Wednesday, February 20, 2008

What Every Seller Should Know - Part I

Before you think about putting your home up for sale, there are a few things that you should know. For the most part, these are general ideas, applicable to most forms of real estate. Check with your Realtor® to be sure.

1. Selling is a 4-step process

Sale <-> Offer <-> Showings <-> Competitive Price

A: In order to get a sale “A”, you must:
B: Get an offer. In order to get an offer “B”, you must:
C: Get showings. People do not buy a home without seeing it,
at least once (usually twice). In order to get showings “C”, you must:
D: Have a competitive price. Your Realtor® can help you price your home
competitively, while earning the top dollar for you. If your price is not competitive, prospective buyers will not even look at your home, since you cannot be objective about the price of your own home, and they do not want to insult you with a low (but fair) offer, when there are other, more realistically-priced homes available.

2. The Seller’s Job

Your job, as the home seller, consists of two critical tasks:

A. You must price your home competitively, and
B. You must “stage” it well (in other words, make it look its best for prospective buyers).

If you, the seller, do your job well, your Realtor® will be more able to do their job well – get your home sold for the most money in the fastest time possible.

3. The Market Analysis

A Comparative Market Analysis (CMA) gives you a range of value that a ready, willing, and able buyer may pay for your home in a competitive market. If you price your home above the CMA range, you risk ever getting a sale (based on the 4-step process described above). If you price your home in the CMA range, you are doing your job of pricing your home competitively.

4. How Much Is Your Time Worth?

Selling a home looks easy. But if you stop to add up all of the time, effort, and money put into advertising, phone calls, showings, paperwork, negotiating an offer, dealing with lenders, title companies, building inspectors, obtaining public records, and shouldering the liability of the sales process, you quickly find that the Realtor® earns their commission at a fair wage.

5. Third-party Negotiators

When an offer is received on a home, there is likely to be several thousand dollars between your asking price and the offered price. Should you stick to your guns? If you do, you may lose the sale. If you don’t, you may cheat yourself. This is likely to be a time of compromise, of give-and-take. But knowing how much to give, and whether to give at all, demands knowledge and negotiating skill. The fact is that you are in an awkward position to best advance your own interests.

At this point, your Realtor’s® advice is invaluable. As a third party, your Realtor’s® objective viewpoint will be reassuring to the buyer. And as a seller, you’ll have an experienced professional in your corner to bargain for you.

6. Cooperating Brokers

Did you know that there are over 1100 licensed Realtors® in the Ann Arbor Area Board of Realtors®? When you list your home for sale with a cooperating broker, you immediately gain not just the listing broker and their agents, but all those other 1100 salespeople working to help sell your home. When you consider the commission paid, how could you hire 1100 experienced salespeople to work for you at the same total compensation?

7. Improvements That Will Pay Off

There are two primary improvements that will have an immediate positive impact on selling your home – the condition of the kitchen and bathrooms.

In both cases, make sure the rooms are clean and freshly painted – preferably white, or a slight off-white. Make sure the faucets work, with no drips. Make sure the sink drains do not leak – and, by all means, do a spotless clean-up job in the cabinet under the sink. Clean the windows and curtains, and clean the light fixture. It might help to put in a brighter light bulb, too.

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