Information for House Sellers - Page 3
Selling Your House
Now is the time to decide whether to sell your house all by yourself or call in a professional. What do
you know about setting a good sale price, marketing your home, showing the house, providing
buyers with information required by law, negotiating a sale, and closing the deal? A REALTOR® can
guide you through all this.
Let's start by talking about the difference between a real estate agent and a REALTOR®. Suppose
you have two groups of kids going camping this weekend. One group may have been camping
before and set up a tent, chopped firewood without cutting off any body parts, cooked edible meals,
and knew what to do in case of an emergency. The other group is a local boy scout or girl scout
troop. This second group has additional training and most importantly have taken an oath such as
"On my honor I will do my best to do my duty to God and country and to obey the Scout Law; To help
other people at all times; To keep myself physically strong, mentally awake, and morally straight.".
This is the difference between real estate agents and REALTORS®. Both groups have completed
training required to be licensed as either a Real Estate Salesperson or Broker but REALTORS®
follow a written Code of Ethics and pledge themselves to protect and promote the interests of their
client.
A REALTOR® also joins a local REALTOR® organization at a significant cost, completes additional
required training, follows a set of rules and regulations in addition to real estate law, and helps the
local REALTOR® organization police other members to make sure everyone plays fairly. Only real
estate agents who have joined a REALTOR® organization are allowed to call themselves a
REALTOR® and use this in advertising.
Working with a REALTOR®
One of the first important steps a REALTOR® will help you with is determining the listing price of the
house. The price needs to be at a level to attract potential buyers but also give you the most money
for your house. The REALTOR® will prepare a CMA or Comparative Market Analysis. This a
comparison of the sale prices of similar houses in the same general geographic area to help
estimate the value of a house. The REALTOR® will look for houses in your area with similar
features (size, age, style, amenities) that have sold in the last six months, are currently listed for
sale, and those that did not sell to determine a listing price. The REALTOR® may give you a single
price such as $150,000 or a range such as $150,000-155,000. It is your decision as the seller to set
the listing price, not the REALTOR®. What happens if you think the price should be $10,000 higher?
You can call another REALTOR® who may give you a similar price of $153,000. You call a third Real
Estate Salesperson and complain that your house is worth more than these other two bozos have
come up with. The third Real Estate Salesperson quotes you $160,000-165,000 as a good listing
price and you sign on with her. This Real Estate Salesperson has just "bought" your business by
quoting you a higher listing price than the other two. The problem here is that your house may sit on
the market for months until this Real Estate Salesperson eventually convinces you to reduce the
price back to the $150,000-155,000 range. By this time you may have run off potential buyers and
incurred additional real estate taxes and home maintenance costs. Why would a Real Estate
Salesperson do this? Either he/she felt pressured by you to try and sell it at the higher price or this
may be his/her way to get more business.
You need to set a realistic price for this house that is fair to both you and the potential buyers. Don't
set the price on how much you want to get so you can also buy that new car or pay for your moving
expenses but set the price based on the house alone. Price is one of the most important factors in
determining how fast a house will sell and setting it too high can delay the sale. If a buyer decides
your house is overpriced he/she will probably not return for a second look even if you lower the price.
Now is a good time to discuss how a REALTOR® gets paid. Which of the following are true:
If you said anything but <E> then you're wrong. The REALTOR® only gets paid a commission once
the house is sold. In many cases the commission that a home seller pays gets split between the
listing REALTOR®, their broker, and the home buyer's REALTOR® and broker. If you are charged
$10,000 in commission to advertise, show, and sell your house the REALTOR® you are working
with may only see $2,500 to cover his/her time, gas, office supplies, advertising, and insurance and
still pay for REALTOR® organization dues and required licensing classes.
Once you have determined a listing price with the help of your REALTOR® you are ready to move to
the next step. At this point the REALTOR® will want you to sign a listing agreement. This is a legal
contract that specifies the listing price, any personal property such as a refrigerator that you may
leave with the house, any real property such as a antique stained glass window that you plan to take
with you, and the commission rate that you will pay the REALTOR® to represent you and to advertise
and sell your house. This commission rate could run 7-9% of the sale price of the house but the
REALTOR® will only end up with part of that to cover his/her time and expenses. There are different
types of listing agreements. In most cases your REALTOR® will want you to sign an exclusive-right-
to-sell contract. This means that you authorize only this REALTOR® to sell your house for a specific
period of time, usually 3-6 months. If the house is sold during this period of time the REALTOR®
collects a commission. Your REALTOR® will want this because he/she is spending a lot of their
time and money to advertise and sell your house and most of their brokers will require this type of
contract. If you reject this type of listing agreement you may have trouble finding a REALTOR® that
will take on your house.
The REALTOR® will want to measure rooms and take pictures to post the information in the MLS or
Multiple Listing Service. In the Peoria area this is an Internet based system maintained by the
PEORIA ASSOCIATION OF REALTORS®. You definitely want your house listed in the MLS. Other
REALTORS® in the area have access to this system and can search for houses that meet the
criteria of their buyers. Your REALTOR® will offer a co-op commission to any REALTOR® that brings
a qualified buyer to buy your house. This is usually 50% of the commission you are paying to your
REALTOR® that your REALTOR® is passing on to the buyer's REALTOR®. The majority of the
houses sold in the Peoria area will be sold through the Multiple Listing Service. According to the
National Association of Realtors 70% of houses in the United States are sold through the MLS. This
is why many home owners who try the "for sale by owner" option for a few months usually turn to a
REALTOR® to get their house sold.
Besides entering your house into the MLS your REALTOR® will also advertise in the newspaper and
schedule an open house. The open house is scheduled at a time convenient to you and is
commonly done on a Sunday afternoon. Normally you will not be at home and the open house will
be hosted by your REALTOR® or possibly another REALTOR® from the same company. Some of
the reasons that you should not be there are:
You may have more than one open house scheduled. This gives the people who saw your house in
the newspaper or on the Internet a chance to see inside. Some people feel more comfortable
attending an open house than scheduling a private showing with a REALTOR®. Your REALTOR®
will also attach an electronic key box to your front door with a key to your house. This key is available
to other REALTORS® that have a special keypad to open the box and retrieve the key. You will not be
at home during these private showings but they must be scheduled in advance at your convenience.
Remember the buyer will only have access to your house with a REALTOR® who will walk them
through the house and is responsible for his/her buyers.
Now is the time to decide whether to sell your house all by yourself or call in a professional. What do
you know about setting a good sale price, marketing your home, showing the house, providing
buyers with information required by law, negotiating a sale, and closing the deal? A REALTOR® can
guide you through all this.
Let's start by talking about the difference between a real estate agent and a REALTOR®. Suppose
you have two groups of kids going camping this weekend. One group may have been camping
before and set up a tent, chopped firewood without cutting off any body parts, cooked edible meals,
and knew what to do in case of an emergency. The other group is a local boy scout or girl scout
troop. This second group has additional training and most importantly have taken an oath such as
"On my honor I will do my best to do my duty to God and country and to obey the Scout Law; To help
other people at all times; To keep myself physically strong, mentally awake, and morally straight.".
This is the difference between real estate agents and REALTORS®. Both groups have completed
training required to be licensed as either a Real Estate Salesperson or Broker but REALTORS®
follow a written Code of Ethics and pledge themselves to protect and promote the interests of their
client.
A REALTOR® also joins a local REALTOR® organization at a significant cost, completes additional
required training, follows a set of rules and regulations in addition to real estate law, and helps the
local REALTOR® organization police other members to make sure everyone plays fairly. Only real
estate agents who have joined a REALTOR® organization are allowed to call themselves a
REALTOR® and use this in advertising.
Working with a REALTOR®
One of the first important steps a REALTOR® will help you with is determining the listing price of the
house. The price needs to be at a level to attract potential buyers but also give you the most money
for your house. The REALTOR® will prepare a CMA or Comparative Market Analysis. This a
comparison of the sale prices of similar houses in the same general geographic area to help
estimate the value of a house. The REALTOR® will look for houses in your area with similar
features (size, age, style, amenities) that have sold in the last six months, are currently listed for
sale, and those that did not sell to determine a listing price. The REALTOR® may give you a single
price such as $150,000 or a range such as $150,000-155,000. It is your decision as the seller to set
the listing price, not the REALTOR®. What happens if you think the price should be $10,000 higher?
You can call another REALTOR® who may give you a similar price of $153,000. You call a third Real
Estate Salesperson and complain that your house is worth more than these other two bozos have
come up with. The third Real Estate Salesperson quotes you $160,000-165,000 as a good listing
price and you sign on with her. This Real Estate Salesperson has just "bought" your business by
quoting you a higher listing price than the other two. The problem here is that your house may sit on
the market for months until this Real Estate Salesperson eventually convinces you to reduce the
price back to the $150,000-155,000 range. By this time you may have run off potential buyers and
incurred additional real estate taxes and home maintenance costs. Why would a Real Estate
Salesperson do this? Either he/she felt pressured by you to try and sell it at the higher price or this
may be his/her way to get more business.
You need to set a realistic price for this house that is fair to both you and the potential buyers. Don't
set the price on how much you want to get so you can also buy that new car or pay for your moving
expenses but set the price based on the house alone. Price is one of the most important factors in
determining how fast a house will sell and setting it too high can delay the sale. If a buyer decides
your house is overpriced he/she will probably not return for a second look even if you lower the price.
Now is a good time to discuss how a REALTOR® gets paid. Which of the following are true:
- REALTORS® get paid each time they hold an open house or show the house to buyers,
- REALTORS® get paid by the hour,
- REALTORS® get paid a salary whether they sell a house or not,
- All money earned by a REALTOR® goes into a big pot at their company and then it is split up
evenly between all agents, - REALTORS® are independent contractors that are paid a commission based on the sale
price of a house only after it is sold.
If you said anything but <E> then you're wrong. The REALTOR® only gets paid a commission once
the house is sold. In many cases the commission that a home seller pays gets split between the
listing REALTOR®, their broker, and the home buyer's REALTOR® and broker. If you are charged
$10,000 in commission to advertise, show, and sell your house the REALTOR® you are working
with may only see $2,500 to cover his/her time, gas, office supplies, advertising, and insurance and
still pay for REALTOR® organization dues and required licensing classes.
Once you have determined a listing price with the help of your REALTOR® you are ready to move to
the next step. At this point the REALTOR® will want you to sign a listing agreement. This is a legal
contract that specifies the listing price, any personal property such as a refrigerator that you may
leave with the house, any real property such as a antique stained glass window that you plan to take
with you, and the commission rate that you will pay the REALTOR® to represent you and to advertise
and sell your house. This commission rate could run 7-9% of the sale price of the house but the
REALTOR® will only end up with part of that to cover his/her time and expenses. There are different
types of listing agreements. In most cases your REALTOR® will want you to sign an exclusive-right-
to-sell contract. This means that you authorize only this REALTOR® to sell your house for a specific
period of time, usually 3-6 months. If the house is sold during this period of time the REALTOR®
collects a commission. Your REALTOR® will want this because he/she is spending a lot of their
time and money to advertise and sell your house and most of their brokers will require this type of
contract. If you reject this type of listing agreement you may have trouble finding a REALTOR® that
will take on your house.
The REALTOR® will want to measure rooms and take pictures to post the information in the MLS or
Multiple Listing Service. In the Peoria area this is an Internet based system maintained by the
PEORIA ASSOCIATION OF REALTORS®. You definitely want your house listed in the MLS. Other
REALTORS® in the area have access to this system and can search for houses that meet the
criteria of their buyers. Your REALTOR® will offer a co-op commission to any REALTOR® that brings
a qualified buyer to buy your house. This is usually 50% of the commission you are paying to your
REALTOR® that your REALTOR® is passing on to the buyer's REALTOR®. The majority of the
houses sold in the Peoria area will be sold through the Multiple Listing Service. According to the
National Association of Realtors 70% of houses in the United States are sold through the MLS. This
is why many home owners who try the "for sale by owner" option for a few months usually turn to a
REALTOR® to get their house sold.
Besides entering your house into the MLS your REALTOR® will also advertise in the newspaper and
schedule an open house. The open house is scheduled at a time convenient to you and is
commonly done on a Sunday afternoon. Normally you will not be at home and the open house will
be hosted by your REALTOR® or possibly another REALTOR® from the same company. Some of
the reasons that you should not be there are:
- Your REALTOR® has experience in marketing and showing houses.
- Buyers feel more comfortable if the home owner is not home, otherwise, they may think they
are intruding and hurry through the tour. Buyers need to be relaxed and have time to check
out the house. This is a major purchase and they don't want to rush into to it. - Your REALTOR® is not emotionally attached to the home. How would you respond if you
overheard a buyer say "this house is a dump!" or criticize your decorating skills? - Your REALTOR® should be the contact point for any purchase offers and negotiating with the
buyer and their REALTOR®. You always have the final decision on whether to accept an offer. - You are paying your REALTOR® to do their job so let them do it.
You may have more than one open house scheduled. This gives the people who saw your house in
the newspaper or on the Internet a chance to see inside. Some people feel more comfortable
attending an open house than scheduling a private showing with a REALTOR®. Your REALTOR®
will also attach an electronic key box to your front door with a key to your house. This key is available
to other REALTORS® that have a special keypad to open the box and retrieve the key. You will not be
at home during these private showings but they must be scheduled in advance at your convenience.
Remember the buyer will only have access to your house with a REALTOR® who will walk them
through the house and is responsible for his/her buyers.
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Sponsored by Dave McMillin, Jim Maloof/Realtor®, East Peoria, IL
Copyright© 2007-2008 Greater Peoria Homes
Copyright© 2007-2008 Greater Peoria Homes
www.greaterpeoriahomes.com
SELLERS GUIDE
Selling a House in the Peoria, Illinois Area: