In this artice you'll learn:
- The Role of Your Agent
- When to Contact an Agent
- How Long it Takes to Sell
- Pricing Your Home
- Putting Your Home's Best Foot Forward
- Investing in Repairs or Renovations
- Finding Buyers
- Closing a Sale
A full 90% of American homeowners hire a qualified agent to sell their homes. And no wonder—it’s a daunting task for an owner to price his/her house accurately, determine whether a buyer is qualified, create and pay for advertising, show the home to prospective buyers, understand the latest real estate regulations, be available whenever a prospective buyer wants to view the property, negotiate and prepare contracts, and coordinate the details of a closing.
So perhaps it’s no surprise that homes sold by real estate agents sell faster and easier—and for more money.
Real estate agents know how to sell homes. Successful sales balance four components: the market, price, condition of the house, and exposure.
Because agents know about market trends and the other houses in your neighborhood, they’re perfectly equipped to play up your home’s advantages and downplay disadvantages.
- Have access to people who are most likely to buy your home
- Are trained in areas like pre-qualifying potential buyers and negotiating with them
- Will list your property in the MLS so anyone worldwide can find your home
- Are always "on-call"—they work on the weekends, answer the phone at all hours, and will always being polite about it
We like to think good training and experience make the best agents. But the truth is, not every agent is right for every seller. And that's why we suggest you follow this simple formula to help you decide whether a particular agent will work well for you:
COMPETENCE + COMFORT = CONFIDENCE
- Competence: When you first meet with an agent, expect to see a portfolio of credentials, past achievements, sales volume and letters of recommendation. Look for evidence that his or her background is relevant to your needs—someone whose portfolio includes success with houses in your price range, preferably in your immediate neighborhood.
- Comfort: The importance of being comfortable with your agent as a person cannot be overstated. You're going to be dealing with this individual on a regular basis, maybe for months, during a time that can be emotionally trying for you and your family. Indeed, your agent may well become something of a family member, who shares in the tension, anticipation, frustration and ultimately the joy of selling your house.
It takes a unique combination of those two characteristics to inspire the confidence a homeowner needs to maintain peace of mind through the process of selling a house. It's something every Coldwell Banker agent strives for. "Just the kind of help you'd expect from a friend" is more than a slogan. It's our way of doing business.
If you’re looking for an agent, a good place to start is by talking to friends, neighbors, relatives—anyone whose recommendation you trust. Another way to find an agent well-suited to sell your house specifically is by responding to local advertising from agents—such as those "just sold" mailings you find in your mailbox from time to time. The very existence of such self-marketing efforts suggests that they may have more to offer you than the agent who picks up the phone when you call the local real estate office.
As soon as you decide to sell your home. There is always a buyer looking, and in real estate, the agent is your bridge to those buyers. Although the number of buyers remains relatively constant, they will act when a new property with high value comes up for sale.
Speed is key for both you and the buyer, and an agent delivers speed.
Peak selling seasons vary in different areas of the country, and weather has a lot to do with it. For example, in the Mid-Atlantic, late spring and early fall are the prime listing seasons in many areas because houses tend to "show" better in those months than they do in the heat of summer or the cold of winter. And of course, people like to do their house shopping when the weather is pleasant.
But keep in mind that there are also more houses on the market during the prime seasons, so you'll have more competition. So while there is seasonality in the real estate market, it's not something that should dominate your decision on when to sell.
Even if you're under no pressure to sell, waiting for particular market conditions is not likely to increase your profit potential. The reason is that while you are waiting for the market to improve, you continue to make mortgage payments, insurance payments, in some cases HOA payments, and home repairs. That increases the amount of money you have invested in your home while the price of your next home may also be increasing.
Average listing times vary from 14 to 90 days, dependent on a variety of factors your broker will fully describe to you.
Creating a perception of value and a sense of urgency will see the greatest number of showings when your property is first introduced to the marketplace. Buyers who look at your property typically are financially qualified who have been working with a Realtor® already, have seen the other properties in the area, and are knowledgeable about market prices. They contacted agents months ago about properties they found, and they are now prepared to make offers when they see the right home at the right price.
By the time we enter the third week of marketing, the showings will have dropped off. From this point, most buyers who are learning about your property are just entering the market and will not be ready to make decisions for several months. They still have to arrange their financing and have not seen enough properties to be educated about the market.
So, your best opportunity is during the initial exposure to the market, because with the largest pool of buyers during that time, properties sell at their highest price.
Buyers pay attention to how long a house has been on the market. Let’s look at what buyers may be thinking at different days on market.
- With the house on the market for only two days, it becomes a "must see"
- As the days go on, buyers think the seller is anxious and should be willing to negotiate
- When the property is on longer, they wonder why it hasn’t sold and think something might be wrong with it
So buyer perceptions of value decrease with every day a house is on the market. That is another reason a property sells at its highest price in the first days of exposure to the market.
Your home is only worth what a buyer in the current market is willing to pay. In other words, fair market value.
Simply put, the fair market value of a house is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase. It is usually not the asking price.
You will know if your home is priced right by the number of showings.
- If a property is overpriced, the buyer pool and agents notice the property when it hits the market, but there is not a perception of value. There are no showings and no offers.
- If it is priced close to buyers’ perception of current value, there may be some showings, and maybe one offer below the asking price. Without competition and the sense of urgency, there is no need for a single buyer to offer the asking price, and a low offer is usually the result.
- If the property is priced a little below buyers’ perception of value, it becomes a hot property. Buyers now perceive high value. The property receives significant showings and possibly multiple offers that could start a bidding war for the property. By setting the price a little below the buyers’ perceived value, the seller has simulated the conditions found in an appreciating market and ultimately, sells the property quicker and possibly for higher than the asking price.
You are hiring an agent to watch the market and determine how your property stands out against the competition. It is the broker’s job to make sure you have positioned your property at a price to drive significant traffic to it to create the best climate for more than one buyer to make an offer. That’s why they recommend asking prices based on real transactions—recent listings and selling prices of houses in your neighborhood.
If you want more help on accurately pricing your home, you can also:
- Order an appraisal to price your home
- Ask for feedback from people who walk through your home; this will help you see your house as a commodity that has positive and negative selling points
- Ask a neighbor, friend or relative to point out advantages or disadvantages about your house that you hadn't thought abouts
Finally, most buyers leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and seller. While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a good agent can be of great assistance to you during the negotiating process. As negotiations proceed -- whether in writing, face-to-face, or by phone -- your agent should inform you of your options in responding to each offer from the buyer. Even without such advice, a cool, rational manner in what is often a long, emotionally charged process will usually net you a significantly higher price.
To get an estimate of fair market value plus details on recently sold homes, ask a Coldwell Banker sales associate for a Competitive Market Analysis (CMA) of your house. This service is free of any charge, without obligation.
Unless your house is nearly new, chances are you'll want to do some work to get it ready to market. The type and amount of work depends largely on the price you're asking, the time you have to sell, and of course, the present condition of the house.
In general—stick to light, neutral colors. Keep the yard and rooms free of clutter or kids' toys. Remember, when a buyer looks at a house, he or she is trying to imagine living there. Create as clean a canvas as possible.
Here are a few low-cost ways to achieve that:
- "Curb appeal" is the common real estate term for everything prospective buyers can see from the street that might make them want to come in and take a look. Keep two key words in mind: neat and neutral. New paint, an immaculate lawn, picture-perfect shrubbery, a newly sealed driveway, potted plants at the front door—put them all together, and drive-by shoppers will probably want to see the rest of the house.
- People may look behind closet and crawl space doors, as well as those to the bedrooms and bathrooms. So get rid of all the clutter; have that garage sale and haul away the leftovers.
- After you've cleaned, try to correct any cosmetic flaws you've noticed. Paint rooms that need it, regrout tile walls and floors, remove or replace any worn-out carpets. Replace dated faucets, light fixtures and the handles and knobs on your kitchen drawers and cabinets.
- Clear as much from your walls, shelves and countertops as you can. Give your prospects plenty of room to dream.
Certain higher-cost home improvements have proved to add value and/or speed the sale of houses. These include:
- Adding central air conditioning to the heating system
- Building a deck or patio
- Finishing a basement
- Doing some kitchen remodeling (updating colors on cabinets, countertops, appliances, panels, etc.)
- Adding new floor and/or wall coverings, especially in bathrooms
Improvements that return less than what they cost are generally items that appeal to personal tastes, like adding fireplaces, wet bars, swimming pools, or converting the garage into an extra room.
You're unlikely to sell for more than 15% above the median price of other houses in the neighborhood, whether you do $1,000 worth of work or $50,000. That's why you might want to ask your broker’s opinion about the viability of recouping the cost of any major renovation before you start the work.
To view a complete list of people who can help you make smart updates to your home— especially for larger jobs involving mechanical systems (heating, electrical, plumbing) or local building codes—contact a licensed home-improvement company.
This is particularly important because if the buyer's inspection reveals major problems with your house's structure or mechanical systems, the buyer can negotiate to have them fixed properly. Sometimes, repairs may be required before the transfer of title takes place. This is especially true in sales that involve financing insured or guaranteed by the government (FHA/VA loans, for example).
You may have also heard about lawsuits involving sellers who failed to disclose major problems before the sale—like an addition to the house that wasn't built to code. Most states now maintain very specific disclosure laws that require sellers to disclose any pertinent information relative to the condition of the property. For example, most states require sellers to notify buyers about the presence of any lead-based paint. It is important for you to be knowledgeable about your state's disclosure laws.
These are just a few good reasons to retain a lawyer or sales associate who knows as much about the condition of your property as you do. It's also a good idea to get the buyer's written acknowledgment of any major problems when you accept their offer. A Coldwell Banker Home Protection Plan offers protection for you and your buyer, covering repair or replacement costs for breakdowns to most major systems and built-in appliances up to a year or more after the date of closing.
When you consider the returns—a quicker sale, a better chance of selling, and the peace of mind that comes with knowing 24-hour emergency service is always just a phone call away— it's hard to imagine a better investment.
Our agents will list your home in the Multiple Listing Service (MLS), a system that reaching millions of buyers around the world. The system also enables participating brokers to share commission on the sale of houses. For example, if you list your house with one broker and another broker actually sells it, he or she shares the commission. The advantage to you is clear: more brokers have an interest in selling your house.
Fewer than 5% of buyers actually purchase the first house they call an agent about. So our agents will design advertising to "find the buyer" using large-size fonts and easy-to-read layouts, eye-catching photographs and professionally written descriptions, and multiple channels—the Internet, newspapers, magazines, radio, TV, and direct mail.
As another valuable part of the marketing process, our agents offer open house to prospective buyers who want a low-pressure, "browsing" atmosphere. With that in mind, you shouldn't expect it to generate a sale, at least not directly. What you should look for is increased showings of your home after an open house, whether it be from calls to your broker for private showings or from the open house attendees returning with their agent.
(Agents often hold an open house for other agents shortly after a house is listed. This event, usually held mid-week when other real estate agents can give it their full attention, can be as important to your efforts as your listing in the local MLS. The more professionals who see your house, the more prospects you're likely to reach.)
You and your pets should definitely plan to be out of the house during any open house your agent has scheduled; the same goes for showings to prospective buyers. People often feel uncomfortable speaking candidly and asking questions in front of current owners. You want them to feel as free as possible to picture your house as their "dream home."
Keep in mind that when you do sell, you’ll owe your agent’s broker a commission. Perhaps the most important matter you negotiate at the time of listing your house with a broker is the duration of the listing contract. Terms vary, but listing agreements are seldom for less than three months or greater than one year. Some brokers offer homeowners an "out" if the agent isn’t performing or if they are unhappy with the services.
Good agents are also extremely helpful in the days immediately prior to the closing. They'll help you prepare by giving you a step-by-step preview of the entire process and what will be expected of you. And they'll make certain you bring all necessary documents and other information.
With you around the table when you close the sale of your home and hand over the keys will be the buyer, the buyer’s agent, and the broker who represents your agent. (You’re welcome to invite your agent, but his/her presence is not required by law). The lender and/or title companies also will be at the table.
Once all of the documents are signed, the home is sold. Congratulations!
We'll help you make the experience of selling your home as smooth and easy as possible. So even if you're not ready to list your home quite yet — if you simply have questions about the market in your area, price or mortgage trends, anything at all about real estate as it relates to you — just contact the Coldwell Banker office nearest you.