. If you’re agent isn’t doing all these things, he/she
isn’t working it…and he or she shouldn’t be working for you much longer.
Thing No. 5 Raise the stakes.
Most people probably do
not negotiate commission with their agent but, consider it if your
house is relatively expensive. It’s possible that an agent might not
flinch if you suggest a percentage or two lower than is standard.
Conversely, if you know it's a buyer's market, consider offering the
incentive of a higher commission if the agent can land you a sale
within 5 percent of your asking price.
Thing No. 6 Fixer Schmixer.
Very few buyers want a fixer
upper. The houses that sell the quickest, and for the most money, are
the ones that buyers feel they can move into without having to do any
work (aka “turnkey”) So, fix all the little things, like the leaky
faucets and doors that stick. Replace warn carpet, and paint with
neutral colors. The time and money you invest in getting your
home in prime selling condition will pay off. You might even
consider hiring a home inspector to uncover potential problems before
you try to sell. And always, disclose everything you know about
your home to buyers.
Thing No. 7 Presentation is everything.
Nobody is going
to walk in and dream of living in this house by looking at your
depressing treadmill in front of the TV or your collection of vintage
Star Trek memorabilia. Clean out the closets, clear out extraneous
furniture and get rid of all the junk. Clutter is bad for your
chi anyway. Put it in storage if you have to, but get it OUT! Pay
special attention to the landscaping, front exterior and entryway, as
these contribute to “curb appeal.” Hire a cleaning crew.
Remember, buyers are looking for a clean, free flowing home, in which
they can live like those people in the magazines. You can also
hire someone to come in and “stage” your home. They will take
away and add furniture, art and accents with a professional designer’s
eye. This how the house “shows” (and how you live in it) until
you sell. This is expensive but they will basically make your
house photo-shoot ready and they are experts in terms of the touches
that sell homes. If you are on your own – put flowers in the
vases, some fruit in the bowls, stash the photos of Gram on Space
Mountain in her favorite teal track suit and, if you’re really
inspired, put some apple pie flavored mulling spices on the stove
before the open house. If you don’t know what mulling spices are…
www.williams-sonoma.com and please, don’t leave the flame on when you
take off.
Thing No. 8 You’ve got a live one.
When you receive a
bid via your agent, ask for guidance on how to respond. This will
depend on how you priced the house, what the housing market is in your
area and your urgency to sell or wait for a better price. You can
accept, decline or counter offer. If you are lucky enough to have
multiple offers, don’t just go with the highest one. Look at the
percentage down, how “clean” the terms are, even if you think they love
the house most. You’re looking for the offer with the lowest
chance of “falling out.” What’s a few thousand more on paper if
they never complete the sale and you have to start all over again?
Thing No. 9 Clauses are not just for Santa.
Make sure
your lawyer or agent reviews the contingency clauses included with the
bid. For example, it's generally not a good idea to agree to sell your
home with the contingency that the buyer must first sell his or her own
home. Also make sure that all the buyer's contingencies are
restricted within specific amounts of time. For instance, if the deal
is contingent upon the home passing an inspection, then the inspection
must occur within a week to 10 days of an accepted bid. The same is
true of the closing date: Make the buyer commits to a reasonable date,
usually 30 to 45 days from acceptance.
Now dump that shack and go enjoy your piece of the pie.