Interest rates are low and the real estate market is getting even hotter. Homeowners who decide to “test the waters” find their homes selling in a matter of minutes, often for more than they imagined getting.
Sound like a dream? If you’re not in control of the situation, it could be a nightmare. It’s okay to sell your home for a small fortune, but in this market, you’d better plan on spending all of your windfall if you hope to move into something comparable in the same neighborhood.
Losing control of the process is just one thing that frequently happens to sellers. They often forget who’s supposed to be running the show (hint: it isn’t the real estate agent or mortgage lender).
Because the early Spring 98 selling season looks like it’s going to be red hot, here’s a seller’s bill of rights so that all sellers know where they stand and what they should expect. As a seller, you have the right to:
- Not Use Aunt Sally. What you should do is solicit a comparative marketing analysis from at least three different real estate agents. A CMA is an extremely useful tool for sellers. A good one should list all the homes that are similar to yours in your neighborhood that have recently sold. The best ones include photos so that you know exactly which home yours is being compared to. Next, the CMA should analyze the speed of the market, and your home’s projected strength in the market. Finally, the agent presenting the CMA should give you a suggested list price, based on its size, amenities, location, and how quickly you hope to sell.
That’s not to suggest that you shouldn’t ask Aunt Sally to prepare a CMA to compare with the others, and perhaps hers will be the more insightful and accurate. But when you sell your home, you’re likely selling your biggest asset, so you should approach it carefully.
- Expect Excellent Service From Your Agent. Here’s what the agent you hire should do: He or she should contact you often with updates about your property and the market situation; prepare you realistically for the length of time you’ll have to wait to sell your home; set up appointments; show your home (I’m not a fan of lock boxes); protect your interests; and help you negotiate the contract.
If you don’t get your calls returned within 24 hours, if your agent is rude to you or doesn’t if he or she doesn’t answer your questions directly or completely, you should consider terminating your listing agreement.
- Negotiate Your Listing Agreement. Too many sellers simply sign on the dotted line without reading what it is they’re signing. Or, they think that because the form is preprinted, it’s okay.
Well, maybe it is, and maybe it isn’t. Most listing agreements are relatively one-sided. That is, one-sided in favor of the real estate agent. If you’re going to use a real estate attorney, contact one now and have him or her look over your listing agreement and make suggestions. You may want to negotiate everything from the commission to how long you’ll owe the firm a commission if you remove your property from the market and then later sell it yourself.
- Decide When To Sell, and To Whom. Often, real estate agents will push you to accept the first offer you receive. That’s because typically the first offer is the best one you’ll get. However, in a hot market, you might get several offers all at once, or over a couple of days. And even if the first offer is the best (too bad there’s no way to know upfront), you still have the right to reject it.
Just be aware, that if you reject an offer for the full amount of the list price, without any contingencies, you may still owe your real estate agent a commission (unless you’ve changed that particular clause in the listing agreement).
- Be Greedy. Especially in the kinds of hot markets we’re seeing now. But being greedy usually isn’t in your best long-term interest. Holding out for every last dollar, making the buyer really pay through the nose, isn’t going to make the deal go smoothly.
Remember, the best deals end with everyone feeling like a winner. And if you can get through the process without too many scars, so much the better.