Jim’s Rules For First Time Sellers

OK, so you think it is time to sell. You need to make a few basic decisions and then be aware of the traps along the way. I hope this article will help out. You may also want to check out my article on Premium Home Selling as a companion piece to this article.

Rule 1: List your property on February 1st

Never be a seller in the second half of the year. For some reason, (call me if you want to hear my expanded theory) buyers and sellers operate on different clocks. My research indicates two basic points; first, appreciation rates are greatest early in the year and second, the rate of sales is higher.

Rule 2: Ignore the Trash in your Mailbox

The next question to answer is exactly how to sell the property. If you want to sell it yourself or use one of the discount brokers, go to my article on For Sale By Owner. If you want to use a traditional broker, as over 90% of home sellers do, then read on.

Choosing the right broker is your most important decision. The problem in the business is that advertising and other forms of mis-information distort this decision process. The business seems to revolve around listings and who gets them. The real question to ask is: “who sells the property?”

Listing agents are very important but are only a part of the selling machine. The agent with the buyer is usually the most important player in the process. The skill of both agents, both professional and interpersonal, will largely determine if the transaction is successful. And by successful I mean a deal wherein no one is sued and the price settled upon has some relationship to market reality.

Agents who tend to get the most listings are generally aggressive in their mailings, personal marketing and porchings (where the stuff is dropped at your door). This tactic has little relationship to what concerns you: getting the best service and price when you sell. It just means they spend a lot of money, presumably yours, in promoting themselves. And once you sign up with one of these agents, some other agent within that marketing group will actually service your listing. That agent is too busy getting listings to work on them.

Rule 3: Pick an Agent, not a Company

Mass real estate marketing has one aim, to obtain listings. Selling the home is often secondary. Marketing campaigns are designed to promote an individual who leads his or her own selling organization or larger companies. Large companies and other marketing groups (for example the “Smith Team” or “Team Vandelay)” should not be of any real interest to you. You are going to end up with one agent. So choose that agent, not the larger organization.

Rule 4: Avoid Uncle Harry

You know this one; some relative or new agent who happens to be a friend has a license and wants to do their one deal a year. I have seen much grief over this one. Get someone active in the business or a part-time agent who has plenty of experience.

Rule 5: Know How to Choose an Agent

Ignore the pre-packaged lump of paper that accompanies the agent. This is not high school where your grade depended upon the sheer mass of your term paper. You are hiring an agent, not a graphic design studio. Interview three or four agents and choose the one with enough experience, with a high standard of proven integrity and one you can get along with.

Once you think you have a likely candidate, call some other agents in your area and ask them their opinion of that agent. This can be petty, but it is also very illuminating. Agent-to-agent relationships are key to a smooth transaction. Then ask the agent you have selected for a list of their past ten transactions and the contact information for the clients, both buyer and seller. Call one or two at random. If you hear something you do not like, move on to the next guy in line.

Remember you are hiring a person to facilitate a complicated and important transaction. Someone who gives you a punch recipe once a month does not connote competence in this field.

Rule 6: Disclose, Disclose, Disclose…

Work closely with your agent and give that agent, in writing, a complete disclosure of facts about your home prior to the marketing process. Nothing is too small to disclose. If the guy next door snores during the month of November, disclose it. If your agent is not on board with this process, fire them. Avoid shortcuts.

Rule 7: Price Right

You and your agent should arrive at a consensus as to the probable selling price of the home. Both of you need to be on planet earth and be frank and honest. This is almost like a pre-sale bargaining session; the agent is really like a buyer seeking to get a market asking price. The seller usually wants an aggressive and often unrealistic price.

Once you two have agreed on the likely price of the completed transaction when your home eventually sells, add five percent and go to market. It is no more complicated than that. Greed and ignorance have no place at the table. Get good information and make a realistic decision.

Rule 8: Avoid Confusion Range Pricing

Get a real price. Variable pricing is an option for anyone. I think a variable price means neither party has any faith in their respective judgment or in each other. There is no evidence that using this pricing method helps the seller. It is a marketing tool for obtaining listings. Make a real choice about the price and stick with it. The buying public knows they can make any offer on a home for sale. Take car sales, who pays sticker? It is common knowledge that you may offer less for a car than the sticker price. The same is true for homes.

Rule 9: Pay Attention to Who Shows Your Home

The major obstacle to obtaining an offer will be value. If the price is wrong, no marketing will overcome that problem. Demand feedback from other agents who have shown your property. One of my tricks is to compare the ratio of in-area and out-of-area agents who have shown the home. This tells all. Call me for information on this rule.

Rule 10: Be Careful of Dual Agency

Do not fall prey to selling too early. Make sure the home is property exposed to all agents and all buyers before selling. Insist on this point. Your agent may subtly discourage other agents, for example, by making the property difficult to show. If your listing agent brings in a buyer very early in the sale process be very careful. If this happens you may want to engage some outside professional assistance. It is in your best interest that the property be exposed to the broad market and to all agents.

Rule 11: Be Flexible

There will be the unexpected during the process. Be ready to adapt to changes in the marketing and escrow process. Remember that all parties want the transaction to close and will be operating in good faith. Do not get emotional and demonize other parties in the transaction. Escrow is replete with third parties providing assorted and required services that may cause unintended problems. There are many cooks in the kitchen and often some soup is spilled.

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