SUB-MENU:

NOW THAT ALL THE HOMES LISTED FOR SALE ARE ON THE INTERNET, WHAT DO WE NEED AN AGENT FOR?

PERSPECTIVE - Objectivity, Insider understanding, Expert witness to market events.

REPRESENTATION - Operating for your best interests from Full-time, Inside, Expert stand.

INTERMEDIARY - Delivering, De-pressuring, and creating some Emotional Buffer.

COUNSELING - Information source, Strategy consulting, Avoiding Irrelevant.

NEGOTIATION - Strategy consultations, Data and Information gathering, keeping the eye on the ball.

PROTECTION - Legal obligations, Disclosures, Qualified prospects, Accompanying and the benefit of All the Above!
 

Agency Law says the Principal is responsible for the acts and representations of his agent     -     Who do you want speaking on your behalf?

The following are some questions to ask your prospective Realtor.

1) Do you work as a full-time Realtor?
2) How many listings do you have at this time?
3) How do you decide your responsibilities to your sellers?
4) How do you plan to maximize my sales price?
5) Do you have an assistant or other help?
6) How will you find buyers for my property?
7) In what ways will you encourage other Realtors to sell my home?
8) Why should I hire you rather than other agents?

WHAT DO I GET FOR MY MONEY WHEN I WORK WITH A REALTOR?

SELLERS: Most Real Buyers are in the hands of a Realtor. Most buyers appreciate the knowledge, resources, problem solving and protection they believe an agent provides them. Most buyers today - the well qualified buyers - do not have time to stay on top of market inventory.

Homes are bought comparatively. A "For Sale By Owner" only has access to showing the one home and, therefore, a limited means to satisfy the concerns of a typical buyer that this house is their "best choice" on the market. Agents have access to all listed properties and can usually also arrange an agreement to show "For Sale By Owner" properties, so those homes do not become obstacles to the sale of your home.

Value is always, and rightfully, a buyer's Number One question. Again, because a "For Sale By Owner" has access only to the one home and because he is seen as serving his own needs rather than those of the buyer, he is handicapped when supporting his price. Value is also a result of successful negotiating, and with the mantle of self-serving purpose, a "For Sale By Owner" is limited in being able to speak from the buyer's point of view or to discover issues that may sway a buyer who is protecting himself.

Value is also perception. Professional staging and presentation, guidance in preparation of the property and materials, repeated delivery of the support and affirmation information helps today's very savvy buyers find the path to make the choices they want. Realtors are also expert in fielding, resolving and overseeing the myriad issues that can arise during escrow. Escrow is the vulnerable period when inspectors, appraisers, well-meaning "expert" friends and relatives, and everyone in general are thinking there may be a better choice out there. The agent is the person best positioned to deal with these issues from knowledge of the buyer, the property, resources and the market.

Obviously Realtors are a time saving service. He directs and produces the marketing program, supervises showings and follow-up, balances presentation with public response, prepares then manages all documents, administers the process of the escrow, inspections, financing, and contingencies, and, not least, pursues all possibilities to the successful close of escrow.

A Realtor helps the seller maximize his dollar proceeds by knowing what the market values most and how to emphasize those issues, directing his marketing to the most appropriate buyer prospects, taking the heat out of negotiation and having the expertise to develop the best solutions, knowing repair and replacement resources, and minimizing the seller's legal liability with professional processing, verifications and written communication.

Realtors add safety. Neither the seller nor the buyer have to risk security breeches by a "sez so" prospect. The buyer is accompanied by a Realtor at all times, the seller's property is shown to qualified buyers, a third Party (the Realtor) is on the premises during all showings. Since Realtors make their own security precautions, witnesses usually know who a Realtor is with and where and when, backing up the client's security.

A Realtor takes the Heat. Most sellers and buyers are understandably very emotional and volatile, because moving is a major life change and a very vulnerable state with a large sum of money at stake. The Realtor translates charged words into focus on the objectives, and keeps the clients directed toward achieving their purpose rather than games.

A Realtor is a professional salesman. All his training, experience and purpose are directed toward satisfying the client's goal and, as a result, assuring future business from that client, his friends and family.

A Realtor is a reliable source of related services. His future and dollar also depend on the quality of his counsel and referrals.

Communication minimizes liability, advances the transaction and reduces stress, focuses the concerns back to the information and ensures the smoothest possibilities. Realtors do this with all the parties involved, all day, all week, all year, all the time. They track, advise, prod, prevent, anticipate, resolve and manage whatever concerns are relevant to the transaction. And finally, a Realtor is going to close the transaction. Other than the seller and buyer, none of the players in a transaction are as committed to this conclusion. Not only does his compensation depend on this, but so also does his reputation, market position and future business. And since success is in the eye of the beholder, in this case the client, it is the Realtor's at-risk that generates the ever-present willingness to go the extra effort all through the sale.

THE DIFFERENCE IS REAL

TYPICAL COSTS OF SALE

COSTS OF SALE: What expenses will you as seller have in connection with selling your property? NOTE: Everything is negotiable. However, when you go outside of “customary”, it CAN be a big issue to the other party, and they feel they are adding or subtracting.

ESCROW FEE: The “Settlement Agent” holds your deed and the buyer’s money, administers the requirements of the transaction until all agreements are complete, collects all final monies, balances the accounts, records the deed and pays you the “proceeds” for the sale. Fee equally divided by buyer and seller may be estimated for each at roughly .0025 x Sales Price (it goes to a smaller % as the price increases).
Escrows have a multitude of additional fees they charge, under different names and in different amounts depending on the structure of the sale and the escrow company. These may include fees for drawing documents (deed, power of attorney, usually $10 – 50 per instrument); messenger, UPS/FedEx/Airborne, or wiring fees ($10-35 usually); Loan Tie-In Fee ($75-150) for handling lender documents and sign-ups, Notary Fees ($10 per certification), 1099 Processing Fee (usually $50-60) for calculating and reporting the sale to the IRS, which they are required to do by law. Some escrows are making small additional charges for paying additional expenses beyond those mentioned above, and all are beginning to charge for holding (and accounting for) funds after close.

TITLE INSURANCE: Normally in Southern California a seller provides title insurance to a buyer guaranteeing that the seller has conveyed valid “marketable” title. The seller pays a fee for this insurance roughly calculated at .004 x Sales Price, with a 20% reduction for “short term” (less than 5 years since last policy of title insurance). Buyer is also charged for a title insurance policy if he acquires financing, but his policy is greater coverage and insures the lender against prior lien rights.

TRANSFER TAX: A charge by the County of San Diego and is calculated at $1.10 per $1000 of sales price. (In other municipalities there are also city taxes!)

PRORATION OF PROPERTY TAXES: The tax year in San Diego County runs from July 1 through June 30th. Escrow will always verify the date to which taxes have been paid, pay taxes current, charge the seller for payment up to the close of escrow, and charge the buyer (if the taxes are paid ahead of the closing date) for taxes paid from closing date to date paid.

AFTER close of escrow the taxes will be newly assessed to reflect the sale price, as provided by California law. Since the new tax rate becomes effective on the date of sale, buyer will receive a SUPPLEMENTARY TAX BILL for the period from close of escrow to the issuance of his newly assessed bill. If you have recently purchased subject property, and have not yet paid your Supplementary Tax Bill, it will remain your responsibility regardless of this sale.

ZONE DISCLOSURE REPORTS: A zone disclosure report is a detailing of geologic, soils, seismic, earthquake, flood, fire, and Mello Roos disclosures pertinent to and publicly recorded as affecting subject property. There are companies who provide this information and more importantly take legal responsibility for the correctness and currency of their information off the shoulders of the sellers, whose disclosure on these items is now required by law. These are the first disclosures in California where the Seller is legally obligated to investigate as and not rely on only what he knows to be true. Costs range from $50-ish to $114 at this time.

REAL ESTATE FEE: Sometimes known as “commission”, this is the fee charged for our brokerage service and which is agreed in the listing agreement. Commissions are NOT set by law, they are negotiable and reflect the quality and amount of service and expertise a seller chooses. I charge 6% of the selling price, plus or minus for special circumstances.

WATER CONSERVATION RETROFIT, SMOKE DETECTOR COMPLIANCE, AND WATER HEATER COMPLIANCE CERTIFICATIONS: San Diego has enacted Ordinances which
require compliance with standards for safety and water conservation. The smoke detectors and hot water compliances are requirements against sellers. The water conservation can be satisfied by either buyer or seller, but is usually a seller cost. Smoke detectors are minimally expensive ($7-10 each. Strapping kits for water heaters may be obtained for $20 or less at Home Depot, but depending on the location of the water heater, may be difficult or more expensive to accomplish with the required bolting, etc. Costs to meet water conservation requirements for a 2-bath home averages $500, but choices of fixtures, numbers of toilets, sinks, showerheads, location and related plumbing issues can increase the cost.

TRANSACTION COORDINATOR FEE: This fee is a relatively new (5 years or so) item in the residential sale transaction. A Transaction Coordinator is charged with making sure that deadlines, disclosure requirements, compliances and the general outside-escrow agreements of the contract are all met. In the propitiation of paperwork to make sure principals understand their legal rights and obligations, the flurry of writing and reading has become so great it necessitates a special administrator to be sure all is communicated and complete. Most Transaction Coordinators work for several agents and have a greater breadth of knowledge about these specific issues and related experts you can call us, because of their broader exposure. Fees range from $250-350 per seller or buyer side of the transaction. I choose to pay my coordinator, rather than pass this cost on to the client.

LENDER PAYOFF: Principal balance plus interest to the date the lender receives your payoff. Lenders also charge for writing their payoff “demand” and for issuing their “Re-conveyance”, which is the release of lien. Demands and Recons generally range from $100-$150 per loan paid off. You will also be charged $5 per page for recording the Re-conveyance.

CONDOMINIUM TRANSFER FEE: If the property being sold is a condominium, most Associations
have a transfer and/or documentation fee. This is for producing all their paperwork on budgets, CC&R’s, By-Laws, statements about litigation and delinquent assessments, minutes, etc., as well as for changing their records of ownership at close. Costs run $100 - $200 generally. In addition, Escrow will prorate the homeowner’s monthly fee for the month of close.

RECORDING FEES: The seller is usually charged for recording releases of all liens against the property and for any documentary changes needed to affect the close. Typical cost is $20 - $50.

HOME WARRANTY: A 1-year warranty on the (systems) electric, plumbing, heating, and hot water
heater, etc. in the building, does NOT include structure or termites or roof. Generally seen as protecting the seller from those annoying (and possibly expensive) calls after escrow that something doesn’t work, the average cost runs $250 for condos and $280 for basic home coverage to $550 with additional coverage for pool, spa, washer, dryer, air conditioning, etc.

SURVEY: Not typical in our area, since most property liens are assumed by neighborly custom, but cost $500 to $2000 is typical, depending on how extensive the required monuments and paperwork, and how far the nearest markers are located.

TERMITE CLEARANCE: This is NOT required by law, but it is a condition of many lenders and is typically provided by sellers in Southern California sales. This would be fumigation (called “tenting”) if required, or local treatment of any termite infestation, and correction of any fungus or dry rot damage, including correction or recommendation of contractor correcting of the cause.

REPAIRS: As requested by buyer after physical inspection. Cost reflects type of repairs and quality of work/guaranties required. Repairs in escrow must be done by qualified professionals, to code if appropriate, and in quality at least as good as that being repaired or replaced. Your repair contractor may accept payment out of escrow rather than at time of work.

Some additional costs may be elected by the parties. Buyers generally hire and pay for inspections by general inspection contractors, sometimes also by engineers or environmental specialists. Parties may choose to have attorneys or financial counsel involved in their decisions and to review paper work. Exchangers may use the services of an “Accommodator”. And there is no limit to what a principal may choose to facilitate his transaction.

Generally these transaction costs are either expansible or add to the tax basis of the property. It is always a good idea to have professional guidance with taxes after a real estate transaction.

THE COMMISSION GOES WHERE?

*Commissions are not set by law.
*Commissions are negotiable between seller and broker.
*I charge 6% commission unless there are special circumstances.

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SOME MARKETING TIPS

STRATEGY
The best steps to the best results come from reality.

The ideal buyer is financially qualified.
The ideal buyer is knowledgeable about market and conditions, and is informed enough to make a decision he and you can rely on to close escrow.
The ideal buyer has motivation to buy, so that you don't have to provide it by offering him a "deal".
The ideal buyer sees value in YOUR product rather than compromising on what he really wants and wanting to compromise your dollars.
The ideal buyer is emotionally ready to make a decision, having resolved his "why" and cast off his apprehensions.
The "average buyer" may not be able to perform, lacks confidence in his decisions and is always second-guessing with outside opinions which may or may not be well-informed, wants all the balls in his court, will have to subtract on the price for features that don't satisfy him, and may not be ready to meet a
resolution. The average buyer is your typical buyer. The ideal buyer is what smart agents and sellers design their marketing to attract.

The ideal buyer pays your best price.

Selling residential real estate is much like a series of "first dates". If the buyer prospect is not attracted, all the rest of the business doesn't matter.

WHERE IS THAT IDEAL BUYER?

1. Look around your neighborhood. What kind of people live there? Since water and people seek their own level, your ideal buyer is one of like kind.

2. Define what is most important to that buyer - impression or comfort? style or space? looks or savings? Accessorizing or ease of maintenance? etc. Of course everything is somewhere in between, but where is the emphasis?

3. How can the strengths of the property best be spotlighted and the drawbacks and limitations best be minimized or off-set?

FIRST IMPRESSIONS COUNT!

The objective is to sell and to obtain the best possible price with the least possible upheaval. The market has proven consistently that the property that is "Dressed for Success", what we now call "Staged to Sell" generates the best possible seller proceeds.

Time and money are always a consideration in making any preparations. I would be happy to review with you what will pay and what will only pay your ego, what you must do and what is more optional. While we cannot assume that everyone's life experiences are the same, we can be certain that most people have certain positive experiences in common. It is our aim in staging a home to capitalize on those common items. Likewise you will want to make your property attractive to as many people as possible, since the greater the demand, the greater the price. Packing up those very personal touches, 400 bowling trophies, eliminating cigar odors, keeping your "wild and crazy"/possibly offensive to someone else belongings in discreet storage can add to your possible prospects.

NEUTRAL? Contrary to most people, I do NOT believe that beige on beige is the best path to your best price. Buyers make decisions on practical considerations, but they ACT on emotions. How excited does beige make the average person? However, major items of the property should be neutral enough to convert easily from seller to buyer, regardless of any disparity in styles. Clever use of colorful accessories and singular furnishings can provide real sizzle that grabs and holds the buyer. Realtors know that 95% of the buyers who will look at your property have NO visual imagination. What you show them is what they think they will buy. So your presentation makes a HUGE difference in your buyer response.