When looking to either buy or sell a home, you will inevitably encounter the Multiple Listing service, or MLS. This is, in many ways, the very lifeblood of the real estate business. But just what is the MLS?
In the late 1800s, real estate brokers regularly gathered at the offices of their local associations to share information about properties they were trying to sell. They agreed to compensate other brokers who helped sell those properties, and the first MLS was born, based on a fundamental principle that’s unique to organized real estate: Help me sell my inventory and I’ll help you sell yours
Today, the multiple listing service is the most effective tool real estate brokers use to sell a property. Listing your home through a broker’s MLS makes it available to every member of the MLS, plus their buyers. Once a broker publishes a listing, every brokerage within that local MLS system will be notified. The premise being that there is a real estate agent somewhere within the local area that is working with a potential buyer for that property.
The MLS has proven to be very effective. According to the National Association of Realtors, ninety percent of all homes sold are listed in the MLS. Once a home is listed in their local MLS, that property is published on Realtor.com and real estate websites like Zillow, Trulia, hundreds more. Only properties listed on the MLS can be published on realtor.com. The listing also is shared with all local brokerages like Century21 and Coldwell Banker, just to name a couple. As you can see, the immense marketing reach the MLS has is why it is by far the most powerful real estate marketing platform available.
Home sellers without a real estate license can’t post their home directly to the MLS, because access to this database is limited to licensed agents and brokers who pay for membership. Most of the homes listed on the MLS are through conventional full-service brokerage relationship where seller agrees to pays a 6% commission which is divided between a listing agent and a buyer’s agent. With the advancement of technology and the abundance of resources available to property owners, a flat fee listing method is growing in popularity. Savvy property owners can use a company like Premier Flat Fee Realty to add their property to the MLS and save at least half of that lofty 6% commission. Homeowners using FSBO MLS listings save money because they’re only paying commissions to buyer brokers.
Open Houses can be a great way to generate some buzz about your home. When you are selling by owner, you can ask your Premier Flat Fee to announce your Open House on the MLS and it would be populated to over 750 sites including the MLS and realtor.com.
It is recommended that you announce your open house at a minimum of 3 days but preferably a week in advance to give prospective buyers a chance to schedule it into their day.
Here is a guide to follow when hosting an open house.
Step 1: Visit other open houses in your neighborhood and surrounding areas. …
If you have never help and open house before, visiting an open house is a great way to see how a realtor does it.
Step 2: Prepare a property flyer. …
This should include one picture of the house along with major property detains such as number of bedrooms, bathrooms, square footage and lot size, asking price. Don’t forget to include your contact info such as phone number, name and email address.
Step 3: Prepare and stage the home. …
The less clutter around the better. Make sure you get the kids out of the house and keep dogs away during the open house. Clean home along with windows and glass doors.
Step 4: Spread the word. …
Premier Flat Fee can announce your open house on the MLS and it will be shared to all major real estate sites such as Zillow, Trulia, Realtor.com and many more.
Step 5: Be a gracious host. …
Be friendly and welcoming. Answer any questions buyers might have without being too sales oriented. Help potential buyers imagine themselves living there. For example, if you have ample room in the backyard for a pool, let them know it would be great for entertaining with ample room to add a pool.
Have visitors sign in with name, phone number and email address to follow-up with them.
Step 6: Follow up.
Give every visitor a call a day or two later to get some feedback. Even they don’t end up making a offer, this is a great way to get some feedback from prospective buyers in the area such as price.
I am sure you all familiar with the quote of how “nothing of value is free”. Listing on Zillow or other free for sale by owner listing sites like it is a prime example of that concept. Navigating through all the solicitation calls from real estate agents costs you your valuable time and frustration.
If you have a current zillow listing or have had one in the past when selling by owner, you can probably relate. I know it is frustrating because I have been through it myself. Most of the calls are from realtors soliciting for the listing. It is also understandable how for sale by owners get frustrated and lose their cool when called because these calls are in the middle of the day during your hectic workday or at night when you are home spending precious time with your family. Plus, it is not like you can just ignore the calls either because you just don’t know when the actual buyer might be calling.
The problem isn’t the realtors because they are simply doing what they must to gain an edge in a very competitive industry. The inherent problem lies in the nature of these free listing sites that profit from advertising money from real estate professionals looking for new leads. This phenomenon is at the top of the list in complaints from for sale by owners. It creates a very stressful challenge for most. It is also a major reason why for sale by owners end up listing with a realtor after a few weeks trying to sell on their own. In fact, I speak with a homeowner every day that tell me they signed up with a traditional realtor and gave up 6% commission just because they were “overwhelmed” and had finally caved in.
The good news is that selling by owner doesn’t have to be this difficult. A extremely effective but little known alternative to selling your home while saving that listing commission exists. Our flat fee, commission free, for sale by owner platform not only eliminates this problem but also significantly increases your homes online visibility and even, often times nets you more lucrative offers! Think of it as a loop hole that allows you essentially act as a real estate agent. You have the tools of an agent while selling by owner and saving commission. Sell by owner using a licensed real estate brokers access to the MLS. Not only will you get a lot more interest in your home because of the increased exposure but you can now confortably answer your phone because it will only be from realtors with a qualified buyer! It isn’t free but it is far less costly than listing it on these “free” listing sites.
What if you could sell by owner but with all the tools available to a licensed real estate agent (including MLS access) without paying a listing commission and not being locked into a long-term contract? Would you say no to selling faster and pocketing more money?
As a licensed broker, we can pass on these tools to you so you can achieve these goals. Our Flat Fee listing service is designed for the savvy home owner to sell faster and profit more on their sale. If you are tired of being harassed by realtors from your Zillow listing and want to upgrade to our processional, for sale by owner MLS listing service and eliminate the frustrating realtor solicitation, then Premier Flat Fee is excited to have you.
Did you know that, according the National Realtor Association (NAR), Eighty-seven percent of buyers recently purchased their home through a real estate agent or broker and ninety percent of sellers listed their homes on the Multiple Listing Service (MLS)? In contrast, only eight percent of recent home sales were FSBO sales again this year.
It is also true that FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $190,000 last year (up from $185,000 the year prior), and significantly lower than the median of MLS listed homes at $250,000.
The explanation is simple. The MLS gives your home more exposure leading to more demand. Basic economics tells us that more demand helps generate a higher price. Traditional real estate agents will try to tell you that the reason the homes sold for more money is due to their participation. While there are realtors that are very good at what they do, no realtor negotiates a price up an average of $65,000.
Deciding to sell your home is a big deal, and determining a sales price is the largest hurdle and according the National Association of Realtors (NAR) when selling by owner If you’re asking yourself “How much should I sell my house for?” this guide will help you through the process.
All the information you will need to determine a price of your home is mostly public information. With some research and some basic math, you can come up with a farily accurate sales price on your own.
Sure, there are easier ways to getting an estimate of your homes worth. Sites like Zillow offer tools which makes it very easy. The truth is that, often it can be misleading. In fact, Zillow has been sued due to its Zestimate feature due to its inaccuracies. These sites are not an expert in your neighborhood as you are. It doesn’t now that ¼ mile west, an entirely different neighborhood exists and shouldn’t be considered when determining the price of you home. It’s a generic pricing tool that should only be used to get an estimate as its name suggests.
More accurate options usually have a cost. Appraisals which are conducted by licensed appraisers are the best way to go. Appraisals do come with a cost. Appraisals can range from 200-500.
If you’re working with a real estate agent, they’ll be providing you with a CMA, which is a compilation of recent sales from your area. It takes into consideration home details, days on the market, and final sale price.
With Premier Flat Fee, we want you to sell quickly so we are offering you a complimentary comparable market analysis (cma).
Knowing the market
In Economics 101, we were taught the basics of supply and demand, and it definitely applies to real estate. Supply and demand in real estate will determine whether we have a sellers market, buyers market or a neutral market. Understanding this will help with pricing and helps with dealing with offers.
You wouldn’t know it from a trip to the grocery store or a stroll through the mall, though. Indeed, many studies have shown that odd prices—especially those ending in the number nine—are far more common than round numbers, which end in zero, in marketplaces around the world. That’s because consumers generally prefer to pay less for products, and often associate prices ending in a nine with discounts or bargains. The idea is that $9.99 sounds like a better deal than $10.00. For whatever reason, your $299,999 home might seem more approachable than if it were priced at $300,000.
Price for online search ranges
Consider how buyers search for homes online or how their real estate agent searches the MLS for them. They input their minimum value as well as the max value into their program. Any homes outside those values will not show on the results. Let’s say most of the homes in your neighborhood is selling under $300,000 so most buyers looking for homes in your neighborhood will most likely set their max search value at 300.000. If you home is priced above 300,000 then it most likely will not be viewed by most of the potential buyers for your neighborhood.
Learn from other sellers’ mistakes
Review sold listings from your area to gain insights on pricing your home to sell. Compare original list prices of recently sold homes with their final sale prices. Did it take many price cuts to get a sale? Perhaps it was overpriced to begin with?
Don’t hesitate to cut the price after listing
Even with the best research, sometimes you’ll come to the conclusion that you’ve listed too high. Luckily, it’s not unusual to see price cuts. In fact, according to the Zillow Group Consumer Housing Trends Report, 60 percent of sellers change their price at least once. The key is to recognize quickly that you’ve overpriced, and make an accurate adjustment.
Avoid the temptation of making a few little pricing tweaks over time. Older listings simply aren’t as attractive to buyers, and your goal is to sell quickly. It’s always better to make one big price correction up.
The importance of understanding and evaluating the entirety of an offer.
Offer Price is obviously very important in evaluating an offer on your home but sometimes it isn’t the deciding factor, specially, when you are multiple offers! Naturally, a home seller will gravitate towards the highest priced offer. What if you are fortunate enough to have multiple offers that are relatively close in number? Sometimes the highest bid isn’t necessarily the best offer! Let’s analyze all the factors that you should consider before accepting an offer on your home.
Is the buyer pre-approved? Let’s start with the basics! Even the best price will quickly lose its luster if your buyer can’t come up with the funds on closing day. To protect yourself, make sure the offer specifies that the buyer has been pre-approved for a mortgage big enough to purchase your home. Tip: ask for DU letter and proof of funds!
Size of the deposit. A serious sales offer comes with a deposit (also known as “earnest money” or “a binder”) which is held in trust by your lawyer or the buyer’s real estate agent until the closing date. It can be anywhere from 1 to 10 percent of the selling price, but a higher percentage indicates a higher commitment on the part of the buyer.
Timing. A closing date that meets your requirements, such as your need to move right away, or at the end of your child’s school year, might be worth more to you than the highest price.
Inspections and repairs. Most sales goes through an inspection period. Home insurance companies require an inspection to determine how much coverage will be. More importantly, it helps determine in what kind of shape the house is in and if it’s a good financial investment. In a sellers’ market, with multiple offers in hand, you may have the leverage to negotiate that offer is non-contingent of inspection. It doesn’t mean they don’t conduct an inspection but the sale does not hinge on that inspection.
Contingencies. The main contingencies customarily seen in offers are inspection contingency, appraisal contingency and loan contingencies. If your property is receiving multiple offers, you may try to negotiate any of these contingencies out of the contract. Removing these contingencies improves the chances you close the deal.
Who pays for what. Almost every aspect of a real estate sales/purchase contract can be negotiated. Items such as, closing costs, title insurance, real estate commission, and price just to name of few. If price between multiple offers are relatively close, these other items can make a impactful difference in your decision.
Items included in the deal. Most buyers expect you to include everything permanently installed or attached to your property, such as light fixtures or a built-in dishwasher. The selling price should be slightly higher if your buyer also wants items such as your refrigerator, washer-dryer, chandeliers, furniture and curtains.
It is important to sit down with a good broker to evaluate an offer. Our Team at Premier Flat fee will gladly review each offer you will receive and explain what every clause will mean to your bottom line. We are also skilled negotiators. We can often respond to an unacceptable offer with a successful counter-offer that includes a better price or fewer conditions.
Lets dig into what happens once you have a solid offer accepted. First, congratulations! I hope that we were helpful in marketing your home and advising you along the way and if not, the congratulations still stands! Now, after you have taken a moment to celebrate let’s get our game faces on because the real is fun is about to begin.
I highly recommend creating a transaction deadline checklist for all important dates within the contract. There are significant implications for both the seller and buyer to comply with these contractual deadlines agreed by both parties. In fact, if you are selling by owner, getting a lawyer to review the contract is a great idea.
Once the contract has been fully executed, or signed by all parties, then initial deposit for escrow is due. If otherwise agreed, this is due three days from the effective date or executed date. Important to note is that days are counted in calendar days and not business days unless otherwise specified within the contract. Sellers, as the buying party deposits the escrow monies, you are entitled to receive proof of that payment from the title company or attorney holding escrow.
If your effective date is December 1 and first escrow is due three days after, then your initial escrow is due December 4th by 5 pm.
There is a second escrow deposit due later. Usually the due date for the second escrow coincides with the inspection period deadline. There are couple reasons for this. First, a buyer can pull out of the contract during the inspection period for any reason. Once the inspection period ends, the likelihood that the deal closes increases.
The house must be examined by a licensed property inspector. An inspection that turns up serious defects in the home could be grounds for nullifying the purchase agreement. This is a critical period in the sales process. It is important that any issues with the home that is known by seller is disclosed upfront to avoid and surprises during this period.
If a loan is to be considered for approval, the lending institution usually wants to see the property appraised at the sale price or higher. If property doesn’t appraise at the agreed upon price, then, renegotiation may occur but if no compromise can be reached, the contract can be nullified and escrow monies returned to buyer if there is an appraisal contingency.
The buyer must secure mortgage approval. This can be a time-consuming process and the buyer should start shopping for a loan immediately after a purchase contract is signed. Getting pre-qualified from a lending institution before looking for a new home is always a good idea and can speed the lending process. As a seller, make sure you accept offer only from qualified buyers to avoid this issue from occurring.
The property must have a clear title for a clean exchange of ownership. Experts strongly recommend consulting with an escrow officer or real estate attorney who can explain the title report to you.
If these contingencies (or any others listed in the purchase contract) are not met, the deal can be nullified and the good faith money returned to the buyer.
The buyers are allowed to do a final walk-through of your new home up to 48 hours before closing.
This allows them to make sure any items that should be there, as per your contract, remain. It also lets them to check the condition of the home to make sure no extra damages have occurred. If anything is different from what was agreed upon, the closing may be postponed to give the seller time to fix the problem.
This is the day when ownership of the home is transferred. You will need to bring ID. Check with your attorney or the title agency about the details of your closing.
If you change your mind
If you are a seller and you have changed your mind about selling your house to a particular buyer — or selling at all — you may have an out, depending on how the contract was negotiated. Some real estate contracts are written with a kick-out clause or escape clause that allows you to accept a better offer if one comes in during a specified time period. If you don’t have a kick-out clause and you have signed a contract with a buyer, you run the danger of being sued by the buyers if you decline to sell your home.
If a buyer wants out of a real estate contract and don’t have any contingencies available, they can breach the contract. However, once they do so, they may lose their deposit along with the money they spent on an appraisal, a home inspection and a title survey. The seller could also decide to sue you for breach of contract.
Showing your home is fairly straight forward but it can prove costly if the handled incorrectly. Before I owned Premier Flat Fee, I had a friend ask for my help when he was selling his home by owner. He listed his home on the MLS, and acted as his own agent during the process with my support along the way. He did great and sold his home quickly for top market value. For the most part, the process went well but this story will reveal a very important lesson about you could lose out if you say the wrongs things when you show your home! When he excitedly told me he had multiple showings on the second day of his listing, he asked me for advice. I gave him two simple instructions.
He followed advice number 2 very well but when it came to advice number 1, he was not able to restrain himself. To give you some insight, this man is a good person and almost too good. He has a hard time not answering someone’s direct question with an honest answer. He could not remove his personal feeling from this business transaction. He felt compelled to reveal his bottom line number to this realtor and even got sucked into agreeing verbally to an offer!He even disregarded the fact that he had other showings later that day. He even wanted to cancel the showings because of this verbal agreement but I encouraged him to not do that because he had nothing since a verbal agreement is worth nothing.
He did follow my advice and because of that he ended up getting a higher offer from the second showing. He thought he was now was in a tough situation since he is a man of honor and felt compelled to his verbal agreement. I had to help realize that he was in a great situation. He had multiple offers on his home! But because of his boy scout like values, he still felt bad about the verbal agreement he made with the other realtor. My advice to him at that point was to call that realtor as quickly as possible and be completely honest with them about his amateur realtor skills.
It worked out great. He was able to get both offers up because of this scenario and ended up with an even higher offer than he anticipated!
So, if we learn anything from this, if you are not an experienced real estate person or just don’t feel comfortable negotiating in person, do not talk price and terms during the showing. Request a written offer before you agree to anything!
It is also a good idea to show a clean and organized home. If Possible, keep the kids and pets away during the showing. remove clutter so the home looks more spacious. People tend to be visual andthese little details can help make for a successful showing.
Closing costs are fees associated with your home purchase that are paid at the closing of a real estate transaction. Closing is the point in time when the title of the property is transferred from the seller to the buyer. Closing costs are incurred by either the buyer and/or seller.
COSTS TO BE PAID BY SELLER:
Commission- Commission can be negotiated but it is typically 6% of sale price. ( With a Premier Flat Fee, you save at least 3%. If you want to learn more, visit premierflatfee.com)
State Documentary Stamp Tax for Deed of Conveyance – $0.70 per $100.00 of sales price or fraction thereof ( $0.60 per $100 in Miami Dade County)
Assessment Search – $70.00 – $80.00, depending on City
Owner’s Title Insurance Policy – Based on the sales price ($5.75 per $1000) up to $100,000 & $5.00 per $1000 after $100,000-
(In Miami-Dade and Broward County, the buyer customarily chooses the title company and pays for the title issuing services. In Palm Beach County, the burden of who chooses the title company and pays for the title insurance policy, including related title service charges, shifts to the seller of the real property. If you are financing the purchase of the home there are usually two title insurance charges. One is the owner’s policy (customarily paid for by the seller in Florida) and the other is the lender’s policy, which is paid for by the buyer.)
Taxes – Current year’s real estate taxes are prorated at closing
Title Search, Exam and Closing Fee – Approximately $600.00
COSTS TO BE PAID BY BUYER:
Taxes and recording fees on notes and mortgages
Recording fees for deed and financing statements
Owner’s Policy and Charges-
In Miami-Dade and Broward County, the buyer customarily chooses the title company and pays for the title issuing services. In Palm Beach County, the burden of who chooses the title company and pays for the title insurance policy, including related title service charges, shifts to the seller of the real property. If you are financing the purchase of the home there are usually two title insurance charges. One is the owner’s policy and the other is the lender’s policy, which is paid for by the buyer.
Buyer’s attorneys’ fees
Lender’s title policy and endorsements
All property related insurance
HOA/Condominium Association application/transfer fees
Buyer’s market: In a buyer’s market, you need to be priced slightly lower than the competition, because there are more homes for sale than there are buyers in the market.
Seller’s market: In a seller’s market, you can add about 10 percent to a comparable sale, since inventory is limited and buyers are competing for fewer homes.
Neutral market: In a neutral real estate market, there’s a good balance between the number of buyers and the number of homes for sale. In this market, you’ll want to keep an eye on nearby comparables to make sure your pricing is similar.
National Association of Realtors (NAR) – National Association of Realtors. The National Association of Realtors (NAR), whose member brokers are known as Realtors (member agents are known as Realtor associates), is a North American trade association for those who work in the real estate industry.
Appraisals– An appraisal is a professional appraiser’s opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience, and professional judgment of the appraiser.
CMA– The ‘comparative market analysis,’ or CMA, is the old standby marketing tool for agents trying to win listings. The agents try to demonstrate their value by pulling sales numbers they claim only they have access to and assemble a set of recent and pending home sales that provide context for pricing your house.
MLS-Multiple Listing Service.
DU Letter: A DU or desktop underwriter presents a fairly complete financial picture of the borrower. It is an automated underwriting system that Fannie Mae has approved but it is also used for FHA loans. The initial summary shows the borrowers’ ratios, both front-end and back-end ratios. The front end is the percentage of mortgage payment, including taxes and insurance, against the borrower’s gross monthly income. This number is often referred to as the housing expense ratio. This is by far more comprehensive than a pre-approval letter and will drastically improve your clarity on the buyers financial situation.
Pre-approval letter– A mortgage preapproval letter documents how much mortgage you can borrow, which loan product you have and your interest rate.
Proof of funds– A proof of funds letter is a document that is given to a property seller from the potential buyer that verifies and provides proof to a seller of a property that the funds to purchase their property are available and ready to be used toward the purchase.
inspection period- The Inspection Period is the specified amount of time agreed upon by both parties in which the Buyer may examine the property before purchase. The time frame selected for the Buyer may range and must be agreed upon by all parties at the beginning of the transaction.
Contingency clause- A contingency clause defines a condition or action that must be met for a real estate contract to become binding. A contingency becomes part of a binding sales contract when both parties (i.e., the seller and the buyer) agree to the terms and sign the contract. Common contingencies seen in a real estate sales contracts are inspection contingencies, appraisal contingencies and financial contingencies.
financing contingency– is a clause in a home purchase and sale agreement that expresses that your offer is contingent on being able to secure financing for the house. Typically a buyer uses this clause to establish a set period of time to apply for a mortgage and/or close on the loan.
Appraisal contingency-says the house must be appraised at the sale price or higher, which will help you secure a mortgage. If the agreed upon sales price is above the appraisal price, the buyer either will have to come out of pocket to pay the difference or the parties will have to renegotiate and if the parties cannot come to an agreement, then mutually cancel the contract. Keep in mind that appraisal price is relatively stardard amongst most financial institutions so if seller is set on a certain price, make sure to stipulate that in writing into contract prior to accepting offer in order not to lose time and money.
Inspection contingency- requires the home to pass an inspection. Most homes inspection periods are anywhere from 5-15 business days. This varies and can be negotiated.
Abstact of title: An abstract of title is a written history of all the recorded documents and proceedings related to a specific property. All liens, encumbrances, encroachments, and claims should be on this report. Only things on record at the courthouse will be found, but normally anything not recorded is not as big of a threat, and you can buy title insurance to cover unknown title defects. An attorney or a specialist at searching county records normally does this. In Florida, each county varies as to who pays for this at closing but like anything else in the contract, it can be negotiated.
Easements: It is common for there to be easements for utilities. Easements are often worded as a certain number of feet along a property line which are reserved for installation and repair of sewer, water lines, etc. You don’t want to build a deck over this space, as the easement allows the utility to tear it up to do their work.
HOA restrictions and covenants: You need to know what you can and cannot do with or on your property, so these are important rules to read, as you’re bound by them.
Homeowner association (HOA) liens: If you don’t pay your HOA dues, they can put a lien against the property.
liens: If property taxes are in arrears, there could be tax liens on the property. They take precedence over other liens, and you can lose the property if they’re not paid.
Surveys and notes: If there are encroachments on your property, they will show up in surveyor notes. An example would be the neighbor building a new fence a foot into your property line.