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) Home Buyers and Sellers Profile, fourteen percent of homes were sold by the owner. The NAR study listed the two most difficult tasks for selling by owner (FSBO): preparing and arranging the home for sale and getting the price right.
Invite three full-time mid- to high-production agents over to your home for a price opinion. Understand that if the three pricing opinions are not what you think the property is worth, you need to understand the danger of an overvalued property. Homes that are overpriced have been studied by large national real estate brokers, and homes that are overpriced 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 to do to make your home visually appealing to most buyers. Below are some staging tips to prepare your home for the market.
1) Research how to “stage” your home to maximize its appeal to home buyers by creating a spacious and homebuyer-friendly home environment.
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 seating 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 gaze to the characteristics of a room.
· Move large furniture away from windows.
Place large furniture at the entry 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 focus attention.
V-shaped corner cabinet in living and family rooms.
Angled furniture can help fill 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 on the bed.
Set the dining room table with a linen tablecloth, porcelain, cutlery and glasses.
· Set up the 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.
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 characteristics of the house.
Live plants or fresh flowers add finishing touches.
6) Understand the decorating basics that can guide you in repositioning a room.
· Color. A little goes a long way.
· Scale. Do furniture sizes complement or 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 hardest 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 will facilitate a smooth transaction.
Here are some key notes on real estate contracts.
· Use a real estate contract approved by your state’s association of real estate attorneys or the 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 a consideration (that is, money).
· Acceptance. Agreement by the parties to the terms of a contract.
· Contract period. Research the usual duration of contracts, the standard is 45 days from contract to closing.
· Have sold comparable properties available to potential buyers.
·Comparable. Closed prices for homes 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 should 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 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 the 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 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 the funds are on deposit to close the contract.
Federal law requires disclosures about the hazards of lead-based paint.
Lead Hazard. A disclosure of reports or knowledge of lead-based hazards. Buildings built after 1978 do not present lead 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 (s) of a property that reveal any known defects.
· Local Disclosures. Local disclosure requirements provided by the seller and acknowledged by the buyer, such as certificates of occupancy.
Form W-9. An IRS form requesting taxpayer identification and buyers’ certification numbers to receive interest on the security deposit from delivery to closing.
· Subject to appraisal. Most contracts as part of the mortgage contingency require that the property in question be appraised at the minimum of the contract price.
· Appraisal. An objective third party opinion of the value from a licensed or certified appraiser.
· Deposit of earnest money. Money given to the seller at the time of the offer as a sign of good faith from the buyer.
Research common security deposits as they vary. The higher the deposit, the greater the motivation shown by buyers to fulfill the contract.
· Refund of deposit deposits. The contracts must stipulate the reimbursement of the entire security deposit within the agreed contingency periods. The seller’s attorney must have security deposits.
· Attorney approval period. Your attorney reviews and makes changes to the contract, usually within 5 to 7 business days.
· Property inspection period. The right under a contract for the buyer at his expense to discover the actual condition of the property. This period generally lasts 5 to 7 business days.
· Well and septic tank inspections. These are independent of structural and mechanical inspections.
· Schedules for contingencies run concurrently.
· Contingency. A provision in a contract that requires certain acts to be completed before the contract becomes binding.
· Closing date / guarantee deposit. 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 on which the buyer can occupy the property.
· Final route. A tour of the property prior to closing or escrow that allows buyers a final check of 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. The proportions must 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 upon 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.
· Contingency due to housing closure. The contract depends solely on the successful closing of an existing real estate contract.
Marketing your home to potential buyers should include these methods.
· A professionally painted garden sign.
· Newspaper classifieds and photo ads.
· Days open to the public and runners.
· Internet: virtual visit and at least eight photographs.