<> PRICE: Price your home to sell for top dollar in your market.
<> PREPARE: Spend only what is necessary to prepare your home to sell fast.
<> SHOW: Present your home to make buyers fall in love at first sight.
<> NEGOTIATE: Counteroffer to get the best contract that fits your timetable.
We Want To Hear From You. Early And Often! Nothing informs our readers as much as stories from other Smarties … what they did right, stupid mistakes they can laugh about (now), and advice on tricky choices they had to make along the road of good intentions. Come back regularly to our website at http://www.SmartEssentials.com. Share your experience. Lurk over the amazing tips and slips other Smarties experienced. Join the community. Tell us how we can do better in the next edition. (We’re smart, but we’re not perfect. Yet.) We love your stories! And we know other Smarties do, too.
Now let’s cut to the chase. First stop: Find and hire a top-notch real estate professional.
Chapter 1 Roundup Smart Essentials ROADMAP :: What You Have Learned
>> 10 key steps to selling your home. >> Top 10 really big selling mistakes to avoid. >> Why we respect your time and skip the filler. >> What you’ll take away from this guide. >> How this SMART ESSENTIALS guide is organized. >> We want to hear from you.
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CHAPTER 2 :: TEAM
In this chapter, you’ll learn smart ways to:
1. Know what an agent can do for you.
2. Select a top-notch real estate agent to sell your home.
3. Decide if your situation fits being a For Sale By Owner.
HIRING A REAL ESTATE PROFESSIONAL
The major reason homeowners consider selling “by owner” is to save the cost of commissions/fees for professional representation — which can be thousands of dollars. Depending on your contract, you might pay a percentage of the final sale price (the most typical arrangement), or a flat fee, hourly rate or fee-per-service basis. Rates vary and are officially negotiable. (Getting a break is the secret.)
Agents Versus Brokers When you sign a contract for real estate representation, known as a “listing agreement,” you’re actually signing a contract with two parties — an agent and a broker (although your agent could also be the broker). Think of the “agent” as the salesperson for the broker, who operates the “brokerage company.” The listing agent is the individual who works with you personally to market your home.
By law, only a broker, who has passed a special exam, can receive a brokerage commission. When an agent/salesperson represents a broker in a transaction — rather than the broker working personally with the seller — the broker splits the brokerage commission with the salesperson.
Your listing agent and broker may not receive all of the commission/fees from the sale of your home, however. Actually, the commission is frequently split as many as four ways — among your listing agent and broker (the “listing side”) and among the agent and broker who bring the buyer to the contract (the “buying side”).
The agent who produces the buyer may be a “seller’s agent” (working for the seller) or a “buyer’s agent” (working for the buyer). In most listing agreements, sellers offer a commission or fees not only to their own listing agent and broker, but also to agents/brokers who produce a buyer for the home. Here’s where it gets hairy: Those “co-brokers” are actually working for the seller, too — unless the buyer has hired a buyer’s agent through a buyer’s representation contract.
A buyer’s agent is one who is under contract to represent the interests of the buyer. The fee or commission for a buyer’s agent may be paid by the seller, the buyer, or negotiated between buyer and seller. In most cases, the seller’s commission/fees are shared with the cooperating buyer’s agent and broker. Regardless of whether the buyer is found by a listing salesperson or a buyer’s agent, anyone with a real estate license is required to treat both the seller and the buyer honestly.
Essential Takeaway: Think about this: The seller’s commission/fee typically pays for the buyer’s agent services. That means if you are selling by-owner instead, to avoid paying a commission, then (1) agents working with buyers have no incentive to show your home for sale, and (2) their buyers may be shocked to discover they must pay their agent’s commission/fees if they purchase your by-owner home … when most of the other competing home sellers will pay those commission/fees. In a nutshell, many by-owner sellers end up saving only half the full commission/fees because they often end up paying the buyer’s agent and broker or they lower the price of their home to compensate for the buyer having to do so.
Although you may work personally with either a broker or a salesperson, we use the term “agent” interchangeably throughout this guide for simplicity.
What Your Realty Commission Buys The reason 90% of sellers use an agent, rather than go the for-sale-by-owner (FSBO; pronounced “Fisbo”) route, is that a full-service real estate agent provides services that most sellers simply can’t do by themselves:
<> Craft a marketing strategy targeted to your home and advise you on how best to prepare your home for sale.
<> Provide up-to-date and crucial local market information, including recent sales, current listings and various statistics, that you may have a hard time finding yourself.
<> Place your property in the Multiple Listing Service (MLS)^^, which exposes your home to all the buyers working with cooperating member brokers. This effectively puts every agent in town and beyond to work helping to sell your home.
^^Multiple Listing Service (MLS) A network that contains a database of all area homes on the market listed by members of the local MLS. All area members of the MLS have access to the regularly updated information.
<> Advertise your home through various media — syndicated to online portals and classifieds sites, newspapers, home-guide magazines, emails, websites, social media, direct mail, signage, broker open houses, etc.
<> Conduct open houses and home showings whether you’re at home or not, saving you hours of “minding the store.”
<> Provide pre-qualified buyers who know what they want and how much they can afford. Pre-screening prospects minimizes “sightseers” who have no intention of buying your home and protects you from the threat of “unwelcome” visitors.
<> Show your home to its best advantage. Buyers often shy away from asking homeowners questions, and homeowners are sometimes defensive about defects or are not forthcoming enough with essential details buyers want — or are too forthcoming with comments that become a disadvantage during negotiations. An agent can answer questions objectively and guide the buyer to a purchase.
<> Help you negotiate a satisfactory sale. As an experienced mediator, an agent acts as a buffer between the parties to a home sale, helping prevent negotiations from bogging down. Loads more on negotiating in Chapter 7 NEGOTIATE.
<> Lead both you and the buyer through the mortgage