What Are Some Good Resources To Learn The Basics About Selling A House?
February 2, 2016 11:53 AM Subscribe
My husband and I are planing to sell our first home this year. I need things explained to me in a very simple, clear way. More inside.
I am actually surprised I didn't find a previously asked question about this, I did look and I apologize if I missed something.
If anyone has suggestions for resources that explain the home selling process I'd be very grateful. I am SO ignorant of the whole thing. I've been reading this and that but have wound up with more questions and very few answers. For example, one website said to check and see if our agent would give us a discounted commission price if they both listed and sold the home. I have no idea what that means. I thought listing and selling were all part of one "home selling process." I have no idea what is a normal commission for an agent to make. I have no idea what an agent normally provides as part of their service and what they might ask us to pay extra for. I'm afraid to talk to an agent because I feel like I'm wearing a big "SUCKER!" sign around my neck.
Thanks again Meta Filter, I love you guys!
I am actually surprised I didn't find a previously asked question about this, I did look and I apologize if I missed something.
If anyone has suggestions for resources that explain the home selling process I'd be very grateful. I am SO ignorant of the whole thing. I've been reading this and that but have wound up with more questions and very few answers. For example, one website said to check and see if our agent would give us a discounted commission price if they both listed and sold the home. I have no idea what that means. I thought listing and selling were all part of one "home selling process." I have no idea what is a normal commission for an agent to make. I have no idea what an agent normally provides as part of their service and what they might ask us to pay extra for. I'm afraid to talk to an agent because I feel like I'm wearing a big "SUCKER!" sign around my neck.
Thanks again Meta Filter, I love you guys!
On the specific thing about the discounted commission --- I think the website is referring to a situation where the same realtor acts as the buyer's agent and the seller's agent on the same transaction. So they would represent both you, as the seller's agent, as well as the buyer.
In a normal transaction where the seller and the buyer have separate agents, the entire commission usually comes out of the seller's end and is then split with the buyer's agent. If a single agent is representing both sides of the deal, they don't have to split the fee, so they're often willing to take a discounted commission.
posted by slenderloris at 12:06 PM on February 2, 2016 [1 favorite]
In a normal transaction where the seller and the buyer have separate agents, the entire commission usually comes out of the seller's end and is then split with the buyer's agent. If a single agent is representing both sides of the deal, they don't have to split the fee, so they're often willing to take a discounted commission.
posted by slenderloris at 12:06 PM on February 2, 2016 [1 favorite]
I was the same as you and one day I logged in to my bank website and they were like "Find an agent! We have a special!" and apparently they had a special so I went with the agent they suggested and she was amazing and helped me sell my house. If you happen to bank with USAA take advantage of their service. Otherwise, a few answers
- you can get but don't need to get an agent, buyers have more to worry about
- typical commission is 6%, if a buyer and a seller both have an agent, they typically split this (this can vary WIDELY but that's ballpark)
- when your house is listed it just goes into a big real estate blabity bla database so theoretically, depending on how you do it, people who are not "your" agent may be the ones who show up with a buyer
- I did not pay my agent a thing over and above her commission and she did a lot of work for me, random work.
I read house selling for dummies. It was fine. A lot of this will vary depending on how competitive your market is and how much you want to wring top dollar out of this transaction. I wanted my house GONE and wanted to put in minimal effort and that worked out pretty well.
The biggest thing that was helpful to me was knowing it was a time consuming process. I had to get a survey (my place came with land) I had to go back and forth with a number of sellers, there was definitely a lot of "Is this really happening this time?" feelings literally until a few days before the closing. A good real estate agent who you are comfortable with will really help with all that. My sister (who sold her house in a much tighter market) had a real estate agent who was sort of bossy and told her she "had" to do a bunch of things to get her house sold. Find someone who wants what you want, it's fine to "interview" a few people before you go with one.
posted by jessamyn at 12:07 PM on February 2, 2016 [3 favorites]
- you can get but don't need to get an agent, buyers have more to worry about
- typical commission is 6%, if a buyer and a seller both have an agent, they typically split this (this can vary WIDELY but that's ballpark)
- when your house is listed it just goes into a big real estate blabity bla database so theoretically, depending on how you do it, people who are not "your" agent may be the ones who show up with a buyer
- I did not pay my agent a thing over and above her commission and she did a lot of work for me, random work.
I read house selling for dummies. It was fine. A lot of this will vary depending on how competitive your market is and how much you want to wring top dollar out of this transaction. I wanted my house GONE and wanted to put in minimal effort and that worked out pretty well.
The biggest thing that was helpful to me was knowing it was a time consuming process. I had to get a survey (my place came with land) I had to go back and forth with a number of sellers, there was definitely a lot of "Is this really happening this time?" feelings literally until a few days before the closing. A good real estate agent who you are comfortable with will really help with all that. My sister (who sold her house in a much tighter market) had a real estate agent who was sort of bossy and told her she "had" to do a bunch of things to get her house sold. Find someone who wants what you want, it's fine to "interview" a few people before you go with one.
posted by jessamyn at 12:07 PM on February 2, 2016 [3 favorites]
I can answer some questions generically for the US.
1. Realtors charge 6% of the purchase price of the home to sell your house. So if the house sells for $100,000, $6,000 will be paid to the realtors, the listing agent (your realtor) and the sellers agent (the agent used by the people who buy your home.) They split it evenly. So, you might get a discount if your realtor also sells the property. Maybe 1%
2. Interview a few realtors before deciding to list with one, pick one you feel VERY comfortable with. This may or may not be your aunt, your neighbor or someone on a billboard on your way to work. A good realtor will be honest with you about the value of your home, will tell you to pack up your collection of Hummel figurines and will recommend someone to clean your house so that people can do surgery on your kitchen floors.
3. A realtor will market your property. The first part of this is putting it into the Multiple Listing Service. This is a listing of ALL homes in the US that are for sale. If you want a glimpse into what this is, put your zip code and house dimensions into Realtor.com. This will show you a list of all the homes that have been listed for sale in your area with the same number of bedrooms and bathrooms. It will give you an idea of what homes are listed for in your area. Other marketing may be Realtor Showings, where a parade of realtors come through the house some weekday so they can see if anyone they're working with might be interested. They will host Open Houses. You will be away from the house whenever someone is viewing it.
4. You will be asked if they can leave a lock box on your door so that realtors can show your house when you are not home. If you're serious about selling your home, you should say yes.
5. You will need to stage your home before putting it on the market. This means packing up more than half of your stuff. Depersonalizing your home. Fixing EVERYTHING on your honey-do list and cleaning the bejesus out of your house. It will involve cheesy shit like baking cookies before showings. Filling up the tub with Calgon so it's blue and floating flowers and rubber duckies in it. It means that towels and bed linens are pristine and white. No pictures of the family at all. The pets will be clean and if they are dogs, they will be quarantined away from the main part of the house (in a crate or the laundry room.)
6. The realtor will tell you what the market price of your home should be realistically. They will negotiate offers. In most cases you will be offered LESS than the asking price (unless you're in an active market) so it's important that your Realtor is a good negotiator. Additionally you may be asked to pay closing costs for the buyers, if so, consider the entire offer before deciding.
7. Your realtor will coordinate with the buyer's agent to get the home inspected. If there are significant findings, you may be asked to come down on the price the value of whatever doesn't meet standards. You can say no but it may put the deal in jeopardy.
8. At closing the buyers will come with their check for closing costs, down payment, etc. You will sit at the same table. You will wait until their loan is funded. I've done this a few times. You'll have a time to close, but if the loan isn't funded, you won't close. We went out to lunch with our buyers when their bank was dragging its feet.
9. The day of closing, the buyers will do a walk through to confirm that what the inspector found was fixed and that everything promised in the contract is still in the house (appliances, draperies, fixtures, etc.) If something is missing or amiss, they may halt the deal or request money in escrow until the thing is remedied.
10. Grow a thick skin because people will judge your shit. The feedback you get will be brutal, especially if your realtor told you about it before.
11. You have to keep your house 100% clean and ready to show at a moment's notice.
It's daunting, but any extra effort you put into the endeavor will result in a faster sale, for more money. Now is the time to get the ball rolling, people in the US start to look in the spring and close in the summer to get kids into the new school for the new year.
Good Luck!
posted by Ruthless Bunny at 12:30 PM on February 2, 2016 [5 favorites]
1. Realtors charge 6% of the purchase price of the home to sell your house. So if the house sells for $100,000, $6,000 will be paid to the realtors, the listing agent (your realtor) and the sellers agent (the agent used by the people who buy your home.) They split it evenly. So, you might get a discount if your realtor also sells the property. Maybe 1%
2. Interview a few realtors before deciding to list with one, pick one you feel VERY comfortable with. This may or may not be your aunt, your neighbor or someone on a billboard on your way to work. A good realtor will be honest with you about the value of your home, will tell you to pack up your collection of Hummel figurines and will recommend someone to clean your house so that people can do surgery on your kitchen floors.
3. A realtor will market your property. The first part of this is putting it into the Multiple Listing Service. This is a listing of ALL homes in the US that are for sale. If you want a glimpse into what this is, put your zip code and house dimensions into Realtor.com. This will show you a list of all the homes that have been listed for sale in your area with the same number of bedrooms and bathrooms. It will give you an idea of what homes are listed for in your area. Other marketing may be Realtor Showings, where a parade of realtors come through the house some weekday so they can see if anyone they're working with might be interested. They will host Open Houses. You will be away from the house whenever someone is viewing it.
4. You will be asked if they can leave a lock box on your door so that realtors can show your house when you are not home. If you're serious about selling your home, you should say yes.
5. You will need to stage your home before putting it on the market. This means packing up more than half of your stuff. Depersonalizing your home. Fixing EVERYTHING on your honey-do list and cleaning the bejesus out of your house. It will involve cheesy shit like baking cookies before showings. Filling up the tub with Calgon so it's blue and floating flowers and rubber duckies in it. It means that towels and bed linens are pristine and white. No pictures of the family at all. The pets will be clean and if they are dogs, they will be quarantined away from the main part of the house (in a crate or the laundry room.)
6. The realtor will tell you what the market price of your home should be realistically. They will negotiate offers. In most cases you will be offered LESS than the asking price (unless you're in an active market) so it's important that your Realtor is a good negotiator. Additionally you may be asked to pay closing costs for the buyers, if so, consider the entire offer before deciding.
7. Your realtor will coordinate with the buyer's agent to get the home inspected. If there are significant findings, you may be asked to come down on the price the value of whatever doesn't meet standards. You can say no but it may put the deal in jeopardy.
8. At closing the buyers will come with their check for closing costs, down payment, etc. You will sit at the same table. You will wait until their loan is funded. I've done this a few times. You'll have a time to close, but if the loan isn't funded, you won't close. We went out to lunch with our buyers when their bank was dragging its feet.
9. The day of closing, the buyers will do a walk through to confirm that what the inspector found was fixed and that everything promised in the contract is still in the house (appliances, draperies, fixtures, etc.) If something is missing or amiss, they may halt the deal or request money in escrow until the thing is remedied.
10. Grow a thick skin because people will judge your shit. The feedback you get will be brutal, especially if your realtor told you about it before.
11. You have to keep your house 100% clean and ready to show at a moment's notice.
It's daunting, but any extra effort you put into the endeavor will result in a faster sale, for more money. Now is the time to get the ball rolling, people in the US start to look in the spring and close in the summer to get kids into the new school for the new year.
Good Luck!
posted by Ruthless Bunny at 12:30 PM on February 2, 2016 [5 favorites]
"interview a few realtors before deciding to list with one"
Yes, absolutely - talk to at least three. We went with the first one we talked to because he seemed nice and knowledgeable and had glowing recommendations. He wasn't bad, but he wasn't the best for us. Realtors will be delighted to talk with you, and you should learn even from ones you don't choose.
posted by Mr.Know-it-some at 1:06 PM on February 2, 2016 [1 favorite]
Yes, absolutely - talk to at least three. We went with the first one we talked to because he seemed nice and knowledgeable and had glowing recommendations. He wasn't bad, but he wasn't the best for us. Realtors will be delighted to talk with you, and you should learn even from ones you don't choose.
posted by Mr.Know-it-some at 1:06 PM on February 2, 2016 [1 favorite]
In picking a realtor, consider your market. My MIL sold her house recently, in an area with a lot of Chinese families moving in. She watched for a while, and found a realtor who sold a lot of homes in the area, who spoke Mandarin (and maybe Cantonese). She felt that gave her an edge because it seemed that a lot of the Chinese buyers felt more comfortable with a sellers agent who spoke their language.
posted by radioamy at 1:34 PM on February 2, 2016 [2 favorites]
posted by radioamy at 1:34 PM on February 2, 2016 [2 favorites]
If your house is in a 'hot' neighborhood, and/or you're willing to set a price that will attract buyers, you could ask around and find a realtor who will act as a facilitator rather than as a broker. You pay the facilitator a flat fee of maybe $1K to do all the paperwork, basically everything except finding the buyer. The advantage to them is that they don't have to deal with the red tape etc. that comes with operating as a broker and listing the property. I'll be selling my house this summer, and hope someone will correct me if this is a bad idea - a knowledgeable and experienced friend has recommended it to me.
posted by mmiddle at 2:19 PM on February 2, 2016 [1 favorite]
posted by mmiddle at 2:19 PM on February 2, 2016 [1 favorite]
Agent fees are usually pretty standard for a given market, 6% is typical. You can negotiate a lower fee, but remember: the 6% is usually split with the buyer's agent. The fee goes in the MLS listing where the buyer's agent can see it. So if you do manage to negotiate down to say 4%, agents on the buyer side may steer clients away from your house and towards other houses where they'll get the extra percentage point.
Another thing about the commission structure is that it may make your (seller's) agent more inclined to close a deal at a lower price rather than risk it falling through for a higher price. This was a chapter in Freakonomics IIRC. The gist of it is this: if someone offers $190,000 and you want to hold out for $200,000, your agent would rather you just take the offer and not counter. The upside of the extra $10,000 is only another $300 for them (their share of the 6% commission). Keep this in mind when negotiating. You may want to have someone else you can bounce offers off of (like your attorney, if you are hiring one and she's willing to help you negotiate) who doesn't have a stake in the final sale price. Your agent should also give you comps--recent sale prices of comparable houses in your neighborhood--look these over carefully and even drive by the houses yourself to get a feel for what yours might be worth.
Look into how much closing costs are in your area. In addition to the real estate commission, there are transfer taxes (which may be paid by the buyer, the seller, or split by both of you) and billions of other fees. If you still have your closing docs from when you bought the house, that would be a good place to start as there are columns for each party's share of the closing costs and you can quickly work out a rough percentage. It really helps when you get an offer to quickly ballpark "we are only going to see X% of this, minus the mortgage equals $Y."
Depending on the local real estate market, your contract with the buyer will probably contain contingencies, especially an inspection contingency. This lets them back out of the deal if an inspection uncovers problems. Buyers often can use the inspection as leverage to get you to fix issues or give them a credit to make the repairs themselves. Keep this in mind as you negotiate--fix things yourself and/or budget for a concession.
posted by mama casserole at 2:58 PM on February 2, 2016
Another thing about the commission structure is that it may make your (seller's) agent more inclined to close a deal at a lower price rather than risk it falling through for a higher price. This was a chapter in Freakonomics IIRC. The gist of it is this: if someone offers $190,000 and you want to hold out for $200,000, your agent would rather you just take the offer and not counter. The upside of the extra $10,000 is only another $300 for them (their share of the 6% commission). Keep this in mind when negotiating. You may want to have someone else you can bounce offers off of (like your attorney, if you are hiring one and she's willing to help you negotiate) who doesn't have a stake in the final sale price. Your agent should also give you comps--recent sale prices of comparable houses in your neighborhood--look these over carefully and even drive by the houses yourself to get a feel for what yours might be worth.
Look into how much closing costs are in your area. In addition to the real estate commission, there are transfer taxes (which may be paid by the buyer, the seller, or split by both of you) and billions of other fees. If you still have your closing docs from when you bought the house, that would be a good place to start as there are columns for each party's share of the closing costs and you can quickly work out a rough percentage. It really helps when you get an offer to quickly ballpark "we are only going to see X% of this, minus the mortgage equals $Y."
Depending on the local real estate market, your contract with the buyer will probably contain contingencies, especially an inspection contingency. This lets them back out of the deal if an inspection uncovers problems. Buyers often can use the inspection as leverage to get you to fix issues or give them a credit to make the repairs themselves. Keep this in mind as you negotiate--fix things yourself and/or budget for a concession.
posted by mama casserole at 2:58 PM on February 2, 2016
Some tricks of the trade:
If the house is priced right there are buyers for every house at every time of the year. So every monthly mortgage payment and associated carrying cost payment (utility, taxes, management fees) you make on the house for sale is a price reduction you could have made 30 days earlier to help price the residence correctly. Price right, market correctly, and you will have a quick sale.
Drive around your neighborhood and take note of the Brokerages (not necessarily the Realtor, but it may be clear that one Realtor is the local expert) that has the most amount of For Sale signs up in seller's yards. This will help you narrow down the local area expert brokerages and then you can research Realtors from that broker.
I suggest staying with known brokers and known agents as too many Realtors are part time, half-assed, or in it because they think it's an easy fun job. The best Realtors work for established brokerages and have their name all over their markets. Small timers cannot always afford this and their marketing, buyer lists, and networks (or lack thereof) may reflect their small time status.
For most Americans, your home sale and home purchase are two of the most financially impactful transaction you will even make, so remember that you and your Realtor are in a business transaction. You do not need to make your Realtor comfortable and you do not need them to be your friend. Tell them what you want and expect from them, and negotiate from that point so that you and the Realtor are in agreement to concessions, open houses, marketing, and showing availability. While you and your Realtor should be in a professional business relationship where you are pressing them hard to sell your home, your Realtor cannot be afraid to give you the honest truth about your residence's cleanliness, marketability, functional obsolescence, comparable sales, local markets, normal and customary seller concessions. You must then be receptive of their information and advice. It's a two way street that you must also be willing to travel down....
Here are some legitimate marketing tricks that should be in place for every showing: Open all drapes and curtains, turn on every single light in the house including closet lights and the oven light, have the heat or air on so that the house is comfortable, and do not scent the air. People think you are covering up bad smells when there are air fresheners or cookies or whatever smelling up the house. Before your first showing, have the house deep cleaned. If any walls need paint touch up, have it done and if you are fully repainting anything - then paint it Home Sale Beige.
Make sure your home pictures are top notch because 98% of buyers start searching on the internet, and bad pictures will cause potential buyers to wonder what other bad things are wrong with the house that no one paid attention to; basically, homes with strong pictures will imply quality and will be interesting to a buyer. If you don't like even one picture on your listing, change it! And always lead with a picture of the front of your house. If you lead with anything else people will think you are hiding something about the front of your house and even when they see the picture of the front of the house, they will already have a negative preconceived of the front of the house.
Yes, buyers are odd.
posted by lstanley at 4:20 PM on February 2, 2016 [3 favorites]
If the house is priced right there are buyers for every house at every time of the year. So every monthly mortgage payment and associated carrying cost payment (utility, taxes, management fees) you make on the house for sale is a price reduction you could have made 30 days earlier to help price the residence correctly. Price right, market correctly, and you will have a quick sale.
Drive around your neighborhood and take note of the Brokerages (not necessarily the Realtor, but it may be clear that one Realtor is the local expert) that has the most amount of For Sale signs up in seller's yards. This will help you narrow down the local area expert brokerages and then you can research Realtors from that broker.
I suggest staying with known brokers and known agents as too many Realtors are part time, half-assed, or in it because they think it's an easy fun job. The best Realtors work for established brokerages and have their name all over their markets. Small timers cannot always afford this and their marketing, buyer lists, and networks (or lack thereof) may reflect their small time status.
For most Americans, your home sale and home purchase are two of the most financially impactful transaction you will even make, so remember that you and your Realtor are in a business transaction. You do not need to make your Realtor comfortable and you do not need them to be your friend. Tell them what you want and expect from them, and negotiate from that point so that you and the Realtor are in agreement to concessions, open houses, marketing, and showing availability. While you and your Realtor should be in a professional business relationship where you are pressing them hard to sell your home, your Realtor cannot be afraid to give you the honest truth about your residence's cleanliness, marketability, functional obsolescence, comparable sales, local markets, normal and customary seller concessions. You must then be receptive of their information and advice. It's a two way street that you must also be willing to travel down....
Here are some legitimate marketing tricks that should be in place for every showing: Open all drapes and curtains, turn on every single light in the house including closet lights and the oven light, have the heat or air on so that the house is comfortable, and do not scent the air. People think you are covering up bad smells when there are air fresheners or cookies or whatever smelling up the house. Before your first showing, have the house deep cleaned. If any walls need paint touch up, have it done and if you are fully repainting anything - then paint it Home Sale Beige.
Make sure your home pictures are top notch because 98% of buyers start searching on the internet, and bad pictures will cause potential buyers to wonder what other bad things are wrong with the house that no one paid attention to; basically, homes with strong pictures will imply quality and will be interesting to a buyer. If you don't like even one picture on your listing, change it! And always lead with a picture of the front of your house. If you lead with anything else people will think you are hiding something about the front of your house and even when they see the picture of the front of the house, they will already have a negative preconceived of the front of the house.
Yes, buyers are odd.
posted by lstanley at 4:20 PM on February 2, 2016 [3 favorites]
Response by poster: Thanks for the great advice! Mr Vino, we are in the North Austin area of Texas in US.
posted by WalkerWestridge at 8:38 AM on February 3, 2016
posted by WalkerWestridge at 8:38 AM on February 3, 2016
You can interview agents but it's better to see them in action. Go to some open houses. Look at the house. It is clean? Are simple things fixed up or are there little things that could have been fixed, like broken cabinet hinges? Most importantly, how is the agent?
I've been to many open houses and have seen disinterested agents at many. One agent answered our questions with an odd insult. One agent was nice enough but the house was disgustingly filthy and if I were her I would have refused to have an open house in it. A few agents actually impressed me and if I had a house to sell I would call them.
Some people will say "but open houses don't sell houses" to which I say: so what? If the agent is having an open house she should do it right, and any good agent knows that an open house is a chance to drum up business.
Another way to see them in action: see what listings they have sold.
posted by massysett at 9:25 AM on February 3, 2016 [1 favorite]
I've been to many open houses and have seen disinterested agents at many. One agent answered our questions with an odd insult. One agent was nice enough but the house was disgustingly filthy and if I were her I would have refused to have an open house in it. A few agents actually impressed me and if I had a house to sell I would call them.
Some people will say "but open houses don't sell houses" to which I say: so what? If the agent is having an open house she should do it right, and any good agent knows that an open house is a chance to drum up business.
Another way to see them in action: see what listings they have sold.
posted by massysett at 9:25 AM on February 3, 2016 [1 favorite]
Make sure your home pictures are top notch because 98% of buyers start searching on the internet,
Oh yes, make sure you look at your prospective agent's previous and current listings. Look at the photos. If they are lousy camera phone photos, do not hire. If they were taken at night, do not hire. If the house was not clean, do not hire. Photos should be done by a professional photographer with professional equipment, not by anybody walking around with an iPhone or a point and shoot camera. I am always astonished at how many listings I see with horrible photos.
posted by massysett at 9:30 AM on February 3, 2016 [1 favorite]
Oh yes, make sure you look at your prospective agent's previous and current listings. Look at the photos. If they are lousy camera phone photos, do not hire. If they were taken at night, do not hire. If the house was not clean, do not hire. Photos should be done by a professional photographer with professional equipment, not by anybody walking around with an iPhone or a point and shoot camera. I am always astonished at how many listings I see with horrible photos.
posted by massysett at 9:30 AM on February 3, 2016 [1 favorite]
Staging, by an expert stager. Put your house in its best possible appearance. Staging pays for itself, unless it's already Architecture-Digest-beautiful.
posted by JimN2TAW at 3:43 PM on February 3, 2016 [1 favorite]
posted by JimN2TAW at 3:43 PM on February 3, 2016 [1 favorite]
This thread is closed to new comments.
posted by mr vino at 11:56 AM on February 2, 2016