I think I’m ready to get my house listed. How’s that work?

The 4th in a series of 12 posts for would-be home sellers.

Let’s discuss getting the house listed. Your Realtor® will be asking you to sign a contract giving them the exclusive right to market and sell your house for some period of time, usually six months or more. Don’t get all wigged out by the six-month window. Houses are selling in average times much less than that right now; however, some don’t. The Realtor wants to be around for the payoff. They don’t want to do all the marketing and have some other agent come in and pick up your house in month four and close the sale after you've finally agreed to drop the price to where it should have been all along. It probably won’t take six months to sell your house, but they need sufficient time to do the right job of marketing it.

Make sure the Price is Right. The most important thing in real estate used to be location, location, location; now it’s price. Location is still important; but, at this point getting the property priced right is the key to making a quick sale (which when you do the math is the most profitable sale). Your Realtor will do a Comparative (sometimes called Competitive) Market Analysis (CMA) for your house. The CMA process is as much art as it is science. Realtors use the MLS database of recently sold houses in the immediate area and of houses currently on the market. They try to find comparable houses to yours, which is easier in a modern subdivision where one or a few builders build all the houses.  I tend to use the term "similar", rather than comparable, since I don’t spend hours laboring over making adjustments like an appraiser will. If it's got the same space, the same number of bedrooms and baths and mostly the same other amenities, that's good enough to include in the comparison database. It’s much harder with older houses or with house that have very custom architecture (try finding a bunch of octagonal shaped houses in the immediate area).

Realtors factor in such things as condition, improvements, updates or upgrades, extra features like a swimming pool, and other things that either add or subtract from the house’s market value. They normally come up with a price range and will make some recommendation about which end of the range they think the house should be priced. Don’t be offended if your house is priced below the average or median price in the comparison area; perhaps most houses in your neighborhood have finished basements and yours doesn't. There is always an explanation available about why it is priced the way it is (you just may not like the explanation). Don't expect the Realtor to agree with your argument that "it's good enough for me, it ought to be good enough for a buyer". The Realtor is trying to show you how your product compares to other products in the same market that buyers will also being seeing. Listen to your Realtor.

Things that Realtors don’t consider (and neither should you) include: what you “need to get out” of the house, what you put into the house, what someone else that you know sold their house for or what your dad, brother or uncle told you your house is worth or what the house appraised for six months ago when you refinanced it. It may well be that you are still underwater on your mortgage, so that you need to get more than the house is worth on the market. In that case, you should discuss with your Realtor whether a short sale makes sense for you; and then listen to your Realtor. 

As Realtors, we are looking at your house as a product within a market and comparing it to other products in that same market. You have to get to that mind-set too. You need to try to take as much emotion out of the sale as possible. Once it is put on the market you need to stop thinking of it as your home and start seeing it as a product that you are trying to sell. Ultimately the decision on what to list your house for is yours, but forcing the price too high will just drag out the process and could end up costing you more than starting at a fair market price; especially if it sits on the market for a while. Buyers start to wonder about what’s wrong with the house or they conclude that the owner isn't really interested in selling at a market price. So the best advice on this is to listen to your Realtor. Did I mention that before?

As for the Listing process itself. The Realtor will ask you to fill out a Sellers Disclosure document. Be very serious about filing in this document truthfully, to the best of your knowledge. This document asks you to identify any defects or issues that you know about and could be used in a court later if the buyer thinks that you deceived him with false statements. There are lots of places where “Unknown” is a possible answer; but, be careful when and how you use that answer. You are expected to know about and accurately report on the condition of the house. The Realtor will also be asking you to fill out a statement about the presence of lead-based paint in the house. Answer that truthfully to the best of your knowledge.

He’ll also be measuring rooms and getting other listing information for the MLS. It takes about 1.5 to 2 hours to go through the whole process of paperwork and measuring. The Realtor may want to take pictures then or will schedule a time to come back and get pictures for the listing. They’ll probably order a sign for your front lawn and put a lock-box on one of your doors, so they’ll need a spare key. They’ll also be setting up the showing instructions, so be as flexible and cooperative with that as possible, more on that in a later post.

The Realtor should be able to get your home onto the local MLS within 24 hours of the listing appointment. Within another 24 hours it will probably be all over the Internet and available for you to see at whatever real estate sites that you use. Read through the listing to make sure that the information is correct and let your Realtor know of any errors that you've spotted. It is not unusual if there is a flurry of showing activity that occurs right away. The real estate market is always hungry for new products, so expect some showing appointment calls right away. If you don't get showings within the first few days, that is usually an indicator that you and your Realtor may have missed the mark on price. Watch for that and talk to him/her right away. Don't let your listing go stale right away due to being overpriced - more on that later.