Seller FAQ's

Selling a home raises a lot of questions. Over the years we’ve found that sellers we work with ask similar questions about selling their home in East Bay. We answer all of those questions (and more!) below.

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1. Why do I need to hire a Realtor?

One of the most important questions when it comes to a successful sale is who you chose to represent you in the sale of your home. If you’re planning to sell your home, it’s probably crossed your mind to try to sell it yourself and save the sales commission. There are some very good reasons why that would be a mistake. According to housing industry experts at HomeGain.com and Realtor.org, more homes listed by real estate agents are sold than homes marketed by owners, and they sell more quickly and for more money. Homes listed by real estate professionals get more exposure and their sellers get more support. Real estate professionals offer many advantages:

They’re trained and licensed professionals.

They have experience in your neighborhood and your market.

They have oversight from brokers and state licensing officials.

Their job is to advise you on the best way to reach your goals.

Their continuing education keeps them up-to-date on housing issues.

They know how to present your home and deal with buyers.

They know how and where to market properties.

They know how to overcome typical snags that occur in all real estate transactions.

They understand state-required disclosures and look out for your best interests.

They understand personal safety and security for your belongings during showings.

They know the best resources to make transactions go more smoothly, from bankers to home stagers to contractors.

They have the most accurate data sources – the MLS, the only data repository that has the most up-to-date listing and sales information.

They know how to negotiate.

Their job is making real estate transactions successful.

When you market your own home, you have to make the time to do all the jobs a real estate professional would do, and you’ll be competing against other sellers who have real estate professionals by their sides. If you can’t leave work to show your home, or you feel it requires more knowledge and experience than you have, you can’t go wrong by hiring a well-respected real estate professional.


2.  Why do I have to pay commission?

Nearly 9 out of 10 real estate agents work on commission and are paid only when the transaction closes. Except for the legal profession, real estate agents are the only fiduciaries and agents who work this way. Commissions are paid according to the terms of two contracts - the listing agreement, and the sales contract. To simplify how commissions are routed, the real estate industry customarily allows all sales commissions to be paid out of the seller's proceeds, according to the terms of the listing agreement.

  1. Brokers: According to licensing law, only licensed brokers can serve as fiduciaries. They have “agents” or licensed salespeople who work for them, but they have the legal responsibilities of operating the brokerage. The salesperson license allows salespeople to serve as agents of the broker. They can negotiate contracts, but the seller is actually negotiating with the broker, by proxy. It’s the broker’s company name and signature on the listing contract.

  2. Distribution: Once the home is listed in the Multiple Listing Service (MLS), the listing broker discloses the terms of the commissions to other competing brokers, so they will bring their buyers to the listing. When the buyer’s broker presents a contract to the seller, it will include a provision to collect their share of the sales commission, as offered by the listing agent in the MLS.

That means a commission can be split as many as four ways:
1. Listing broker or agent

2. Listing salesperson

3. Buyer's broker or agent

4. Buyer's Salesperson

At closing, the listing agent is paid by the escrow agent out of the seller’s proceeds, or a day or two later when the buyer’s loan is funded by the lender. The listing agent, in turn, pays the buyer’s agent his or her share of the sales commission. All commissions are negotiable, but sellers should keep in mind that commissions are incentives.


3. How long does the process take? 

A typical sale from start to finish takes about 2 months. This can be adjusted depending on the needs of the Seller and the amount of work that needs to be completed to the home prior to putting it on the open market.

Week 1:  PLANNING PHASE
• Sign Listing Agreement
• Complete Disclosure
Package
• Open Pre-Escrow
• Staging Consultation

Week 2: ADVISORY PHASE
• Finalize Pricing Strategy
• Finalize Marketing Plan
• Property Improvements

Week 3: OFF-MARKET PREP
• Marketing Collateral
• Staging Prep
• Media Executions
• Broker Outreach

Week 4: LISTING GOES LIVE
• Weekend Traffic Reports
• Review Offers
• Negotiation
• Property Syndication

Week 5: ESCROW & DUE
DILIGENCE
• Manage Escrow
• Work with 3rd Party Experts
• Assist with Closing Procedures

Week 6: POST-SALES
• Signing & Transfer of Title
• Disbursement of Funds to Seller
• Transfer of Utilities


4. What is my home worth?

Estimating a home’s market value is far from an exact science. What these sites attempt to do is provide greater transparency to homebuyers and sellers by making data derived from public records, more…public. They publish what you paid for your home and how much you pay in taxes. Many have satellite views so accurate they can spot your cat laying on the front porch. How do they do it? Home valuation sites contract with major title companies such as First American to obtain county tax roll data. All property is registered with the county for property taxing purposes. They
also find ways to become members of local multiple listing services, which are either subsidiaries of real estate associations or owned by local real estate brokers. That way, they have access to listing data. Between tax roll data and listing data, home valuation sites apply their own secret sauce, or algorithm to come up with “zestimates” or approximate values of what homes are worth. Sometimes the results are spot on, but they can also be terribly inaccurate. First, transaction data has to be recorded with the county, which could take weeks. But, what alters the algorithm most is that properties not currently on the market are included in the data. The algorithms can’t possibly show whether or not a home has been updated, how well it’s maintained, or esoteric values such as curb appeal and views. For that reason, online valuations should be used only as one of many tools to estimate a home’s value. 

Ask your real estate professional for their expert analysis.

Ask your real estate professional for a comparative market analysis, or CMA. He or she can show you the most recent listings and sold comparables, accurate to within hours or a few days at most.


5. How much money will I get from the sale of my home? 

Ultimately this depends on your outstanding mortgage (if any), commissions and a few other line items. Your bottom line will be the purchase price minus all of these expenses.

Mortgage Balance:
whatever you still owe on your current loan, if anything.
Broker's Fee: 5-6% of the total purchase price.
City Transfer Tax: if applicable, many cities have transfer tax. Oakland, for example,  is $15 per $1000 as of 7/2018.
Country Transfer Tax: if applicable, many cities have transfer tax. Oakland, for example, is $1.10 per $1000 as of 7/2018.
Escrow Recording Fee: Approximately $150
Home Inspection Report: Approximately $600 (This depends on the size, age, and the company that will complete the inspection.)
Natural Hazard Disclosure: Typically $125, as of 7/2018
HOA Docs: Vary by homeowners associations, but are approximately $300-$500
Repairs/Prep Work: Vary depending on the condition of the home, fresh paint/floors, etc. generally $5000
Staging: Approximately $5,000, again this depends on the size of your home and the company you utilize for staging.

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Find out the value of your home in the East Bay real estate market.

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