Given 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 owner. The NAR study listed the two most difficult tasks for selling by owner (FSBO): preparing and fixing up the home 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 all three price opinions are not what you think the property is worth, you need to understand the danger of an overpriced 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 the agents to give you 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 buyer-friendly home environment.
· Start by eliminating the first thing that gets in your way.
Remove one or more important pieces of furniture from each room to make it more spacious.
·Keep matching furniture pieces together to create uniformity in a room.
·Create break areas where two or more people can talk.
2) Keep your eye moving when organizing a room.
·Use the placement of furniture to direct the buyer’s eye to the features of 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 at the opposite end of the room.
·Use rugs to anchor the seating arrangement.
·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 draw attention.
·V-shaped angled furniture in living and family rooms.
· Angled furniture can help fill a sparsely furnished room and give it a designer look.
4) Create room vignettes 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 their furniture and lifestyle.
Smell clean, fresh and new.
·Attention to details. Clean rooms and trimmed landscaping.
· Subtle, classical, light jazz or rock background music.
·The interior decoration and the colors of the walls accentuate the architectural characteristics of the house.
·Live plants or fresh flowers add the finishing touches.
6) Understand decorating basics that can guide you in repositioning a room.
Color. A little goes a long way.
·Scale. Does the furniture complement the sizes or overwhelm a room?
·Pattern. Easy does this to avoid being distracted from the room.
·Turning on. Use it to define dark corners. Helps fill a room.
·Focal point. Fireplaces, views, art, find one in every room.
·Texture. Add visual interest, bring warmth to cool 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 typical contract lengths, the standard is 45 days from contract to close.
Have sold comparable properties available to potential buyers.
·Comparable. Fixed prices for homes similar in age, condition, location and size.
·Price. Study the average prices sold as a percentage of listings over the past six months.
· Low-ball offers. Buyers must offer more than 87% listing if serious; otherwise, you should not respond to low offers 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 counter offers be in writing.
Require all buyers to present 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 strong down payments of twenty percent or more. Interest-only loans indicate that buyers may be struggling to qualify for a loan.
Offers in cash in lieu of mortgage financing must be confirmed with a letter from your financial institution stating that funds are on deposit to close the contract.
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 present lead-based hazards.
Read Protect Your Family From Lead in Your Home by the US EPA.
Real property disclosures required by the federal government or your state Written statements from the seller or sellers of a property revealing any known defects.
·Local disclosures. Local disclosure requirements that are provided by the seller and recognized by the buyer, such as certificates of occupancy.
W-9 form. An IRS form requesting buyers’ taxpayer identification and certification numbers 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 appraised at the minimum of the contract price.
Assessment. An objective third-party opinion of value from a licensed or certified appraiser.
Down Payment. Money given to the seller at the time of the offer as a sign of good faith on the part of the buyer.
·Research typical security deposits as they vary. The higher the deposit, the higher the motivation buyers show to fulfill the contract.
Return of earnest money deposits. Contracts must provide for repayment of the entire security deposit within agreed contingency periods. The seller’s attorney must have security deposits.
· Period of approval of the lawyer. Your lawyer 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 expense to discover the actual 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.
· The deadlines for contingencies are executed simultaneously.
·Contingency. A provision in a contract that requires certain acts to be completed before the contract is binding.
Closing/Escrow Date. The completion date of the transaction process where the deed is delivered, documents are signed, and funds are dispersed.
· Date of possession. The date agreed by contract in which the buyer can occupy the property.
·Final tour. A tour of the property prior to closing or escrow that allows buyers a final check on condition, agreed upon repairs, and personal property.
· Tax apportionment. The amount of credit given to buyers at closing for unpaid property taxes, when taxes are paid late. Apportionments should always be more than 100%.
·Personal property. Please list and initial all personal property included in the sale, such as air conditioners, appliances, and play equipment.
· Contingency sale of housing. The contract is contingent on the sale of the buyer’s property.
Buyers show motivation by including a contingency in the home sale by having their current property already on the market.
Home closure contingency. The contract is solely contingent 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 tour and at least eight photos.