It may be helpful to contact two or three real estate companies that work in your area for information. Ask neighbors and friends which real estate companies and real estate agents they have used. An experienced real estate agent should come prepared with information on other homes for sale in your neighborhood, including prices per square foot. More importantly, they can provide information such as the actual sale price and time on the market for homes that have recently sold in your neighborhood. This information can help establish a reasonable price for your home and a reasonable expectation on how long it may take to sell.

If you have difficulty setting a price, you may want to study the competition more thoroughly. Ask the real estate agent to show you comparable homes for sale in your neighborhood, so you can view and compare amenities, landscaping and other features.

When there are no comparable sales in the area or when acreage is involved, evaluation can be difficult. Generally, a real estate agent is the best resource for assisting with establishing the asking price; however, an independent property appraisal can be another option.

An appraisal to establish market value is different than one to establish property taxes and may yield a different result. The appraiser will measure the exterior of the property and will take into account the overall property condition, as well as the most recent market data to establish a value.

Some states now require sellers to make comprehensive disclosure statements regarding the property’s condition. Your real estate agent or attorney will know the requirements for your state.

While a preliminary property valuation can help determine the property value, the mortgage lender may require another property valuation at the time of sale. Each property valuation can cost several hundred dollars. To locate an appraiser, ask your real estate agent for a list of names or consult your mortgage lender on the appraisers they use.

A real estate agent may suggest a list price, but the decision is ultimately yours to make. Overpriced homes usually do not sell. The longer they are on the market, the greater the buyer resistance.

If you have an existing loan on the house, check with the mortgage company to determine if you will be assessed a prepayment penalty or any other charges when you sell your home and pay the loan in full. Keep your closing costs in mind when setting a price.

A real estate agent and a real estate broker are licensed by their states to sell real estate.

Real estate agents work for the real estate broker's company. Though the agent will work directly with you throughout the process of selling your home, the listing contract will actually be between you and the real estate brokerage company.
A REALTOR® is a broker or real estate agent who belongs to the National Association of REALTORS® and agrees to abide by its Code of Ethics and Standards of Practice.

Selecting the right real estate agent is critical.

Interview at least three real estate agents before making your selection. Select someone with whom you are compatible because you will work closely with the real estate agent throughout the selling process. Refer to the interview questions on the Interviewing Real Estate Agents work sheet.
Although commissions usually range from 5 percent to 7 percent of the selling price of the home, they are negotiable. Prior to signing the listing agreement, determine which services you need that the real estate agent provides. You may be able to negotiate a lower commission.
Agents should belong to a Multiple Listing Service (MLS) if there is one where you live. A MLS is a computerized database providing a fast, convenient way to gather much useful information about most of the local homes for sale. Some companies also belong to a referral or relocation network, working with out-of-town buyers.

Selling Through A REALTOR®

A professional real estate agent offers many services such as:

Conducting market research to help establish an asking price for the home.
Creating a marketing plan specifically for your home.
Displaying a professional, attractive “For Sale” sign.
Scheduling open houses.
Providing recommendations to help show your home as favorably as possible.
Creating, placing and paying for advertising.
Promoting the home to other real estate agents.
Screening prospective buyers and showing them the home.
Executing earnest money contracts and depositing funds in an escrow account.
Acting as the seller’s consultant on related matters and financing issues.
Scheduling appraisals, inspections and repairs.
Coordinating the closing process.

There is also an advantage in listing your home with a well-known company that employs more than two or three full-time real estate agents. Most real estate agents will bring other real estate agents from their office to preview your home within the first month. The more individuals who see your home, the better chances you have of finding a buyer. Larger firms can have access to more buyers through various business relationships, such as relocation contracts.

Ask real estate agents to present a marketing plan for your home. Ask what they would do if they had your listing and your home did not have any showings for 3 weeks or more. Good real estate agents will be innovative and go the extra mile.

Find out how often and where the company will advertise your home. In slow times, additional advertising may be needed, but you should realize that advertising can be very expensive for the company. The real estate company and real estate agent’s success record in your particular neighborhood is most important.

You may also want to investigate new listing opportunities via the Internet. These services expose your home to an expanded market of potential buyers, help reduce the number of lookers who are not really potential buyers and can help expedite the selling process. Some companies can display color pictures or a video virtual tour of your home for buyers to view online, or provide access to basic information on listings via touch-tone phone with details faxed or e-mailed to the interested buyers. Discuss the benefits of these options with your real estate agent.

Some online computer networks accept real estate classified ads for a small fee, while some real estate brokers run their own Web sites listing the properties they have for sale.

Once you have selected a real estate agent, you will be required to sign a listing agreement contract for a specified period of time. This period generally corresponds with the average length of time it takes to sell a home in that market. Read the contract to determine if there is an early-out option. If not, you may try to negotiate a shorter contract upfront, ideally for 90 days. Most contracts state that, even if you sell the home yourself during that period, you must pay the real estate agent a commission. This is because the company incurs expenses in listing and marketing your home. However, if you have shown your home to an interested party before signing a listing agreement, you may negotiate to exclude them in your contract. If this party buys your home, you are not obligated to pay a commission.

For Sale By Owner

After talking with several real estate companies, you may still decide to sell the home yourself. This prospect intimidates many first-time sellers. A title company or your attorney can advise you as to what must be done. There are also Web sites which contain valuable information for owners who want to sell their homes without the assistance of a real estate agent.

Selling your home yourself will save real estate commissions. Buyers, however, will generally expect to pay a lower price when dealing directly with the owner. Both the buyer and seller will be responsible for all the transactions that agents routinely handle. As the seller, plan to spend time advertising, answering calls and showing your home. Later, you will need to oversee the property valuation, inspection, repairs and necessary paperwork for closing the sale. An owner-seller must also be careful to avoid unintentional misrepresentations and other legal complications. Current laws tend to protect the buyer.

Be sure the buyer qualifies for the loan before taking your home off the market. Do not hesitate to ask a buyer to provide a copy of their mortgage preapproval letter, demonstrating that a lender has already reviewed the buyer’s credit and is likely to approve the buyer’s mortgage application

Timing The Sale

In most markets, the best time to sell a home seems to be in the spring or early summer, with closings occurring after schools are closed. This enables families with school-age children to make the move during the summer months and be settled in a new home before the start of the next school year. On the other hand, there are fewer homes on the market during the fall and winter, so there is less competition for the potential buyers.

Changing Strategies

There is no way to know how long it will take to sell your home. If you become discouraged with the results of your marketing efforts, make some changes. If you are attempting to sell it yourself, you may want to consider other advertising methods or listing with a REALTOR®. Find out what prospective buyers did and did not like about your home. Consider options, such as an open house, to increase showings.

Next: Selling Points

Updated Thursday, April 17, 2008

HELPFUL FORMS & LISTS

Interviewing Real Estate Agents

Making Your Home More Sellable