Considering the rapid rise in home prices over the last few years, home sellers are especially concerned about the commissions they pay real estate brokers to market and sell their homes. Real estate commissions vary across the country; they averaged in the four to seven percent range.
According to the 2004 National Association of Realtors® (NAR) Home Buyer and Seller Profiles, fourteen percent of homes are sold by their owners. The NAR study lists the two most difficult for-sale-by-owner (FSBO) tasks of preparing and repairing homes 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 pricing. Understand that if the three price opinions don’t match the value of the property in your opinion, you should understand the dangers of overpriced property. Overpriced homes have been studied by major national real estate brokers and higher priced homes take longer to sell and are sold at a lower price as a percentage of the original selling price.
Ask the agent to give you constructive feedback on what you should do to make your home visually appealing to most buyers. Here are some staging tips to prepare your home for the market.
1) Research how to “stage” your home to maximize its appeal to homebuyers by creating a spacious and pleasant home environment for buyers.
·Start by eliminating the first thing that stands in your way.
Take one or more of the main pieces of furniture from each room to make it more spacious.
· Maintain matching pieces of furniture to establish uniformity in a room.
·Create a seating area where two or more people can talk.
2) Keep your eyes moving while staging a room.
Use furniture placement to direct the buyer’s eye to the features of the room.
· Remove large pieces of furniture from windows.
· Place large pieces of furniture at the entry end of the room to lighten the visual load at the opposite end of the room.
Use area rugs to arrange seating.
· Cover your dining table with the smallest size.
3) Use furniture placed in the corner of the room to provide a quick update.
Corner bed in the corner of the bedroom to focus attention.
· Corner furniture in the shape of a V in the living room and family room.
· Slanted furniture can help fill a room lacking furniture and give it a designer look.
4) Sketch in the room to set the mood.
· Breakfast tray with coffee cup, newspaper, vase on bed.
Set the dining table with linen, porcelain, silver and stemware tablecloths.
· Set up a game table for chess, bridge, or backgammon.
5) An effective home model focuses on creating the right environment.
· Eliminate clutter so shoppers can layer their furniture and lifestyle.
· Clean, fresh and smells new.
·Attention to detail. The rooms are clean and the landscaping is trimmed.
· Smooth, classical, light jazz or rock background music.
· Interior decoration and wall colors highlight the architectural features of the house.
Live plants or fresh flowers add the finishing touch.
6) Understand decorating basics that can guide you to reposition a room.
·Color. A little goes a long way.
·Scale. Does the size of the furniture complement or fill the room?
·Pattern. It’s easy to do this to avoid distractions from the room itself.
·Lightning. Use it to define dark corners. Help fill the room.
·Focus point. Fireplaces, views, art, find one in every room.
·Texture. Adds visual interest, warms a cool space and is a finishing touch.
Understanding and completing paperwork in real estate transactions is the third most difficult task according to the NAR study. Once your home is properly priced and ready to be marketed, you should retain a real estate attorney to help you review contracts, disclosure forms, and to help you qualify your potential home buyers. An experienced real estate attorney can help you avoid common pitfalls in real estate negotiations and will facilitate a smooth transaction.
Here are some cliff notes on real estate contracts.
·Use a real estate contract approved by your state’s association of real estate attorneys or your local Board of Realtors®.
· Real estate contracts. A binding agreement between the buyer and seller. It consists of offer and acceptance and consideration (i.e. money).
·Reception. Agreement of the parties on the terms of the contract.
· Contract length. Research customary contract length, the default is 45 days from contract to closing.
· Have sold comparable properties to potential buyers.
·Comparable. Prices are closed for similar homes in age, condition, location and size.
·Price. Study the average selling price as a percentage of listings in the last six months.
· Low ball bid. Buyers must offer more than 87% of the listing if they are serious, otherwise you will not respond at all to low ball offers.
· Counter offer. A response to an offer or offer by a seller or buyer after the original offer or offer. Have all counter offers in writing.
·Require all buyers to demonstrate the highest level of mortgage commitment with their contracts.
· Mortgage Commitment. A document by a mortgage lender that binds the lender to grant a loan on agreed terms and conditions.
· Mortgage term, rate and amount. Look for a strong down payment of twenty percent or more. Interest-only loans signify that buyers can stretch to qualify for a loan.
·A cash offer in lieu of mortgage financing must be confirmed with a letter from your financial institution stating funds have been deposited to close the contract.
·Federal law requires disclosure of Lead Based Paint Hazards.
· Lead Based Hazards. Disclosure of reports or knowledge of Lead Based Hazards. Buildings constructed after 1978 do not present a Lead Based Hazard.
·Read Protect Your Family From Lead in Your Home by the US EPA.
· Real property disclosures required by your federal or state A written statement by the seller of the property that discloses known defects.
· Local disclosure. Local disclosure requirements provided by the seller and acknowledged by the buyer, such as certificates of ownership.
· W-9 shape. An IRS form requesting a taxpayer identification number and a buyer’s certification to receive interest on real money from delivery to closing.
· Depends on the assessment. Most contracts as part of a mortgage contingency require the subject property to be valued at the minimum contract price.
·Evaluation. An objective third party opinion of value by a licensed or certified appraiser.
· Real money deposit. The money given to the seller at the time of the offer is made as a sign of the buyer’s good faith.
· Research on traditional real money deposits as they vary. The larger the deposit, the more motivation the buyer shows to enter into a contract.
· Refund of real money deposit. The contract must provide for a refund of all real money deposits within the agreed contingency period. The seller’s attorney must take the money deposit seriously.
· Term of attorney’s approval. Your attorney reviews and makes changes to the contract, usually 5-7 business days.
· Property inspection period. The right under the contract to the buyer at their expense to discover the true condition of the property. This period usually lasts 5-7 working days.
· Well and septic inspection. It is independent of structural and mechanical inspections.
· Timelines for contingencies run concurrently.
·Possibility. Provisions in a contract that require certain actions to be completed before the contract is binding.
· Closing date/escrow. The end date of the transaction process where the deed is submitted, the document is signed, and the funds are disbursed.
· Date of ownership. The date agreed upon by the contract when the buyer can occupy the property.
· Final completion. A tour of the property prior to closing or escrow that allows the buyer one final verification of condition, agreed repair and personal property.
· Pro-tax ratio. The amount of credit given to the buyer at closing for unpaid property taxes, when taxes are paid in hindsight. Pro ration must always be more than 100%.
· Individually owned. List and initialize all personal property included with the sale, such as air conditioning, appliances, and play equipment.
Home sale contingencies. The contract is contingent on the sale of the buyer’s property.
Buyers show motivation when incorporating the contingency of selling a home by having their property currently on the market.
Home closure contingencies. The contract only depends on the successful closing of the existing real estate contract.
Marketing your home to potential buyers should include these methods.
· Professionally painted page marks.
· Classified newspaper ads and photos.
· Public open houses and brokers.
Internet: virtual tour and at least eight photos.