The Home Selling Process

Below is a Seller Guide Flowchart that illustrates the basic parts of the home selling transaction. In the blog entries that follow the Flowchart in this catagory will expand on each of the items listed. You will learn what the process is, how it works in the market and how we do things to make sure that our Seller clients get the most money for their property.

Home Selling: Step 1a - Agent Presents Comparable Sales / Market Analysis

Comparable Sales (CMA) / Market Analysis

This is arguably the most important part of the whole sales process. While every aspect is exceedingly important, if you price the property too high and you will not attract the right buyers and if you price too low you leave money on the table.

If you already have a MLS Home MarketWatch Portal, you will have a good idea of your property's price range. If you do not have one, email me for more information or click above.

During our first discussion, I will ask you about your property. How many bedrooms, bathrooms, square feet, upgrades, etc. I will take this information, and before and our first meeting I will do the following:

Comparable Market Analysis
I look at MLS at similar properties that are currently on the market or that have recently sold. From this I select the most appropriate properties, and then I use this to come-up with a general listing price range.

Property Preview
During our first meeting I will ask you to give me a tour of the property. I will take notes and with your permission some photographs, from which I will then come up with a more narrow listing price range.

Market Analysis
A Realtor has always got to be on top of the market. I go to sales meetings every week, Broker Tour every Tuesday, I talk with other agents (both at Vanguard and other firms around The City and Bay Area) about their listings, sales and the market, I read a lot and I write this blog which helps me. Reading is great, but Reading - Analyzing - Writing is even better!

The Market Analysis helps me adjust my more narrow listing price range up or down depending on how the market is doing. Pricing a property without knowing where the market is going can be disastrous.

Home Selling: Step 1b - Price is Established - Listing Agreement

Once we have narrowed the price range I will outline everything for you about what is currently "happening in the market" and we will finalize the actual listing price.

The "best" listing price:
The best listing price is the price that gets the most qualified buyers looking at the house.

Pricing:
It is useful to consider how buyers look at properties (as you may remember when you bought your property). One of the major considerations is the "price range." For example, a buyer is looking for a two bedroom in district 9 between $850,000 - $950,000. If your place should be in this range but it is not, then you will likely not get the most money for it. And the market will tell you if you are "in" or "not in" the right price range.

BUT! This is where having a really good Realtor is worth the money. If you read the defintion at the "market" link above it talks about the efficient market theory and that "prices on traded assets, e.g., stocks, bonds, or property, already reflect all known information" and it further states "that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck."

A good Realtor, like a good stockbroker, is the first person to know the real estate market "information" mentioned above and as able to use that information, ahead of other participants in the market, to outperform the market on behalf of their clients.

Over pricing:
When you price too high, you put your property in a higher league and are looked at and judged accordingly. If your place should list at $750,000, but you list it at $800,000, the property will be compared against all the other (properly priced) $800,000 listings which will be nicer, bigger or otherwise just better.

Your property will sit on the market while all the other and better $800,000 listings are sold. Finally, after wasted weeks or months even, you start getting lowball offers and/or you reduce the price.

Why would you do this to yourself?

Under pricing:
When a property is underpriced, you will know it because the market will tell you. When you get 12 offers on a place or an offer the first day the property came on the market, you are likely (though not necessarily) under priced.

The good news about under pricing is that you can always counter the offer at a higher price or not accept the "low" offer.

The problem though is that if you price your property at $750,000 and it should be $800,000, the $800,000 people that might be interested in it, may miss it all together as they are looking in the $775,000 - $825,000 range.

Always price properly!

Home Selling: Step 3 - Open Houses - Showings by Appointment

During the first two weeks is when most of the buyers and agents will come to either a Sunday Open House, a brokers open on the Tuesday Tour or a private showing by appointment.

We are unique in that we always have myself in the property and Ye Gong at the door. In a condominium building this is key. See here what can happen (and in talks with buyers and agents, it happens more than you think) here when you only have one agent to show your property, let people in the building, make sure they get to your property, show them the common areas, etc. Even with two people we both stay busy at open houses.

During Sunday Open Houses Ye Gong will welcome people at the door, show them to the elevator/stairs and make sure that they know how to get to the property. Do not keep buyers waiting in front of the building while waiting for someone to open it for them. This is a great way to lose a potential buyer.

For the first Brokers Open on the Tuesday Tour, we make either homemade Shanghai-style wontons or have XO Cafe cater the Open House with their fantastic sandwiches. We do this as agents are very busy, and hardly have time for lunch. And since we want as many agents to see your property as possible, we bring lunch for them and we advertise this on the MLS so that they all see it and come over. Also, Ye Gong is at the Broker Open's opening the door for the agents and watching out for the DPT in case they have to park creatively.

Home Selling: Step 3b - Advertising (Marketing Plan)

My advertising and marketing plan for my listings includes the following:

1. Enter the property in the San Francisco multiple listing service (MLS)
2. Add property to www.SFCondoMap.com and www.SFCAhomes.com with multiple photos, links to showing request forms, disclosures, flyers, condo fees, pre-inspection reports, and any other pertinent information
3. Create Google Ad Campagin for the new listing
4. Create auto-responder at www.SFCondoMap.com and www.SFCAhomes.com with property statement information
5. Create a virtual tour
6. Design and send an e-mail to a database of 700+ prospective buyers
7. Send e-mail to the real estate professionals on the San Francisco MLS
8. Produce color property flyers
9. Messenger a flyer to a list of  the top agents in San Francisco
10. Write and place classified advertising
11. Record 800 number property description and assign an extension
12. Order yard/property sign with 800 rider
13. Put MLS Preview link in my email signature at the bottom
14. Enhance listing on REALTOR.com with copy, photos, links, etc.
15. Create an ad for the San Francisco real estate section of www.CraigsList.com, a giant online bulliten board.
16. Create full color postcards for Vanguard Buyer Lists
17. Create full color email flyer for Vanguard Buyers
18. Develop a "Property Showing Presentation" for the team for showing buyers and agents
19. Develop a single property website for your property
20. Send email to SFCondoMap buyers (3.5%)
21. Send email to SFCondoMap and SFCAHomes.com Newsletter Subscribers (3.5%)
22. Send property flyer to mortgage offices with referral fee advertised

Home Selling: Step 4 - Purchase Offer Presented to Seller

And again, this is where having a top mortgage agent on my team comes in handy. When you look at the first page of the Purchase Contract, you can see that it is mostly about financing.

While Line H. Purchase Price (page 1) is the most important number, it is not the only number. The goal is to make sure that all the numbers from the buyer are solid, reliable and accurate as to the current market conditions. Having a top mortgage agent on my team means that offers from buyers for your property will be reviewed by an expert in financing to make sure that you select the best offer for price and financing terms along with all the others in the contract.

Since most agents (buyers agent and listing agents) are not experts in loans or mortgages, having an expert to help negotiate for you on the financial side of the contract is invaluable.

We will review each offer and make sure that all the contingencies, terms and conditions are agreeable to you, along with the price. If you decide that you want to accept one of the offers at this time, I will first call the mortgage agent to make sure that the buyer is financially qualified to buy your property. If and when this is confirmed, you will sign and date at the bottom of page 7 of the Purchase Contract. You will now have a ratified (Accepted Sales) contract. Congratulations.

If you decide to reject the offer, I will call the agent and let them know.

If you decide to counter the offer, we will go to the next step here.

Home Selling: Step 5 - Negotiation of Terms

After we receive and review the offer(s) you have three choices: Accept, Reject or Counter.

If everything meets your expectations you can accept the offer and we will start escrow.

If the offer is so far off base as to not warrent even a counter offer, you can reject it outright. I will call the agent that submitted the offer and thank him for his efforts and invite him to submit another offer.

And when an offer is somewhere in between, you can counter the offer with a Counter Offer.

Some good articles on Counter Offers:
Counter Offers - All About Real Estate Counter Offers
How To Succeed With Counter-Offers

This is where I add some of the most value in the entire transaction.

Always consider carefully any Counter Offer. Once a Counter Offer is submitted, it is a new contract!

The "Regular" Counter Offer:

You may counter for any of a thousand reasons. Many have little or no material impact on the buyer monetarily, but will deal with contractural items that strengthen the likelyhood of the deal actually closing. You do not want to wait 30 days to find out if a buyer is serious or not! We can also counter for a higher price or both. A recent offer made by our buyers received a counter offer from the seller with a long list of items. I almost had a heart attack when I first saw the faxed counter offer. But they were all contractual items that did not affect anything financially. After I explained each item to the buyers, they happily signed the counter offer are looking forward to closing on their new home soon.

(Click here for Counter Offer)

 The Multiple Counter Offer:

This is when you receive mutliple offers on your property and you counter two or more of the offers. You can counter in price, terms or both. The counter offer (in all forms) is technically a new contract. But, Buyers can:             1) walk away and not accept or exceed the terms of the counter offer              2) they can meet the counter offer at the terms stated in the counter, or              3) or they can offer a lower or higher price and/or better or worse terms. Each property, offer and situation is so different that you will probably do one thing in one circumstance and another thing in another situation. We will always give you all the information and data you need to make the best decision possible.  And we will negotiate to success for you in all matters.

(Click here for Multiple Counter Offer)

Home Selling: Step 6 - Disclosures and Inspections

During the showings of your property, most good agents will ask me if there are any known problems with the property that they should tell their clients about. This is good as we do not want a buyer coming back asking for a credit if they find out something bad later. Or even as weak as they did not see something in the disclosures and now they want a credit. This is the surest way for a deal to get cancelled costing everyone time and money.

A leak at the kitchen window when it rains is not going to kill a deal or make anyone ask for major credits (well, it could, but not usually). But if a buyer finds out after they buy the house that a roofing company had been there telling you that the roof was leaking a year ago, and you did not tell the buyers or have it in the Transfer Disclosure Statement, you can get bet you are going to get sued. And people get sued all the time for much smaller things than this.

One of my major responsibilities, along with getting you the best price for your place, is to make sure that you do not have any problems during the transaction or after. Selling property is stressful enough. You do not want sleepless nights wondering if you are doing something wrong. I carry E&O insurance through Vanguard Properties for any errors or omissions I make. At this point, I am free of anything remotely like that for all of our/my/her clients.

I will schedule a time to review and complete the Disclosure Package with you. This will be much easier than trying to figure it out yourself. It is not this bad, but almost.

I will also be present for any and all inspections that the buyers will have on the property. I will always report to you the status and results of any inspections and make sure that they do not cause you any problems.

Home Selling: Step 7 - Additional Negotiations and Condition Removal

As the inspections are being completed, the disclosures being signed and approved and the loan is being approved and funded the buyer can come back at any time for any reason and want to negotiate more before they remove contingencies.

We will minimize this as much as possible by having a complete disclosure package which will not give the buyer or their agent any reason to come back for a credit or other counter.

It is not uncommon that the Buyer will need to extend the escrow for any number of reasons. Normally this does not mean that the transaction is not going to close, just that the process for the buyer is much more complecated than it is for the seller. I will always be in constant contact with the Buyer's agent, always making sure that we are meeting the terms of the contract, including contingency removals, etc. If I get any sense that something is wrong, I will work to ensure that it is resolved and that the transaction stays on course and closes.

This is the time when

Home Selling: Step 8 - Closing, Funding & Title Records