Real estate transactions with or without a broker. The first thing to decide when you’re ready to sell your house is whether or not to use a broker. Realtors (members of the National Association of Realtors) and other licensed brokers will bring in many prospects, but their fee is usually 5 to 7 percent of the selling price. Saving that fee gives you the option of lowering the price for a faster sale or keeping the proceeds, but you’ll have to finance your own advertising and promotion.
A broker usually arranges an open house, provides a listing fact sheet, takes care of advertising, shows the house, and helps close the sale. Services and fees are negotiable. In some areas, discount brokers offer pared down services for a lower flat fee.
There are several ways to list your property. With an open listing you list your house with several brokers, but only the selling broker gets a commission. With an exclusive-agency listing, you pick one broker and pay a commission only if he or she sells the house (not if you do). With an exclusive right-to-sell listing, you pick one broker, but you lose the right to sell the house yourself without paying the broker a commission. Any broker you use may handle your house exclusively or may share the listing with other brokers, in a multiple listing, which guarantees the broker some commission no matter who sells the house.
Read any agreement carefully before you sign it and have your lawyer negotiate for any changes you would like. Listing agreements may run anywhere from 30 days to 6 months, and you will still owe a commission if the sale is made up to a certain amount of time after the expiration and if the buyer saw the house while listed. Both time periods are negotiable.
Whether or not you use a broker, you will need a real estate lawyer (or in some areas, an escrow company). Get one involved in the sale as soon as possible. Pricing your house Investigate the local market to see what comparable houses are selling for. Check recent sales records with the local tax assessor. Get advice from your broker, if you’re using one, or consider using a qualified appraiser-it will cost between $100 and $1,000.
Underpricing sacrifices profit, but overpricing can mean taking longer to sell or maybe not selling at all. You are much likelier to sell the house if the price is close to fair market value. Advertising and promotion
Prepare a listing sheet giving the age of the house, lot size, room sizes, taxes, and costs for fuel, utilities, and water. A photograph helps. Specify what comes with the house, such as carpets and appliances. Have about 200 copies of the listing sheet printed.
Place ads in several papers. In the ads, stress features that make your house appealing-“Walk to station,” “Secluded setting,” “Sale by owner.” Avoid confusing abbreviations. Preparing to show Look at the house for faults as if you were a buyer, then fix it up to look its best. Make sure the lawn and shrubbery are well manicured. Give the place a coat of fresh paint, if necessary. But don’t over invest in new additions or modernization that someone else won’t be willing to pay extra for. Avoid improvements that price the house above its neighbors.
When showing the house, provide such warm touches as flowers, a fire in the fireplace, or cookies in the oven. Don’t play music that might offend. Keep noisy children and dogs out of the way. If a broker is showing the house, smile, retreat, and say nothing unless asked. Never lie. You could be sued for concealing known defects.
Every real estate transaction is unique. You can start with a standard contract form, but have a lawyer amend it to your advantage. Always try to have a cap put on expenditure liabilities such as termite-damage repair. Make sure that the contract specifically mentions everything that will stay or go (verbal promises don’t count). Keep insurance in force until after the official closing of the sale. Don’t pay real estate commissions until the closing.
The buyer may ask you to help finance the purchase. Do so only if you’re prepared to take back the property or if the tax benefits of installment payments outweigh the benefits of collecting the full purchase price in cash and investing it for a high, trouble-free return.