I have had several requests to blog about selling a house. Boring! But wait, Kelly just sold her home, Chris and Shelby unsuccessfully tried to sell their house and Debs is thinking about selling her place. Paul is on a five year plan to move up to a house with more amenities. And Margaret? Who knows but I would bet a dwelling is in her future. So here goes. My intent is to just "frame" the sales real estate transaction. You can get "Real Estate for Dummies" to tell you how to go about the sale.
First, it is your house. You get to decide the parameters of the sale.
Second, it is probably your biggest asset and it is important that you realize the maximum return from it's sale.
Third, it is your money! You decide how it is managed.
I am not going to deal with selling a house yourself. Kelly did it in a good Madison market but it takes research and special efforts. The payoff is that you save 6% commission. The risk is that you don't price it properly so you lose potential sales dollars or you make costly financial mistakes. And then there are the potential legal entanglements that could arise from selling yourself.
Most people sell through a real estate broker. Appleton is dominated by Coldwell Banker and Sheboygan is ShoreWest. When you sell through a real estate broker you sign a legal document giving them the right to represent you in the sales/marketing effort and such things as a 6% sales commission (which is negotiable) and the length of time they represent you. Usually they want a contract for 6-12 months. I prefer 120 days because it creates urgency on their part. You can always renew.
A licensed real estate agent is obligated by law to represent your interests. That means they work for you and if they compromise that representation in any way, you can sue them. They should do what you want.
The real estate agent is a licensed professional hired to perform sales/marketing functions as it relates to your home. Generally they bear all the costs associated with advertising and marketing efforts. The term professional is important because they should be above reproach on integrity. Now that you are done laughing, we will proceed.
You should get at least two and possibly three quotations on the sale of your house. A professional will do comparative sales analysis, examine recent sales in your area and make recommendations about the salient features of your home. The highest price projection may just be a sales ploy to get you to sign a contract hoping that you will accept lesser offers. My rule of thumb is to get a fair price for your property and then move on with your life. If you hold out for an exhorbant price, you might be waiting a long time. Use common sense.
Lastly, you will sign several legal documents that determine all conditions of sale. They hold up in court. Verbal commitments mean nothing. Understand everything in writing. Get everything in writing. A good real estate professional will insist on everything in writing. Read the "sales listing agreement" with the agent very carefully to be sure it is what you want. When someone decides to make an offer to buy your house, they will fill out a "offer to purchase" contract. Read it very carefully before signing it. You will be bound to it when your house sells. I have always used a lawyer to draft my offers to purchase a property (even with my real estate brokers license). I have also have used a lawyer to review someone's offer to purchase a property from me. The legal documents are key to the sale. Sometimes, lawyers can save you money.
Of course you have to deal with the inconvenience of vacating your home for showings, open houses and quickly arranged "walk throughs". Are we having fun yet? And oh yeah, a real estate agent will tell you the things that you should do to improve the appeal of your home. Things like paint, furniture arrangements or upgrades of things that are important to buyers. You decide what you will do but I'd suggest you listen to the real estate agent. Selling is what they do!
Then you sell your house. You take the huge profit that is left after paying off your mortgage loan and apply it to the purchase of a bigger house and you wait on average 5-7 years to do this exercise again.
Love,
Dad