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The Selling Process
A Step by Step Overview of the Entire Home
Buying Process
It's a lot more involved than you might think
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Click on the menu choices above to go
step by step through the
process involved in selling
your home. Below is a description of the subject matter covered under
each menu choice. |
Agents/Agency
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Choosing the right agent & info about agency &
types of representation.
Pricing & Prep
- Insights and the
steps involved in searching and finding your dream home.
Marketing & More
- Marketing options to get your home exposure plus more.
Purchase Offer
- Receiving a purchase offer and the steps and points
to consider.
Home Inspection
- Information on Home Inspections and
required repairs, etc.
Appraisal
- Info on the home appraisal (valuation of your home for
mortgage purposes).
Title
Insurance
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Title Insurance: What it is & why you need it and more.
Final Walk Thru
- The final walk-thru inspection, repairs and things to
consider.
Closing
- The closing process, closing costs and things to do after the
closing.
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As a seller you want to sell your
home as quickly as possible, for the highest price with least amount of headaches. In
order to achieve these goals you need to choose the right company and agent and be sure
that you do everything possible to make your home as attractive as possible to potential
buyers. Selling a home can be a difficult process. Real estate is becoming more
and more complex. Studies have shown that the anxiety and stress
levels associated with buying or selling a home can be equivalent to a
divorce or the death of a spouse. Let us help you smooth out the
process and save you $$$ in the process.
Choose an experienced full time agent who will protect
your interests, especially in a tough negotiation.
More often than not, the goal in the real
estate industry is "sell" rather
than "represent". Many have an undeclared
mission statement that reflects "salesmanship"
rather than "representation" of
Buyer or Seller. First and foremost, ethically
and legally, a real estate agent should be
continuously aware of his or her responsibility
to the client.
Market
Timing When Selling
Ask anyone and you’ll get a different opinion
on when is a good time to sell. The big reason
given for not selling is that it’s not a good
market. You don’t need a good market to sell
a home. Priced correctly, almost any home
will sell quickly. The reason a home does
not sell is because it’s priced too high for
it's present condition and location. Many
sellers make the mistake of pricing their
home based on what they need to get out of
it. Unfortunately, buyers don’t care what
you need to get out of the property. They
base their offer on what other similar properties
have sold for in the past and what similar
properties are selling for at present.
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Tax
laws
There may be tax implications to selling your
home so before making any decision I would
advise consulting your financial advisor.
Below is a brief summary of the new tax laws:
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An exemption of up to
$250,000 of long term capital gains for
a seller's principal residence. Long term
is classified as 24 months or greater.
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Couples will get up to
a $500,000 exemption for long term capital
gains.
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Exempt amounts are reusable
every two years. This eliminates the old
once per lifetime "$125,000 gain
rule".
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The maximum tax rate
on capital gains over $250,000 will be
reduced from 28% to 20%.
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The roll over provision
is gone and the only provision for the
new law is that one must owner occupy
their principal residence for two years
or more.
Note: This tax information
is for informational purposes. Please consult
with your financial advisor.
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Understanding
Real Estate Agency
On the surface all real estate agents seem
alike. They all charge similar fees and provide
similar services. However picking the wrong
agent can cost you thousands. One of the first
things your new agent should discuss with
you is real estate agency. Most buyers don't
understand the difference between a listing
agent, a buyers agent, a transaction broker
or who represents whom in a transaction. A
single agent represents either the buyer or
seller but not both parties. A transaction
broker represents both parties in a limited
fashion. Click to view Florida’s Agency Disclosures,
Single
Agent Disclosure or
Transaction Broker Notice.
You may also choose a third option
No Brokerage Relationshi.
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The
Buyers (Selling) Agent
The selling agent is the buyer's agent exclusively.
He or she has a responsibility to represent
you and look out for your interests. You may
or may not have a written agreement (Buyer's
Broker Agreement) with your agent.
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The
Listing (Sellers) Agent
The listing agent is the seller's agent exclusively.
He or she has a responsibility to represent
the seller and look out for the seller's interests.
The listing agent almost always has a written
agreement called a listing contract that specifies
among other things, the price, commission
amount, and the authorization to put the property
in the MLS, split the commission with the
selling broker, and put a yard sign in front
of the property.
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The
Transaction Broker (Buyer and Seller)
There are time when a real estate agent will
represent both the buyer and seller in a transaction.
This happens when a buyer who is not represented
by a buyers agent calls on a sign, ad, or
Internet listing. The listing agent will show
their property listing to the buyer. If the
buyer decides to write an offer for the home
without employing their own agent they will
ask the listing agent write the offer. Before
writing the offer, the listing agent has the
buyer sign the transaction broker notice and
the seller sign the transition to transaction
broker notice form which discloses that the
agent will not work to represent one party
to the detriment of the other party when acting
as a transaction broker to both parties. This
is perfectly legal but not always in the best
interest of the buyer. When you make an offer
to buy a house, you are entering a negotiation.
The seller wants as high a price as possible
and the buyer wants the lowest price possible.
If a Realtor represents both sides, there
is a conflict of interest, though an ethical
Realtor can equally represent both sides.
Most Realtors are very ethical and take their
responsibilities seriously. However, If the
listing Realtor knows how much you are willing
to pay for a home or the loan amount you have
been qualified for, and that information gets
somehow passed on to the seller even though
they are also representing you as the homebuyer,
you are at a disadvantage. You won’t be in
this position, wondering if your getting a
good deal, if you hire your own agent to protect
your interests.
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Seller
Beware
A seller interviews agents to get their opinion
on what their home should sell for, what price
to list the home at and to hear their marketing
plan. Most agents will provide pricing opinions
within a few thousand dollars of one another.
However, there is usually at least one agent
who says he can get the seller significantly
more for the property than the other agents.
This agent will lavish praise on you and your
home, how special it is, how good the market
is, and how he knows it will sell for more.
What do you the seller do? You list your home
with the "pie in the sky" agent
who promises the world. Then the property
sits there because it's overpriced. A
few weeks or possible months later you wonder
why there have been few showings and/or no
offers on your home. At this point the "pie
in the sky" agent tells you that your
home is overpriced and maybe you should lower
the price. In the meantime you’ve wasted precious
time and you are now furious at the agent
for misleading you. The lesson here is, do
not choose a listing agent based on their
unrealistic value of your home. This type
of agent is either a blatant liar or has no
idea of what is going on in the local market.
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Understanding
How Agents Get Paid
Many buyers and sellers don't understand how
agents are paid. Some think the buyer has
to pay a fee for representation. Here's how
it works: When a seller lists a property for
sale, the listing agreement includes a commission
clause that stipulates how much commission
the seller will pay. It's usually a percentage
of the final selling price, let's say six
percent. Typically that 6% commission will
be split between the buyers agent and the
listing agent at the close. The listing broker
lists the home in the MLS notifying all the
other brokers that the commission split is
3% to the selling broker. However, in certain
situations the buyer pays a commission. For
example, the buyer may want to buy an unlisted
home from a private party. The buyer can hire
an agent to write the contract and pay him
direct. But generally with most listed MLS
properties the seller will pay the entire
commission.
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THE LISTING AGREEMENT
AND REQUIRED DISCLOSURES
Listing
Agreement
The Listing Agreement is a contract between
you and your agent to sell your house. This
contract details each parties responsibilities,
the commissions to be paid and under what
circumstances. You should ask for a copy a
listing agreement to review or sit down with
your agent to go over this document. Listing
agreements are flexible and can be tailored
to each clients needs and desires.
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Disclosures
There maybe numerous other disclosure forms that must be filled out by you and
your agent. Some of the more important forms are the Seller’s Disclosure, The
Homeowner’s or Condo Association Disclosures and the Lead-Based Paint
Disclosure. These forms are used to disclose material facts about the property
so that the buyer is aware of known defects, expenses or issues impacting the
property. There are various time periods in which a buyer is to receive these
disclosures.
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The
Seller’s Disclosure
This is a disclosure form that is filled out
by the seller and the listing agent and is
signed by the buyer and the seller. This form
discloses all known material defects in the
property. In general your agent should fill
this form out before listing your home. Buyer’s
agents will request a copy of this form from
the your agent before making an offer.
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Lead-Based
Paint Disclosure (Property built prior to
1978)
This form discloses to the buyer if the seller
has any knowledge of lead-based paint in the
property. The seller is also obligated to
provide the buyer (usually via one of the
agents) with a booklet that explains the hazards
of lead-based paint.
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Homeowner’s Or Condo Association Disclosures
These disclosures inform the buyer about the
cost of your association dues and any special
assessments that they may be liable to pay
for. In the case of a condo resale the buyer
is entitled to receive a copy of the condo
documents to review and approve. They have
the right to cancel a purchase contract if
they do not agree to the terms and conditions
within these documents.
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Pricing & Preparation of Your Home |
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The Right List Price
The right list
price is critical when listing your home.
Setting the list price is dependent on many
factors some of which are:
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Market Conditions
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Sales price of recently sold comparable homes
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Seller input
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Upgrades such as the view, lot size, etc.
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Your time frame
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The list price of other similar homes currently for sale
It can be difficult to pinpoint
the exact price that a home will sell for.
A custom home set on the beach with ocean
views can be much more difficult to price
as opposed to a cookie-cutter tract home in
a stable neighborhood. The custom home is
unique and can be harder to comp where the
tract home is easy to compare to other homes
in the neighborhood with the same floor plan.
A good listing agent will be able to give
you a narrow range where your home should
be priced.
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Check the Sales Comps
It's important to closely check the sales
comps provided by your agent. Look at the
properties that have sold within the last
6 months. Try to pick homes that are similar
in condition, location, and floor plan. Here
are the criteria that should be used:
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Homes that most recently closed
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Homes with the same number of bedrooms
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Homes with the same name number of bathrooms
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Similar square footage (within 300 sq ft if possible)
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Same number of stories
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Similar condition
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Similar lot size
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Similar location (the closer the better)
It's not always possible
to find sales comps that match your property.
You may have to use comps that are slightly
larger or smaller, a little further away,
that have a different lot size, or are in
better or worse condition. At that point you
have to make adjustments based on these factors.
For example, if you have a comp right down
the street that is the same floor plan but
is in need of renovation and yours is remodeled,
you’ll need to adjust your list price to reflect
the difference. Your agent will should be
able to help you decide the adjustment factor.
Also look at similar properties that are pending
sale. Your agent can provide these as well
through the MLS (Multiple Listing Service).
These are the most up to date sales comps
even though they have not officially closed.
Although we are not privy to the contract
sales price, a good agent may be able to ascertain
the approximate sale price.
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Check
the Competition
Along with the sold and pending comps, make
sure to look closely at similar properties
that are for sale in your area. This is another
clue to what your home is worth. However,
you have to use a bit more caution with these
properties because many times they are overpriced
and so you won't want to use these as true
comparisons. However, drive by these homes
and see what your competition is doing. Find
out how long they have been on the market.
Market time can be an indicator to how a property
is priced. A property on the market for 4
months in a hot market is probably priced
too high. As always, consult with your agent.
He or she will be able to guide you.
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Market
Conditions
Make sure you know which way the market is
going. If the market is booming and good listings
are scarce, you can probably price your home
a bit higher than the last sale. If the market
is slumping, prices could be softening and
you should be very careful you don't overprice
it and watch your home just sit there. Be
sure to consult with your agent as to which
way the market is heading. Markets are not
static, they are usually moving one way or
the other.
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Overpricing
Your Home
Pricing your
home too high will result in little activity,
a longer marketing period, and wasted time
and energy. Sometimes sellers will calculate
the improvements they spent on the home and
add that to the equation. But remember that
you usually don't get a dollar for dollar
return on the money you invested in repairs
or improvements. Sometimes sellers base an
asking price on what another neighbor's house
sold for but forget to take in to account
that the neighbor's house had a larger lot,
bigger square footage, and an extra bath.
In my opinion, overpricing is usually the
reason why a home doesn't sell. Many sellers
refuse to lower their asking price, which
results in no sale. Some sellers price their
home based on what they need out of it. Buyers
don't care what the sellers need out of the
home, they base their decisions on what similar
properties in the neighborhood have recently
sold for. Remember this: Buyers typically
look at every home in their price range and
make comparisons between those houses. They
will then narrow their choices to the homes
that best fit their needs. They will then
pick the home that they feel is the best value.
If your home is overpriced and doesn't represent
a fair value, buyers will pass on your home.
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Under
pricing Your Home
Sometimes a
seller will under price a home. Sometimes
it's to get a quick sale and sometimes it's
an error when choosing the correct price.
Maybe they hired an inexperienced agent or
someone who doesn't know the area very well.
Whatever the reason, an under priced home
will usually result in a very rapid sale or
in multiple offers. Remember buyers make comparisons
and will generally choose the best value.
If you do have multiple offers on your property
and they are all full priced or higher, chances
are you priced your home too low. The good
news is that if you do have multiple offers,
you can usually drive the price up as the
buyers bid against each other. This may lead
to a final selling price where it should be.
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GETTING
YOUR HOME READY TO SELL
Introduction
Many sellers pay little attention to the outside
of their home. The exterior in fact is quite
important, it is the first impression a buyer
gets of your home. You know what they say
about first impressions. Many buyers drive
by properties before hand to get a feel for
the neighborhood and homes for sale. If the
landscaping is a little overgrown, trim everything
back and cut the lawn. If the front door is
weather-beaten, give it a coat of paint. Make
sure there are no toys, junk, or pet accessories
in the front yard. On the inside make sure
your home is sparkling clean. Most people
don't mind living in a home that is a bit
dirty or messy---as long as it's their mess.
But rarely do people want to live in someone
else's mess. Buyers will pay top dollar
for a home that is well cared for and in move-in
condition. When you decide to sell, make sure
the home is ready to be sold. Some sellers
think they can just put up a sign in front
of their home and it will sell. You have to
remember there is competition and buyers will
be much more detailed oriented than a normal
visitor would be. Buyers have a tendency to
find the littlest things wrong and turn them
into major problems in their mind. A good
idea is to have a home inspection at the outset
to pinpoint all problems. This may cost you
some out of pocket money, however potential
buyers will be impressed and feel confident
your home is worry free. Homes that are in
the best condition are the ones that are shown
most often by real estate agents because they
know those are the homes that will be the
easiest to sell. If you want to take the extra
step you may purchase a Home
Warranty through Florida Rebate Realty
that will protect you from costly repairs
while your home is listed and will protect
the buyers of your home for a period of 1
year. This is a great way to set your home
apart and give yourself and the buyers of
your home peace of mind.
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Use the following checklist as your guide to preparing your home
for sale.
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Paint:
Few things
you will enhance the salability of your
house quite as much as painting the outside.
Before painting, scrape or water-blast
any blistered or peeling paint; repair
gutters and down spouts; and replace wood
showing dry rot. Pay special attention
to wood, trim, gutters, and wrought iron.
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Front
Entry:
Give special care to this area. First
impressions do make a difference! All
woodwork should be freshly and neatly
painted, including the door if necessary.
Replace badly worn or broken doorbells.
Polish any door brass. Paint or replace
an unsightly mailbox. Put out a new or
clean doormat.
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Yard:
Mow and trim the lawn. Weed flower beds;
remove or replace dead plants or trees.
Water regularly during the growing season.
With desert landscaping, make sure that
no underlying plastic is exposed, that
rocks and sand are tidy, and that weeds
and unwanted grass are removed.
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Driveway,
garage/carport:
Clean up grease or oil spots; remove the
soil at least, if not the stains. See
that the garage door opens freely, and
if you have an automatic door opener,
make sure it's in good working order.
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Air
Conditioners:
Paint or replace any rusted exposed metal.
Correct improper draining.
Patio: A nice spread of outdoor
furniture looks very appealing. If necessary,
borrow some from a friend to enhance the
"showability" of your property.
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Swimming
pool: Adjust chemicals until the pool
sparkles. Hose-off dust and cobwebs from
filtration equipment. Store chemicals
and tools neatly. Keep pool area tidy
and secure.
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Windows: Repair or replace torn
or bent screens. As a last resort, remove
them entirely; it's better to have no
screens than to have unsightly ones. Replace
any cracked or broken panes. Also, notice
unsightly foliage near windows. A window
framed in ivy can give a warm, homey feeling,
but cut it back if the foliage is restricting
the light coming into the rooms. Drapery
rods should be affixed firmly to walls
and work smoothly; draperies should be
clean and hang properly.
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Doors: Check to see that all
doors open and close freely, including
closet doors and patio or sliding glass
doors. Oil any squeaky doors. Tighten
the hardware, particularly doorknobs.
And while you're at it, tighten hardware
on kitchen and bathroom cabinets, too.
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Walls: As with the exterior,
painting indoors will pay dividends out
of all proportion to the time and effort
spent. Wallpaper should be clean and adhere
smoothly to walls.
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Floors: Repair or replace missing
or damaged pieces of tile; polish if needed.
Repair of a loose stair tread plate or
loose carpeting on a stairway is a top
priority.
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Carpet:
Steam cleaning is the best answer for
soiled carpets, especially when shampooing
isn't enough. If pet odors are present,
clean the carpet some time before your
home is placed on the market to be sure
the odors have been eliminated.
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Lights:
Every light socket in and around the
house should have a good bulb of adequate
wattage. Don't overlook those outside
and in the garage. Also remember the utility
room, halls, closets, over the kitchen
sink, and in the oven and exhaust hood.
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Switches
and fixtures:
Repair or replace wall switches, outlets,
and light fixtures that don't work. Replace
any broken switch plates.
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Appliances:
Those that will be sold with the home
should be in good working condition. If
specific equipment doesn't work and you
don't intend to repair it, point this
out. Your appliances should also be clean
inside and out.
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Plumbing: Badly chipped or irreversibly stained
sinks and tubs should be re-enameled,
patched, or replaced. Leaky or noisy toilets
should be fixed, as well as any dripping
faucets.
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Sprinkler
systems:
These should be working properly with
no defective heads.
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One
of the best and least expensive ways to improve
the "showability" of your home is
to open up as much space as possible. Openness
stimulates positive feelings in buyers. Overstuffed
rooms or closets give the impression of being
smaller than they really are. You can't change
the size of what you have, but you can try
to present it in a pleasing way.
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Closets
and storage areas: One of the most
frequently voiced requirements of buyers
is for more closet and storage space.
Open up your storage areas by removing
items you aren't using.
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Counters
and cabinets:
The same principle used for closets applies
here: overcrowding gives the impression
of inadequacy. This applies to bathrooms
and kitchens with the kitchen being most
important. Store infrequently used appliances.
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Garage:
Buyers will pay a premium for a garage
if they can visualize it being of value
to them, but it's hard to sell when the
garage is filled to overflowing. If your
garage has become a two-car attic, move
the excess to a mini-warehouse
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Bathrooms:
Few places in the
home can get so dirty so fast, and yet few things will "unsell" a house as fast
as dirty bathrooms. Vanity, sink, faucet hardware, and mirror are the focal points. But
don't forget other potential problems: soap residue in a shower, a moldy shower curtain,
accumulated dirt in the track of a sliding shower door, soiled or missing grout, soiled
toilet bowls, and dirty or battered bath mats.
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Kitchen: Most buyers
will inspect the kitchen carefully, so time invested here is well spent. Clean the stove
inside and out. Replace badly stained or corroded reflector plates under the heating
elements on electronic range tops. Don't neglect the kitchen exhaust hood; buyers
frequently check this area as a clue to general housekeeping.
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Windows:
Clean windows are
an absolute necessity if a house is to look its best. Weather permitting, open windows to
let in fresh air.
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Water heater and softener:
Perhaps because it's so unusual, a sparkling clean water heater or water softener really
impresses buyers: and it takes so little time and effort.
All this may seem like a lot
of work, and it is, but it means a quicker
sale with less hassle and more money in your
pocket. Not to mention the pleasure you and
your family will receive from living in a
well-kept home.
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Marketing
Your Home & More |
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There are a wide variety
of marketing alternatives available to sell
your home. The most important and most effective
is the MLS. When we meet to discuss the sale
of your home we will discuss the alternatives
and let you make the final decision on how
you want to market your home. Remember,
as with all our services you are free to pick
and choose the services you want and need
and pay for those services. We offer discounted
service packages or a la carte pricing, check
out our
Profile
of FRR Home-Seller Services
page for more info.
Multiple Listing Service (MLS)
Most homes are bought and sold through
real estate agents. The place the real estate
agent get information about property for sale
is through the local Multiple Listing Service.
The MLS is the real agent's computerized database
of all listed properties. It's where agents
find homes to show buyers. It's also where
they find sales comps which help a seller
determine the sale price of their home and
also helps a buyer determine what a fair offer
price is for a home for sale. Agents can access
property information from their home or office
computer 24 hours a day. The MLS is the single
most important and most effective marketing
tool available. The vast majority of sales,
some say 80% of sales, are a result of exposure
to real estate agents through the MLS.
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Professional Signage (where
permissible)
Since buyers often drive around looking
for signs, a visible sign is important. Our
company uses professional signs. We can also
use information boxes filled with brochures
so that buyers driving past your home can
stop their car and grab a flyer. We install
or remove signs within 24 hours.
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Tuesday
Caravan
Think of Tuesday Caravan as an open house
for Realtors. We can hold your home open for
agent viewing on a scheduled Tuesday. This
is an excellent way to expose your home to
the most important group of individuals to
know about your home, other real estate agents.
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Internet Exposure- Virtual Tours
Many of today's tech-savvy buyers view
homes on the web before starting their search.
We can give your home maximum exposure on
our web site at FloridaRebateRealty.com as
well as other major sites such as Homeseekers.com,
Realtor.com, Yahoo.com, HarmonHomes.com and
others. We can post pictures of your home
on our website or we can, through the latest
software, provide a virtual tour of your home
over the internet. Potential buyers can view
your home inside and out, online. The web
is increasing in importance in marketing real
estate. Feel free to call or email us any
Internet questions.
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E-mail
Marketing
A unique method of exposing your home is email
marketing. When your home is listed, we send
an e-mail message to our clients as well as
other agents. Within the e-mail there is a
link to our website where they can view photos
and info about your home.
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Showing
Your Property
It is extremely important to make your
home easily available for showing to agents
and buyers. The easier it is to show the more
people will see it and the faster it will
sell. If you are not home regularly or the
house is vacant we like to use an electronic
lockbox so that agents can easily access the
property. A lockbox is a secure way of providing
entry to your home. Only licensed Realtors
have access to the electronic keypad and the
electronic lockbox records the identity of
each visiting agent. If you are not comfortable
using a lockbox we can make other arrangements
to show your home.
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Follow-up
on Showings
We ask our clients to call us if they have
any information that may be helpful. We can
contact agents who have shown your home to
get any meaningful feedback, which we will
share with you.
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Open
House
Many think an open house is a good way to
attract buyers. Most buyers who come to an
open house are not qualified and probably
can’t afford your home. Many are just looking
or passing an afternoon. There may be times
when an open house does make sense. For instance
if there are a lot of requests to see your
home it may be better to have an open house
and tell everyone when the house will be available
for showing.
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Photographs
We can take a color photos of your home immediately
to be used in advertising, brochures, the
internet and on the MLS. Thanks to digital
photography your pictures will be available
immediately rather than in days. It would
be a good idea to have your house ready both
inside and out. For instance, make sure there
are no cars in the driveway and the garage
is closed and the yard manicured.
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Custom
Color Photo Brochure
We can prepare a custom color brochure. We
would feature both exterior and interior shots
as well as vital information buyers want to
know. We want a buyer to receive a nice color
information sheet so that he or she will remember
your property. We also print the web site
address of your listing on the flyer so that
the buyer can log on from their computer to
see additional photos and information about
your property.
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Print
Advertising
There are many available newspapers and periodicals
available to advertise your property. The
Local newspapers offer a weekend photo display
ads and classified ads. Most local community
newspapers offer real estate advertising.
Another periodical is the real estate publication
"Harmon Homes" and "Homes Review".
These free magazines are located on newspaper
racks in convenience stores and markets. Properties
and open houses can be advertised here with
or without photos. When we meet to discuss
listing your home, we will review the various
print advertising options available.
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Marketing
Intangibles
Is your agent cooperative and helpful to other
agents? Does your agent respond quickly to
phone or email inquiries about your property?
Can you communicate easily and quickly with
your agent? Is he or she easy to reach? Does
your agent screen himself behind voicemail
or assistants? These intangibles can make
the difference between an easy sale or a stressful
sale.
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Final
Thoughts
Real estate marketing and sales is not that
difficult. Price the property correctly, expose
it to agents and qualified buyers, make it
easy to view the property, and hire a competent
professional agent to handle all of the contracts
and negotiations. That's it. Sometimes Realtors
make it seem much more complicated than it
is.
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WHILE YOUR HOME IS ON THE MARKET
Take
care of your valuables
Exercise good common sense. Don't
leave valuables or cash lying around your
home. You never know who will come to view
your home. There are times when buyers may
ask to view your home on short notice and
you will agree. In these situations you won’t
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