The Help You Need to Sell Your Home

One of the infallible signs of Spring—besides new leaves on the trees and the return of the birds—is the appearance of “For Sale” signs on lawns. If you’re thinking of selling your property, here are some tips on putting together a winning team on your side and making the process work for you.

Who’s Involved?

It’s possible for a home to be bought and sold strictly between principals—buyer and seller—and we discuss this possibility later in this article, but more often sellers choose to use a real estate agent. With or without an agent, you should use the services of your lawyer early in the process, before any contracts are signed, as well as at the closing. You may also turn to your accountant for help in sorting out the tax consequences of selling.

What are some of the contracts involved?

Your listing agreement with a real estate agent is a contract, and may be negotiable, giving you some better terms.

When you actually get to the point of selling, the deal will almost always entail a contract. So, keep in mind that a typed or handwritten “letter of agreement” or “letter of understanding” signed by the parties will be binding if it meets the legal requirements of a contract. Don’t sign something assuming it’s not a contract and, therefore, not important. If something goes wrong, you don’t want to discover too late that you’ve signed away important rights, failed to include important protections, or failed to receive what you expected. And beware of making oral promises. Many kinds of contracts don’t have to be in writing to be valid. For example, if a seller verbally promised to update the electrical system, the buyer might be able to insist that the system be updated even if the matter doesn’t arise in later negotiations. Legal advice will be much more helpful—and less expensive—before you sign any contract.

What is the role of the seller’s agent?

The seller’s listing agent will help you determine the price of the home, suggest how to market the home, schedule advertising and open houses, show the home to prospective buyers, and otherwise facilitate the sale. In most cases, you, the seller, pay the sales commission, which is shared by the seller’s and buyer’s agent.

What fee will I pay on the sale of my home?

Typically, real estate firms charge 5 to 7 percent of the sale price. On some higher-priced homes, a firm may charge the full commission on the first $100,000 or $200,000 and a lower percentage of any amount above that price.

Keep in mind that all commission agreements are negotiable, particularly in a seller’s market.

What other terms in the listing agreement are negotiable?

In theory, they all are. At the very least, the real estate agency should be willing to negotiate provisions on:

The length of the contract. Many of the standard forms provide that the contract renews automatically. Many firms want a six-month listing. If you’re in a hurry to sell your home, try to get a 60-day or 90-day listing.

When the commission is earned. For example, this might occur only when you and the buyer actually complete the sale, not when you both sign the purchase agreement.

Who will be responsible for the advertising expenses—you or the agency.

What legal protection do I have after signing a listing agreement?

The listing agreement between a seller and a real estate firm carries a fiduciary responsibility. The firm and all of its agents act for the seller. They owe you the duties of care, obedience, accounting, loyalty, and notice.

What can I do if my real estate firm doesn’t seem to be working very hard to sell my home?

Your best protection is to limit the term of the listing agreement to 90 days or less. If your home doesn’t sell in that period of time, you’re legally in a position to try another firm.

Are there advantages to selling my home without an agent?

Yes. If you sell your home on your own, you will not have to pay a sales commission. While this may seem like a large savings, you must prepare yourself to assume all the responsibilities and costs associated with selling your home. These include advertising your home, spending time with potential buyers, and negotiating the sale.

Experts generally recommend that the seller hire both a lawyer and appraiser at the beginning of the process. An appraiser can help you establish a price for your home, and the attorney can help you with the legal issues, legal filings, and other necessary documentation.

Are there disadvantages to selling my home myself?

There are three distinct disadvantages:

First, you will lack the many resources that real estate agents have to attract buyers. For example, your home will not be listed in your local Multiple Listing Service, so it is unlikely that as many potential buyers will be shown your home.

Second, you will have to find time to show your home and talk to potential buyers, and you will need to pay for all advertising.

Third, you will be directly involved in negotiating the sales price and other contract provisions. Many sales fall through without the mediating influence of a third person who has the experience to bring the buyer and seller together on a variety of issues. If you’ve decided to sell on your own, you should have one of the lawyers at Burns & Associates help you in the negotiations.