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. An Investment. 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 as well as getting rid of any clutter.
Exclusive Right to Sell
Giving a real estate agent the "exclusive right to sell" your property does not mean that there will not be other agents involved. Your agent is the listing agent and part of his or her job is to market your home to other agents who work with buyers. Those agents will show your home to their clients. Regardless of who sells the home, even if you sell it yourself to a friend at work, your listing agent will earn a commission. An exclusive right to sell is the only type of listing an effective real estate agent will accept. This is because they have a reasonable expectation of earning back any money they spend on promoting and marketing your property.
Details of a Listing Contract
Obviously the name of the seller and the property address will be included in the listing contract. There are many other things that are included, too, and you should be aware of them.
Price and Terms of Sale
When setting the terms of sale, the main thing you are concerned with is the price. You should have a basic idea of what your home is worth by keeping track of other sales in the neighborhood. Plus, you have probably interviewed at least two real estate agents and they have given you their own ideas. Exercise great care in determining your asking price, making sure not to set it too high or too low. In addition to the price, you will disclose what personal property, if any, goes with the house when you sell it. Personal property is anything that is not attached or fixed to the home, such as washers, dryers, refrigerators, and so on. There may be some item that is considered "real property" that you do not intend to include in the sale. Real property is anything that is attached to the home. For example, you may have a chandelier that has been in your family for generations and you take it from home to home when you move. Since the chandelier is attached to the house, it is considered "real property" and a reasonable buyer would normally expect it to go with the house.
Lockboxes
A lockbox is a basically a padlock with a cavity inside where a key to your home can be placed. Only someone with an electronic key or the combination can get into the lockbox and access the key. Having a lockbox available at your house makes it easy for other agents to get access to your house. Without the lockbox, agents representing buyers would have to set appointments to meet you or your agent at the house so they could gain access and view the home. This would be inconvenient. Since almost every other house does have a lockbox available, if you do not allow one most agents will simply not show your property. You will miss out on lots of potential buyers. The listing contract specifies whether you allow a lockbox or not. It is locked into place, usually on the front door and cannot be removed. Only other agents can access the key that is located within the lockbox.
Real Estate Commissions
The real estate broker of the office you list with – Commissions are always negotiable and not set by the industry. The commission amount is normally a certain percent of the sales price or some companies will charge a set fee for their services. 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.Commissions are normally paid and due at closing unless other agreements are made.
Under-Pricing Sales Technique – Commission Issues
During a "hot market" there is a certain marketing technique which, though very effective, could cause trouble because of the way the contract is written. This is the practice of "under-pricing" the home. In a hot market, a home under-priced gets a lot of attention from other Realtors®, and they all start showing your home to their clients. Often, you get into a situation where multiple offers are presented and the price starts going up because of the frenzy. You end up selling the house above your asking price and perhaps above what you could have received if you had priced it traditionally. However, the technique does have the potential to backfire, so you should be sure to build safeguards in the listing agreement to prevent having to pay a commission "just in case." You see, the listing contract usually states that if an offer received that meets the terms presented in the contract (including price), the real estate agent has earned his or her commission – even if you decide not to sell. A reputable agent would never attempt to collect a commission if they were using the "under-pricing" technique and it backfired, even if they are technically entitled to one. For that reason, in the "additional terms" space on the listing contract, you should specify your true target price – when the agent has truly earned the commission.
Multiple Listing Service
Your listing contract should specify whether or not the house will be listed with the MLS (multiple listing service) and what commission will be offered to the broker who actually brings you an acceptable contract (Buyer’s agent, Transaction Coordinator or a Sub-Agent). It is definitely in your interest to have the house listed to reach as many agents as possible. Your sales force is automatically multiplied by however many agents are members of the local MLS. If your house is not listed, then you only have one agent working for you instead of many and depending upon their marketing plan, you may suffer a longer marketing time.
The Listing Agent - Marketing of Your Home
When you bought your home, you probably used the services of a real estate agent. You found that agent through a referral from a friend or family member, or through some sort of advertising or marketing. The agent helped you in many ways and eventually you found the house of your dreams, made an offer, closed the deal, and moved in. For whatever reason, now it is time to sell your home and you need a real estate agent again. Many home sellers, especially those selling their first home, tend to think all agents are similar to the one that helped them buy their home. Although real estate agents can (and do under Dual Agency Agreements) work with both buyers and sellers, most tend to concentrate more on one than the other. They “specialize”. When you bought your home, you probably worked with a "buyer’s agent" – an agent that works mostly with buyers. Because of the nature of real estate advertising and marketing, the public’s main image of the real estate profession is that of the selling agent. As a result, many homeowners expect their listing agent to do the same things that a selling agent does – find someone to buy their home. After all, they do the things you would expect if they were searching for buyers. A sign goes up in the front yard. Ads are placed in the local newspaper and real estate magazines. Your house is proudly displayed on the Internet. But this is only "surface" marketing. More important activity occurs behind the scenes. After the "for sale" sign goes up and flyers are printed, your agent’s main job is to market your home to other agents, not to homebuyers.
**You should know EXACTLY how your home will be marketed and be able to see examples of past marketing pieces from the agent.Know exactly who, what, when, and where your home will be marketed. Ineffective or poor marketing can and will effect your market position and time frames.
HINT: Type the agents name into your web browser.If they are effectively marketing on the internet, you should see numerous references return.Since over 70%-80% of today’s homebuyers begin their search on the internet, effective marketing online is a MUST!