Tips for Homesellers

Selling a home can be one of the most emotional experiences a person or family goes through. Not only is there a lot of work to prepare the house for being on the market, there is the constant upkeep involved of keeping the house in a clean, orderly condition for prospective buyers who would like to view your house. There is also the personal attachment that comes with selling a home that has been a person's primary residence for a large part of their life.

All of these factors come into play when selling a home, along with trying to determine an adequate price for the home. In some cases, the realization for some homesellers is that their home is not worth quite as much as they may think it is. Combining all of this with trying to coordinate the closing of a home sale with the closing date or a moving date to the seller's next property involves a lot of potentially stressful and timely decisions to be made.

Many home sellers are of the belief that is their Realtor's primary job to find a buyer for their home. In reality, that is only a small part of what a Realtor is hired to do for a home seller. With that being said, if a Realtor does a good job of what he or she has been hired to do, the home will sell, and the home sellers will walk away from the transaction happy and feeling that they received value from the transaction.

I consider there to be four steps to selling a home. I will summarize those four steps for you in detail:

1. STEP 1 - PREPARING THE HOME FOR SALE & ESTABLISHING A PRICE

   Often, the most important step in selling a home for the maximum price is the first step you take. It is critical to pay close attention to this step and not overlook any details.

   A seasoned Realtor should be able to go through your home with you and offer some suggestions on what things can be done to make your home more marketable and appealing to potential buyers. Some little items, such as making the front door easier to unlock or open and cleaning up the front steps and entryway, can be an inexpensive way to create a "positive first impression" for homebuyers.

   There can be numerous other suggestions a Realtor can make for home sellers. One of the more common suggestions is to clean up "clutter" around the house. This involves removing excess items in the home that prohibit a potential buyer from seeing the free-flowing openness of a home. Boxes, children's toys and excess furniture are the most common "clutter" items. Excess items on tables and shelving can also contribute to this situation.

   Some home sellers need extra convincing that their home is subject to clutter and needs some refinement before being put on the market. One of my favorite ways of accomplishing this is by taking home sellers out to preview other active listings in their neighborhood. Not only does this help sellers see the condition of other homes on the market, it also gives them an idea of what their competition will be when their house is on the market.

   This ties right into the second part of this step, which is establishing a sale price for the home. By going out and previewing other competitive listings on the market, home sellers are able to see how the condition of their property compares to others. In many cases, home sellers tend to feel their home is worth more than it really is. Previewing other homes is a way for home sellers to sometimes get a "reality check" and help them realize that we as Realtors want them to get as much as they can for their home, but at the same time, establish realistic expectations for them. I have walked away from many listing opportunities because I felt the sellers were unreasonable with the price they expected to get for their home.

   The second part of establishing a proper price is the Comparative Market Analysis (CMA). This is a report which will compare like homes to the subject property that are either active (currently on the market), pending (have received an offer but haven't closed yet) or sold and are located within the same neighborhood. At times it is necessary to go back six months to come up with enough "comps", but it should create a good snapshot for home sellers on what is happening in their neighborhood. Previewing the active listings adds to the value of this report. It is important to note that in a typical CMA, the average price of the active listings tends to be a little higher than the pending or sold listings. This is usually due to the fact that properties usually sell for a bit less than their list price and that active listings will sometimes have one or two price reductions before they bring in an offer.

2. STEP 2 - MARKETING YOUR HOME FOR SALE

   The second step of selling a home is usually the one that is most visible to the homeseller. It involves putting the home on the market and trying to give it as much exposure as possible. An important part of any listing agreement with a Realtor is the marketing plan and what that Realtor will do to give your property the exposure it needs to get it sold.

   The main source of exposure is the MLS (Multiple Listing Service). This is an internet database which all licensed Realtors have access to. It lists all of the homes for sale and contains a lot of the specifications of the house as well as up to six photographs of various parts of the home. Most homes that are sold today are sold through the MLS. Most people who are looking to buy a home use a Realtor to assist them and the MLS is the primary tool used by Realtors to help their clients find a home.

   The internet has become an effective tool for increasing exposure for homesellers. Today, there are numerous websites which allow homebuyers to go through and search for their dream home. Many of these sites are set up similar to MLS, although usually not as detailed. It is important for a listing agent to be able to offer internet exposure as well as MLS exposure. Today, many homebuyers search some of these websites on their own to screen prospective properties and forward the one's that interest them to their Realtor so he or she can set up showings of their selected properties. Without a good internet presence, a homeseller may be missing out on the fastest growing source of exposure for their home.

   There are many other forms of properly marketing a home for sale. An attractive "For Sale" yard sign with a box for brochures is an easy, inexpensive way for homesellers to advertise their home. This is even more effective if the home happens to be on a busy street. It is important that the sign be easy to read with the Realtor's contact information, at least a phone number, so interested parties can inquire to find out more information on the property and set up a showing, if they desire.

   Open houses are still a common part of most Realtor's marketing plan. These are usually seen as much more effective by homesellers than they are by Realtor's and in reality, have become less and less effective over the years. Although I'm not dismissing the positives that can come out of an open house (additional exposure, feedback from people walking through, etc.), less than 1% of all homes sell through an open house. With that said, I do feel some open houses should be a part of a home's marketing plan. There are benefits derived from doing them and the possibility of selling it is still there. It is important that the Realtor be prepared at these open houses with an adequate number of brochures to hand out to visitors, with their contact info clearly printed on these brochures. Even though you do get a lot of "nosey neighbors" at these open houses, you never know when one of their family members, friends or co-workers may be looking to move to the area.

   Print advertising is another part of a successful marketing plan. It is also important that these ads be used in correlation with open house schedules to increase their traffic. There are many forms of print advertising, from the two larger Twin Cities newspapers, to local "neighborhood" newspapers. Some of these local papers can be a very effective way of advertising your home. Many homebuyers use these papers on a regular basis as they tend to be more condensed and less cluttered than the larger papers.

   Although there are other forms of marketing a house that are used, a home that shows well and is priced properly will sell under normal circumstances through proper MLS placement and sufficient internet exposure. Although the other tools mentioned along with some others that aren't mentioned can help in the process, they are primarily used as lead generators for Realtors and rarely are the sole reason a home sells. Oftentimes, they are tools used by listing agents to justify a higher commission rate, when in reality, they do very little to help sell the home and usually end up being nothing but lead generators for that listing agent.

3. STEP 3 - NEGOTIATING THE OFFER

   This third steps starts when there is a valid purchase agreement written up for the property for sale. The basic part of this step is to make sure that the offer is written up correctly and documented on all of the necessary forms which are approved for a real estate transaction in the Sate of Minnesota. As I like to say, its up to the Realtors to make sure all of the I's are dotted and the t's are crossed. Most of the time, before this can be accomplished, there is a negotiation process between the buyer and the seller. The key to any negotiation is knowing your areas of leverage and weaknesses that you bring to the negotiation and prioritizing the importance of each, in relation to that of the buyer for your home. Depending upon the situation of the home seller, there can be many factors to this agreement that end up being more important than just the price offered for the house. The more flexible a home seller can be in some of these areas (closing date, possession timeframe, inspections, etc.) generally, the larger the dollar amount a seller can command for his/her home.

   This is an important job of a Realtor that often goes unnoticed in a transaction. Many home sellers have a strong personal attachment to their home, and rightfully so. Unfortunately, there are times where this attachment can get in the way of the realization that a reasonable offer has been put in front of them. An experienced Realtor will recognize this, and without being the "pushy" salesman, convince the seller that there is a reasonable offer to work with that is not worth jeopardizing. An average Realtor sells about 30 homes per year. It is their job to be involved in the negotiation process and a benefit for the home seller to draw upon the experience of a seasoned Realtor to know what is a reasonable offer and what isn't, based on the current market conditions.

   As important as all of the other steps in selling a home are, the ultimate level of trust and comfort with the Realtor you are working with is most important at this point in the transaction. There is a fine line between accepting or working with a legitimate offer for your home and jeopardizing an offer for your home by rejecting it or making a counteroffer. Although no Realtor can read the mind of others to know what will happen, an experienced and trustworthy Realtor will have a history of experiences to draw upon and have an idea, based on all of the circumstances involved, what is in the best interest of a home seller.

   Purchase agreements can also contain contingencies in them, which can involve a number of issues. The most common contingencies involve the buyers to conduct a home inspection or a contingency for the buyer's home to sell. Buyers of townhomes and condominiums also have a ten day contingency to review all of the by-laws and rules and regulations of the association or community the seller's unit is a part of. During any of these contingency periods or other potential contingencies that could be requested, there often are additional issues which need to be negotiated between both the buyer and the seller. Again, the benefit of an experienced Realtor can be critical to help home sellers look at the "big picture" involved with getting their home sold and not focus too much on any potential items that can arise during these contingency periods. Accomplishing this, while at the same time, maximizing the amount that a home seller takes away from the sale of their home, is the ultimate job of any Realtor.

4. STEP 4 - SALE TO CLOSE FACILITATION

   This is the part of the home sale process where, as I like to say, the "behind the scenes" activities take place. Many homes sell with very few snags in the period between the offer acceptance and the actual closing. In many cases, when these snags do occur, the home sellers are still oblivious to the situation, as should be the case. It is our job as Realtors to deal with some of the many issues that can arise during this process. After all, that is what we are being paid to do. A home seller should only be brought into the situation if it is absolutely necessary.

   Most of the glitches that occur during this process involve title defects, or the home seller not having clear title to the property. In many cases, this involves an item or two that may need to be cleared up with the county the home is in. In other cases, it can involve the need for additional documentation, such as copies of divorce decrees or the need for signatures of divorced spouses allowing for their release of their interest in the property.

   There are wide array of other possible items that might need to be cleared up during this part of the transaction. If the buyer of the home will be obtaining a mortgage to pay for it, the lender will require an appraisal of the property to determine its value and that it is worth what the buyer is paying for it. A home not appraising for what is sells for or an appraiser that requires repairs or work orders to be completed before closing are two common items that can occur in this process. Again, the experience and tools of a seasoned Realtor are invaluable when these circumstances arise.

   It's hard to summarize every glitch that can occur at this part of the transaction. But, it is not uncommon for glitches to occur. Many home sellers are never made aware of these glitches, as they are usually corrected by their Realtor and the closing company they are using. It is important to know, that for those who may be looking to sell their home on their own, the deal is not done once a purchase agreement is agreed to. This is not to scare away potential home sellers, just to make them aware that its possible for these situations to occur and with a good Realtor, most home sellers are never made aware of these unless its absolutely necessary.

5. CONCLUSION

   To summarize, there are a lot of items involved with selling your home. As I started out this section, I mentioned that many home sellers think the only job of their Realtor is that of finding a buyer for their house. And in some ways, that is true. Without a buyer, the home won't sell. The way I like to put it is that it is the Realtor's job to put the house in a position to succeed, by doing the homework to establish a reasonable price range, without setting unrealistic expectations for a home seller. From there, all of the other steps involved with selling a home should come into play.

   At Matson Real Estate & Mortgage, although we prefer to offer our home sellers traditional, full-service representation, we also understand that in today's market, some home sellers are looking to participate in the process themselves. For those home sellers, we offer some fee-for-service options, which will allow home sellers to pick and choose what parts of the process they would like assistance with and what parts they would like to do themselves. By clicking on the 'Service Options for Home Sellers' tab, you can find more information about these options.