The Benefits of a Professional Opinion

Selling a house is time-consuming and hard work, especially in today’s market.  If you are thinking about selling your house, you might feel a little overwhelmed by it all.  That’s why it is helpful to have a professional by your side–one who can guide you every step of the way.  In this blog entry, I am going to give you a brief overview of how a realtor will help you sell your house.  This is just an overview, so if you would like to discuss it in more detail, feel free to contact me.  

Pre-listing:  This is the first meeting between sellers and agent.  This will be an interactive interview in which both sides get to discuss what they want and need from the relationship.

• Discuss and explain what are agency relationships.  
• Obtain a signed Agency Relationships in Real Estate Transactions form.
• Find out what the seller’s experctations are, as well as his/her wants, desires, motivation for moving, price, marketing plan, etc.  
• Find out what the sellers are looking for in an agent.  What is most important to the sellers?
• Discuss compensation in a real estate transaction, including the listing company’s policy for paying co-op agents.  This includes a discussion of the Code of Ethics Standard of Practice 1-12, Variable Commissions, etc. 
• What is the sellers’ position?  Are they first-time buyers?  Are they relocating, moving-up, or retiring?

Marketing Plan Presented

• Present a Comparative Market Analysis (CMA)
• Discuss the venues in which the sellers want to market.  Discuss the pros and cons of said marketing.  For the real estate agent, present a comprehensive marketing plan–including on-line marketing.

Listing the Property:  This is what will occur at a meeting after the house is listed.  This step is essential.

• Present Seller Disclosure and related forms.  These include:
  • Truth-in-housing disclosure requirements (if applicable)
  • Sellers Property Disclosure Statement
  • Resale Disclosure Certificate (if applicable)
  • Environmental Disclosures (if applicable.  Wells, septic systems, Methamphetamine labs, lead pant, underground storage tanks, wetlands, etc.)
  • Property Tax preference disclosures
  • Seller inspections
• Abstract or owners’ title insurance policy and location.
• Address issues of the house (repairs and/or replacement–get quotes for repairs/replacements).
• Verify data such as selling price, mortgage amount, pre-payment penalties, taxes, assessments, and other issues with the house.
• Tax implications (1031 exchange, valuation exclusions, etc.).
• Net Proceeds.
• Marketing Plan:
  • Services that the agent brings to the sellers
  • Valuation issues–properly pricing the property
  • Marketing time neighborhood sales and types of financing
  • Currents statistics/inventory
  • Market expectations (i.e., first-time  home buyers may use FHA financing requiring sellers to pay for some repairs)
  • Staging
  • Advertising/signs
  • Open houses
  • Virtual tours
  • Promotional flyers/brochures
  • Closing time
  • MLS exposure
  • How showings are arranged through listing agents and who will be the contact person if the listing agent is sick, out of town, or otherwise unavilable.
  • Electronic lockbox key security system
  • Seller availability for potential time-sensitive issues regarding purchase agreement negotiations, removal of contingencies, inspections, etc.

Pre-Offer Consultation

• How will offers be handles?  (Faxed, buyer or buyer’s agent present, etc.).
• Will an attorney be reviewing offers?
• Explain company policy on multiple offers and obtain seller’s approval.
• Counter offers vs. ‘sleeping on it’.  Explain pros/cons of waiting to make a decision on offers received.  Discuss the risk of losing the buyer if there are long delays in acceptance or counter offers.
• Contingencies and inspections:  Discuss the pros/cons of accepting/rejecting offers that include contingencies.
• Determine buyer’s ability to purchase and consummate the transaction.
• Discuss the difference between pre-approved vs. pre-qualified qualification.
• Proffer an estimate net proceed sheet.
• Discuss capital gains and tax implications.
• Explain about binding purchase agreements, execution, and acceptance.  Oral agreements are not binding.

Presenting/Countering and Offer Acceptance

Analyzing the offer

• What is flexible and what is not.
• Assist sellers in understanding the risks and rewards of countering/accepting a particular offer. 
• Walk through the contract with them to analyze and understand the proposal.
• Talk about earnest money, purchase price, and personal property (i.e., refrigerators).
• Discuss financing issues and fraudulent arrangements.
• Talk about contingencies.
• Talk about inspections and what happens during them.  Discuss the consequences and what can happen as a result of the inspection.
• Closing date.
• Possession/Move-In Agreements.
• Risk vs rewards of multiple offers.
• Review the integrity of the other agent involved.
• Verify the mortgage pre-approval strength of the buyer.
• Anticipate any potential problems.
• Secure appraisal and full-underwriting approval.
• Explain the net proceeds:  bottom line for the seller.
• Final walk-thru review.

Negotiate the offer

• Due diligence/time is of the essence
• Obtain proper signatures
• Provide copies to the seller

Post-Purchase Agreement

• Follow through  and stay on top of all aspects
• Inspection time frames 
  • Work orders:  negotiated, completed, and re-inspected
• Buyer’s mortgage lender follow up
• Verify that an appraisal has been ordered
• Title:  locate and provide to title company
• Schedule closing date. time, and location, and  provide necessary documents to the closing agent
• Provide necessary documents for closing to the lender 
• If a Common Interest Community sale (condo), make sure the Disclosule Statement or Resale Disclosure Certificate and other required documentation are delivered to the buyer.  Track the purchaser’s right of rescission period
• Remind seller that the buyer has the right to a walk-through prior to closing (generally the day of or the day before closing)
• Negotiate any last minute complications/problems
• Obtain and verify mortgage information and pay-off requirements
• Review and summarize the purchase agreement for the seller
• Counsel seller on what to expect at closing
  • What to bring to closing
  • What to be prepared for
  • Review net proceeds, financials, etc.
  • Driver’s license (photo ID)
  • Social Security Numbers
  • Previous addresses
  • Preview closing documents

Closing the Sale

• Attend the closing
• Go through the HUD with the seller and match with estimate proceeds
• Credit for anything (money transfers for bad carpet, etc.)
• Watch for fraudulent financing proposals that could bring liability to the seller
• Handle any last minute issues–all known conflicts to be resolved by a written agreement, including escrow agreements to avoid adverse consequences
• Exchange keys, garage door openers, and final information about the property
• Verify possession date and time

Post Closing Follow-Up

Closure

• Survey
• Any questions/problems/concerns
• Send thank-you note and/or gift

During the pendency of the transaction and after the closing, the real estate agens can perform a significant role in resolving disputes and moving the transaction forward.  The real estate agent can also solve the problems before they escalate.  However, there comes a point in time when an agent will have to back off and suggest that the parties consult their attorneys.  A dual agent is in a particularly awkward position when problems arise because s/he represents both parties.  The dual agent can be an information disseminator, but must not be a negotiator.  Theus, when a dual agent is involved and a problem starts to develop, the dual agent may have to refer the parties to an attorney earlier than s/he might have if serving as an exclusive agent.