Considering the rapid rise in home prices in recent years, home sellers are taking a hard look at the commission they have to pay a real estate broker to market and sell their home. Real estate commissions vary across the country; they average in the range of four to seven percent.
According to the 2004 National Association of Realtors® (NAR) Profile of Home Buyers and Sellers, fourteen percent of homes were sold by the owner. The NAR study listed the two most difficult tasks for sale by owner (FSBO): preparing and fixing the house for sale and getting the price right.
Invite three full-time mid to high production agents to your home to give you an opinion on the price. Understand that if the three price opinions are not what you think the property is worth, you need to understand the danger of an overvalued property. Overpriced homes have been studied by large national real estate brokers and overpriced homes take longer to sell and sell for a lower price as a percentage of the original listing price.
Ask agents for constructive feedback on what you need to do to make your home visually appealing to the majority of buyers. Below are some staging tips to get your home ready for the market.
1) Research how to “stage” your home to maximize its appeal to homebuyers by creating a spacious and friendly home environment for buyers.
·Start by eliminating the first thing that gets in your way.
Take one or more important pieces of furniture out of each room to make it more spacious.
·Keep matching furniture pieces to create uniformity in a room.
·Create breakout areas where two or more people can talk.
2) Keep your eye moving when organizing a room.
·Use furniture placement to direct the buyer’s gaze to features in a room.
·Move large furniture away from windows.
Place large pieces of furniture at the entrance end of the room to lighten the visual load on the opposite end of the room.
·Use area rugs to anchor seating arrangements.
·Have your dining table closed to its smallest size.
3) Use furniture placed at an angle in a room to give it a quick update.
· Tilt a bed in a corner of a bedroom to focus attention.
·V-shaped corner furniture in living room and family rooms.
Angled cabinets can help fill out a sparsely furnished room and give it a designer look.
4) Create vignettes in rooms to set the mood.
·Breakfast tray with coffee cups, newspaper, vase in bed.
· Set the dining room table with a linen tablecloth, porcelain, cutlery and glasses.
·Set up a game table for chess, bridge or backgammon.
5) Effective model homes focus on creating the right environment.
Tidy up the clutter so shoppers can layer your furniture and lifestyle.
Clean, fresh and new smell.
·Attention to details. Clean rooms and trimmed landscaping.
·Subtle background music, classical, light jazz or rock.
·The interior decoration and the colors of the walls accentuate the architectural features of the house.
· Live plants or fresh flowers add the finishing touches.
6) Understand the basics of decorating that can guide you in repositioning a room.
Color. A little goes a long way.
·Scale. Does the furniture complement the sizes or does it overwhelm a room?
·Pattern. Easy does this to avoid being distracted from the room.
·Turning on. Use it to define dark corners. Help fill a room.
·Focal point. Fireplaces, views, art, find one in every room.
·Texture. Adds visual interest, gives warmth to cold spaces and finishes.
Understanding and completing the paperwork in a real estate transaction was the number three most difficult task according to the NAR study. Once your home is priced right and ready for the market, you should hire a real estate attorney to help you review contracts, disclosure forms, and help you qualify potential buyers for your home. An experienced real estate attorney can help you avoid common pitfalls in real estate negotiations and facilitate a smooth transaction.
Here are some key notes on real estate contracts.
Use a real estate contract approved by your state real estate bar association or local Board of Realtors®.
· Real estate contract. A binding agreement between the buyer and the seller. It consists of an offer and an acceptance, as well as consideration (ie money).
· Acceptance. Agreement by the parties to the terms of a contract.
·Contract period. Research the usual length of contracts, the standard is 45 days from contract to closing.
Have sold comparable properties available to potential buyers.
·Comparable. Closed prices for houses similar in age, condition, location and size.
·Price. Study the average prices sold as a percentage of listings in the last six months.
·Low-ball offers. Buyers must offer more than 87% of the list if they are serious; otherwise, you shouldn’t respond to low bids at all.
against offers). The response to an offer or offer by the seller or buyer after the original offer or offer. Request that all counteroffers be in writing.
Require all buyers to submit the highest level of mortgage commitment with their contract.
Mortgage Commitment. A document from a mortgage lender that commits the lender to provide a loan on agreed terms and conditions.
Term, rate and amount of the mortgage. Look for hefty down payments of twenty percent or more. Interest-only loans indicate that buyers may be working hard to qualify for a loan.
·Cash-in-lieu-of-mortgage-financing offers must be confirmed with a letter from your financial institution stating that funds are on deposit to close the deal.
Federal law requires disclosures about lead-based paint hazards.
Lead-based hazard. A disclosure of reports or knowledge of lead-based hazards. Buildings built after 1978 do not have lead-based hazards.
Read Protect Your Family From Lead in Your Home by the US EPA.
Real estate disclosures required by the federal government or your state Written statements from the seller(s) of a property disclosing any known defects.
·Local disclosures. Local disclosure requirements provided by the seller and recognized by the buyer, such as certificates of occupancy.
W-9 form. An IRS form requesting taxpayer identification and certification numbers from buyers to receive interest on the security deposit from delivery to closing.
Subject to appraise. Most contracts as part of the mortgage contingency require that the property in question be evaluated at the minimum of the contract price.
Evaluation. An objective third-party opinion of value by a licensed or certified appraiser.
Down Payment. Money given to the seller at the time of the offer as a sign of good faith by the buyer.
·Research typical security deposits as they vary. The higher the deposit, the greater the motivation that buyers show to fulfill the contract.
Return of earnest money deposits. The contracts must stipulate the reimbursement of the entire guarantee deposit within the agreed contingency periods. The seller’s attorney must have security deposits.
· Lawyer approval period. Your attorney reviews and makes changes to the contract, usually in 5-7 business days.
·Property inspection period. The right under a contract for the buyer at his own expense to discover the real state of the property. This period usually lasts 5-7 business days.
·Inspections of wells and septic tanks. These are separate from structural and mechanical inspections.
· Deadlines for contingencies run simultaneously.
·Contingency. A provision in a contract that requires certain acts to be completed before the contract becomes binding.
Closing/escrow date. The end date of the transaction process where the deed is delivered, the documents are signed and the funds are dispersed.
· Date of possession. The date agreed by contract in which the buyer can occupy the property.
Final tour. A pre-closing or escrow tour of the property that allows buyers a final check of condition, agreed-upon repairs, and personal property.
· Proration of taxes. The amount of credit given to buyers at closing for unpaid property taxes, when taxes are paid in arrears. Prorations should always be more than 100%.
·Personal property. List and initial all personal property included in the sale, such as air conditioners, appliances, and play equipment.
· Home sale contingency. The contract is contingent on the sale of the buyer’s property.
Buyers show motivation to include a contingency in the sale of the house by having their current property already on the market.
Home closing contingency. The contract is solely dependent on the successful closing of an existing real estate contract.
Marketing your home to potential buyers should include these methods.
·A professionally painted yard sign.
Ads in classified newspapers and photo.
· Houses open to the public and brokers.
Internet: virtual visit and at least eight photos.