Why Use a Real Estate Agent?
Manhattan townhouse transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $2,000,000. If you had a $2,000,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $2,000,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a Real Estate Agent.
How Much Is Your Home Really Worth?
Your home's market value is an important factor in a long list of financial decisions, including selling the home, refinancing your mortgage, borrowing against your equity, estimating your annual property tax bill, buying homeowner's insurance, calculating the expected return on remodeling costs, managing your other investments, estate planning and so on.
The trick is figuring out how much your home is worth -- and remembering that how much you paid for it months or years ago isn't relevant to its current market value. It's not a bad idea to gather information from several sources and compare the findings, rather than relying on just one approach to home valuation.
Here are three suggestions to start:
Call a couple of Real Estate Agents. Even if you're not planning to sell your home right away, many agents will be willing to prepare a comparable market analysis (CMA) for you as a marketing service with the goal of getting your business whenever you decide to move. A CMA shows the prices of recently sold homes that are comparable to yours and the prices of comparable homes on the market. A market-savvy agent can give you a rough idea of what your home would be worth, given its size and condition and local market conditions.
Go to neighborhood open houses. Open houses are a good opportunity to view comparable homes for sale in your neighborhood and chat with real estate professionals about the local real estate market. Two caveats: It's not easy to be objective about your own home and you shouldn't assume that the listing price on a for-sale necessarily reflects the home's true market value. If you keep those points in mind, information gathered at open houses can be worth considering along with data from other sources.
Do research online. A number of Web sites offer home valuation information free or for a fee. The free service at iOwn.com displays sales prices of comparable nearby homes and market activity data within three minutes. Dataquick.com charges $30 for a full home valuation estimate, while Appraisal-net.com offers a comparable sales report for $9.95. VirtualRealEstateStore.com will send a free home price analysis to your e-mail address within 72 hours or you can pay $14.95 for an immediate reply.
Setting the Stage Sells Your Home:
Making a good first impression can mean the difference between receiving serious offers for your home or being subjected to months of lookie-loos dropping by but never buying.
How can you ensure that your home will make the best impression possible? Here are six tips for savvy home sellers:
Focus on curb appeal. The outside of your house can be the source of a very good first impression. Have your trees trimmed. Cut back overgrowth. Plant some blooming flowers. Store bicycles, gardening equipment and the like out of sight. Have at least the front of your house and the trim painted, if necessary. Sweep the stoop and the sidewalk. After dark, turn on exterior lighting.
Clear out the clutter. Real estate agents say buyers won't purchase a home they can't see. If your home has too much furniture, overflowing closets, crowded kitchen and bathroom countertops or lots of family photos or collectibles on display, potential buyers won't be able to see your home. Get rid of anything you don't need or use. Rent some off-site storage space if that's what it takes to clear out your home.
Use your nose. Many people are oblivious to scents, but others are extremely sensitive to offensive odors. To eliminate bad smells, bathe your pets, freshen the cat litter box frequently, shampoo your carpets, dry clean your drapes, and empty trash cans, recycling bins and ash trays. Place open boxes of baking soda in smell-prone areas, and refrain from cooking fish or strong-smelling foods. Introduce pleasing smells by placing flowers or potpourri in your home and using air fresheners. Baking a fresh or frozen pie or some other fragrant treat is another common tactic.
Make all necessary repairs. Buyers expect everything in their new home to operate safely and properly. Picky buyers definitely will notice-and likely magnify -- minor maintenance problems you've ignored for months or even years. Leaky faucets, burned-out light bulbs, painted-shut or broken windows, inoperable appliances and the like should be fixed before you put your home on the market. These repairs may seem small, but left undone they can lead buyers to question whether you've taken good care of your home.
Introduce lifestyle accessories and make your home as comfortable and attractive as possible. Set the dining room table with your best dishes. Put out your only-for-company towels. Make up the spare bed. Hang some fresh curtains. Put some logs in the fireplace. Use your imagination.
Get a buyer's-eye view. Walk up to your home and pretend you've never seen it before. What do you notice? How do you feel about what you see? Does the home seem inviting? Well-maintained? Would you want to buy this home? Your answer should be an enthusiastic yes!
The Basics of Marketing Your Home
Your home should be listed, whenever possible, on nytimes.com, and on REALTOR.com, which has the largest online database of homes. Your broker should immediately co-broke your home with all residential real estate brokers in Manhattan.
A Real Estate Agents largest expense has traditionally been classified advertising in the local newspaper. However, today properties are also exposed through popular Internet home search/listing services, and real estate guides. Even with all these additional advertising avenues, "For Sale" signs on the front of your townhouse are still remarkably effective. When appropriate, and with your permission, your agent may send a mailing about your property to neighbors. Sometimes one of them has "a friend or relative who always wanted to live near me." You never know.
Showings and open houses
To prepare your home for viewing, make it as light, cheerful and serene as possible. Your agent will probably find a tactful way to suggest that you not be present while the house is being shown to prospective buyers. This is done because your presence will inhibit their actions and conversations. They won’t feel free to open closets and cabinets, test out the plumbing, and discuss their observations objectively as they walk through. It goes without saying that your children and pets should not be on the premises either.
Picking the Best Offer
In many of today's strong real estate markets, home sellers can expect to receive multiple offers for their home. Multiple offers are a classic example of economic realities because they appear when the supply of homes for sale is limited and the demand for good-condition homes is strong. Sellers love multiple offers because they push up home prices and create an opportunity to spark a bidding war. Knowing how to respond to multiple offers can help you get the best price and terms for the sale of your home.
How can I make sure my home will attract multiple offers?
Hit the market at the right price and, assuming your home is in good condition, multiple offers should come in.
Do I have to accept the offer with the highest price?
No. If you prefer a lower-priced offer, perhaps with a better qualified buyer or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers. Caution: If you reject a full-priced offer, you may owe your agent a full commission even if you don't sell your home.
One of the buyer's agents is from the same brokerage company as my agent. Should I give extra consideration to this "in-house" offer?
No. All offers should be evaluated equally based on the net price and terms.
My home has been on the market for four weeks, but I haven't received any offers. Is this situation my agent's fault?
If you ignored your agent's advice about pricing your home or making any repairs, it's not really reasonable to blame the agent for the dearth of offers. However, if the home is priced right and in good condition, you'll want to have a frank conversation with your agent and take corrective action. Never sign a listing agreement with a term of more than six months, unless the property is in the top ½ percentile of the market. As a last resort, you can ask your agent's sales manager to help resolve any complaints.
Contract Negotiation: Terms and Conditions
There's a lot to consider before you sign a real estate purchase agreement. If the terms and conditions of the deal aren't acceptable, you might want to pause and think twice, even if the purchase price is more than satisfactory. After all, the price will be moot if the transaction never closes.
The typical residential real estate purchase contract is complicated, densely written and packed with legal jargon, but don't use that fact as an excuse for not reading the entire contract. Take your time and read slowly. Ask questions about anything you don't understand. Be flexible and willing to negotiate. The following five points are among the many items that merit attention:
What are the cutoff dates for inspections and approvals of the inspection reports? A typical contract provides an opportunity for the buyer to hire all manner of experts to check out the condition of the home. From the buyer's perspective, the more time that's allowed for these once-overs, the better. Sellers, on the other hand, usually want the inspections to be completed and signed off as soon as possible.
Who is responsible for making repairs, if any, as a result of the inspections? The fact that the buyer orders one of more inspections of the home for informational purposes doesn't obligate the seller to make repairs or modifications as a result of those inspections. In practice, however, inspection reports often are used to negotiate repairs of major problems or safety or environmental hazards that may be noted. The purchase contract should provide some guidance for these negotiations.
Is the seller making any representations or warranties regarding the condition of the property? In some contracts, the seller warrants that specified major components of the home (e.g., the roof or central heating or cooling system) are in good repair and working order at the close of escrow. Buyers should understand which components of the home are guaranteed and which are being sold "as-is."
When is the property scheduled to close? Pay attention to this date! If you're selling your home, you'll be expected to move out completely before the property changes hands. You'll want to make sure the closing date doesn't fall before you're able to move into your next residence.