The Real Estate Transaction in 110 Steps - What your REALTOR® Actually Does for You.
I had a pretty good wake-up call when I joined the Real Estate industry. My mom has bought and sold homes by herself (For Sale By Owner) for as long as I can remember - and I loved the process. Naturally, I thought, I can do this… and get paid! Simple, right?
I quickly realized the process is NOT so simple, and REALTORS® aren't just making money the easy way. I realized why sellers need professional assistance, and why we get paid for our hard and valuable work. I also realized that my mom had been selling her homes “successfully” for the last 20 years by pricing them 10-15% under market value, undercutting her competition and herself! It had literally never occurred to her that she could have LISTED her home for what it was really worth, paid an agent 7% commission, and still come out ahead. All without the headache of marketing it herself, dealing with unqualified buyers, open houses, security issues, etc. She could have sat back and had someone do all of the work for her (see my list below), and actually ended up with more money. On top of that, the majority of buyers who want to purchase a FSBO are looking to save money just like the seller is, which means they generally offer well below asking price for the obvious reason, they know you aren’t paying a commission so you you are willing to take less. Right? (Double whammy!) It made no sense.
Can you sell your home By Owner? Of course. Does it work? Sometimes. Does it make more sense to not fight the system and use a REALTOR®? The majority of the time, it does.
Here is a simple breakdown, actually using the FSBO seller best-case scenario, meaning that you would still have “paid” an Agent, had you listed it professionally:
Property’s Fair Market Value: $200,000
Your FSBO Deal: $193,000 (We’re saving you the commission, Mr. Buyer!)
Your buyer’s offer: $188,000 (You aren’t paying a commission, Mr. Seller!)
Time on market: 2 months
Net: $186,000 (Sale price minus mortgage interest payment of $1000/mo.)
Listed w/REALTOR®: $199,900
Qualified offers: Buyer #1 - $198,000; Buyer #2 - $199,500; Buyer #3 - $200,000
Accepted offer: $200,000
Time on market: 1 week
Net: $185,750 (Sale price minus commission and one week of interest)
FACT: You saved money selling your home By Owner ($250! - if you didn't pay to advertise online)
FACT: Call me so I can do the following:
What your REALTOR® Actually Does for You - in 110 Steps
Below is a list of actions, processes, and procedures that are provided by a Full Service Agent in a successful Real Estate transaction in exchange for their commission. Please note that I left out steps 111-125 which include smoothing over seller/buyer/lender/inspector/closing issues (aka putting out fires), and steps 126-150 where I fended off every unqualified buyer and nosey neighbor that is trying to snoop through your home!
- Develop presentation, anticipate seller questions and concerns
- Research all comparable properties, active, sold, pending, recently expired
- Research sales and market activity, such as days-on-market, price range, location
- Download and review county assessment and tax records
- Prepare comparative market analysis (CMA) and establish fair market value
- Research public record for lot size, zoning, deed restrictions, legal ownership, etc
- Prepare presentation and data for seller
- Compile formal file for subject property
- Discuss market conditions, projections, and trends with seller
- Review Agent and Company credentials
- Discuss market analysis results with seller
- Offer pricing strategy based on sellers needs regarding price and time-frame
- Establish marketing plan that will meet the sellers needs and desires
- Explain marketing plan and benefits
- Explain what the agent does, what the brokerage does, hours and availability
- Discuss agency relationships, commissions, contract dates
- Review all clauses and addendums
- Review title information
- Measure square footage by room, floor, heated/non-heated, finished/non-finished
- Confirm lot size and obtain survey if necessary
- Note easements, encroachments, unrecorded property lines, etc
- Prepare showing times and instructions
- Obtain mortgage and loan information & verify with lender
- Discuss buyer financing options with seller
- Review current appraisal if applicable
- Discuss HOA fees and contact manager for bylaws
- Discuss and calculate utility usage for previous 12 months
- Review water/sewer systems, obtain necessary documents
- Provide lead based paint information and obtain seller disclosure
- Provide radon information and obtain seller disclosure
- Provide mold information and obtain seller disclosure
- Obtain seller property disclosure
- Compile list and advise on repair or maintenance items
- Discuss benefits of Home Warranty
- Install lockbox and obtain necessary entry keys and codes
- Take photos of home
- Edit photos and descriptions
- Carefully craft an appealing listing description
- Create virtual tour of home
- Place yard sign
- Fill flyer box
- Place neighborhood directional signs
- Perform “curb appeal” assessment and make suggestions
- Discuss staging options
- File and record all listing documents in seller file
- Prepare detailed MLS sheet
- Enter details into MLS Listing Database
- Enhance property listing on REALTOR.com, Zillow and Trulia
- Post property on Craigslist, Blog, and all Social Media
- Create internet advertising and print advertising
- Schedule REALTOR® Open House
- Schedule public Open House(s) if requested
- Coordinate showings with buyers and other Agents
- Prepare mailing and contact list
- Prepare showing log
- Follow up on all showings for feedback
- Order “just listed” marketing materials
- Upload listing to company listing system
- Mail out listing post-cards to neighbors
- Provide marketing data to international buyers
- Provide marketing data to relocation buyers
- Print and stock marketing material as needed
- Be available on nights and weekend to coordinate showings
- Meet weekly or as-needed to evaluate marketing
- Update market analysis and discuss with seller
- Receive and review all purchase contracts
- Evaluate offer and prepare “net sheet” for seller
- Counsel seller on offers and components of
- Discuss qualifications of buyer with other agent
- Obtain pre-qualification letter
- Obtain and deliver sellers disclosures
- Negotiate final purchase conditions on sellers’ behalf
- Schedule date for loan approval and closing
- Prepare and deliver counter offers or amendments
- Record and deposit earnest money into escrow
- Deliver contract to closing attorney or title company
- Deliver executed agreement to buyer and seller
- Deliver contract to lender
- Discuss handling of other offers during pending period
- Update all marketing materials and MLS to Pending status
- Order desired inspections including radon, whole house, mold, termite
- Order well and septic inspections if needed
- Track buyer’s loan progress
- Follow loan process through to underwriter
- Track progress weekly through close
- Relay final approval
- Coordinate home inspections
- Discuss inspection report with seller
- Explain seller responsibilities and requirements
- Negotiate repairs or changes to contract as needed
- Refer trustworthy service providers if needed
- Confirm signed contract by all parities
- Coordinate closing with buyer, seller and lender
- Update files accordingly for closing
- Ensure all parties have forms and info needed to close sale
- Select closing location, date, time and confirm with all parties
- Assist in solving title issues or obtaining death certificate
- Coordinate final walk-through
- Request final closing figures (HUD settlement) from title company or attorney
- Review for accuracy and forward to all parties
- Provide home warranty info if applicable
- Review closing documents for errors
- Forward closing documents to absent parties
- Provide earnest money check to closing agent
- Coordinate seller’s next closing to avoid timing issues
- Refer seller to agent, if moving outside area
- Change MLS status and all files to Sold status
- Follow up after closing about any questions or concerns
- Clarify and resolve conflicts
- Provide continuous follow up and provide any requested information
My advice: STOP THE INSANITY - HIRE A REALTOR®
