It Can Feel Overwhelming
There is a saying among San Carlos realtors that goes something like this: “Want to meet the neighbors you have never met before? Move.” If having half the City of San Carlos through your home on a given Sunday afternoon isn’t enough to put you on edge, perhaps the thought of keeping a perfectly clean home with three kids running through it is enough to make you feel a bit uneasy. Add the inspectors, photographers, designers, landscapers and a flurry of brokers to the mix, and it does start to feel overwhelming for many. However, much of the uneasiness that accompanies this process can be lessened significantly through a well written and negotiated listing agreement with your prospective listing agent. The listing agreement is the framework which sets out the key circumstances under which you will be selling your home. It also strictly defines the role of your agent. Properly negotiating this agreement ahead of time will make your experience far less stressful.
The Listing Agreement
There are many key components to a listing agreement. Below are the ones that you will want to pay extra attention to:
1. Fees. The vast majority of listing agreements stipulate that your listing agent will be paid a certain percentage of the final sales price of the home. Typically, most San Carlos homes sell with listing commissions between 5-6%. The agreement will also state how much of that listing commission will go to the buyer’s broker, often referred to as the selling commission. In San Carlos, this amount is typically 2.5-3% percentage points. When your home goes onto the MLS, brokers will be able to see exactly the compensation that is being offered on your home. Additionally, it is worthwhile to note that of all of the properties currently listed in San Carlos, not one is currently being offered below 2.5% to the buyer’s broker. Fair or not, if you decide to offer the buyer’s broker less than 2.5%, you may risk the home not being shown as often.
Insider’s Tip>>> By law all commissions and commission structures are negotiable. Do not let anyone tell you otherwise. Finally, if your prospective listing agent brings you the buyer, it seems logical to ask for some type of break on the commission. Have this clause written into your listing agreement.
2. Preparation. There is a lot that goes into preparing a home for sale. Who will be doing inspections on your home? Don’t let just anyone do the inspections. There are only a few inspectors out there that I would trust to give an accurate assessment of the home. San Carlos homes have San Carlos issues. Be sure you are using one of the few inspectors that consider San Carlos their specialty. Remember, once a licensed inspector offers you a written report, it becomes a mandatory disclosure document with your home.
With regard to staging, understand who will be staging or redesigning your home. Ask for photos of past work. Remember, first impressions are everything. My experience has been that most potential buyers are deciding to pursue your home, or not, within the first minute of being in a home.
Speaking of photos, who will be conducting your photography? Remember, most buyers will be seeing your home for the first time online….photos will be the first impression. Do not make them overly dramatic and vaguely photo-shopped. Instead, make them realistic in a clear definition while emphasizing the best angles for your home. If you put some time and energy into researching the issue of photography and home sales, you would find that most photographers who shoot homes are doing so to pay the bills while they pursue more creative interests and subjects in photography. However, there are a few that specialize in shooting homes, and understand the subtle difference between making a home look overly dramatic and photos that show the home in its best light.
Insider’s Tip>>> Discuss the potential inspectors, designers and photographers in detail with your agent. Ask about their experiences with all as well as the expected costs. Have each specifically written in the listing agreement and consider inserting a “do not exceed” cost associated with the preparation costs.
3. Understand Pricing Strategy Is Not Uniform. Price is one of the most important details in the listing agreement. The biggest mistake some sellers and their agents make is in pricing a home. There is so much attention paid to Days on Market (DOM), when that really is a vastly over-inflated data point. Understand that not every home in San Carlos is set up to take multiple offers on day seven. In fact, many homes (for a variety of reasons) are meant to be on the market for some time at a higher price and negotiated down. This can be due to location, uniqueness of the home, how the home fits in with the rest of the neighborhood and a long list of other possibilities. Be very inquisitive if a realtor comes along boasting of a very low DOM average. Either that realtor is only selling 3/2s just below a million dollars in White Oaks or Howard Park, or they have probably short-changed a few sellers. Some homes are meant to go on the market at higher prices and not sell right away….they require more effort, patience and negotiation in order to truly get every last dollar that the seller will want.
Insider’s Tip>>> Understanding where your home fits in on the pricing spectrum and the strategy of whether to go for broke with a slightly lower price or prepare for a strategy at a higher price and higher DOM is perhaps the most important call you and your agent make. If you have even the slightest hesitation on the advice you are receiving, get a second opinion before moving forward and signing the listing agreement.
Remember: The listing agreement is the defining document for your relationship with your agent and the circumstances under which you are agreeing to sell your home. Do not hesitate to ask questions and obtain additional opinions. It is important that you are completely comfortable with the entire process.
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