Putting Your House On The Market            

The first step in putting your house up for sale is to meet with a real estate agent at your home. What we call the "Free Consultation."

But beforehand, it's important to understand "who's who" and how brokers may cooperate to sell your home.

Traditional Arrangement

Listing Broker or Listing Agent, An individual real estate broker whom the seller hires to represent the seller through a contract called a "listing agreement". The listing agent is associated with the listing broker. The listing broker is directly paid the listing commission and then splits the commission with the listing agent. (Although the broker and agent may be two different individuals the term "broker" is used throughout the Guide for simplicity.)

New Fee For Service Arrangement

Some Realtors now offers a new service where the seller may choose from various services to assist the seller and the seller only pays for the services requested. The broker and the seller will review this program on the initial "Free Consultation".

Selling Broker or Selling Agent in a "cooperative" sale, the house is listed by one broker and a buyer is provided by another broker. The selling broker receives the selling side of the commission. If the selling broker also produces the buyer, then the listing broker receives both listing and selling sides of the commission. A selling broker may have a signed buyer representation agreement with a buyer and, therefore represents the buyer and not the seller. If the buyers agent also represents the seller (Has the home listed) then the Realtor  becomes a disclosed duel agent with the consent of both buyer and seller.

A Little Homework

Before the "free consultation" appointment both the home seller and the listing broker are busy. While the home seller collects a list of documents requested by the broker, the listing broker studies recent neighborhood sales of homes comparable to yours, and also comparable homes that are for sale.

There's No Place Like Home

At the "free consultation" appointment, the listing broker will want to inspect the house and yard to become familiar with its special features.

You have probable enjoyed living in your home and have been pleased with its many unique features. Your listing broker will want to tell prospective buyers about the special features of your home and neighborhood. Be ready to be specific about schools, day-care, public transportation, and other desirable community features, as well as home features not readily apparent.

Remember prospective buyers will be "comparison shopping" and keenly aware of subtle differences in houses for sale in the area. Be sure to tell your listing broker why yours is special from any home remodeling to afternoon winter sunshine.

Demand Sets Price

After conferring with the listing broker on marker conditions, comparable near-by sales and listings, and available financing the home seller will set the listing or "asking" price for the house.

A common definition of marker value is "What a ready, and willing, and able buyer, will pay, at a price a seller will accept." Metropolitan area buyers are sophisticated. They've already been shopping, and when they see your home they'll be comparing features and financing.

There's a rule of thumb that says. "A house priced more than 5% over market value discourages offers." Buyers who can afford the price can get "more house" for their money elsewhere. Buyers who cannot afford the price simply won't look. This is why we say. "A house priced right is half sold."

A fair market value will be determined by comparing the properties with similar properties which have recently sold and (in some cases) with similar properties currently on the market. Experience in the industry has proven this" market analysis" approach is more accurate than the "replacement cost" or "potential rental income methods. 

Sample "Net Sheet"

Based on this sales price, the listing broker will go through a worksheet that estimates the "net cash" from the sale. Simple this exercise subtracts anticipated charges paid by the seller from the sales price. A copy of the "net sheet" is left with the home seller. (An itemized list of typical selling costs is presented in the "(Settlement" chapter, which is the stage when these charges are paid.)

Financing Strategy

No sale can be completed without financing. This is why it is generally to the home sellers advantage to appeal to the greatest number of home buyers by accepting the greatest number of financing plans. Our program has a unique "One Stop Homebuying" and can provide you with a loan specialist from Union Savings Bank who will explain the basic differences between VA (Veterans Administration), FHA (Federal Housing Administration), conventional, and (Sub-Prime) financing, as well as explain "discount points." In many cases the buyer can purchase the sellers home with out a down payment through our vast array of mortgage programs.

What is a Point?

A point is one percent of the amount of the buyer's mortgage loan. For example, if a loan is $100,000, one point is $1,000. Lenders charge points to lower the interest rate and to increase the yield on their loans. In most cases lenders charge points only to assist the buyer in lowering the interest rate, making it easier to purchase your home. On all loans, home buyer and home seller may share the charges by mutual agreement.

Property Profile Folder

To enable the listing broker to prepare a folder of information on the property, the home seller needs to provide a number of documents of information specific to the location and jurisdiction. (This property profile is often left in the home for the convenience of prospective selling brokers.) Because the list is long, you can understand why it's best to collect the papers before the listing appointment. These materials may include.

Pay-Off Notice

A letter signed by the home seller and mailed to the lender by the listing broker to notify the lender of the intention to pay off the mortgage in order to minimize prepayment of interest penalties to the seller. (Home seller should the broker with the lender's address, loan balance, assumability, years remaining on present mortgage, P.I.T.I. and the interest rate, if possible.)

Well and Septic Inspection

If property is on septic/well, current inspections by local health authorities are required while home is occupied. Listing broker will usually arrange after contract is ratified.

Order Lender Appraisal

Lenders usually require an appraisal to insure that the property is adequate collateral for a loan. Appraisal may be ordered before (paid by seller), but is more often done after an "offer to purchase" is accepted (paid by buyer).

Assessments/Easements

Listing broker will ask home seller if any tax assessments or easements exist on property that must be paid or included in purchase contract and passed with the land when sold.

Property Taxes/Condominium Fees

Home seller provides record of property tax (Court House), or condominium fees (Condo Association) which seller will reimburse a pro-rate share to home buyer at settlement.

Inspections

VA/FHA and most lenders of new mortgages require a termite inspection certificate that shows house is free of infestation. If home seller does not have a current certificate, then listing or selling broker (depending on area) will arrange inspection at home sellers or buyers expense again (depending on area). Sometimes a home inspection and radon testing will be ordered. home seller should also provide all information as to the physical condition of the property, such as any known defects, any possible current or new assessments, any adverse (such as criminal activity that may have previously happened in the home), or  on the plus side the presence of fire retardant plywood, etc.

Utilities

Home seller should provide a record of the last 12 months utility bills, including gas, electric, sewer, water, fuel oil and trash where applicable. Most buyers will want to know history of utility costs.

Helpful Documents

If possible home seller should provide listing broker with deed, house location survey, condominium bylaws or home owners association documents, subdivision plat map, house floor plan, previous title search abstracts, legal description of property (subdivision, section and lot), and home warranties on major systems, if still in effect.

What Conveys?

In anticipation of a Buyer's offer the home seller must be ready to supply listing broker with a specific list of the personal property that is included in the real estate property for sale. Examples of items to "convey" may include draperies, drapery rods, remaining heating oil, firewood, washer, dryer, refrigerator, stove, microwave, swimming pool chemicals, Venetian blinds, window air conditioners, etc.

Listing Agreement

When the home seller is ready to put the house on the marker, the listing agreement is filled out indication a specific period of time the agreement is in effect ("listing period"), and signed by the seller. You've now hired a listing broker and listing agent.

Questions And Answers

A lockbox is a universal metal container for your house key that is usually hung on the front door and can only be opened with a special electronic key pad carried by licensed sales agents. It provides access while the owner is away, thus assuring full exposure to prospective buyers.

So certain geographical areas have unique home selling requirements?

Yes. Home selling requirements vary from county to county. Investigate special taxes or other requirements applicable to the area in which you live.