Sellers Tips

When conversing with real estate agents, you will often find that when they talk to you about buying real estate, they will refer to your purchase as a "home." Yet if you are selling property, they will often refer to it as a "house." There is a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation.

You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.

The first step in getting your home ready to sell is to "de-personalize" it.

The Exterior of the House

Most real estate advice tells you to work on the outside of the house first, but unless there is a major project involved, it is probably best to save it for last. There are two main reasons for this. First, the first steps in preparing the interior of the house are easier. They also help develop the proper mind set required for selling - beginning to think of your "home" as a marketable commodity. Second, the exterior is the most important.

A homebuyer・s first impression is based on his or her view of the house from the real estate agent・s car.  They call that first impression "curb appeal."

So take a walk across the street and take a good look at your house. Look at nearby houses, too, and see how yours compares.  Then it may be time to go to work.

Meeting With Realtors

So you・ve decided to sell your home and have a fairly good idea of what you think it is worth. Being a sensible home seller, you schedule appointments with three local listing agents who・ve been hanging stuff on your front doorknob for years. Each Realtor comes prepared with a "Competitive Market Analysis" on fancy paper and they each recommend a specific sales price.

Amazingly, a couple of the Realtors have come up with prices that are lower than you expected. Although they back up their recommendations with recent sales data of similar homes, you remain convinced your house is worth more.

When you interview the third agent・s figures, they are much more in line with your own anticipated value, or maybe even higher. Suddenly, you are a happy and excited home seller, already counting the money.

A Sales Practice Called "Buying a Listing"

If you・re like many people, you pick Realtor number three. This is an agent who seems willing to listen to your input and work with you. This is an agent that cares about putting the most money in your pocket. This is an agent that is willing to start out at your price and if you need to drop the price later, you can do that easily, right?

After all, everyone else does it!

The truth is that you may have just met an agent engaging in a questionable sales practice called "buying a listing."  He "bought" the listing by suggesting you might be able to get a higher sales price than the other agents recommended. Most likely, he is quite doubtful that your home will actually sell at that price. The intention from the beginning is to eventually talk you into lowering the price.

Why do some agents "buy" listings this way?

There are basically two reasons. A well-meaning and hard working agent can feel pressure from a homeowner who has an inflated perception of his home・s value. On the other hand, there are some agents who engage in this sales practice routinely.

Types of Listings

There are several different types of listing contracts, but very few of them are used. The "Exclusive Right to Sell" is the most common, but there is the "open listing," the "exclusive agency listing," and the "one-time show."

The "open listing" is mostly used by people trying to sell their home by owner who are also willing to work with real estate agents. Basically, it gives a real estate agent the right to bring buyers around to view your home. If their client buys your home, the agent earns a commission. There is nothing exclusive about an open listing and a home seller can give out such listings to every agent who comes around.

For that reason, no agent who accepts an open listing is going to market your home or put it in the Multiple Listing Service. If your home fits the criteria for one of their clients, and it is convenient, they may be willing to show it to their client.

That is all an "open listing" is good for.

A "one-time show" is similar to an open listing in many respects, as it is most often used by real estate agents who are showing a FSBO (for sale by owner) to one of their clients. The home seller signs the agreement, which identifies the potential buyer and guarantees the agent a commission should that buyer purchase the home. This prevents the buyer and seller from negotiating directly later and trying to avoid paying the agent・s commission.

As with an open listing, agents will not be spending money on marketing your home and it will not be placed in the Multiple Listing System.

In most areas there is a "customary" percentage that real estate agents and companies expect to earn as a commission.  The percentage varies from region to region, and depending upon whether it is residential real estate or commercial real estate.  However, just like anything else in real estate, this amount is negotiable. When completing the listing agreement, you and your agent will agree on the amount of the real estate commission.

The listing contract also specifies when the commission is earned. This is important and you should pay close attention:

If a ready, willing and able buyer presents an offer that meets your listing price and terms, the agent has effectively earned the commission at that time.  If a buyer presents an offer and you reach agreement on price and terms through counter-offers, the agent has also earned his or her commission.

Sellers occasionally get cold feet, just like buyers do.  If this is going to happen to you - make sure you consider it before you agree to terms with a buyer.

Once you reach terms with a buyer, you have incurred two contractual obligations.  One is to the buyer and the other is to your agent.  if you should decide to cancel just because you've changed your mind about moving -- the agent has earned their commission according to the terms of most contracts.  They will probably want to be paid.