Editor’s note: Robert Bruss is temporarily away. The following column from Bruss’ “Best of” collection first appeared Sunday, March 19, 2006.
Spring is traditionally the best time of year to sell your house or condominium. The reason is that March through June is the peak home sales season when the largest numbers of prospective buyers are in the market place.
Purchase Bob Bruss reports online.
HOW TO SELL YOUR HOME FOR TOP DOLLAR. If you are thinking about selling your house or condo, this is the best time of year to do so. However, a successful home sale requires preparation and planning.
The first step is to get your residence into near “model home” condition. That means cleaning, repairing and painting. But don’t go overboard with renovations. Let your buyers remodel to their taste. Most home improvements rarely bring in as much in additional sales price as they cost.
However, modest-cost cosmetic improvements usually pay off. Profitable examples include fresh paint inside and outside (paint is the most profitable dollar-for-dollar improvement you can make), new light fixtures, new floor coverings (if needed) such as wall-to-wall carpets, and outdoor landscaping spruce-up.
THE BEST WAYS TO DETERMINE YOUR HOME’S MARKET VALUE. Home sales prices depend on recent sales prices of nearby comparable residences within the last few months. A good place to start is on the Internet to determine your home’s approximate market value.
A brand-new Internet Web site that provides free “guesstimates” of home values is www.Zillow.com. When I checked my home, I was amazed to see an aerial photo of my house, including the lot boundaries. The Zillow estimate of my home’s market value was remarkably accurate. However, this remarkable new Web site doesn’t yet cover the entire nation.
Other free Internet home-value-estimate Web sites include www.HomeGain.com, www.HouseValues.com, www.OurHomesPrice.com, www.Domania.com and www.PriceAHomeOneline.com. These Web sites will often refer you to a local realty agent.
After you have had fun with the Internet estimates of your home’s market value, if you are a serious home seller, the best way to obtain a more accurate market value estimate is to interview at least three successful local real estate sales agents.
Even if you are thinking about selling your home alone (known as “for sale by owner” or “fizzbo”) the agents you interview won’t mind giving you their listing presentations. The reason is they know most “for sale by owners” give up and list with a professional agent within 30 to 60 days.
KEY QUESTIONS TO ASK EACH LISTING AGENT YOU INTERVIEW. The reason it is so important to interview at least three local agents is to compare their sales abilities and their CMAs (comparative market analysis) of your home’s market value.
Each interview, including the agent’s inspection of your home, should take about an hour. These will be the three most profitable hours you ever spend.
The reason is each agent should prepare a written CMA showing the agent’s estimate of your home’s market value. The CMA will include recent sales prices of comparable nearby homes, the asking prices of neighborhood homes now listed for sale (your competition), a list of recently expired nearby listings which didn’t sell, and the agent’s estimate of your home’s market value.
In addition to receiving each interviewed agent’s CMA, here is a list of key questions to ask each agent (the best agents anticipate these questions as part of their listing presentations):
1.) What are the names, addresses, and phones of your five most recent home sales listings?
Before you decide to list with one of the agents interviewed, be sure to phone those recent sellers to ask, “Were you in any way unhappy with your listing agent?” and, “Would you list another home for sale with the same agent?”
2.) How long have you been selling homes in this area? Do you sell real estate full-time? What professional courses and designations have you completed?
Some agents will resent these questions, realizing you are a well-educated home seller. But the best agents will have anticipated these important questions.
Occasionally, you will find a successful part-time agent who comes highly recommended by recent home sellers. Or you might encounter a promising new licensee who has lots of time to devote to selling your home listing.
3.) What is your minimum listing term? The best answer is 90 days so you won’t tie up your home for a long time with a lazy or ineffective agent. However, some agents insist on 180-day listings.
They usually justify such a long term by saying, “The average number of days on the market for homes in this area is 150 days (or whatever).” But your reply should be, “I don’t want just an average agent. I want an outstanding agent who has confidence in his or her ability to get my home sold within three months for top dollar.”
If the agent you think is best still insists on a six-month listing, after checking his or her references, an acceptable alternative is a 180-day listing with an unconditional cancellation clause after 90 days written into the listing contract. Then, just in case you chose a “bad agent” you won’t be stuck more than 90 days.
4.) What is your marketing plan for my home? The best agents will have anticipated this question by providing a written marketing plan as part of their listing presentation.
Each written marketing plan should include at a minimum a) a weekday open house tour for all MLS (multiple listing service) member local agents, b) Internet promotion on the agent’s personal Web site and at www.Realtor.com (where 70 percent of today’s home buyers begin their search), c) weekend open houses once or twice a month, d) newspaper ads at least once every week, e) brochures (ask to see samples of the agent’s past brochures for other listings), and e) depending on the sales price, advertising in additional publications.
5.) How many listings do you have now? What are their addresses? Do you have an office assistant? What percentage of your listings didn’t sell last year? What day of the week do you take off and who covers for you when you are gone? Are you planning any vacations during the next three months?
If the agent you are considering has too many listings, he or she might not be able to devote enough time to your home sale. Watch out for “numbers agents” who take many listings, have several assistants, but sell a low percentage of their listings. However, consider it a bonus if two agents work as a “team” to handle a large percentage of their listings.
Having an office assistant is another bonus to free the agent’s time for sales while the assistant handles the details such as arranging inspections, appraisals, and sales closings.
6.) What sales commission do you charge for a home like mine?
You should be aware, according to a recent survey by Real Trends, the average home sales commission is 5.1 percent. However, many agents try to get the traditional 6 percent sales commission, especially for homes priced below $500,000.
If the listing commission is competitive, this is not the time to cut the agent’s commission and incentive to get your home sold. Presuming the agent’s references and success record are satisfactory, a sales commission up to 6 percent is acceptable.
However, if the listing agent produces a low purchase offer, that is the time to say, “Well, since you didn’t produce a purchase offer at your recommended asking price, if you will lower your sales commission, maybe I can accept this low purchase offer.”
The most important part of the sales commission is the portion that will go to the buyer’s agent. To illustrate, if your home sale listing offers only a 2 percent commission to the buyer’s agent, but other local listings offer a 3 percent commission, agents representing buyers are likely to show those homes before yours.
In addition to the sales commission, at the time of listing be sure to ask if there are any additional fees for you or your buyer. Some brokerages try to charge “transaction” or “administration” fees in addition to the sales commission.
SUMMARY: Spring is the best time of year to sell your house or condo to earn top dollar. But before listing your home for sale with the best agent for your situation, be sure to interview at least three successful local agents before selecting the best agent.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
