Selling a Home

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– goonbirds. 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.