Frequently Asked Questions - Selling House

Frequently Asked Questions - Selling House

** Can I sell my house myself ?

Many people believe they can save a considerable amount of money by selling on their own. They look at the average commission on a house, and remember stories of friends or relatives who managed to get through the process with seemingly little trouble. “People sell their own homes,” they say ~ “so why can't I ?”

In order to join the ranks of the successful ones, you need to realistically assess exactly what's involved. The routine part of the job involve pricing your house accurately, determining whether or not a buyer is qualified, creating and paying for your own advertising, familiarising yourself with enough basic real estate regulations to understand ( and possibly even prepare ) a real estate contract, and coordinating the details of a closing. The greatest downsides are the demand on your time, and the possibility that a mistake may cost you the money that you're trying to save.

The best reason for working with real estate salespersons is the enormous amount of information they have at their disposal ~ information that can help make your property sell faster and easier. These professionals know about market trends, houses in your neighbourhood, and the people most likely to buy there. They also know how to reach the largest number of people who may be interested in your house, and are trained in areas like screening potential buyers and negotiating with them. Finally, they're always “on-call”, and willing to do the things most of us hate : working on weekends, answering the phone at all hours, and always being polite about it.

** What makes a house sell ?

To be as concise as possible, a successful sale requires that you concentrate on these considerations : the selling price, condition of your house, location, and buyer exposure.

Since you can't control all of them, you may have to compensate in one or more areas to offset a competitive disadvantage in another. For example, if the location of your house is not ideal, it may not command as high a price.

** When is the best time to list a house for sale ?

As soon as you decide to sell it.

If you want to get the best price for your house, the key is to give yourself as much time as possible to sell it. More time means more potential buyers will probably see the house. This should result in more offers ; it also gives you time to consider more options if the market is slow.

What about market conditions ~ price trends, interest rates, and the economy in general ? Should they have any bearing on when I list ? Probably not. Even if you're under no pressure to sell, waiting for better market conditions is not likely to increase your profit potential.

** How long should it take to sell ?

The average listing time is about 90 days, depending on the selling price, condition of the house, its location and buyer exposure. Selling in any market is easier if you keep time on your side. Most professionals will tell you that allowing yourself at least three months will put you in a position to get a better return from their marketing efforts.

** What if I am unable to sell my old house before I have to move ?

This situation can arise for any number of reasons. For instance, getting the overseas posting you've been waiting for may mean having to relocate very quickly. Another example : you finally find your “dream home,” and need to get it under contract before it's sold to another buyer. Whatever the reason, don't panic. You have some viable alternatives to the potential nightmare of double mortgage payments.

If you don't have to sell in order to buy a new home, renting is one option to think about. Consider the advantages and disadvantages of renting your old house. A real estate salesperson can usually help to advise you on how much you can expect to charge to cover your mortgage payments and other costs you'll entail as a landlord.

** How do I price my house ?

In a word, realistically. Today's residential real estate market is no place to look for easy profit. That's not to say you can't get what your house is worth. You just have to be realistic about its value, and price it accordingly. A good place to start is by determining the fair market value.

** What is “fair market value” and how do I determine mine ?

Simply put, the fair market value of a house is the highest price an informed buyer will pay, assuming there is no unusual pressure to complete the purchase. It is usually not the asking price.

To get an estimate of fair market value, call a real estate salesperson and ask for a Comparative Market Analysis ( CMA ) of your house. The analysis will give you a realistic figure based on the most salient points of the real estate market. It should provide information about recent sales of similar houses. The price range given in a CMA is very helpful in determining the right asking price.

** What is the difference between fair market value and asking price ?

Generally speaking, the owner's asking price ~ the advertised price of a house when it goes on the market ~ is set slightly higher than fair market value. You can assume that some negotiation will be necessary to reach an agreement with a buyer. In most cases, the real estate salesperson who presents you with the results of your CMA will be willing to help you establish a competitive pricing strategy.

** Who can help me determine the right asking price ?

A real estate salesperson suggests asking prices based on a variety of information you may not have at your disposal, including recent listing and selling prices of properties in your neighbourhood. If you’re not completely confident in the suggestion, you may want to request for a valuation.

Next, establish clear priorities. If you had to choose, are you more concerned with selling quickly, or getting the most money possible ? Do you think the real estate salesperson's suggested asking price is reasonable ? What would you pay for the house if you were the buyer ?

Someone else ~ a neighbour, friend or relative ~ may point out advantages or disadvantages about your house that you hadn't thought about. Third-party views will help you start thinking of your house as a commodity, with positive and negative selling points. Then you should decide on a price that you feel is competitive and consistent with what other houses in your area have sold for.

** How flexible should I be about the asking price ?

Most buyers tend to negotiate before they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both you and the buyer. While it is ultimately your decision to accept or reject an offer, or present a counter-proposal, a real estate salesperson can be of great assistance to you during the negotiation process.

In fact, negotiation is one of the valuable skills the real estate salesperson can offer you. As negotiation proceeds ~ whether in writing, face-to-face, or by phone ~ your real estate salesperson would inform you of your options in responding to each offer from the buyer.

** Should I fix my house up before it goes on the market ?

Unless your house is nearly new, chances are you'll want to do some work to get it ready to market. The type and amount of work depend largely on the price you're asking, the time you have to sell, and of course, the present condition of the house. If you're in a hurry to sell, do the “little things” that make your house look better from the outside and show better inside. Subsequent two questions offer several specific ideas for making low-cost improvements.

** How do I create a good first impression ?

Creating a good first impression is critical to generating buyers’ interest. While it does take time, it needn't be difficult or expensive, provided you keep two key words in mind : neat and neutral.

Neatness sells. Throw away unwanted items, give a new coat of paint, add in fresh potted plants and bring out the welcome mat.

Hand in hand with neatness is neutrality. If you're going to repaint, stick to light, neutral colours. Remember, when a family looks at the house, they're trying to paint a picture of what it would be like as their home.

** What should I do to make the house show better ?

First, make your house look as clean and spacious as possible. Remember, people may look behind your doors, wardrobes as well as bedrooms and bathrooms. So get rid of all the clutter ; have a clean up and get rid of all unwanted items.

After you've cleaned, try to correct any cosmetic flaws you've noticed. Paint rooms that need it as well as remove or replace any worn-out carpets. Replace faulty taps, light fixtures, and the handles and knobs on your kitchen drawers and cabinets.

Finally, as with the outside of your house, try to make it easy for prospective buyers to imagine your house as their home. Clear as much from your walls, shelves, and countertops as you can. Give your prospects plenty of room to dream. Use the “Show & Sell” Checklist to get specific ideas on how to make your house look its best. Additionally, ask any real estate salesperson for brochures on the subject. Such materials are usually free and extremely helpful to most homeowners.

** Should I make any major home improvements ?

Certain home improvements that are useful to almost everyone have been proven to add value and/or speed up the sale of houses. These include adding a new air conditioner, some kitchen remodeling and new floor and/or wall coverings, especially in bathrooms.

The challenge that comes with any home improvement designed to help sell your house is recouping your investment. There's always the risk of over-improving your house ~ that is, putting more money into it than neighbourhood prices will support.

** So how much is too much ?

Generally, it has been observed that no matter how much you improve your house, you're unlikely to sell it for more than 15% above the average price of other houses in the neighbourhood. That's why you might want to ask your real estate salesperson’s opinion about the viability of recouping the cost of any major renovation you have in mind before you start the work.

** Am I liable for repairs after I sell ?

In certain situations. If the buyer's inspection reveals major problems with your house's structure or mechanical systems ( air conditioning, electrical, plumbing, etc... ), the buyer may wish to negotiate the price downwards on the basis of anticipated repair costs. So even though the repairs won't be made until after the sale, practically speaking, you'll be paying for them.

Sometimes, repairs may be required before the transfer of the title takes place. You may have heard about lawsuits involving sellers who failed to disclose major problems before the sale ~ like an addition to the house that was built without approval from the relevant authorities. Therefore it’s a good idea to get the buyer's written acknowledgement of any major problems when you accept their offer.

** How do I reach the right potential buyers ?

There was a time when selling a house was simple.

Your real estate salesperson would place an advertisement in the newspaper and wait. Of course, real estate salespersons still do those things ~ but that's far from all they do. Today, people are moving more frequently than they used to; it's not unusual for upwardly mobile executives to relocate overseas. The result is that the pool of potential buyers for your house is much larger and spread far wider than ever before and the competition to reach them are fierce. Real estate agencies have responded by developing increasingly sophisticated marketing techniques that define likely buyers, where to find them, how to reach them, and how to persuade them to buy one house over another.

The fact is, virtually everything we've discussed up to this point, from pricing to home improvements, the Comparative Market Analysis to the placing of advertisements, is part of a marketing process that's put into motion when you decide to work with an agency.

** What is a Multiple Listing System, and why do I need one ?

A Multiple Listing Service ( MLS ) is one innovation that makes it easier to reach prospective buyers and increase the exposure of a property.

Quite simply, it's a computer system under which participating real estate salespersons agree to share commission on the sale of houses listed by any one of them.

** How important is advertising ?

Advertising remains one of the most important components of the marketing process. But again, it's not as simple as it seems to be. To be effective, do not limit yourself to a three or four-line Classified ad you would probably run if you were selling the house yourself.

** How does the inclusion of other houses benefit yours ?

The power of numbers, plain and simple. Fewer than 5% of buyers actually purchase the first house they call about. When they call to respond to an ad, they're likely to be shown a number of houses similar to the one they initially express an interest in seeing. Today, real estate agencies also employ other proven advertising methods, including magazines, radio, TV, and direct mail.

** Is open house marketing an effective way of selling ?

Open house marketing is another critical part of the selling process as it offers prospective buyers the chance to view houses in a low-pressure, “browsing” atmosphere. It is usually held during the weekends when the human traffic of prospective homebuyers is at its peak.

If you list your property with a real estate agency, your sales agent will conduct a an open house. He will be on hands to receive any guest who walks in by asking them to leave behind their names, addresses and contact numbers in a Guest Book. This record will facilitate future correspondence between the sales agent and potential buyers.

He will then conduct a tour of your property. Along the way, he will answer queries from interested parties concerning the facts and features related to your property. The queries could range from the age of your property to the type of amenities available in your neighbourhood. So make sure the agent is fully equipped with all the information pertaining to your property.

** Should I be around when my property is being shown, or should I let my real estate salesperson handle the entire process ?

You should be out of the house during any open house your real estate salesperson has scheduled. The same goes for first showings to prospective buyers. The rationale is that people often feel uncomfortable speaking candidly and asking sensitive questions about the property in front of current owners. You want them to feel as free as possible to picture your house as their “dream home” and to encourage them to raise any issue that they are not comfortable with.

** Should I be present during the negotiation process ?

Good real estate salespersons will help you during the negotiation process. In fact, your real estate salesperson should be professionally trained to take care of your interest so that you need not be present. He should negotiate with the buyer to arrive at a price acceptable to you and present to you the buyer's offer.

** What makes a real estate salesperson effective ?

We like to think good training and experience make the best salespersons. But the truth is, not every salesperson is right for every seller. And that's why we suggest you follow this simple formula to help you decide whether a particular salesperson will work well for you :

When you first meet with real estate salespersons, they’ll do their best to show you that they have what it takes to sell your house. You can expect to see a portfolio of credentials, past achievements, sales volume and letters of recommendation. Look for evidence that their background is relevant to your needs - someone whose portfolio includes success with houses in your price range, preferably in your immediate neighbourhood.

The importance of being comfortable with your real estate salesperson as a person cannot be overstated. You’re going to be dealing with this individual on a regular basis, maybe for months, during a time that can be emotionally trying for you and your family. Indeed, your real estate salesperson may well become something of a family member, who shares in the tension, anticipation, frustration, and ultimately the joy of selling your house.

It takes a unique combination of those two characteristics to inspire the confidence a homeowner needs to maintain peace of mind through the process of selling a house.

** How do I find the right real estate salesperson to market my property ?

Start by talking to friends, neighbours, relatives or anyone whose recommendation you trust.

Another source would be from responding to the advertising efforts of real estate salespersons, such as the marketing brochures that you receive or the corporate advertisements in the newspaper. Alternatively, call a reputable and established real estate office. They should be able to provide excellent help and information.

** What is the difference between an open listing and an exclusive authorization to sell ?

An open listing may be given to any number of real estate salespersons. However, the salespersons are not obligated to spend time and money in trying to make the sale as no commitments have been made. Their policy is to wait for an offer by a buyer ~ any offer for consideration by the owner.

The disadvantage to the seller is that a considerable period of time may lapse before the property is sold. Very often, the control of price is lost in an open listing as real estate salespersons may resort to undercutting prices so as to close the deal.

An exclusive authorization to sell is the right given by a seller to a particular agency to sell his property within a specific period of time. It is the only way a real estate salesperson can serve the seller properly as the seller would then have the right to demand proper attention in the marketing of the property.

The real estate salesperson working on an exclusive authorization to sell will be able to control the marketing price without any unnecessary price undercutting and he is more likely to sell the property faster.

** What is the advantage of an exclusive authorization to sell ?

The answer is incentive that it affords real estate salespersons the protection they need to know their time and effort will not go unrewarded. That's one reason many residential listings are marketed under exclusive authorization to sell agreements.

** Should I pay 2% commission whilst some agencies charge 1% commission ?

There are several reasons why a professional real estate agency charges 2% commission.

Firstly, the government had recommended in the Singapore Government Gazette dated 22 February 1974 that a minimum 2% commission be payable.

Secondly, a professional real estate agency will have a wider international network and a more established local network with a larger sales team to source for more potential buyers to view your property.

It also offers more real estate products and services to enable your property to sell faster and has better real estate salespersons that are well trained and more professional. Most importantly, buyers will be more willing and feel more secure in dealing with a professional and established real estate agency.

** What can a trained real estate salesperson do for a seller ?

To begin, a trained real estate salesperson has received professional training, both in theory and practice. He would thus have first-hand knowledge of competitive prices of properties as well as access to records of recent sales of comparable homes. A well-trained real estate salesperson also has access to a wide range of marketing tools that are crucial in the successful selling of any property in the shortest time possible.

Another important contribution by a trained real estate salesperson is his house-selling skills. Often, potential buyers raise objections regarding certain aspects of the property. A well-trained real estate salesperson knows how to handle such objections. In fact, he welcomes them.

** What if my real estate salesperson does not produce ?

Besides commission, the most important matter you negotiate at the time of listing your house with a real estate salesperson is the duration of the listing contract. Terms vary, but listing agreements are seldom for less than three months. So what if you find yourself dissatisfied midway through a 3-month contract ? While the listing contract is legally binding, some real estate salespersons offer homeowners an opportunity to opt out if they are unhappy with the services they are receiving.

** How do I select the right real estate agency to market my property ?

Homeowners who are selling their properties should be aware of problems that lurk in sales handled by untrained or unscrupulous real estate agencies. They should select the agency carefully, taking into consideration several factors.

One of the most important factors is to make sure that you are working with a licensed real estate agency that has a proven sales record. Select an agency that has a large sales team and an established local network simply because more salespersons will be looking for potential buyers for your property. The real estate agency should preferably also have an international network to connect you with potential buyers from other countries.

Selecting a real estate agency that has a comprehensive range of effective marketing tools will mean that your property will be sold in the shortest time possible. You would also want a real estate agency that can provide you with the home warranty plan and a deposit guarantee program to give you the advantage when your property is being marketed.

In addition, find out if the real estate agency trains its salespersons.Visit the office of the real estate agency and make sure that they have a full team of professionals to provide service and support to its real estate salespersons. Check to see if they have the full range of legal, valuation, public relations and advertising support so that the sale of your property will be swift and trouble-free.

Use the “How to Select a Real Estate Agency” below when evaluating real estate agencies.

** How to Select a Real Estate Agency ?

Shopping for the right real estate agency from among the many in todays' market can be a tedious and confusing process.

To help you select the best agency that’s going to sell your property for you, use the following factors to make an evaluation. Gather information on a number of agencies and make a comparison to find out which is the right agency for you.

1. ) Can the agency provide maximum buyer exposure ? Look at its local & international network.

2. ) What are the products & services offered ? Look for home insurance, home content insurance, Multiple Listing Service, advertisement, professional advice, and good customer service.

3. ) What is the quality of the team ? Are the agents professionally trained ?

Thanks for your reading,
Hoping those tips are useful for you.

Regards

Wingcent Ning
ATG (ECG Property)
(+65) 8163 6290
wingcent@singnet.com.sg
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