Signing A Listing Agreement
When you choose a REALTOR®, you will most likely sign a listing
agreement - a contract in which you agree to allow the REALTOR® to sell your
home during a given period. The agreement says that you will pay the
REALTOR® a fee when you sell your home. Most REALTORS® are independent
contractors who work for a company operated by a licensed real estate
broker. (A salesman is licensed by the state to sell real estate through a
broker. A broker is licensed by the state to sell real estate to others
for a fee and employ salesmen and other brokers.)

The amount of compensation you pay a broker is negotiable, but the
REALTOR® will generally follow the company's policy regarding compensation.
The amount of the fee will be spelled out in the listing agreement.
Make sure you understand how the fee will be paid before signing.

Exclusive Listing
Most REALTORS® will ask for an exclusive right-to-sell listing. This
means that you will owe the broker a commission regardless of who finds a
buyer during the listing period. In other words, if you decide to sell
the house to your cousin, your broker still gets a commission. The
advantage of this kind of arrangement is that the broker is motivated to
work harder to sell your home.

It's possible that a REALTOR® from another company will find a buyer
for your home. In that case, your broker is the listing broker, and the
second agent is the selling or cooperating broker. Many times your
listing broker will agree to pay the cooperating broker a fee from the
amount you pay the listing broker. Your listing broker cooperates with other
brokers who procure buyers interested in your property and offers to
compensate the other brokers for procuring a buyer. Cooperating and
compensating other brokers is discussed in the listing agreement you sign
with the listing broker.

Length of Listing
The listing agreement will specify how long you agree to list your
house with a company. Your REALTOR® will probably suggest an average time
that homes like yours are on the market. You want a period that's long
enough to motivate your REALTOR® to advertise your home and respond to
buyers, yet short enough to allow you to change to a different company
if you become unhappy with the REALTOR®'s service. Remember that the
listing agreement is a contract. You should get a copy for your records.

Your REALTOR® is bound to the terms just as you are. You can expect the
REALTOR® to keep appropriate information confidential and effectively
market your property.

Setting A Price
As you interview REALTORS®, they may suggest a listing price on your
home. Only you can decide what price to set, but you want it to be
realistic. The listing price is critical. Set it too high, and you may not
find a buyer. Set it too low and you cheat yourself out of money.

Appraisal
Regardless of what you originally paid for your home and the cost of
improvements you have made, the price your home can command is what the
market will bear at the time you decide to sell it. You may consider
hiring an independent real estate appraiser. An appraiser has specialized
training and experience. Don't rely on assessed valuations made for tax
purposes. Such valuations may not be reliable indicators of value as
these valuations are made by mass appraisal techniques.

Comparative Market Analysis

Whether or not you get an appraisal, a REALTOR® can develop a
comparative market analysis. This analysis will describe homes in your area that
have recently withdrawn from the market. The analysis may compare
specific features of your home to others - the value of a corner lot, a city
view, or an extra bedroom, for example. The analysis may also point out
market fluctuations caused by the opening of a new school or business,
for example, as well as long-term trends.

If you do not have a good idea, based on reliable data, of what the
price your home can generate, you may decide to set a higher price
thinking that if it doesn't sell at first, you can come down. However, if you
set it too high, you may keep away buyers who are looking at comparable
homes with lower prices. Lowering the price later sometimes gives your
home a negative image. On the other hand, you don't want to set the
price too low. You may be tempted to set a low price because you feel the
pressure of transferring to another town, or you're afraid that your
worn carpet will turn away buyers. Be realistic and get advice from your
REALTORS®.

Net Proceeds
Once you've decided on a price range, the REALTOR® may help you
calculate an estimated amount you might net from the sale. If you have owned
your home for several years, you may have built up a sizable equity.
Equity is the different between the value of your home and the balance on
your mortgage after subtracting what you owe on your mortgage. Ask your
REALTOR® what costs you will incur at closing. These may include title
fees, taxes, a penalty for prepaying your mortgage, brokerage
commission, attorney fees, and charges for preparing and recording documents.
Finally ask your tax adviser or attorney about the tax implications of
your proposed sale.

The Offer
When a buyer makes an offer to purchase your home, your REALTOR® will
contact you promptly. The REALTOR® will scrutinize the document, review
it with you carefully, and answer your questions. The written offer is
important because it lays out all the terms of the proposed transaction
and will become a binding contract if you sign it. The offer states the
price the buyer is willing to pay and the financing terms, such as
assuming your loan or arranging a new loan.
The offer may be contingent on the buyer's selling a home first, or
obtaining an inspection. Ask the REALTOR® how these terms affect you and
whether the offer is reasonable and in line with the market. The offer
describes the property, states who pays for which closing costs, and
specifies dates of closing and possession. Along with making the offer,
the buyer may place some earnest money with the escrow agent as a sign of
good faith. The earnest money will be kept in an escrow account and
applied to the buyer's down payment or closing costs when the sale closes.

Your Options
In reviewing the offer, you have three options: accept, reject, or make
a counter offer. A counter offer is a rejection of a buyer's offer with
a simultaneous offer from you to the buyer. In making your decision,
carefully review the figures compiled earlier to determine your net
proceeds. Because the terms and estimated closing costs may be quite
different from earlier calculations, you will want to discuss the
possibilities with your REALTOR®. You are also encouraged to seek the advice of an
attorney and a tax adviser.

Seller's Disclosure
In most residential sales, a seller will deliver a Seller's Disclosure
Notice to a buyer on or before the effective date of a contract to
purchase the property. The notice is required by law to be delivered. It
provides important information about the seller's knowledge of the
condition of the property. Complete the notice to your best knowledge and
belief. Your REALTOR® will most likely ask that you complete the notice at
the time the listing is first taken. Copies of the completed notice
will be made available to the prospects looking at your property.

Lead-Based Paint Disclosure

If your property was built before 1978, federal law requires that
before a buyer is obligated under a contract to buy the property, the seller
shall: 1) provide the buyer with a lead hazard information pamphlet (as
prescribed by EPA); 2) disclose the presence of any known lead-based
paint or hazard; 3) provide the buyer with a lead hazard evaluation
report or records available to the seller; and 4) permit the buyer to
conduct a risk assessment or inspection for the presence of lead-based paint
or hazards. A contract for the sale of property built before 1978 must
contain a statutorily prescribed Lead Warning Statement to the buyer.
Your REALTOR® will provide you with the forms necessary to comply with
their law and will suggest procedures to follow in order to comply.

Accepting the Offer

Once you and the buyer agree on terms and sign the contract, the buyer
will generally have to find a lender and apply for a loan. Your
REALTOR® may monitor the loan process, which could last several weeks. During
this time, your REALTOR® will also be busy coordinating other
arrangements to prepare for the final sale.

Title Search
As part of the process, the title company may order a survey of your
property and research the title to your home, making sure the chain of
title is clear. Clearing the title may require paying off liens - that
is, any monetary claims - against your property. Examples are mechanic's
liens, unpaid state and federal tax liens, court judgments, and probate
considerations (if a co-owner has died). The product of the title
search can be in the form of title insurance, abstract of title, or
certificate of title, depending on what is commonly used in your area.

Inspection and Repairs
If the buyer requires inspections of your home, your REALTOR® may
coordinate the scheduling of inspectors. A buyer may hire an inspector to
review many items in the property such as the structural components,
mechanical items, electrical systems and plumbing systems. The inspector
will report to the buyer the items that the inspector finds to be in need
of repair. Most likely the buyer will provide a copy of the inspection
report to you and may ask you to complete certain repairs. Do not be
surprised when the inspection notes some items in need of repair. An
inspector is trained to see items and defects that are not obvious to you
and your REALTOR®. No matter how new or well maintained a home is, an
inspector may very well find some items in need of repair.

Closing The Transaction
The sale is formally ended at the closing table. In most transaction,
the closing lasts less than an hour and often occurs at the title
company office. Your REALTOR® and the buyer's agent may be present, and a
title company officer or escrow agent will preside.

Basic Documents
The sale actually consists of two transactions:
1. Transferring the property to the buyer
2. Paying off the existing mortgage on your home (or allowing the
buyer to assume your mortgage). To transfer the property, the title company
will present documents proving that you have the title. Proceeds of the
sale may be disbursed at closing or shortly thereafter, once all
paperwork has been processed. When you give your house key to the new owners,
the sale is completed.