Expert: Jim Root - 5/26/2008

Question
QUESTION: I live in New Jersey and I am going to sell my house and relocate.  I would like to know should I clean up the clutter, paint, and fix it up BEFORE I ask a Realestate agent for a Market value assement?  Or, should I show the agent my house now and let them tell me how much to list it for “as is” and how much after cleaning and fixing up?  Which is the best way?

Thanks,
Lou


ANSWER: Hey LOU--

That's a great question! I suggest you "clean up the clutter" first for sure--as long as you're talking about strictly HOUSECLEANING and PICKING UP things!

As for whether or not you should "paint," I'd probably do some touch-up painting  before I had a Real Estate Agent look at the home for purposes of analyzing it's sale potential and  possible Listing.But here again, the "key words" are TOUCH-UP.(But I certainly wouldn't do a major interior and/or exterior paint job on  the house yet!)

And should you "fix it up" before the Realtor looks at it for a Comparative Market Analysis (CMA)? I suggest that you DON"T do any major renovation or rehabilitation of the home prior to the CMA.(You might want to take care of any small/inexpensive "deficiencies," but nothing costly!)

With the home relatively clean and uncluttered, with touch-up
painting accomplished, and with minor maintenance done, have the Agent advise you on what else needs to be done to make the home most marketable at a minimal cost to you! Most experienced Realtors know what one should and shouldn't do to a house to INCREASE it's DESIRABILITY and MAXIMIZE it's VALUE!

If the home is habitable after your clutter pickup, touch-up
painting and fixing of minor deferred maintenance items, he/she may recommend an "As Is" sale (and price) OR suggest some COST EFFECTIVE rehab or renovation work that will help satisfy the typical Buyers needs/desires your Real Estate marketplace and suggest an "After Rehab/Renovation" price to ask!

The realty market in your area is a "Buyer's Market," and only properties in VERY GOOD CONDITION with the MOST SOUGHT AFTER AMENITIES and listed at the most REASONABLE PRICES will sell quickly and at "Top Dollar!" PLEASE, LET YOUR REALTOR HELP YOU PROPERLY PREPARE AND PRICE YOUR HOME FOR A FAST & PROFITABLE SALE!

Good luck with the sale of your house, and your finding a new home. I hope I' ve been of some assistance!

--JIM


---------- FOLLOW-UP ----------

QUESTION: Jim,

Thank you for the advice on my situation.  I’ve read that a seller should “interview” 3 Realtors to determine who best to sign on with.  Do you know if a Realtor will give me a CMA before signing with them?  Besides a commission percentage, what other questions do you think I should ask during their “interview”?  Thanks again.

Lou


Answer
LOU--

Welcome back! (1) Yes, you should interview Realtors for "the job" of listing and selling your home. And at last 3 "candidates" for that job should be evaluated. You should then "hire" the Realtor that convinces you that he/she will do the "best job" of selling your home in a minimum of time and at a maximum price to you.I'll address the issue of evaluating the Realtor and other matters relative to hiring "the right one" as I proceed!

(2) If any of the 3 Realtors you're interviewing WON'T give you a CMA before listing the property,show him/her  "the door" and find another Agent to interview. A "sharp" Realtor will do a CMA using info on your home found in the Assessor's Records and by doing a "Drive-By" of your house BEFORE they meet with you the first time. You should have AT LEAST 3 CMA's to look at before you decide who to "hire" as your Listing Agent!

NOTE: As a CMA is NOT a purely arithmetically nor is it even a
semi- scientifically developed estimate of value but is in part the Realtors "guess-timate" of the "most likely selling price,", the 3 CMA's you receive will LIKELY all present different PROPOSED SALE PRICES.(ie, one may say $205,500; another $209,900 and the third $214,000!) And if all of the Realtors have worked from the same/valid data the 3 proposed prices will PROBABLY all be within a $5000 range between the lowest and middle, middle and highest proposal(as are my Examples above).IF THE "SPREAD" IS HIGHER THAN THAT,SOMETHING MAY BE WRONG!

(3)  By law in MOST States, Real Estate commissions are NOT regulated, must not be PRE-SET by the "realty industry," and are NEGOTIABLE. You should discuss the commission and knowing that you CAN negotiate on the percentage, try to get the best /lowest commission rate possible. It's not likely, however, that you'll be able to negotiate  a less than 5% fee. If you find a Realtor who will work for 3 or 4%, you'll probably "get what you're paying for." Not much!

(4) That leads us to "what other questions should be asked during the interview?" Well, you want to know  what the Agent will do to earn that commission--what is his/her marketing plan? Will the home be advertised and if so where? Newspaper, Radio, TV? What about open houses how long has the Agent been in the business, what about the reputation of his/her Company? ,But if you HAVE to ask these kinds of questions, the Realtor isn't showing the proper "salesmanship" needed to either get a Listing or sell a Home! The ones you'll want to "hire" will give you an almost-formal "Listing Presentation" to "close " you on employing them as your Listing Agent!If  the Agent DOESN'T  give you a "Listing Presentation ," and you have to ask these questions, maybe you'll have to do the Agents job for him/her after you've listed.

(5) Some "greedy" Sellers will list with the Realtor whose CMA suggests the highest price and greatest profit, while"impatient" Sellers will list with the Realtor who proposes the lowest price, thinking that that will sell the property more quickly! I almost hesitate to say this, but I've found that the mid-price proposal from a series of 3 CMA is USUALLY the one closest to  a true FAIR MARKET VALUE of a subject property! That doesn't mean I'm suggesting that you throw out the "high" and the "low" and always list with the Agent who came i in in the middle! It's just one more thing to consider when evaluating the Realtors for the "job!"

(6) Probably as important as anything are the answers to questions you'll need to ask yourself. "Do I feel like I can trust this person with handling what's probably the largest financial transaction I've ever been involved in? Do I feel comfortable enough with this person to share personal & financial facts about me and my family?" And "If I was looking for a friend, would this individual qualify? Will we be able to comfortably work together on the job of selling my house?" You should weigh the answers to those questions heavily when making your decision on hiring a Listing Agent!

So--I think I've answered all of your questions, and now it's up to you to get "the ball rolling" and sell your home. Hopefully you'll be able to "reconcile" all of the "hints/tips" about selecting a Realtor and things will go quickly, smoothly and profitably for you! GOOD LUCK, LOU!

--JIM