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Monday, March 20, 2017

FAQ – I’m ready to list. What does the listing process involve?

Understanding the Real Estate Process from A – Z – A Seller’s Guide to Real Estate – Part 3

This is the third post of a series in an FAQ format that I hope will help would be sellers better understand the real estate process that they are about to go through. There will be a follow-on series for real estate buyers.

FAQ – I’m ready to list. What does the listing process involve?

In some cases, all of the things that were in the first two posts will be condensed into one visit by the Realtor. I don’t like to do business that way, because things can get rushed and a client might feel pressured to sign the listing documents before they are ready. I will normally do at least two visits – one to look at the property and provide advice about getting it ready and a second to go over the Market Analysis that I have created, based upon that first visit and to go through the listing process and take care of the Listing paperwork, if the client is ready.

So, just what makes up the listing process? There are two main sets of paperwork to go over and get signed and some physical work that needs to be done during the listing visit. The most important
piece of paperwork is the listing contract itself. I usually go over each page of the contract line-by-line. Our contract is 4 pages long, but some other companies use even longer contracts. It is important that the sellers understand that this is a legal contract between them and the broker to sell the property. The contract has several obligations that they must agree to, not the least of which is they cannot discriminate in any way against anyone who may wish to visit or to make an offer to buy the property.

In the listing contract the obligations of the broker (and me as the agent) and the sellers is clearly laid out. By signing the contract, the sellers agree to those stipulations and to abide by the terms of the contract. In conjunction with the contract, a set of Agency Disclosure documents must be signed by the sellers, acknowledging that they understand the role defined in the listing contract of Seller’s Agent that the broker and I will be playing. In the case of my company, Real Estate One, there are also disclosures to the Sellers about the other ancillary companies that the broker owns – a title company, a mortgage company and an insurance agency – which they might also end up doing business with, but which they are not required to use for any of those functions. However, we are required to disclose that we own them and that the broker may receive compensation from those companies if the Seller does business with or through them. The agent gets nothing from that business.

A second set of documents accompany the contract and agency disclosures and constitute the Sellers’
disclosures of information about the condition of the property. One is the Seller’s Disclosures and One is the Lead-based Paint (LBP) Disclosure. Both are mandated by Real Estate Law in the State of Michigan and the Lead-based Paint Disclosure is required by the Federal Government. These are (and should be thought of as) legal affidavits being made by the Sellers as to the current state of the property. Both use questions, which the Sellers must answer truthfully about what they know about the condition of various systems and components of the house, the history of the house and, in the case of the LBP Disclosure, the presence or absence of paint with lead in it anywhere in the house. Owners/Sellers are expected and assumed to know about those things and to answer honestly. Failure to honestly answer the questions or falsely answering the questions can lead to legal problems later and/or charges of fraud. So we I go over those documents with the Sellers line-by-line and help them understand the questions. There can be no blank lines left on those documents when they are done.

The process of going through the listing contract and disclosure documents can take anywhere from ½ an hour to an hour or more, depending upon the questions that come up.

Next in the listing document packet is usually the MLS Data Sheet. The Multi-List Service (MLS) in each area or state may have slightly different data gathering requirements;, but, generally they all need to capture lots of information about the property, such as – when was it built, how big (in Square Feet) it is above grade and how big is the basement, what materials are using on the exterior, how
many bedrooms and bathrooms and lavatories (1/2 baths) are there, how is it heated and cooled, how big is the actual land that the house sits on, what size garage does it have, what school district is it in, and on and on. You get the idea. Our MLS Data Sheet is four pages long. In addition, at least in my MLS, there is a requirement to measure and record the size of each room and the floor covering for each room. In the old days (just a few years ago) I would ask the Seller to help me with the room measurements by holding one end of the measuring tape. These days I use a laser measuring device. We also record what floor of the building (or the basement) the rooms are on.

We may also discuss the Sellers requirements or restrictions for showing appointments at this time, or a little later. These Showing Instructions are given to the Showing Appointment Center (if the company uses one) or to the people who answer calls and set appointment at the listing office. Sellers have the right to define when they will allow showings and how much advance notice they need. They also define who needs to approve each showing request and what means of communications are required – voice contact via phone, messaging to a phone or email. Some Sellers have family or pet situations that require lots of advanced notice and may require that someone go home to remove a pet for each showing.

Obviously having showing instructions in place that are too restrictive can hurt the marketing effort and discourage would-be buyers. We may discuss this until we reach some agreed upon compromise and I make sure that the Sellers understand the consequences (intended and un-intended) that may result from any restrictions on showings. I also advise them that Buyers (and their agents) do not like to have the Sellers hanging around during showings. It makes the Buyers feel uncomfortable and they
feel like they can’t discuss things out loud while on the visit. Some would-be buyers won’t even visit a home if the seller is going to be there.

In some listing appointments I also arrange to take pictures of the house, both outside and inside; but in many that is another visit. It just depends if the Sellers feel ready for pictures or need more time to “stage” the house for pictures. The minimum that I need to place the house on the MLS is a picture of the front of the house from the street. The interior pictures, and any other outside pictures that I take, are used on the MLS and in the marketing flyer that I will create later. If I am to take pictures during the listing appointment, the appointment can take up to three hours. Without taking pictures that day, the appointment is usually over in about two hours. I usually take 60-70 pictures and chose to use 40-50 on the MLS.

The final things that I will usually do on this listing appointment is to put the sign on the front lawn and put a lock box on the front door, with a house key in it. It is surprising how many would-be sellers have to scramble around to find a front door key or may have to have one made because they can no longer locate one. Most sellers get used to entering and leaving their homes through the garage or a side door. I usually ask for a second key or go have a copy made of the one that is in the lock box. It is amazing how many times the key that is supposed to be put back into the lock box by the showing agent either gets lost or is locked into the house as the agent leaves the showing. There are a variety of different lock boxes, but the idea is the same with all of them. A code is given to showing agents when they make a showing appointment and that code allows them to get into the lock box and use the key that is stored there to get into the house. Sometimes (but rarely) a home may have a punch code lock already on it and we can just use that instead of a lock box.

Most agents in our company use what are called “pitchfork” signs which we can put into the ground by just stepping on the bottom of the sign, which drive the two tines at the bottom into the ground (thus the name pitchfork) to hold the sign up. Some of our agents and most other companies’ agents will order a wooden post to be installed on the front lawn, with a sign hanging on it. That takes a day or two to be installed by the sign service company and may leave a big hole in the front lawn when it is removed, since they dig the hole for the pole with a power auger. I will return within a day or so and also place a flyer box next to the sign to hold the flyers that will have created for the house.  I usually put some flyers in the house, too.

Some clients have requested that their homes be listed but that no sign be put on the lawn. They are apparently worried about nosy neighbors or just don’t want the general public to know that it is for sale, for some reason. It is certainly their call on the sign, but I always advise against that restriction. A significant number of real estate sales are kicked-off by the buyer seeing a sign on the lawn and calling on it. Buyers still cruse neighborhoods looking to see if they like the area and if any homes are for sale in the sub or development.

That pretty much take us through the listing appointment/process itself. Next we’ll start discussing the Sellers’ role during the listing. 

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