Top 10 Questions When You're Selling Your Home

1. What asking price do you recommend?

Some agents will "buy" a listing by suggesting an inflated asking price. We all want to hear great news, and often a seller will select the listing agent with the highest recommended sales price.

Bad decision. An overpriced house will not only sit, it will create price decline expectations as the asking price lowers.

2. What comparables did you use in pricing my house?

There is no better way to value a house than to compare it to other recent sales. Do not be swayed by the "it only takes one buyer" crap. You could also win the lottery, but 99 percent of sales are within the price range of comparable transactions.

3. How long is the listing contract?

The shorter the better, of course. But agents have a legitimate reason to ask for 6 months since good marketing can take time. Anything longer than six months is, in my view, a mistake. Too many agents over-promise and underperform. Keep the listing contract on the shortest leash possible.

4. What happens if I am not happy with your service?

Even with a six-month listing contract, I strongly recommend you try to craft an "escape clause" into the deal. It can be pro-agent, but try to insert something.

For example, "In the event Agent does not perform minimum services, Owner can cancel the herein Contract with 30-days notice."

No one knows what "minimum services" means but just in case your agent is horrible, it would be nice to have a shot at bluffing your way out of the contract (i.e. threaten litigation).

5. What happens if you do not sell the house within the term of the listing contract and I want to list with a different agent?

Most listing contracts have a "tail" - a clause that entitles the agent to a commission so long as the eventual buyer viewed your house during the term of the listing contract. You want this tail voided if you list with a new company. Otherwise, the new company may be reluctant to commit a full marketing campaign to your house.

6. Specifically, what are your marketing plans?

The more your house is marketed, the more likely a buyer will bite. Marketing works. You want to know precisely what the agent intends to do and with what frequency.

7. What is the procedure for showing my house?

Most agents will want a lockbox on your house, as this allows your house to be easily shown by every agent within the multiple listing community. This can also facilitate showings. In certain situations, though, there may be reasons not to do this (e.g. expensive personal items in the house).

Also ask about signage. Some people prefer not to display a "For Sale" sign for security or privacy reasons.

8. What is the commission?

Don't let an agent tell you there is a "standard" commission. This is against the law as all commissions are subject to negotiation. The total commission (including the percentage going to the buyer's agent) is usually in the 4-to-6 percent range, depending where you live. Speak with several agents in your area to get a sense of the range.

9. When do you (the listing agent) earn a commission?

Many listing contracts provide that the agent earns a commission when he produces "a ready, willing and able buyer."

NO, NO, NO.

You should be obligated to pay commission if and only if the house sells. Most agents will back off the "ready, willing, able" language.

10. What split are you offering the buyer's agent?

Some listing agents will shoot for a larger cut of the commission than 50-50. In other words, on a 5-percent commission, he may offer the buyer's agent 2 percent instead of 2.5 percent.

This is a crummy thing to do because it disincentives the buyer's agents to show your house to prospects. You should target 50-50.

What do you think? The ball's in your court now, so let's start a dialogue together. Please leave your comments (agree, disagree, something to add) below. Thanks.

Comments

[Richard C Denis]

After 40 years as a broker, Jim, let me correct number 5 and amend number 9 for you:

The "tail" you refer to in number 5 DOES disappear when another member of the MLS re-lists the property for sale. At least that is the way it is here in California.

Number 9 has all kinds of case law that dictates the seller must pay a commission EVEN IF THE TRANSACTION DOES NOT SEE A CLOSING TABLE. A ready, willing and able buyer can be aced out of the purchase when the seller and/or his agent has a "better" buyer who is ready, willing and able to buy the property. Just because the seller thinks he can get a better price from another buyer, does not mean he can squirm out of the deal. Yes, he can if he wants to pay THE commission to the first buyer's broker (the listing agent will probably go along with what the seller wants). I am sure you have done your research on this topic and know to what I am referring. You probably should extend this topic in your answer. Right?

[Jay Groccia]

According to the National Association of REALTORS (NAR), nearly 100% of home buyers first see the house they buy ONLINE. So the questions you need to ask your agent are things like:
Are you getting an ENHANCED LISTING on REALTOR.com - if the answer is no, RUN away from that agent.
Do you have a website? Facebook or twitter account? If they have limited online presence, you're sunk.

Who is photographing my house? If your agent pulls a little camera out of her purse, you'll be dropping the price, dropping the price, and still asking, "why isn't anyone coming to see the house?" - Demand professional photography. Expect to budget 1/10% of the listing price (if your home is going on the market for $500,000, plan to spend $500)

Are you also going to use a single property website for the house?

See the pattern here? Your online presentation of the house is the single most important thing you can do to sell your house. I've seen many homes where people have spent lots of time, energy, and money staging a home only to have it represented online with photography that's so poor that people can't even tell what's in the room.

This is probably your biggest personal asset. Shouldn't you make it look like a dream home? It might not be yours, but it is to the person that will buy it.

[Jim Randel]

All great points, Jay. You are absolutely right regarding ONLINE PRESENCE. I will amend my list in the future and reference your suggestions. Thank you.

[Jim Randel]

Richard, your points are well taken.

As to #5, the language voiding the 'tail' when a new listing is signed needs to be in the Listing Agreement. It is in most forms I have seen, but not all.

As to #9, I am trying to avoid litigation over what is a "ready, willing and able" buyer. When I am a seller, I do not want a broker claiming I owe him or her a commission until a sale occurs. I definitely understand your point about a seller who squirms out of a deal, but I am writing my questions from the seller's point of view and presuming some level of integrity. As a broker, I understand not wanting to give up that language. Thanks for your insightful comments!

[Green Bay Real Estate]

Richard,

The thing that I love about this list is that it's so tell it like it is. Your approach would scare away quite a few Realtors but the good ones can handle this and should bring up the majority of the things on this list if you know that you are up against other agents. I'm going to have my complete analysis tomorrow on my blog. I believe that your post is that good that it needs to be referenced on my site. Keep up the great work I love your style!

[Jim Randel]

Hi Green Bay.... thanks for your comment! i look forward to reading your post. warm regards, Jim Randel

[Peter Kelaher]

All the ten points are just great and very useful. This is very nice information to have with me. I’m glad that I found your post. Make sure to have a reputed agent for either buying or selling of your house.

[Jim Randel]

Thanks so much for reading Tristen! :)