For a Realtor, selling a house is extremely easy and much of it is automated and done by others. In fact, most of the work is done by the homeowner. There are hundreds of articles that show you how to prepare your house for selling. And there are far more qualified individuals than Realtors to help you prepare. Even if you hire a Realtor, you will still need to do many things yourself. Therefore, give serious consideration to whether or not the services your Realtor provides are truly a value proposition and are worth the expense. Is your Realtor a home decorator? An appraiser? A home inspector? Probably not. I help guide my clients through the entire process:
First, watch out for the gimmicks:
- Office Exclusive Listings are a fake “service” that listing brokers offer clients to supposedly test the market and have their in-house agents tour and provide important feedback. I’ve seen this called the “Private Listing Phase” too. It is an “exclusive” way to betray clients. What they are really doing is severely limiting the marketing of your home in hopes of collecting a double commission (a “hogger”). You are forced into a dual agency situation in which “your” agent is legally prohibited from negotiating on your behalf. They will often recommend keeping the house off the MLS for two weeks while offering tours only to buyers working with brokers within their firm. Their hope is to generate an offer during this time without the benefit of the entire marketplace. The seller is left with the stressful decision of taking the offer in hand or rejecting the offer and placing the house on the MLS to see what real marketing will produce. Real fiduciaries never create situations of duress like this for their clients.
- Agents claiming to have lists of buyers. The real message here is that they are instantly ready to subject you to dual agency. You don’t want that. This is actually a reason not to list with the agent making this claim. If they have a line of buyers ready to buy your home, then they can compete for the home with the rest of the agents.
- Home Warranties. These are some of the most complained about consumer products in the nation. They help reduce liability for the agent and are a waste of money. Most agents or their brokers make extra profit from selling these.
How to properly sell your home:
- Preparing your house for selling: Articles: HGTV (click here), Realtor.com (click here), OpenDoor (click here). There are many more. Remove clutter, meticulous landscaping, fresh paint and carpet are just a few of the expected recommendations. The best money spent is usually on cosmetics and important repairs. It’s all pretty easy. Or if you don’t mind spending $200, have a professional stager visit your home and advise room by room. You might even consider having your house staged. But don’t let a Realtor do this – use a professional stager for this.
- Determine when you are going to sell. The first two weeks of your listing is when you will likely see the most activity and interest. It is best to avoid holidays, bad weather weekends and slow seasons for launching your listing. Here’s a Zillow article on the best time of year to sell (click here). Here’s one from OpenDoor (click here).
- Prepare the Seller’s Disclosure Statement. Minnesota law requires that you do this. I provide the form for you to fill out online and provide legal advice. It is incredibly important to be brutally honest about your house in this form. If you incorrectly fill-out this form, it can result in the cancellation of a purchase agreement and tremendous liability exposure.
- Truth in Sale of Housing (TISH) and Certificate of Compliance (COC). Many cities require that a pre-sale inspection be completed and a certificate be obtained prior to selling. I’ll let you know if your house will require this.
- HOA documents. You will need these handy if your neighborhood is controlled by a Home Owners Association. I will help you through this process.
- Well or Sewer on the property? No problem, just a few hoops to jump through and I’ll help. There are new requirements in Minnesota (click here).
- Houses built prior to 1976? That means there could be lead paint on the premises. No problem, just complete the lead paint disclosure forms.
- Home Inspection. Consider having one done. We can discuss.
- Permit History of the House. Your city can provide you with this information (sometimes it is available online). This is extremely valuable information that can help you accurately fill-out the Seller’s Disclosure Statement. Few Realtors will recommend this.
- Order a CLUE Report. Provides information on all the insurance claims on your home which can be very helpful in filling out the Sellers Disclosure Statement. Sellers can order it free (click here) or your insurance agent can provide this to you.
- Determine the asking price. Use an appraiser to measure square footage and to determine the asking price range. Most of my clients use these services that normally cost around $150 for each service. Appraisers often complain that most properties on the Multiple Listing Service (MLS) are advertised with incorrect square footage. Don’t become a statistic – hire an appraiser to measure your house and help determine an asking price for selling your home. Realtors are not appraisers and they often employ two strategies to obtain your listing:
- Recommend a price that is below market. These Realtors claim to sell a very high percentage of the homes that they list. They convince their clients to list below market to generate a quick commission. Clients often lose valuable equity in these transactions.
- Recommend a price that is above market. These Realtors want to get the listing and appeal to the emotional desires of sellers. Most sellers believe their homes are worth more than they actually are. Realtors know that once they get the listing that they can lower the price when it doesn’t sell. This causes home sellers to miss some prime marketing opportunities and usually results in the property selling for less than it should have.
- Staging a house. If you decide to stage your house, don’t let the Realtor hire the stager. Do it yourself. Realtors are not decorators… My clients who have had their houses professionally staged have been very satisfied. Just Google Minnesota house stagers. Here are a few of many: Stageworks (click here), Full Bloom House Staging (click here), Lionheart House Staging (click here). There are many more.
- Professional photography. Beautiful images of your home are essential to properly marketing your house. Do NOT let the Realtor take the pictures and don’t try to do it yourself (even if you are an amateur photographer). Here are just a few Minnesota house photographers who do everything from stills to drone photography: J Fuerst Photography (click here), Michael Speake Photography (click here), and here is an article on the best real estate photographers in Minnesota (click here). Unlike many Realtors, I do ask my clients to set this up and pay for the service (it’s typically less than $200).
- Scheduling appointments. Did you know that few Realtors ever talk to the buyer agents who schedule appointments to see your home? The process is completely automated and utilizes auto-generated text messages to you. Even the feedback obtained from agents is done through an automated process. I provide this technology to you.
- Open houses. Unless open houses are conducted by the homeowner themselves (these can be successful), Realtor open houses rarely sell houses and serve as a free marketing platform for Realtors to find new clients. Plus, what better way for thieves to case your house or steal from you? – they are a huge security risk.
- Negotiating. Avoid Large Brokerage Firms. Did you know that is illegal for Realtors to negotiate or advocate for you with other Realtors from the same firm? That means that you should probably NEVER hire an agent from a large firm. If you are considering working with an agent from a large firm who claims to be a great negotiator, they are forgetting to tell you that in many situations they will be legally prohibited from negotiating on your behalf. Here is a link to the licensing statute (click here) and look for this:
“Dual agency occurs when one broker or salesperson represents both parties to a transaction, or when two salespersons licensed to the same broker each represent a party to the transaction… Dual agents may not advocate for one party to the detriment of the other.“
Real estate agents command a huge sum of money for their services, yet many of their services are not needed and many of the services they promise can’t be delivered (negotiating). And did you know that one of the biggest complaints about Realtors is that they fail to communicate with their clients? The most effective way to market a house is to get it on the MLS, Zillow, Trulia, Realtor.com, IDX sites and put a sign in the yard. I can do that for you, and represent you throughout the entire transaction (I even review your closing documents), and save you thousands of dollars.
Disclaimer: The above service providers are not intended to be recommendations. I do not know many of these providers and when I do provide firm names to my clients it is only based upon my client recommendations and experiences.