Picture this! You have finally decided it is time to sell your home. You have interviewed three real estate agents and selected one to sell your home. You have made an appointment with the realtor to sign all the required paperwork. Before you go, however, there are some items to consider for your own best interest before signing any kind of listing agreement with the realtor.
This list of frequent questions to consider for listing your house seeks to inform you about these decisions before sitting down with a listing agent. You will be asked (we hope) each of these questions in some form by the listing agent before you sign the written contract.
Once you are done reading over these questions, please make sure to visit all our frequent questions before selling your home. We cover every step in detail in the questions. Please contact us if you are ready to discuss getting your home on the market.
What price will you sell it? – This question always seems to spur the most interest from sellers. Sellers are going to want to make money on their home and their sales price has a direct bearing on how much profit is made. Your realtor can help quite a bit with pricing your home. They will provide you with a Comparative Market Analysis (CMA), which will list at least six properties, three being active and three having already been sold that are comparable to your home. From the comparable properties, your realtor will give you a sales price range. It is not the value of your home as only certified appraisers can provide actual value. It is an estimate based on what the agent is seeing in the comparable properties. It is always a good idea to stay within the range of the comparable properties. If you go too high, it can kill the chances of selling your home quickly. A good rule of thumb is that if you have not gotten any showings within a week or any offers within two weeks, you have priced your property outside what the market will accept.
How long do you want to take to sell it? – The CMA will also cover how many Days on Market (DOM) you can expect for your property. In a seller’s market (which we are currently in), homes DOM tend to stay very low (unless you price your property too high). In a buyer’s market, the opposite is true. A good realtor will not promise you anything as far as DOM, but they can give you a very good idea of what is typical. We recommend you take it with a grain of salt and realize that each property is different and any number of factors can contribute to a house not selling within the normal DOM. Whatever the DOM, you want to make sure to set a term limit with the realtor. The usual number is six months, but it could be shorter if you think the agent should sell your home more quickly.
How much do you want to pay the realtor? How about the buyer’s agent? – The industry standard remains at 6%, but this is negotiable since laws do not let the industry set one price. Many brokerages today will also offer flat rate figures, which saves you money, but you need to be careful that they don’t cut back on their services for the lower price. If you are thinking 6% is too much, we would argue that 6% is actually a bargain in most circumstances as you are actually paying the agent to advertise your listings, work with buyers, negotiate for you and manage the whole process. You also have to realize that you are paying not only your agent, but the agent who brings you the buyer, who usually receives 3% for their efforts. You also have to remember that each agent has a split with their broker and Uncle Same wants his cut. The amount of money your listing agent actually gets to keep is not as much as it might seem.
Do you have any Improvements and/or Accessories you don’t want to sell with the house? – Accessories and improvements can be excluded from the sell of the property. Improvements are items that have been affixed to the property in some fashion like a television mount or a water softener system. Accessories can be anything that has been affixed to the property in a temporary manner like drapes and curtains. You need to sit down and take an inventory of the items that you want to go with you to your new house and let the buyers know that you are excluding them from the sell.
How much of a protection period do you want to give your realtor? – Realtors will have a term limits on selling your house. Like it was written before, most agents get six months to sell a property. If during the last month of the listing, the realtor brings you two buyers who eventually execute a contract with you, but don’t close until after the term of the listing agreement has expired, your realtor will ask you to give him a certain number of days to bring this buyer to closure. We always put 60 days protection period on our listing agreements. In this way, if we bring the seller a buyer and then they end up listing it with another agent after the term expires, we can still get credit for bringing the buyer to the seller. The realtor will have to claim these buyers with you at the end of the listing term.
Will I be willing to reimburse the realtor for any expenses? – When you are selling your home, it is important to put the property in the best light for the buyers. Realtors will often arrange for these upkeep services themselves. Most realtors will ask for reimbursement of these services from the seller. Some realtors will also ask for reimbursement of any advertising costs outside the MLS. It is up to you to decide what you are willing to reimburse the realtor for doing these arrangements for you.
Do I want to advertise my house online via the MLS? Other online sources? – Why wouldn’t you? With over 95% of buyers beginning their house hunt online, it would be foolish not to do so. However, we have to warn you that it can be a bit invasive to your privacy to see pictures of your home all over the internet. If a seller wants to keep a degree of privacy, then they would option out of this part of the selling process (but we don’t recommend it!).
How do I want to handle showings of my house? – In order for buyers to get a good idea about whether they want to buy your house, you will give them access through showings. These showings are usually coordinated by a scheduling service that will field request for showings from buyers agents. Sellers get a message from the scheduling company that a buyer wants to see your home at a certain date and time. You as the seller would need to approve this showing request. You do have the option of not having to approve it, but we don’t recommend this if you are still living in the house. You want time to get your home ready for showings so having advanced warning helps with this chore. Be sure to tell your realtor what schedule you want for showings as you have complete control on the times you will allow buyers into your home.
Will I allow my broker to allow another agent from his company to bring me a buyer? – When listing your house, your realtor will work for a brokerage. What happens if an agent from the same brokerage brings a buyer to the table? In cases like this, you enter into an intermediary relationship with the broker. To aid in understanding, we give out a form called the Information about Brokerage Services. Basically, when you enter into a listing arrangement with the realtor, he is acting as an agent of his broker so you are really in a business relationship with the broker. When an agent from the same brokerage brings a buyer to a sell, the broker is technically representing both sides of the transaction. The IABS form can explain more fully how this plays out, but you have to agree to do this before it can be legally done.
What kind of financing will I take as payment for my house? – It depends on the condition of your house when listing your house and how quickly you want to sell it. Properties in poor condition do not qualify for governmental backed loans like FHA and VA loans. Even most conventional loans won’t approve mortgages for properties in bad disrepair. These properties require cash to purchase them. However, if you have taken care of your property to any extent, you most likely can accept any kind of financing. It should be noted that some sellers do not like the government loans due the extra cost and restrictions placed on the seller. Ask your mortgage professional or realtor about these restrictions and costs.
Do I have any liens, encumbrances or late payments I need to tell my realtor? – Be sure to tell your realtor if you have missed any mortgage payments, have any liens or encumbrances on your property. If you don’t tell them at the beginning, it will come to light when title starts to research ownership of the deed. Nothing keeps a sell from going through quicker than something wrong with a mortgage or title.
Do I need to ask my realtor to do something special with the listing? – When listing your house, you will have an opportunity to sign a listing agreement. Within this document, is a special considerations section where anything not covered in other parts of the agreement can be specified. Be sure to understand that listing your house is a legal transaction so the realtors cannot put anything in the section beyond material facts. If it requires language beyond the material facts, it is best to consult with an attorney.