10 Smart Questions To Ask Before You Sign If not answered in agents’ listing packages or presentations, be sure to drill into these details:
1. Can you give me references from your recent sellers?
2. What fee(s) will you charge, and how are they calculated?
3. If I buy my next home through you or through a referral from you, will you discount your listing commission?
4. Do you guarantee your performance, and can I cancel the listing at any time? What is your broker’s policy on cancelations?
5. What marketing budget will you invest in my listing? First month? Second 30 days? Following 30 days?
6. How are showing appointments handled? Through you? Me? Lockbox?
7. How often will I hear from you, and what type of feedback should I expect?
8. Will you personally handle contract negotiations, not just pass along buyers’ offers to me?
9. Why should I list with you (over the competition)?
10. Do you have any questions for me?
HOW TO KNOW WHEN TO GO FSBO
Selling a home by-owner — without being represented by a real estate professional — can be fraught with difficulties and disappointments. That’s not to say it can’t be done! If your situation involves one or more of the following factors, selling by-owner might save you a bundle of money in brokerage commissions:
<> You already have a qualified buyer lined up, or you know several people who have expressed interest in purchasing your home.
<> You have a hot property located in a seller’s market (rather than a buyer’s market),^^ or it’s in a very popular neighborhood where the inventory of homes for sale is low compared with high demand from buyers.
<> You have significant experience successfully selling previous homes, either by-owner or with representation.
<> You are (or have) a real estate attorney who knows the ins and outs of sales contracts and negotiations.
<> You are in no hurry to sell and can afford to wait for the right buyer to find you with the offer you want.
^^Seller’s Market, Buyer’s Market A seller’s market favors sellers because the inventory of homes is small relative to the number of would-be buyers. It’s a buyer’s market when there’s a large inventory of homes for sale compared with active home shoppers.
So how can you tell what type of market you’re in? Ask any agent. Or run the numbers yourself. Look at the Months Supply of Homes metric. In a nutshell, at the current pace of sales, how many months would it take to sell all the homes currently listed if no new listings came on the market?
Let’s say there’s a six-month supply of homes. That’s considered a balanced market, where neither buyers nor sellers have a particular advantage. During the housing boom, when housing supply in some markets fell to one or two months of inventory, competing buyers bid up prices that resulted in double-digit annual appreciation rates (“seller’s market”). When inventory exceeds a six-month supply of homes, however, buyers begin to have an advantage when negotiating with competing sellers, and downward pressure on prices usually occurs (“buyer’s market”).
Shades Of FSBO Selling by-owner used to mean taking on all aspects of the marketing and negotiation process independently — and being locked out of the MLS. No more. Today, you have more options.
Online services: Do a quick online search with the keywords “for sale by owner” and you’ll find a variety of sites that offer various types of real estate services for a fee, such as: > Listing your home on the MLS and other real estate sites. > Signage, fliers and advertising. > Help with sales-contract preparation. > Discounted agent representation. > Referrals to professionals involved in getting a contract to settlement. > Instructions, information and worksheets.
Remember, as a FSBO you’ll want to offer a buying-side commission/fee to a real estate agent/brokerage that brings in a buyer who goes to settlement. And be sure you understand what your fees for online services are buying and how long the services are available to you.
Local discounters: Smart Tip: Real estate commissions are negotiable. You may find a local full-service brokerage that is willing to offer you a discount from its normal commission rate if you also hire the brokerage to help you purchase your next home. Some brokers may lower their commission just to get your listing, with the intention of offering a smaller percentage split to the selling agent/broker (but which might actually discourage them from working to find a buyer for your home).
Make sure you understand all the particulars of any discounted service you’re considering. The true value of the service will be in the fine print.
Essential Takeaway: There is a reason why over a million people in the United States work as licensed real estate agents and join the National Association of REALTORS … and why less than 10% of all homes are sold by-owner. Especially in a tough market, more sellers turn to agents more often to assist with their sale. Would you do surgery on yourself? No. Selling by-owner may not be surgery, but real estate today is a complex, litigious transaction that most sellers need help navigating.
Chapter 2 Roundup Smart Essentials TEAM :: What You Have Learned
>> Know the difference between agents and brokers. >> Understand what your realty commission buys. >> Use smart strategies to find the right agent. >> Avoid costly mistakes when selecting a listing agent. >> Drill into 10 smart questions before you sign a listing agreement. >> How to know when to go FSBO.
******
CHAPTER 3 :: MONEY
In this chapter, you’ll learn smart ways to:
1. Nail down your home’s real market value.
2. Estimate net “walkaway cash” from your sale.
3. Find out how you can avoid capital gains taxes legally.
Despite various emotions that may be involved, selling a home is first and foremost a financial transaction — one of the biggest ones you are ever likely to make. That makes it important to crunch all the relevant numbers early in the process so you can make smart decisions as you negotiate with buyers and make plans for your next home.
Myth: Home sellers should only focus on getting the highest price for their home. Not! While sale price is an important consideration, the smart focus is on the bottom line — how much money you walk away with at settlement. A number of factors go into that equation, but we’ll start with finding out what your home is currently worth.
NAIL DOWN YOUR HOME’S REAL MARKET VALUE
Many sellers don’t quite get how their home’s value is determined by factors outside the home itself — the