What Is a Real Estate Agent’s Commission?
Ever wonder what exactly a Real Estate Agent does? Are they worth the commission? Ever wonder if you’re paying too much for commission? Even consider going it your own via FSBO or using one of these new apps that are long on promises and short on results?
You may have a great Agent and they don’t communicate with you all they’re doing. Or, you may also have a rock star agent and who’s doing so much it hasn’t even occurred to you all the fine details going into your home sale.
Here are a few facts that might help you sleep at night and have some peace about residential real estate commissions:
1. Real estate agents are sole proprietors
That means that even if they are a part of an agency, they are small business owners and cover all their own costs and carry all the risk. Do you own or have you ever owned your own small business? Then you know you wear ALL the hats and all the responsibility falls to you. Not to mention, your rather high tax rate!
They invest in you and your home. If they take on a listing, that means they’ve calculated the cost of marketing, photos, and time – lots and lots of time. High quality marketing – online and offline – and maybe even virtual tours. All that cost money. There’s considerable overhead if you are active in the field.
They have no salary and no real predictability in income. One deal may have to last them many months or maybe even longer.
2. The sale of your home may be covering for the loss of another
Deals fall through ALL. THE. TIME. Your particular sale may go pretty smoothly – great! I guarantee you it has ended up covering for a major loss on another deal. It’s the nature of business.
3. The real work begins once a contract is accepted
It may feel like all an agent does is show up sometimes for an open house here and there and put a sign in the yard. Or every time they come over, they’re telling you things you need to spend money on. But the real work is done behind the scenes and is intensified once an offer is accepted. Getting to the closing table is more and more challenging.
Pat Vredevoogd-Combs, a former president of the National Association of REALTORS, testified before the House Financial Services Committee on Housing to stark federal complaints about residential real estate industry pricing.
She submitted a list of 184 things that Listing Agents do in every real estate transaction as a part of her testimony to the committee. She stated, “By all accounts the general public is not aware of all the services that agents provide to sellers and buyers during the course of the transaction, probably because most of the important services are performed behind the scenes.”
Here is the list of (just) 184 things residential real estate agents do:
1. Make appointment with seller for listing presentation.
2. Send a written or e-mail confirmation of appointment and call to confirm.
3. Review appointment questions.
4. Research all comparable currently listed properties.
5. Research sales activity for past 18 months from MLS and public databases.
6. Research “average days on market” for properties similar in type, price and location.
7. Download and review property tax roll information.
8. Prepare “comparable market analysis” (CMA) to establish market value.
9. Obtain copy of subdivision plat/complex layout.
10. Research property’s ownership and deed type.
11. Research property’s public record information for lot size and dimensions.
12. Verify legal description.
13. Research property’s land use coding and deed restrictions.
14. Research property’s current use and zoning.
15. Verify legal names of owner(s) in county’s public property records.
16. Prepare listing presentation package with above materials.
17. Perform exterior “curb appeal assessment” of subject property.
18. Compile and assemble formal file on property.
19. Confirm current public schools and explain their impact on market value.
20. Review listing appointment checklist to ensure completion of all tasks.
Listing Appointment Presentation
21. Give seller an overview of current market conditions and projections.
22. Review agent and company credentials and accomplishments.
23. Present company’s profile and position or “niche” in the marketplace.
24. Present CMA results, including comparables, solds, current listings and expireds.
25. Offer professional pricing strategy based and interpretation of current market conditions.
26. Discuss goals to market effectively.
27. Explain market power and benefits of multiple listing service.
28. Explain market power of Web marketing, IDX and MLS.
29. Explain the work the broker and agent do “behind the scenes” and agent’s availability on weekends.
30. Explain agent’s role in screening qualified buyers to protect against curiosity seekers.
31. Present and discuss strategic master marketing plan.
32. Explain different agency relationships and determine seller’s preference.
33. Review all clauses in listing contract and obtain seller’s signature.
After Listing Agreement is Signed
34. Review current title information.
35. Measure overall and heated square footage.
36. Measure interior room sizes.
37. Confirm lot size via owner’s copy of certified survey, if available.
38. Note any and all unrecorded property lines, agreements, easements.
39. Obtain house plans, if applicable and available.
40. Review house plans, make copy.
41. Order plat map for retention in property’s listing file.
42. Prepare showing instructions for buyers’ agents and agree on showing time with seller.
43. Obtain current mortgage loan(s) information: companies and account numbers
44. Verify current loan information with lender(s).
45. Check assumability of loan(s) and any special requirements.
46. Discuss possible buyer financing alternatives and options with seller.
47. Review current appraisal if available.
48. Identify Home Owner Association manager is applicable.
49. Verify Home Owner Association fees with manager–mandatory or optional and current annual fee.
50. Order copy of Home Owner Association bylaws, if applicable.
51. Research electricity availability and supplier’s name and phone number.
52. Calculate average utility usage from last 12 months of bills.
53. Research and verify city sewer/septic tank system.
54. Calculate average water system fees or rates from last 12 months of bills.
55. Or confirm well status, depth and output from Well Report.
56. Research/verify natural gas availability, supplier’s name and phone number.
57. Verify security system, term of service and whether owned or leased.
58. Verify if seller has transferable Termite Bond.
59. Ascertain need for lead-based paint disclosure.
60. Prepare detailed list of property amenities and assess market impact.
61. Prepare detailed list of property’s “Inclusions & Conveyances with Sale.”
62. Complete list of completed repairs and maintenance items.
63. Send “Vacancy Checklist” to seller if property is vacant.
64. Explain benefits of Home Owner Warranty to seller.
65. Assist sellers with completion and submission of Home Owner Warranty application.
66. When received, place Home Owner Warranty in property file for conveyance at time of sale.
67. Have extra key made for lockbox.
68. Verify if property has rental units involved. And if so:
69. Make copies of all leases for retention in listing file.
70. Verify all rents and deposits.
71. Inform tenants of listing and discuss how showings will be handled.
72. Arrange for yard sign installation.
73. Assist seller with completion of Seller’s Disclosure form.
74. Complete “new listing checklist.”
75. Review results of Curb Appeal Assessment with seller and suggest improvements for salability.
76. Review results of Interior Decor Assessment and suggest changes to shorten time on market.
77. Load listing time into transaction management software.
Entering Property in MLS Database
78. Prepare MLS Profile Sheet–agent is responsible for “quality control” and accuracy of listing data.
79. Enter property data from Profile Sheet into MLS listing database.
80. Proofread MLS database listing for accuracy, including property placement in mapping function.
81. Add property to company’s Active Listings.
82. Provide seller with signed copies of Listing Agreement and MLS Profile Data Form within 48 hours.
83. Take more photos for upload into MLS and use in flyers. Discuss efficacy of panoramic photography.
Marketing the Listing
84. Create print and Internet ads with seller’s input.
85. Coordinate showings with owners, tenants and other agents. Return all calls–weekends included.
86. Install electronic lockbox. Program with agreed-upon showing time windows.
87. Prepare mailing and contact list.
88. Generate mail-merge letters to contact list.
89. Order “Just Listed” labels and reports.
90. Prepare flyers and feedback forms.
91. Review comparable MLS listings regularly to ensure property remains competitive in price, terms, conditions and availability.
92. Prepare property marketing brochure for seller’s review.
93. Arrange for printing or copying of supply of marketing brochures or flyers.
94. Place marketing brochures in all company agent mailboxes.
95. Upload listing to company and agent Internet sites.
RELATED: Your Custom Home Marketing Plan
96. Mail “Just Listed” notice to all neighborhood residents.
97. Advise Network Referral Program of listing.
98. Provide marketing data to buyers from international relocation networks.
99. Provide marketing data to buyers coming from referral network.
100. Provide “Special Feature” cards for marketing, if applicable/
101. Submit ads to company’s participating Internet real estate sites.
102. Convey price changes promptly to all Internet groups.
103. Reprint/supply brochures promptly as needed.
104. Review and update loan information in MLS as required.
105. Send feedback e-mails/faxes to buyers’ agents after showings.
106. Review weekly Market Study.
107. Discuss feedback from showing agents with seller to determine if changes will accelerate the sale.
108. Place regular weekly update calls to seller to discuss marketing and pricing.
109. Promptly enter price changes in MLS listings database.
The Offer and the Contract
110. Receive and review all Offer to Purchase contracts submitted by buyers or buyers’ agents. 111. Evaluate offer(s) and prepare “net sheet” on each for owner to compare.
112. Counsel seller on offers. Explain merits and weakness of each component of each offer. 113. Contact buyers’ agents to review buyer’s qualifications and discuss offer.
114. Fax/deliver Seller’s Disclosure to buyer’s agent or buyer upon request and prior to offer if possible.
115. Confirm buyer is pre-qualified by calling loan officer.
116. Obtain pre-qualification letter on buyer from loan officer.
117. Negotiate all offers on seller’s behalf, setting time limit for loan approval and closing date.
118. Prepare and convey any counteroffers, acceptance or amendments to buyer’s agent.
119. Fax copies of contract and all addendums to closing attorney or title company.
120. When Offer-to-Purchase contract is accepted and signed by seller, deliver to buyer’s agent.
121. Record and promptly deposit buyer’s money into escrow account.
122. Disseminate “Under-Contract Showing Restrictions” as seller requests.
123. Deliver copies of fully signed Offer to Purchase contract to sellers.
124. Fax/deliver copies of Offer to Purchase contract to selling agent.
125. Fax copies of Offer to Purchase contract to lender.
126. Provide copies of signed Offer to Purchase contract for office file.
127. Advise seller in handling additional offers to purchase submitted between contract and closing.
128. Change MLS status to “Sale Pending.”
129. Update transaction management program to show “Sale Pending.”
130. Review buyer’s credit report results–Advise seller of worst and best case scenarios.
131. Provide credit report information to seller if property is to be seller financed.
132. Assist buyer with obtaining financing and follow up as necessary.
133. Coordinate with lender on discount points being locked in with dates.
134. Deliver unrecorded property information to buyer.
135. Order septic inspection, if applicable.
136. Receive and review septic system report and access any impact on sale.
137. Deliver copy of septic system inspection report to lender and buyer.
138. Deliver well flow test report copies to lender, buyer and listing file.
139. Verify termite inspection ordered.
140. Verify mold inspection ordered, if required.
Tracking the Loan Process
141. Confirm return of verifications of deposit and buyer’s employment.
142. Follow loan processing through to the underwriter.
143. Add lender and other vendors to transaction management program so agents, buyer and seller can track progress of sale.
144. Contact lender weekly to ensure processing is on track.
145. Relay final approval of buyer’s loan application to seller.
146. Coordinate buyer’s professional home inspection with seller.
147. Review home inspector’s report.
148. Enter completion into transaction management tracking software program.
149. Explain seller’s responsibilities of loan limits and interpret any clauses in the contract.
150. Ensure seller’s compliance with home inspection clause requirements.
151. Assist seller with identifying and negotiating with trustworthy contractors for required repairs.
152. Negotiate payment and oversee completion of all required repairs on seller’s behalf, if needed.
153. Schedule appraisal.
154. Provide comparable sales used in market pricing to appraiser.
155. Follow up on appraisal.
156. Enter completion into transaction management program.
157. Assist seller in questioning appraisal report if it seems too low.
Closing Preparations and Duties
158. Make sure contract is signed by all parties.
159. Coordinate closing process with buyer’s agent and lender.
160. Update closing forms and files.
161. Ensure all parties have all forms and information needed to close the sale.
162. Select location for closing.
163. Confirm closing date and time and notify all parties.
164. Solve any title problems (boundary disputes, easements, etc.) or in obtaining death certificates.
165. Work with buyer’s agent in scheduling and conducting buyer’s final walkthrough prior to closing.
166. Research all tax, HOA, utility and other applicable prorations.
167. Request final closing figures from closing agent (attorney or title company).
168. Receive and carefully review closing figures to ensure accuracy.
169. Forward verified closing figures to buyer’s agent.
170. Request copy of closing documents from closing agent.
171. Confirm the buyer and buyer’s agent received title insurance commitment.
172. Provide “Home Owners Warranty” for availability at closing.
173. Review all closing documents carefully for errors.
174. Forward closing documents to absentee seller as requested.
175. Review documents with closing agent (attorney).
176. Provide earnest money deposit from escrow account to closing agent.
177. Coordinate closing with seller’s next purchase, resolving timing issues.
178. Have a “no surprises” closing so that seller receives a net proceeds check at closing.
179. Refer sellers to one of the best agents at their destination, if applicable.
180. Change MLS status to Sold. Enter sale date, price, selling broker and agent’s ID numbers, etc.
181. Close out listing in transaction management program.
Follow Up After Closing
182. Answer questions about filing claims with Home Owner Warranty company, if requested.
183. Attempt to clarify and resolve any repair conflicts if buyer is dissatisfied.
184. Respond to any follow-up calls and provide any additional information required from office files.
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Top 5 Reasons You Shouldn’t FSBO
In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO).
FREE DOWNLOAD: Critical Info For FSBOs
There are several reasons why this might not be a good idea for the vast majority of sellers. Here are the top five reasons:
1. Exposure to Prospective Buyers
Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
• 49% on the Internet
• 31% from a Real Estate Agent
• 7% from a Yard Signs
• 1% from Newspapers
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
FREE DOWNLOAD: Home Selling Essentials
Everything You Need To Know To Sell Your Home Fast For Top Dollar
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
• The buyer who wants the best deal possible
• The buyer’s agent who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• The home inspection companies, which work for the buyer and will almost always find some problems with the house
• The appraiser if there is a question of value
4. FSBOing Has Become More And More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest recorded figure since the National Association of Realtors began collecting data in 1981.
5. You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more, by not listing with an agent. One of the main reasons for the price difference at the time of sale is:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
If more buyers see a home, the greater the chances are that there could be a bidding war for the property. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6% this year.
Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer. Did you go the FSBO route? What did you learn? Are you considering going FSBO? What questions or concerns do you have? Sound of on our Facebook Page, Twitter or Instagram feeds or connect with us on LinkedIn. And don’t forget to subscribe to our monthly HOME ADVICEtm email newsletter for great tips for homeowners and sellers delivered straight to your inbox. You may unsubscribe at any time.
5 Reasons You Should Never Buy or Sell a Home Without a Real Estate Agent
You’re DIY’ing this real estate thing, and you think you’re doing pretty well—after all, any info you might need is at your fingertips online, right? That and your own judgment.
Oh, dear home buyer (or seller!)—we know you can do it on your own. But you really, really shouldn’t. This is likely the biggest financial decision of your entire life, and you need Real Estate Agent if you want to do it right.
1. They have loads of expertise
Want to check the MLS for a 4B/2B with an EIK and a W/D? Real estate has its own language, full of acronyms and semi-arcane jargon, and your Real Estate Agent is trained to speak that language fluently.
Plus, buying or selling a home usually requires dozens of forms, reports, disclosures, and other technical documents. Real Estate Agents have the expertise to help you prepare a killer deal—while avoiding delays or costly mistakes that can seriously mess you up.
FREE DOWNLOAD: The Complete Home Buyer Guide
2. They have turbocharged searching power
The Internet is awesome. You can find almost anything—anything! And with online real estate listing sites such as yours truly, you can find up-to-date home listings on your own, any time you want. But guess what? Real Estate Agents have access to even more listings. Sometimes properties are available but not actively advertised. A Real Estate Agent can help you find those hidden gems.
Plus, a good local Real Estate Agent is going to know the search area way better than you ever could. Have your eye on a particular neighborhood, but it’s just out of your price range? Your Real Estate Agent is equipped to know the ins and outs of every neighborhood, so she can direct you toward a home in your price range that you may have overlooked.
3. They have bullish negotiating chops
Any time you buy or sell a home, you’re going to encounter negotiations—and as today’s housing market heats up, those negotiations are more likely than ever to get a little heated.
You can expect lots of competition, cutthroat tactics, all-cash offers, and bidding wars. Don’t you want a savvy and professional negotiator on your side to seal the best deal for you?
And it’s not just about how much money you end up spending or netting. A Real Estate Agent will help draw up a purchase agreement that allows enough time for inspections, contingencies, and anything else that’s crucial to your particular needs.
4. They’re connected to everyone
Real Estate Agents might not know everything, but they make it their mission to know just about everyone who can possibly help in the process of buying or selling a home. Mortgage brokers, real estate attorneys, home inspectors, home stagers, interior designers—the list goes on—and they’re all in your Real Estate Agent’s network. Use them.
FREE DOWNLOAD: The Complete Home Sellers Guide
5. They’re your sage parent/data analyst/therapist—all rolled into one
The thing about Real Estate Agents: They wear a lot of different hats. Sure, they’re salespeople, but they actually do a whole heck of a lot to earn their commission. They’re constantly driving around, checking out listings for you. They spend their own money on marketing your home (if you’re selling). They’re researching comps to make sure you’re getting the best deal.
And, of course, they’re working for you at nearly all hours of the day and night—whether you need more info on a home or just someone to talk to in order to feel at ease with the offer you just put in. This is the biggest financial (and possibly emotional) decision of your life, and guiding you through it isn’t a responsibility Real Estate Agents take lightly.
Did you try the DIY route and the go Agent? Tell us about your experience. Sound of on the Patrick Parker Realty Facebook Page, our Twitter or LinkedIn Feeds or on our Instagram account. And don’t forget to subscribe to our monthly HOME ADVICE email newsletter for articles like this delivered straight to your inbox. You may unsubscribe at any time.
Why Using An Agent Is Better Than Going For Sale By Owner
Yes, at the end of the already arduous selling process, it can be painful to turn over that commission. And when you really start to crunch the numbers, it’s very tempting to forgo the listing agent altogether and enter the “For Sale By Owner” (FSBO) fray.
But there are huge advantages of using a real estate agent that you might not realize. Maybe your real estate agent is also an expert stager. Maybe they’ve got handyman friends and can help you get a really good price on a little fix-it work before your home joins the ranks of homes for sale on in New Jersey. Maybe they’ve connected you with the most honest mortgage lender in town.
Never mind that a great New Jersey real estate agent also can get you a better sale on your property. An Agent can save you time and money and fetch a higher selling price by driving more traffic to the home and creating buzz!
Here are five reasons to opt out of FSBO and hire a real estate agent to help with selling your home:
1. They market your home for free
Selling your house is really about marketing your house, which means producing marketing materials for said house. Translation: cash out of pocket and potentially subpar materials if you’re attempting to tap into those long-dormant graphic design skills.
FREE WHITEPAPER DOWNLOAD: Why Use An Agent To Sell Your Home?
But when you sign with that agent, they take over; professional photographs, postcards, brochures, advertisements, and a proper floor plan are just some of the materials that an agent whips up on your behalf — then distributes to contacts you couldn’t even hope to have.
2. They’re stage parents
You may love your homey living-room setup, but that arrangement probably doesn’t show off the space in the best way for selling. A savvy agent will come in, objectively assess your space, and then gently tell you what to keep and what to toss (or store) so that the space presents better. An even savvier agent will redistribute your existing furniture for maximum aesthetic appeal, then add accents for flair.
If you’re lucky, they might even have staging furniture at their easy — and free — disposal. And that sharp eye can extend to lesser-trafficked rooms as well. You’d be surprised how far new white towels and a shower curtain can go… as for bedrooms, simple, inexpensive changes like paint and new linens make a world of difference to potential buyers.
3. They know (the right) people
The best agents are the ones who set you up with their squad. Need a backyard refresh before putting your home on the market? They’ll hook you up with their go-to, well-priced landscape architect … who just happens to be available at a moment’s notice. Need someone to tackle all those small but beyond DIY home repairs? Agents always know the neighborhood handymen who are familiar with the architecture of the area. Freaked out about the loan process? Your agent’s mortgage broker is the one who will find you the best rate and walk you through the process.
During the stress of the selling process, it’s easy to throw your hands up and just toss money at a problem — money you don’t really have and don’t really need to spend. Your agent is there to save you from your own panicked impulses.
4. They’ll get you more money
Do you have any true idea of how the home-selling magic works? Don’t worry: agents do. Pricing is the -most important factor when selling your home and this is where Agents bring the most value. They will obtain top dollar for your home with trade secrets that only their expertise brings to the table.
RELATED: The Importance of Proper Pricing
Whatever their strategy, they’ll have a strategy. And once an offer comes in, they’ll know if and how you should counter, and what that counteroffer should look like. Higher price, different closing date, different contingencies, fees exclusion — your agent will expertly final negotiations with your absolute best interests in mind.
5. They save you time — and time is money
Bottom line: Your agent is there to do the things you cannot. Selling your home is an arduous process that requires multiple thinking caps you might not personally have at your disposal.
Never mind that it’s also a major time-suck. If you have to take time off from work to show your home to potential buyers, it’s costing you money. Sell your home is your Agent’s full-time job. They do the work!
Have you gone FSBO? What pitfalls have you fallen into? Did you opt for an Agent over FSBO? What were the benefits? Sound off on our Facebook or Twitter pages and don’t forget to sign up for our monthly Patrick Parker Realty eNewsletter for articles like this delivered straight to your inbox!
The 10 Sins of Selling
On average, home sellers commit up to five of these home-selling “sins” and lose thousands of dollars on their home sale as a result. The good news? All of these mistakes are easily avoidable — if you know how to identify them.
1. Not hiring a professional to sell your house
Trying to sell your home by yourself is sheer madness, and many sellers who try it soon discover this. Even if you’re in a competitive market such as Boston, and you think your home will sell easily, you need the expertise of a real estate professional to score the best deal.
FREE DOWNLOAD: Why Use An Agent to Sell Your Home
2. Neglecting necessary repairs prior to sale
You will lose money if you don’t take care of repairs before your house goes on the market, because they will most likely be discovered during the home inspection. Do necessary repairs before listing and save yourself the last-minute headache of trying to quickly fix issues such as a leaking roof or botched caulk job.
3. Refusing to remove your clutter and junk prior to the sale
Clutter eats equity and kills deals. With all that extra stuff in the way, homebuyers can’t see the home for its true potential, and the offer will reflect that.
4. Selling your house empty
While clutter is bad, selling an empty house makes buyers feel the same way — empty. They need to be able to visualize how the home looks with furniture and how functional it will be for their own family.
5. Mispricing your home
Overpricing or underpricing your house is a huge money-losing mistake. Work with your agent to list your home at the perfect price to make sure it doesn’t sit on the market for too long, or worse, make you forever wonder if you could have gotten more money.
CRITICAL READING: The Importance of Proper Pricing
6. Not setting the stage for sale day
Remember; buyers purchase with their hearts and not their heads. Create a showplace for your buyers on sale day (but don’t go overboard with music or too much potpourri).
7. Letting your emotions get in the way when negotiating
It’s not uncommon – and almost understandable. But many sellers become emotional while negotiating and lose out on creating a win-win deal. Look forward to a bright future as hard as it may be to let your house go.
8. Neglecting to complete a full set of disclosures prior to closing
This one’s simple. Be honest and reveal everything (plus, what you don’t reveal will be discovered by the buyer). Ask your Agent for help with this. Patrick Parker Realty takes our fiduciary duty to represent your interests very seriously. This includes proper disclosure.
9. Preempting the sale for maximum tax benefits
Even one day can cost you tens of thousands in extra taxes. Don’t be left a day late and many dollars short.
10. Overlooking junk fees and extra expenses at closing
Home sellers throw away thousands by not requesting and confirming a list of fees and expenses long before closing day.
Did we miss any home-selling mistakes? What have you learned in retrospect? Sound off in Comments, on the Patrick Parker Realty Facebook or Twitter pages and don’t forget to sign up for the monthly Patrick Parker Realty eNewsletter for more articles like this delivered straight to your inbox.
10 Questions To Ask Your Next Listing Agent
So, you have made the smart decision to hire a Listing Agent to assist you in marketing and selling your home. But who should you hire – your brother-in-law, your neighbor two doors down, or the lady who sends you a calendar in the mail every December?
Amazingly, according to the latest National Association of REALTORS® Profile of Home Buyers and Sellers, 67% of sellers interview only one agent before making the decision to list with an agent. But is that wise? No, probably not. Instead successful sellers often find it prudent to meet with multiple agents and treat each appointment as a job interview.
So what questions should you ask each interviewee?
Let’s take a look at 10 questions to ask your next listing agent:
1. How long have your been selling real estate and are you a full time agent?
Agents who have been in the real estate business for more than five years are likely to have double or even triple the income of newer licensees, but don’t pull the trigger too quickly. Many new licensees represent the new breed of college educated, internet enabled, smart phone packing entrepreneurs who may be just the kind of aggressive agent you’ve been looking for in this challenging market.
2. How much real estate did you sell last year?
Past performance can often be an indicator of future results. It may be harsh but agents who are having a hard time selling homes may also be suffering through a cash crunch which can affect their ability to invest marketing dollars into promoting your listing. Although a word of caution – don’t be too surprised if you find that even the top producers in your marketplace have had a tough last twelve months.
3. How many homes have you sold in my area?
A great way to find a listing agent is to identify agents who have sold homes in the last six to twelve months in your specific neighborhood. Agents that are consistently selling homes in your market area will have a better handle on how and why buyers prefer living in your community. The ability to market these positives can be a huge plus when trying to locate a buyer for your home.
4. What is your average market time vs. the market?
The average market time is a measurement of how long it takes the average home to sell – from the time it lands on the local multiple listing service to the day it closes escrow. Strong listing agents can often outperform the overall market by using innovate and aggressive marketing techniques that can help a home sell faster and for more money.
5. What is your list price to sales price ratio vs. the market?
If homes in your market area are selling for an average of 96% of their asking price, in real estate lingo this is often referred to as the list price to sales price ratio. Ideally strong listing agents will be able to “beat the street” by helping sellers price homes closer to real market value.
6. May I see a portfolio of other listings you have sold?
If you were going to hire a doctor to perform heart surgery you probably wouldn’t hire a dentist, right? The same is true in real estate. Ideally you want to hire an agent who specializes in your specific type of home – waterfront homes, shore communities, and condos for instance. These agents will be better equipped to provide specialized services that will give you better odds at creating success.
FREE DOWNLOAD: Real Estate is Local, You Need Local Expertise
7. Do you provide a written report to sellers, and if so, how often?
Communication is vital in a constantly changing real estate market. An agent that provides updates, even automated updates, on marketing, website activity, buyer showings, or even the sound of crickets (if nothing is happening) is a huge asset. Be clear and up front about your expectations and, if possible, set aside a day of the week to check in with the agent.
8. May I see your resume or brochure? (Yes… you can see Patrick Parker Realty’s Brochure)
Asking for a resume is a great way to learn in-depth information about your potential new partner in the sale of your home. It can also reveal details you might never have known – like their job history, educational background, and list of references. Don’t be afraid to dig deeper by asking for permission to call previous clients for a testimonial.
FREE DOWNLOAD: Patrick Parker Realty Listing Presentation
9. Do you have a specific marketing plan in mind?
Aggressive agents have aggressive marketing plans that ensure that their listings are exposed to every potential buyer in the marketplace. By coming to a meeting of the minds about what the specific marketing plan will be for your home at the outset of the listing agreement, you will set the stage for a successful relationship.
FREE DOWNLOAD: Your 25-Point Marketing Plan
10. Do you have internet strategy and how will you market my home online?
The vast majority of buyers today use the internet as an information resource when searching for their next home. Because of this you want an agent who has embraced an internet strategy as an integral part of their marketing plan. Ask to see their personal website, samples of virtual tours, web pages, and a list of portals where your home will be marketed.
FREE DOWNLOAD: Patrick Parker Realty’s Online Marketing Strategy
Don’t be too surprised if some agents aren’t quite ready to answer all the questions you have prepared for them. To be fair you may wish to provide them a list of your specific questions in advance so they can come to the listing appointment ready to impress you. Also, to make the most unbiased choice, ask agents to leave their pricing suggestions at the door. This will eliminate the natural but incorrect tendency of hiring the person who tells you the highest price and focus the interview solely on each agent’s individual strengths and weaknesses.
RELATED: The Importance of Proper Pricing >
You can contact us online or call 732.455.5252 today for a complimentary market analysis on your home… feel free to tell us to leave our assessment at the door!
We also invite you to visit our Real Estate Resource Room for more detailed information on the topics above.
Worst Home Selling Mistakes
Your home is most likely your most valuable asset, so you’ll want to do everything possible to help it sell for top dollar. If you’ve never sold your home before, you may be surprised by how time-consuming it can be. When you put your house on the market, your beloved home becomes just another listing. Selling a home isn’t easy; there are a lot of mistakes that can be made along the way. Here are the worse selling mistakes to avoid.
Not Pricing Your Home Properly
There’s no easier way to scare away interested buyers than a high asking price. One of the most important tasks your real estate agent does is helps you determine a fair asking price. If you price your home too low you could end up selling it for less than it’s worth. On the other hand, if you price it too much it could end up sitting on the market for weeks without a single offer. Your agent should perform a comparable market analysis to help determine a fair asking price. Relying on “gut feel” is usually not a wise decision.
Not Choosing the Right Real Estate Agent
Your real estate agent can make your home selling experience a breeze or a nightmare. If you’re hoping for the former, it’s important to do your homework before hiring a real estate agent. Flipping through the newspaper for the first real estate agent you see it’s probably not a good idea. Family and friends are a great source of real estate agents. They’ll be able to provide firsthand feedback if an agent is worth considering. Once you’ve shortlisted three agents, interview them and make your final decision.
Selling Your Home Yourself
Selling your home yourself is a lot more work than you think; most of the time you’re better off hiring an experienced real estate agent. Agents do a lot more than prepare the final paperwork – they show your property to interested buyers, field calls from agents, and negotiate on your behalf. If you decide to sell your home yourself you better have plenty of free time. If you work a 9-5 job, you may find it tough to take calls from interested agents and keep up with your daily job. Selling your home yourself may be a case of penny wise, pound foolish. Statistically, although not paying real estate commission is tempting, homes listed a “For Sale By Owner” sell for significantly less.
Learn More About Why You Should Use An Agent to Sell Your Home
Letting Your Emotions Get the Better of You
To you your house is your home. You’ve lived here many years, perhaps raised your kids here. Although you may feel attached to your house, the secret to home selling success is to think like a buyer. That means looking at your house with a critical eye for areas of improvement. You shouldn’t take anything buyers say personally. Remember, to buyers your home is just a house; they don’t have the same memories as you.
Patrick Parker Realty experts are committed to delivering 100% satisfaction. We offer turn-key services to get your home sold quickly and for top-dollar. Contact us today for a free home market analysis.
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Patrick Parker Realty Takes Marketing Properties to New Heights with Drone Technology
Patrick Parker Realty is the first Jersey Shore-area Brokerage to market real estate listings with aerial video via drone technology.
Bradley Beach, NJ (PHANTOM POWER Marketing) July 20, 2014 – As a market leader in real estate in Bradley Beach, New Jersey and surrounding Shore-area suburbs, Patrick Parker Realty continues to innovate using the latest in real estate marketing technologies. Patrick Parker Realty has a large presence on social media, recently launched a unique Inbound Marketing Campaign to complement an upgraded, mobile-friendly website, and has developed an app designed to make the house hunting process more dynamic with features such as photo-displaying capabilities, GPS/geolocation technology and call/email tools. And now, Patrick Parker Realty is the first area brokerage to use aerial drones that produce extraordinary, meticulous video to market properties for their clients.
New technologies like drones that capture aerial video are revolutionizing the marketing of real estate. Using drones, also known as unmanned aerial vehicles (UAV), homebuyers can view a listing in a way that no other photos or videos allow.
“We’re always looking for new strategies, and that’s where the drone comes in. With over 95 percent of homebuyers beginning their search online, coupled with the expectation for greater interactivity, high quality, detailed video is very important. With aerial videos a potential buyer can get a greater feel for the details of the property inside and out; including a sprawling comprehensive view, depth of the home, size of the lot, and how the neighborhood looks and what else surrounds the house,” says Patrick Parker, Broker and Owner.
“Particularly since many of our listings are waterfront or water adjacent, a potential buyer can really understand the beauty of the area, the context of the home, and the proximity to all the features the community has to offer. In a big way a home sale is about selling lifestyle, and this is where the drone is so important. A buyer can get a better impression of life in their new residence,” continues Parker.
Often times the virtual tours real estate agents provide are just photo slideshows. Every once in a while an Agent will produce an actual video showcasing the home and all its amenities, but even that tour doesn’t give the detail that a drone video can provide.
“Of course we’re still learning how to best leverage this new technology, but we’re excited to be the first in the area to implement it into our aggressive marketing strategy for our clients,” says Parker.
Patrick Parker Realty first introduced drone technology for their listing at 408 5th Avenue, Bradley Beach, New Jersey (MLS# 21424761). The video shows just how maneuverable and advanced drone technology is, and just how much height, alternative angles and high-resolution production enhances perspective.
“In today’s multimedia world it is more important than ever to think outside the marketing box. It’s no longer about browsing the Sunday paper,” adds Parker.
Patrick Parker Realty offers this service to clients for free as an added value to their overall marketing strategy. Their goal is to expose a property to potential homebuyers in every way possible, and with these aerial tours, buyers will get a much better feel for a property before they pick up the phone or send an email to schedule a showing; something both seller’s and buyer’s greatly appreciate.
“We’re visual people. The more you enable an understanding of what the house experience is like, the more time both the listing agent and the seller will save, because they’ll only be showing the property to people who are truly interested,” Parker says.
As effective as drones can be for real estate marketing, getting the technology off the ground has not been easy. All civil aircraft are subject to FAA regulation under U.S. law and the agency has yet to issue policy surrounding use of drone technology for commercial purposes, such as marketing for real estate.
In April, the National Association of Realtors sent a letter to the FAA urging the agency to speed up its process for issuing rules that will govern the commercial use of drones, but the agency has yet to rule.
“The FAA is currently developing a system for integrating commercial use drones into the national airspace. In addition, the National Association of Realtors, alongside a broad coalition of stakeholders, is working with the FAA to expedite the development of rules to allow real estate professionals to utilize drone technology to market properties,” says Russell Riggs, NAR’s senior regulatory policy representative.
Lack of regulation has still not deterred innovative Realtors to use drones to market properties.
“The use of drones in real estate is neither legal, nor illegal. It just has not been regulated yet,” says Brian Doe, Director of Business Development at Home Jab; a real estate video production company offering a network of trained filmmakers who create aerial video for real estate marketing.
Patrick Parker Realty chose Home Jab to produce their aerial videos because of the high standards they set for training and safety. While there is currently no official class or certificate one must obtain to operate drones, Home Jab hired a licensed helicopter pilot to train their staff in the technology. The internal safety guidelines Home Jab maintains offers proof that both Home Jab and Patrick Parker Realty are taking the responsibility of shooting aerial footage very seriously. That way when the FAA does issue rules and regulations surrounding commercial unmanned aerial vehicles, both agencies can show they’ve done all they can to adhere to any guidelines that will inevitably be set forth.
“It’s kind of like saying ‘you can’t speed,’ but the road has no speed limit. So how do you determine what speeding is? There is no way to enforce any rule, there is nothing out there about UAV’s, especially fewer than 55 pounds,” says Doe.
“What the FAA states or claims they can’t enforce. There was one case that went to court but was thrown out because there’s no law saying it’s illegal. They want to control the flow of it but realistically and legally they have no enforcement right, there are just no laws.” continues Doe.
“Until they officially rule it out and it’s against the law, we’re going to continue doing what we do to offer value to our clients. In the meantime, if the FAA says ‘you can’t do this,’ we can say ‘show us where we can’t,’ and they won’t be able to.” Parker says.
“It’s going to be a big part of the industry. We see aerial being a big part of marketing moving forward, and we are excited to already be using a technology that will likely become standard in the coming years,” continues Parker.
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About Patrick Parker Realty
Patrick Parker Realty, an independent boutique brokerage located in the heart of Bradley Beach is your local market leader. We understand the demands of a changing real estate market and avail ourselves of the latest industry information and tools to ensure excellent results.
Our seasoned Real Estate Agents are committed to providing all of our clients, from first time sellers to veteran real estate investors, quality and friendly service. We walk you through every step of the sale process offering the guidance, feedback, and expertise needed to ensure your complete satisfaction.
Patrick Parker Realty is more than just a brokerage; we are your strategic marketing partner boasting a dedicated marketing department to effectively promote your house via modern channels that yield the quickest, most effective results. We do this by monitoring the latest technologies, using effective communication methods and leveraging our knowledge of all things real estate so our efforts are informed by activities that yield results.
Should I Wait Until Spring to List My Home? Not According to the Data…
Sometimes we start a market analysis project looking for one thing and end up discovering something else entirely. Recently we decided to dig into the data to see if it supported our feeling that winter is the best time to buy, and the worst time to sell. However, when we got the results we discovered that our assumptions were dead wrong.
As we roll through the holidays and into winter, many would-be sellers will be holding off on listing their home, waiting for the spring “selling season” to put their home on the market. But if you’re ready to sell your home now, is waiting until spring the best strategy? Not according to the data, it isn’t.
We pulled a year’s worth of data on three quarters of a million homes listed across the country and analyzed sales statistics by season. Here’s what we found:
- Homes listed in winter sell faster: 46 days in winter vs. 55 days in summer
- Homes listed in winter are more likely to sell: 59.2% sell in winter vs. 53.1% sell in summer
- Homes listed in winter sell closest to their original price: a 2.7% drop from the final price in winter vs. a 5.2% drop from the final price in summer, worth more than $7,000 on a $300,000 home
Overall, homes listed in winter sell best. 5.8% more homes listed in winter eventually sell (compared to the overall percentage of homes listed throughout the year), and they sell 1.4 percentage points closer to their original list price than the median—that’s $4,900 on a $350,000 home.
Spring wins in one category: Speed. Homes listed in spring sell the fastest, sitting on the market for 15% less time than the median. Winter comes in second in this category though, at six percent below the median, while homes listed in summer and fall both sell slower than the median (12% and 16%, respectively).
Apparently not many sellers are on to this pattern, because winter has twenty percent fewer listings added than the spring.
Of course, not all markets are alike, but keep in mind we are measuring correlation here, not causation. There are no guarantees, but the data does seem to indicate that winter gets a bad rap for no good reason.
Finding Market Value Before You Talk To An Agent
What is your home worth today? With home prices rising and falling sharply over the last few years, it’s no wonder that this question can be something of a head-scratcher. If you’re watching the nightly news programs lately, you might assume that your home value has dropped to a negative number, that it’s almost impossible to sell your home at any price given the current market conditions. But that is wrong. Millions and millions of homes will be sold this year and yours can be one of them.
The classic line in real estate is that there are really three prices for every home – what the seller would love to get, what the buyer would love to pay, and finally, what the home will eventually sell for. Assuming there is no underlying motivation to sell quickly – something causing you duress which forces a sale to occur faster than normal like a divorce, a medical problem, or a foreclosure – you should be able to reasonably estimate the value of your home.
Competitive Market Analysis
The fastest way, of course, is to invite us to provide you with a complimentary competitive market analysis (CMA). Patrick Parker Realty Agents have access to a huge database of active and sold listings which we can draw from to provide a very accurate picture of your home’s value.
But what if you don’t want to talk to an agent quite yet? What if you want to estimate your own home’s value?
There is good news – you can still do it yourself using a few simple techniques.
Research public records
Every sale which occurs in your city, town, or neighborhood is recorded with a local government entity, typically the county recorder’s office. Because these are public records, anyone can access this information, and many now provide this information free of charge online. Take the time to review as many sales as possible.
Call a title company
Title companies often work with private owners and agents to manage real estate closings or to ensure title for the new home buyer at closing (or both). Because of this they are often happy to provide you with comparable sales for homes in your neighborhood which can be helpful in determining market value.
Be a detective
If you have keen eye for real estate signs in your neighborhood you can often watch as new listings hit the market, go pending, and eventually close escrow. By visiting real estate web sites such as Trulia or Zillow, talking to neighbors, or even visiting with the new buyers themselves, you can often learn what the home was listed for and eventually sold for.
Use the Internet
As a potential home seller you may wish to register at Trulia or Zillow to begin monitoring the activity in your specific market. These sites will automatically update you on new listings, price changes, and statistics that can be invaluable when identifying the right price for your property.
Pay for an unbiased opinion
One way to estimate the value of your home is to hire an appraiser to do a “pre-appraisal”. A pre-appraisal is done before a home buyer makes an offer. Appraisers have a duty to provide unbiased, objective opinions based on the latest market data. While this may cost a few hundred dollars, it can often provide invaluable information when you’re beginning to think about pricing and marketing your home.
Armed with all of this information you should be able to accurately estimate, within just a few hundred dollars, what your home will eventually sell for, right? Wrong. All of these techniques will provide you with a range of values, not a specific amount. Why? A home’s value is constantly changing, moving up, down, and sideways depending on a myriad of influencers. Your hard work should act as guide post, not a destination point.
Patrick Parker Realty experts are here to help you assess your property’s value. When you’re ready, call us at 732.455.5252 to schedule a complimentary Competitive Market Analysis or contact us online.
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