Selling Your Home

Selling your home is a much easier process than might think, as long as you follow sound listing advice and get your home into marketable condition.

If you are an employee engaged in a Corporate Relocation Program - STOP. To remain in the program and receive preferential tax treatment on the sale of your home, you must follow strict guidelines. Refer to Home Disposition in the Corporate Assistance section for details. 

Selecting Real Estate Agent 

Always use a real estate agent when selling your home to take advantage of their knowledge of the marketplace and their ability to market your home through the Multiple Listing Service.

Marketing: interview two or three real estate agents in the immediate area by asking them how they would market your home for sale. There is no one correct answer due to the vast differences between neighborhoods across the country, other than ensuring that your home appears in at least one multiple listing service. It doesn’t matter what company the agent belongs to or if they are part of a Realtor network.

Full-time: the agent that you select should be licensed through a Broker and work full-time as a real estate agent. Do not use a part-time agent.

Familiarity: the agent that you select should have excellent knowledge of your neighborhood and have marketed homes in your neighborhood or condominium complex in the past. Find out their sale success rate.

Motivation: the agent that you select should exude drive, motivation and a passion for wanting to sell your home.

Commissions: the Broker fee that you pay is the commission that is received for the marketing and sale your home. The commission is only paid to the broker if the home ‘closes’ by selling it to another party.

The standard commission at most locations in the US is 6% of the sale price of the home. This commission is negotiable, although most agents are reluctant to do so. In simple terms, the listing real estate Broker will get half of the commission and the selling Broker gets the other half. Out of those cuts, each agent working for the Broker (your listing agent and the buyer’s selling agent) gets a percentage. You may be able to negotiate a half of percent or more off of the listing Broker’s commission if your real estate market is sluggish and you have a higher priced home. Never negotiate a lower selling agent commission.

Contracted marketing time: your agent will want to have exclusive rights to market your home as long as possible. A standard time frame is usually six months. We suggest contracting for only three months to give you the option of changing Brokers if you feel that they are not performing to your liking. You can always renew the contract if the agent is doing a good job.

FSBO (For Sale By Owner): we recommend against marketing your home on your own, without the assistance of a real estate agent. If your home does sell you will save money by not paying a real estate commission, but you will loose out on many potential buyers along the way, increasing your marketing time. Most buyers shy away from FSBO’s because the process is ‘not normal’ and agents will not bring their clients to your home because they do not get a commission on the sale.

If you do attempt to market your home on your own, use the assistance of an online marketing program and offer a 3% commission to any broker/agent that brings you a buyer.   

Listing Strategy 

The bottom line is this: set a desirable listing price for your home and make the place look good!

Condition: take pride in your home and complete needed repairs. Doing minor improvements (paint, etc) is good, but it’s not necessary to do full scale renovations. Spruce up the outside and keep the property well maintained. As a general rule, you want your home to look better than the best house on your street. This ‘curb appeal’ will get buyers in the door.

Brokers fees: setting the standard 6% commission (3% listing Broker and 3% selling Broker) on the sale price of your home is generally good enough for the average market. If you would like to generate more interest on your home, offer 1% more to the selling Broker. It will cost you a bit more but it is a proven method that works. We suggest limiting the time that the extra 1% is available to the first 30 days of marketing.

Emotion: take your emotion out of setting the listing price and when negotiating a sale. This is an objective business transaction and the end goal is to sell your home for the best possible price that your market can support. 

Analysis: your agent will need to do a lot of work to assess the value of your home. Be sure that he or she does a full Broker Price Opinion (BPO) or Market Value Analysis (MVA) that includes several recent sales of comparable ‘like’ homes in your neighborhood, several comparable homes that are currently listed for sale in your neighborhood, and a trend analysis to understand sale prices over the past year.

Staging: have your broker or a professional ‘Stager’ walk through your home and advise you on how to make your home look attractive, bright and larger inside. In general, staging your home will include de-cluttering and removing much of the furniture, adding additional lighting and even sometimes paint or carpet. In many cases people are shocked at what a professional stager can do with their home! 

Setting the price: set your listing price 1] below the other comparable home list prices in your neighborhood and 2] just above the recent comparable sale prices; that’s it! As long as your home looks good and is in good repair, you will have no problem selling, because you are cheaper and better than your competition. This tactic works in either a down or up market. 

For those of you holding on to your emotional ties or are trying to ‘get the best price’ by setting your list price too high – don’t do it. Consider this analogy; if the average price of bananas at your local market is 50 cents a pound and you try to sell bananas at your farm stand for 75 cents a pound, the likelihood of you selling them is low. When your bananas start to go brown and you lower your price to, say 50 or 40 cents, they still won’t sell because now they are old. Eventually you will have to reduce the price ridiculously low or throw them out. The same is true with your home sale. Price it right from the beginning when it is ripe on the market. It will sell.

Multiple Listing Service (MLS): be sure that your home is listed in your primary area’s MLS. If your home is near a county with another MLS or there is another MLS service available, make sure your broker has the ability to list it there as well.

Broker’s Open House: after your home is listed in the MLS, ensure that your agent hosts a Broker’s Open House. This is when agents (no buyers) take a walk through your home and assess if it is ‘good enough’ to bring their potential buyers to. It’s not necessary to host a ‘public’ open house, noting that they rarely produce buyers. 

Accommodation: be accommodating when agents want to ‘show’ your home to prospective buyers. Leave the house when they arrive and let them look through the home in peace. This will also help you avoid questions about the home that you may inadvertently answer incorrectly.

Agent follow-up: follow-up with your agent every week to find out agent and buyer comments about your home and take corrective action to their criticisms. 

Negotiating the Sale

Work closely with your real estate agent when negotiating the sale. He or she probably has good insight to what will transpire based on what the buyer’s agent has said. Be sure that the buyer’s are pre-qualified by a mortgage lender and can close the deal in a reasonably short period of time. Be cautious if the buyer still has a home listed on the market with no buyer.

Be open-minded: expect that you will have to negotiate your price lower to come to terms on the sale. Don’t become stubborn if the buyer won’t rise fully up to your conceived selling price. Realize that it’s usually better to accept a slightly lower price now than to remain on the market for a longer period of time. 

Negotiating repairs: the buyer’s home inspections will almost always note a few repairs that need to be done. Realize that you are responsible for them, regardless of who the buyer is. Always try to negotiate these repairs with the buyer in the form of cash; that is, provide a credit to the sale price of the home based on an estimated cost of repairs. This way the seller is responsible for the repairs after closing and you do not have to worry getting the work done yourself.

Next Steps

Your real estate agent will inform you of the next steps needed to convey the title of your home to the new buyers. You will need to obtain an attorney, if required by law, or a closing agent to process the transaction. Upon closing your mortgage will be paid off, commissions and closing fees will be subtracted, and a check for your remaining equity will be given to you. 

Short Sales and Foreclosures

A quick note about selling your home as a foreclosure or short sale. These types of transactions are highly specialized and should follow a different marketing scheme to be effective. Obtain a real estate agent that specializes in these types of transactions to make the overall process run more smoothly.

If you are selling your home purely because you cannot afford to live in it anymore, there are several government programs available to help lower or defer your mortgage payments while you get back on your feet. These programs may be able to keep you in your home and avoid a move. Begin by visiting the US Treasury HUD program for affordable living.

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The 3 Phases of a Successful Move

 

1] Properly research the new destination before you decide to move. Understand your financial and social impact to you, and download the free assessment form. Stressed Out by Moving

 

2] Learn about each step of the move process to get your move started in an organized way.

 

3] Manage transition and stress from the very beginning. Each family member needs to be fully engaged throughout the entire move to properly assimilate into their new environment.

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Move Acronyms

AMSA  American Moving & Storage Association

CWT   Cost per one hundred pounds

DOT    Department of Transportation

PBO    Packed By Owner

SIT     Storage In Transit

 


Real Estate Acronyms

BPO   Broker Price Opinion

CMA  Comparative Market Analysis

FDR   Formal Dining Room

MLS   Multiple Listing Service

TI      Tenant Improvement

 


Relocation Acronyms

CRP   Certified Relocation Professional

COLA Cost of Living Allowance

FMV   Fair Market Value

MVA   Market Value Analysis

PCS   Personal Change of Station (military)

 

 

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