18 Questions For Every Home Seller (Part 17) e-book

17.               How does the auction work?

Potential bidders are required to verify their identity and provide credit card information to guarantee a basic deposit; this discourages frivolous bids. Bidders are next briefed on what they are expected to do: thoroughly research the property and visit it if possible to verify its description and consider its value. They should review the preliminary title report to verify any that the title is clear of issues or at least as reported, and also to check zoning regulations and environmental credentials. The termite report and any disclosures mandatory in your state should also be reviewed.

An Oresy.com auction allows bid from the moment a property is listed until the closing second of the auction. When a bid is made, Oresy.com automatically confirms it with an email to the bidder and to you, the seller. Other potential buyers who have already bid will be notified that a higher bid as now been placed, prompting them for a response. In a typical online auction, bids are slow and low in the opening hours and even days, but bidding will intensify in the last day, hour, and quite likely even the last moments.

Important note: if a bid is placed at the last moment, the auction will be automatically extended by a few minutes to allow other bidders the opportunity to respond to the bid.

At the end of the auction, the system congratulates the winning bidder by email, and informs you, the seller, of the winning bid. Other bidders are notified that another bidder has won the auction.

Contact the winning bidder immediately to congratulate them and to arrange a meeting to sign the Purchase Agreement and to collect the earnest money deposit. The earnest money deposit should be in the form of a cashier’s check. If the high bidder is out of the area, and it is not possible to meet that day, you should email or fax the purchase agreement to the buyer and have the buyer return a signed paper copy, along with a cashier’s check for the earnest money deposit, within 72 hours.

The deposit should be made out to the escrow company; once the purchase agreement has been signed, the escrow process begins.

George Avram

Broker/Owner

Continental Realty, Inc.

16 Crow Canyon Court Suite 100

San Ramon CA 94583

925-548-5461

www.24by7bid.com

DRE# 01422589

18 Questions For Every Home Seller (Part 16) e-book

16.            What should I do after the sale?

Taxes

Since 1997, individual home sellers in the United States can hold on to $250,000 in profit free of Federal tax. Couples can hold on to $500,000. The requirements are simple: the seller or sellers must have resided in the home for the last two years and the sellers cannot have employed the same exemption in the last two years.

File the form 1099-S to detail the transaction, then calculate capital gains and losses based on the “cost basis” of your sale. This means tallying expenses associated with the transaction. Did you run an ad in the paper offering your home for sale? Did you pay excrow or title fees as the seller? Consult a local tax accountant to understand which other expenses are currently allowed in your cost basis calculation; you will also want to ask about applicable local and state tax codes for such profits.

Closing papers

As we’ve mentioned, you are advised to work with a local closing agent to complete your transaction. No general book can detail a complete checklist of to-do items, which vary substantially by state.  

Oresy.com

Traditional sales online have the advantage of using web marketing techniques to augment the familiar sales process of price - advertise - show - wait for offers. The downsides, as we know, are significant costs (including compensation for brokers and agents that is rarely proportional to their contributions) and an open-ended sales period. Auction-based sales are unfamiliar to many sellers, and can also be very costly given the steep up to 10% fee charged by most auction services. The upside of auction-based sales: accelerated transactions rather than open-ended waiting for offers, the sense of urgency inherent in the process that drives buyers to make competitive bids, and a variety of auction types.

Oresy.com allows you to leverage both traditional and auction-based options while minimizing your cost of doing business. The site’s traditional listings are free and auction services are far cheaper than other major auction options.

So are you ready to save thousands in fees while nabbing an optimal price for your property and selling it faster? That’s our whole sales pitch, because as long-time professionals in online systems and real estate, it has been clear for some time that homeowners could us an open portal to avoid middlemen and connect with serious buyers just as many do when selling a car themselves.

But real estate is a bit more complicated than Buicks: inspections, tax issues, and complex financing are just a few of the barriers to going it alone when selling a property. So we created the “Online Real Estate SYstem, or Oresy.com, to streamline the process of traditional and auction-based transactions. We offer discounted professional services if and when you need them.

In the pages that follow, we’ll outline the selling options and the steps you’ll need to take online. Our service supports both strictly FSBO (“For Sale By Owner”) folks who take over most of the duties of a listing and selling broker, as well as those who don’t want to hire a pricey broker but need help with some aspects of the sale.

Traditional listings on Oresy.com

Registered users can post property listings for free on the site. You will enter the address, specify square footage, number of bedrooms and baths, and age of the property. Also enter a description complete with highlights and upload photos.

Specify dates for upcoming open house events and specify an asking price; keep in mind that because this is a traditional sale listing, prospective buyers will make offers at, above, or below this price.

You’re done when you click “Save & Checkout” but you can update the listing with new information at any time. Of course this is really just the beginning; once the listing “goes live” you are strongly advised to market the property elsewhere both online and off. And you can go back and enhance the Oresy.com listing at any time -- unlike many services it is yours to modify at any time.

Still wondering if you have pulled out all the stops to market your property? Oresy.com charges a nominal fee to assist with your online marketing efforts: we can create and post YouTube videos, optimize search results for your listing, and expose your property to potential buyers worldwide.

What to look for in an online auction provider

Of course every online auctioneer notifies you when you’ve placed a bid, been outbid by another buyer, or won an auction. It should also notify you if you didn’t win an auction, and provide the complete bidding history for review. But Oresy.com believes real estate auctions online have several special requirements:

●     The extension of the auction by a few minutes if a bidder drops a last-second high bid so that all bidders can place their final bids. In other words, nobody can “steal” a house by topping the current bid by a dollar. For the seller, this means you will realize a higher price; for buyers, this discourages “gaming the system”.

●     Once a bidder has placed a bid in an auction, the system must notify them as higher bids are placed and provide an opportunity to outbid the current highest bid. Since most buyers are away from their browser for much of the auction, this helps keep bids flowing so that the maximal value of the property can be reached by the bidders.

●     Automated bidding. In other words, you can bid $200,000 to place the highest bid, but you can also specify a maximum bid that’s even higher. If you enter $250,000 as your maximum and nobody outbids your offer of $200,000, you win at that amount. If another bidder offers $210,000, a slightly higher bid will be placed on your behalf. This continues until another bidder offers more than your maximum or you have won the auction.

●     The process of creating a property listing must be self-explanatory, including the posting of an unlimited number documents and multimedia files, such as photographs, reports, and disclosures. The multimedia is crucial marketing: it’s based on these that prospective buyers will decide to visit the property in person before the auction.

Despite these differences, listing process for auction-based sales is similar to traditional listings. in many way. You prepare the property for auction, document it with photos, and describe it in your listing just as if you were preparing for a traditional sale. Next, select one of the three “auction types” which include absolute, minimum bid, and reserve. Each has its advantages:

Absolute Auction

Two huge benefits from this auction type: it will generate the strongest response from the marketplace, and the property will definitely be sold. Anyone who has used ebay.com is familiar with the absolute model: bidders from all over have the opportunity to place bids on the property within a set frame of time. At the end of that time, the house will be sold at the winning price. Bidding starts at zero and, theoretically, the property could sell for $1 since the winning buyer is contractually obligated to buy the property for the final price and the seller is obligated to sell at the winning price. In practice, as seller you would be unlikely employ this method unless you were certain that multiple buyers were ready to make reasonable bids.

Minimum bid

This type of auction is very popular for real estate auctions since it provides a baseline minimum that bidders must match or beat before their bid can be accepted. Of course this means response may be less enthusiastic than for an “absolute” auction, and there is no guarantee that the minimum bid will be met and that, therefore, the property will sell. So if you are serious about selling, set a low minimum bid; advertise this low-ball prices wherever you list your Open House and you are sure to attract many to view the potential bargain.

Reserve

Want to keep your options open and rethink whether you wish to close the deal once the auction is over? Consider this auction type. It is more difficult to entice bidders since they know that winning the auction at a bargain price will probably result in the seller refusing to sell. You might steer more interest towards your reserve auction with a low starting bid -- bidders may access public records on the property you’re selling and see how much is owed on this property; start bidding at or just above that amount and potential buyers will realize you actually may sell at this price. (Of course, the property should qualify for an auction sale, which means that the property should have equity 25-30%, allowing the starting bid to be 25-30% below the market value.)

Setting auction dates

When setting the auction dates, keep in mind the following for residential single-family homes and condos:

●     Give yourself sufficient time to prepare for and advertise the first preview (open house), typically 7-10 days. If you start advertising the property only two or three days before, you are unlikely to attract a sizable pool of potential buyers and, therefore, a less competitive number of bidders.

●     Some properties require just one or two open houses to generate a sufficient pool of bidders, while others may require three or more. The relative desirability of the property and local level of demand are the determining factors. Rural properties, for example, may require several preview events, while suburban properties rarely require more than two. More showings is not always better; dragging out the open house marketing process may cause potential bidders to lose interest.

●     Experience shows that the best time to end an auction is a day or two after the last open house. I you have only one preview event, market the property for seven to 12 days and finish the auction on the 14th day. This is the minimum recommended marketing time for an auction.

●     If you have two preview events, allow seven to 10 days before the first preview to market the property and then another seven days to market for the second event. Again, end the auction a day or two after the last event.

●     Land, agricultural, commercial, and industrial properties usually take longer to market. Allow at least 30 days; many such properties will require 60 days or more.

●     Of course every property and every market is unique. The above guidelines have worked well for many sellers, but of course it’s up to you to judge your circumstances.

●     The best days for an auction preview are when most potential buyers have time to attend: weekends from 9 AM to 1 PM or from 1 PM to 5 PM. During these hours, you’ll draw “street traffic”who see your signage while driving by in addition to those who’ve read about your open house in advance.

●     If you sell land rather than a built property, you won’t need formal open houses by work with interested parties to show the property on request.

George Avram

Broker/Owner

Continental Realty, Inc.

16 Crow Canyon Court Suite 100

San Ramon CA 94583

925-548-5461

www.24by7bid.com

DRE# 01422589

18 Questions For Every Home Seller (Part-15) e-book

15.            How do I close the transaction?

Hire a closing agent

Non-professionals will generally need help with the final stage of the real estate deal. Laws vary greatly in different places about what is required to complete such deals. Find a lending institution, lawyer, or escrow or title insurance company before a single buyer bids on your property. Your closing agent will gather necessary information, including buyer qualification, to certify the validity of your transaction and, working with the buyer’s agent, will wrap up the contracts, title searches and insurance, and other details that will finally allow them to determine the net due to you, the buyer, at the end of the transaction. 

18 Questions For Every Home Seller (Part 14) e-book

14.       Contingencies: what, why and when?

A contingency exists as a way for the buyer to exit a deal or to reopen negotiations. There are two common types of contingencies: those relating to financing and those relating to the physical condition of the property. Whatever the type, for you the seller, contingencies mean uncertainty.

Financing contingencies

Your deal is conditioned upon a lender or other interested party supplying financing for the deal under certain terms. Since even pre-qualified buyers have yet to sign a loan deal, they may insist on, for example, an interest rate contingency. If for any reason they are denied a loan below a certain maximum, they are allowed to pull out of the deal. All-cash buyers are the only buyers likely to waive financial contingencies.

Inspection contingencies

It's perfectly reasonable for a buyer who loves your property to make an offer quickly, before a definitive inspection has been made. In this case, the offer should allow the price to be renegotiated (or the deal to be cancelled outright) if an inspection turns up an unexpected issue.

Keep negotiations calm

If you find yourself (or your agent) getting frequently upset during negotiations, making accusations of deception, or otherwise losing your cool during negotiations, it may be a sign that you haven't done your homework or need to find a new agent. Think cool, keep calm and collected, and remember that a sense of humor is your best defense in a heated negotiation. Ultimately it’s just a business transaction and any posturing or mindgames are intended to push you to act irrationally. Don’t do it.

A very low offer isn’t an insult, it’s a sign of interest. Offers and counter-offers are just positions, a possibility put on the table. For your position to be accepted as the actual value of the property, you will have to make your case, answer the buyer's concerns, and then simply say nothing more. A little silence (rather than airing your frustration or nervousness) puts the ball back in the buyer's court.

It's always negotiable

Every offer you see can be modified to make it a little better. Don’t just say yes or no, ask yourself what would make a bad offer acceptable and what would make an acceptable one great. Then ask! It doesn’t hurt to ask, so the saying goes, in a formal counteroffer or conversationally if you’re looking for a small adjustment.

Decide in advance what terms are most important to you so you can be flexible elsewhere. In other words, if you need to close by a particular date, you may need to offer a price adjustment or adjust another term important to the buyer.

Read the terms, re-read the terms, and read them again

You can be sure that a buyer has been painstaking in prepare an offer; be twice as careful when reading it. Consider each terms of each offer, not just the price. For example, will the down payment suffice? Is the buyer pre-approved or at least pre-qualified? Are major contingencies (discussed above) required? Remember that selling a house is a bit like buying a car: calculate total cost, not just the price in the window.

George Avram

Broker/Owner

Continental Realty, Inc.

16 Crow Canyon Court Suite 100

San Ramon CA 94583

925-548-5461

www.24by7bid.com

DRE# 01422589

18 Questions For Every Home Seller (Part 13) e-book

13.       What's in a good offer?

Offers are absolutely not just about the price. Before you "ratify" the offer (sign on the bottom line to turn the offer into a contract), consider a few indicators of good offers.

If you don’t have a good agent, it helps to have an understanding of current real estate loan standards, such as interest rates, fees, and financing timelines to confirm that the offer's financing is not overly optimistic. Bonus points if the buyer is pre-approved (a lender has confirmed buyer's income, employment, etc.) since this means you're dealing with someone serious about purchasing rather than someone simply testing the waters.

A good offer is fairly simple: I want to pay you X dollars, this is how I'll pay you, and I want to finish this by date Y. But most offers contain at least one contingency clause that predicate the transaction on certain conditions being met. Don't be put off by this; the good news is that it means your buyer has at least given some careful consideration to the offer.

George Avram

Broker/Owner

Continental Realty, Inc.

16 Crow Canyon Court Suite 100

San Ramon CA 94583

925-548-5461

www.24by7bid.com

DRE# 01422589

18 Questions For Every Home Seller (Part 12) e-book

12.            What is the traditional selling process?

Strategy for traditional selling

The problem

Americans rarely negotiate transactions in everyday life, but the traditional method of selling real estate demands a negotiated transaction. Worse, sellers typically receive most of their advice from the brokers and agents who stand to benefit most from a quick sale. This can result in undervalued properties that sell faster but not necessarily at the best price.

Given the high financial stakes at risk here, it's all too easy to fall into the trap of overvaluing your home or, in a panic, slashing the price to make a quick sale. The fundamental issue, then, is confidence in establishing the market value for your home, an issue we've already discussed at length. (Of course this difficulty in traditional sales methods reminds us that the primary appeal of auction-based selling approaches is avoiding this problem -- the process itself establishes the market value and the seller's efforts focus on up-front marketing rather than price negotiation.)

Minimize the pressure

If you expect to be a "must sell now" seller sometime soon, don't hesitate before placing the property on the market to lay the groundwork for a successful sale. This means performing inspections, making repairs, and working to understand the  market value of the home as early as possible. This will greatly reduce the time between your placing the home on the market and your first Open House, maximizing the time you have to receive offers and realize as much of the market value as possible.

Maximize your peace of mind

Keep discussions formal, face-to-face, and well documented. Assuming you’re using an agent, this means not letting your agent conduct any significant discussions and negotiations without your presence. Keep “memos for record” on who, what when, where and why every time you talk to an interested buyer. Track every query and request you and the potential buyer make.

So you received your first offer

Getting an offer means a potential buyer has given you a real estate purchase contract. These vary by state but at a minimum these should include purchase price, intended close of escrow, deposit and financing details, appraisal contingencies, expected closing and occupancy dates.

George Avram

Broker/Owner

Continental Realty, Inc.

16 Crow Canyon Court Suite 100

San Ramon CA 94583

925-548-5461

www.24by7bid.com

DRE# 01422589

18 Questions For Every Home Seller (Part 11) e-book

11.     How do I prep my house to sell?

Getting started

There’s no reason to give agents or, especially, potential buyers a negative first impression of your house. So before you place the property on the market and before you even consult your second-cousin who’s finishing up his real estate license, work on the big-picture issues for any home seller.

Inspections and disclosures

Many states require an independent inspector to report on the condition of a home before it can be sold. If you live in an area with this is not required, schedule an inspection anyway. Unless you are a builder or architect yourself, it’s impossible for you to provide full disclosure of the material condition of your property without this report. You will learn what issues require immediate repair and which should be addressed over the long term.  Test a septic system with a percolation test. Remember that these reports are to be provided to potential buyers and are for your benefit as much as theirs because any undisclosed problems with your house could turn into a lawsuit down the road.

Roleplaying an Open House

Once you know what must be fixed before the house can be sold, we need to understand what should be fixed to maximize the property’s appeal. In short, it’s time for a little role-playing. Ask a savvy friend to take the role of a prospective buyer (or take the part yourself). The “buyer” should prep a clipboard for the sake of the visit. On paper, make three columns: the good, the bad, and the question mark.

How to play the role: Before you “visit” think like a real buyer. Research online the crime and weather patterns for your area. What questions would this lead you to as a buyer? For example, in an earthquake-prone area you should be able to speak to questions about past earthquakes, distance from the fault line, and so on. Next, imagine you’re a parent. Where would your kids go to school in this area? What are the private school options? Parks? Libraries?

And what questions would you ask about immediate neighbors? Have they been there long? Are they retirees or college kids or young families? Are there any obvious concerns such as chronic noise or poor air quality? If the property is a condo, what would you need to know about the homeowners’ association?

As buyer, drive through the neighborhood like you’ve never seen it before. What do you think of the neighborhood? Arriving at the property, what’s the first thing you notice? How does the property compare to its neighbors? From the moment you step on the property, write down everything you like or dislike about what you see? What questions do you have about what you see? Stop in every room -- paying particular attention to key spaces like the kitchen and major bedrooms. At this point, you may not have cleared out the clutter from your spaces so concentrate on the general space, the condition of amenities such as the shower and perhaps a fireplace, the proximity of neighbors, the condition of the yard and what you might be able to do with it after you live there.

For example, in a bathroom you might love the large bath but hate the slightly leaky sink and old tile. When you’re done with your tour, get at least one other friend to repeat the process if possible. In the end, you’ll have a list of great features to emphasize to prospective buyers, a list of problems to can consider repairing, and a list of questions you’ll need to be prepared to answer. You will also have a more objective perspective on the property you need to sell, which may make your understanding of your home’s value more realistic.

Red flags

Role playing the informed home shopper, you are on the lookout for any sort of dealbreaker. Some examples of the worst: mold in the attic or other dark spaces, plants growing in the gutters, roofs with missing sections or signs of buckling, rodent droppings anywhere, an apparent lack of ventilation in bathrooms, and flood stains on the ceiling.

An example of a lesser problem that might not be dealbreaker but may lead to serious haggling: an outdated furnace that will be expensive to be replaced. Other problems, like terrain that slopes down into the house rather than away from it may scare away buyers because it suggests a leaky basement, but there isn’t much you can do about that when showing the property.

Consider what questions a buyer might ask about the age of your home. If the property has been reworked extensively, some buyers may be nervous about the consistency of quality materials and craftsmanship throughout the structure. And when was the building constructed? Very old homes may get questions about lead pipes while anything built before the 1980s may draw questions about asbestos.

Repairs

If you’ve role-played an Open House inspection, you may have a substantial list of fix-it projects: a wobbly banister, dead light fixtures, missing fencepost, and so on. Likely, you’ll need some help. If you aren’t up doing all the carpentry and plumbing yourself, consider asking friend, your family, a real estate pro, or even the chamber of commerce to recommend a contractor who specializes in home sales. He’ll likely have further suggestions of inexpensive repairs, enhancements or additions you can make to increase the value (and especially the perceived value) of your property.

Fix the little things that will be noticed, like faulty wiring in the electrical outlets, and the big repairs that are required to allow the sale. On the other hand, because it’s not possible to second-guess the taste of your property’s next owner, it’s best to avoid pricey projects that are not strictly necessary. You want to make money on the sale of your home, so why spend $5,000 to install new green tile that may turn off potential buyers? Better to cover the cost of the repair by granting a credit in escrow for this amount. On the other hand, a merely cosmetic flaw that suggests a serious problem, such as major mold damage, is well worth addressing fully since it may turn off all potential buyers.

Safety first

It’s not obvious while you’re working so hard to sell your home, but the worst case scenario when potential buyers visit your property is not that they won’t make an offer. In this litigious world, your first concern should be that no property shoppers injure themselves in your home where you are liable. This is especially likely if you have been repairing the house in preparation for the sale: make sure there are no exposed electrical wires, loose handrails or deck planks, and no dangerous debris or slick surfaces that may cause someone to slip and fall. Dogs are best be confined where visitor have no access or off the property altogether.

Cleaning and Staging

As we’ve mentioned, “staging” professionals are available for maximizing your property’s appeal. The steps below can all be done on your own, though, and they range from the obvious necessity of tidying up to truly theatrical effects.Give yourself at the very least a few weekends to “stage” your property, and if you’re living in the property while selling it, keep in mind that you may have to repeat some of this process over time.

Kill the clutter

It goes without saying that you should remove clutter from every space in the house while you clean it. Also consider putting some of your furniture in storage while you sell, to make smaller spaces roomier. Consider keeping your best furniture in place, while the old comfy couch in the basement should probably get lost. Consider donating clothing, furniture, and appliances to a charity; your donation will probably be tax deductible.

Don’t forget to tidy the practical areas as well as the major spaces: laundry area, woodworking workbench, and home gym are examples of the places many sellers forget to organize. Kitchen counters should be spacious, not filled with appliances. Clean the stove and oven, of course, and fix leaky faucets and squeaky doors. No personal items should be visible in the bathrooms.

Lighting

Show your property in its best light. Literally. Is your property unnecessarily gloomy? Just a bit dim? Make major spaces and hallways bright and cheerful. And by installing brighter bulbs, you might identify long-overlooked corners of the house that need a good cleaning.

Accents and color

Painting interiors is one of the least expensive upgrades you can make to a house. In smaller spaces, keep in mind that lighter tints make spaces appear roomier and can cheer gloomier spaces such as basements. Very strong colors like fire-engine red will be off-putting to most. Replace bland, possibly stained shower curtains with new, vibrant ones. Consider adding a few richly colored throw pillows or rugs where appropriate.

Advanced staging

The key to staging seems to be a kind of magic trick: you’re trying to suggest to your audience of potential buyers that they already live in your house. Appeal to all the senses to do this: let visitors smell fresh-baked bread in the oven and coffee in mid-brew, hear a baseball game on the radio in the den, and stick a toe in the pool. Place an arrangement of fresh flowers in the dining or living room. Some owners replace the paperbacks on their prominent bookshelves with leather-bound hardback volumes.

The ultimate staging is perhaps those owners who, not living in their old home any more, rent one room to a tenant very cheaply who is expected to keep a very tidy house but keep it “lived in”; the hope is to avoid creating the “abandoned” impression of a home that has become unsellable.

George Avram

Broker/Owner

Continental Realty, Inc.

16 Crow Canyon Court Suite 100

San Ramon CA 94583

925-548-5461

www.24by7bid.com

DRE# 01422589

18 Questions For Every Home Seller (Part 9) e-book

9.       Do I need help marketing my home?

Of course homes appeal more to buyers when in good repair, clean and uncluttered. But years ago, real estate professionals began to notice that homes also tended to sell faster with a few touches of interior color accents, optimal lighting, and so on. In recent years, a niche profession has emerged to help you prep your home for sale and, particularly if the property you are selling is unoccupied, a staging consultant may help you attract a buyer faster and fetch a higher price when you find one. Of course, the quality of such consultants varies widely, as do the fees they charge. And of course not all buyers will bid higher in the end after even the best staging consultant has redecorated and lit your property. If you wish to “stage” the property yourself, we’ll look several ideas of how to do this a little later.

In addition to real world staging, services now exist to provide “virtual staging”. This means that photographs of the property can be manipulated to show the furnishing and decoration possibilities. These services take your photos of the major spaces (living room, bedrooms, baths, and dining room), shot empty, and provide “staged” versions with “furnishings” from their image library. These photos (or even 3D walk-through tours) are then used in online listings to attract buyers.

Of course, you might also consider a professional architectural photographer to optimize the quality of the photographs themselves as well. Such professionals may use perspective-correcting cameras and extensive light rigs to maximize the appeal of your property.

Other parties

An escrow officer is typically involved during the final stage of a transaction. He or she is a neutral party who holds the purchase funds as the transaction is processed.  You may also consult a tax expert to review your strategy to minimize the impact of taxes on the proceeds from your sale.

18 Questions For Every Home Seller (Part 7) e-book

Are the services of a listing agent worth 3% of a house to you? The primary function of a listing agent is simply to get your property into the MLS system, something you can do yourself nowadays for a relatively small fee.  What else could you do for yourself? Could you research the realistic value of your house in the market and price it accordingly? Are you savvy at online marketing? Could you prep your home for an Open House and show it to potential buyers in a way that makes the house desirable? Could you be a hard-nosed bargainer and bring your potential buyer up to their “price ceiling?” If so, you could pursue a “For Sale By Owner” method of selling.

Alternately, if the cost savings interests you but you’re less sure about valuing the house objectively and bargaining over the final price, read the surprising options available today from Oresy.com; these are covered in the last section of this book.

The Listing Contract

Think of this contract as the terms of employment between yourself as the seller and the broker you hire to find a buyer. Remember that a broker typically is hired for a fixed period of time and, in order to secure a commission, that broker may urge you to accept a low offer before that period ends rather than see zero compensation because no deal was completed.

The Open Listing option

When you give a broker a non-exclusive agreement to list your property, this is called an Open Listing. Using it, you can hire thirty brokers and agents if you like, assuming they welcome open listings. If one of the brokers listing your property finds a buyer and the deal closes, you must compensate that broker for his role.

6.       How do I evaluate potential agents?

Because of the serious cost of hiring an listing agent or broker -- often more than 6% of the value of your home -- do your best to avoid the services of an unprofessional or ineffective agent. Here are a few potential signs of trouble to watch out for.

Agents must be there to help you, not to push you. Look for thoughtful agents. Not only considerate and polite, although this helps: did the agent come to the interview prepared with list and sold comps in the area? How about a detailed marketing strategy?

If your agent or broker isn’t able or interested in educating you about every step in the process of selling your property, seems to be asking you to “rubber stamp” decisions rather than make them yourself, or seems to play on your inexperience to personal advantage in any way, you need to find a new agent immediately, or consider selling without an agent. Ignore pushy brokers and agents.

If they push you early and hard to sign a listing agreement, especially a lengthy one, walk away. After all, if the agent can’t be bothered to thoroughly outline their intended strategy and patiently answer all your questions before moving on to the contract, you can’t expect much from him after the contract is signed.

And beware of desperate agents. Are agents calling you at all hours to plead for your business? This is probably not a very successful agent.

Agents who have no focus on specific property types or geographical area are unlikely to know enough about your specific area and class of property to serve you optimally.

Agents uncomfortable with other professional consultants such as contract lawyers or property inspectors may not be able to negotiate effectively as you try to close your transaction or present the property well to potential buyers.

Marketing Strategy: Today’s market requires a real estate agent to be a marketer above all else. Ask the agent about his/her marketing strategies. How will they advertise your property and where? If their only responses are the standard ones—the MLS, free sites like Craigslist.org, and fliers in the neighborhood—be skeptical. Can they guarantee strong page rank on the major search engines? If I type in “real estate” and the name of my town into the search boxes of YouTube and Metacafe, will I see my property?

Minimize the term of your contract. It’s in the listing agent’s interest to contract with you for as long as possible. In other words, no agent will promise to sell your house in two weeks. As a seller, you want your agent to do everything possible to maximize the price and minimize the time the house sits on the market. If you sign a contract with an agent for six months, you are giving an inattentive agent no incentive to sell your house in the next five months. A good agent will push the property effectively from day 1, of course, but if you don’t have this kind of agent a long contract term can seem like an eternity. If your agent insists on a six-month minimum contract term, find someone who wants to sell your house sooner. A 60-day term is ideal, but settle for a 3 month contract if necessary.

Could you recommend an agent?

- Mar

ia, I heard you’re putting your house on the market?

+ We already have an ad in the paper and online. But I think we should bring in an agent. Do you know any good ones locally?

- You don’t want to use ours. We sold our house five years back and had some trouble with an inexperienced guy. He not only urged us to sell at a low price, he lost our first promising prospects.

+ What happened?

- We’d already moved out and the agent was going to show the place by himself. The prospective buyers showed up on time first thing in the morning, waited twenty minutes for the agent. When he got there, he apologized for being late but had forgotten the keys to the lockbox and so couldn’t show it anyway. We never saw those two again. So we never saw that agent again!