Real estate transactions can take on many profiles. Most times it is relatively snag free - almost fun. Sometimes though it can be a stressful, frustrating experience with all sorts of problems. In part it can depend on the property involved, the financial circumstances, personalities, and attitudes of the principal parties, and any other number of circumstances. Add to these factors the possible complications that may be caused by the lender, appraiser, home inspector, repairmen, termite inspector, escrow officer, the title company agent, and last but not least, the real estate agent - and you have the potential for many complications.

Also consider the psychological stress that may be associated with the actual decision to sell - new jobs, new location, new friends, new lifestyle, and on and on - sometimes these things can lead to great excitement, joy, and progress, other times not so great. And, for some of us, perhaps the most stressful aspect of all: the actual physical move. Deciding what to take and what not to take, getting rid of the latter, packing, storing, making the arrangements for the move itself, the scheduling, the inconvenience, the expense - what a job.

This discussion is intended to help make this process as problem free as possible and, to explore just the actual selling process - from selecting a real estate agent to the final closing. It is also assumed that you have already made the decision to employ the services of an agent, rather than trying to sell the property yourself - or perhaps, after that attempt has failed.

WHAT MAKES A HOUSE SELL?

Many real estate agents would have you believe it is because of their superior sales ability, their charm, their marketing program, and any other number of other things they may brag about. Though there is no denying that those things can be a factor, the truth, in my opinion, is clearly evidenced by the overwhelming history of properties that have sold. There is an old saying that many people are aware of: "There are three things that make a property sell quickly at the right price: number 1 is LOCATION, number 2 is LOCATION, number 3 is ...LOCATION." Sound silly - maybe, but there is a lot of truth in that statement.

Equally important though are the two additional factors of APPEARANCE & CONDITION and PRICE. Certainly there are other influences - lots of them: size of the house and the lot, floorplan, amenities, view, number of bedrooms and baths, size of the rooms, age of the house, what the neighborhood looks like, proximity to the prospective buyers workplace, schools, churches, shopping, the school system's reputation, the floor coverings, flat roof vs. pitched roof, homeowner association dues amount, etc., etc. This list is virtually endless. What one person thinks is a fantastic house, another will pick apart like a hard-shelled crab. One of the truths that buyers have a hard time dealing with is that there is no perfect house. Sooner or later though, they all come to grips with that fact and start focusing on LOCATION, PRICE, and CONDITION - not necessarily in that order, but regardless of the buyer, they all end up using those criteria to choose the house they buy.

Well, if you buy into that thinking and believe that it is the indisputable truth, then what difference does it make whether you are working with the Number 1 Realtor in town, or the best looking one, or the smoothest talking, or the best dressed, or anything else - rather than one that is competent, has the time, skill, and resources to serve your best interests, one that you can work comfortably with, and that you trust completely? This is something you can have control over.

How about the house then? Do you have any control over it? Can you do anything about its location? Obviously not (unless it happens to be on wheels). Can you do anything about the long list of property features that influence the buying decision? In most cases the answer again is going to be no. You cannot change the view (though you might be able to improve it by trimming hedges or pruning trees), or any of the other things mentioned earlier.

You do, however, have some control over the other two principal factors of appearance/condition and price. You can make what you have look the best that it can - which is an absolutely powerful thing to do. And, without "giving it away" you can set the price at a fair market value. How do you arrive at the right number? You do not want to sell your house for too little money. You want to get as much as you can possibly get. Right? How is that amount determined? Well, an underlying maxim for establishing the VALUE of anything is that Value is determined by what a willing seller will take and what a willing buyer will give. You have to accept the fact that it simply does not matter what you paid for the house when you bought it, how much money you have put into it since then, how much you still owe on it, or how much profit you want to make. The only thing that matters is what a willing and capable buyer will pay for it. And, what a lender's appraiser is going to value it at. Usually, that amount is going to be based on what the current market value is - based on recent sales of comparable properties in your neighborhood or surrounding area. Do people sometimes pay too much for a house? Yes, it does happen sometimes - but it is truly the exception and a very rare event. We'll talk more about price later.

So, let's consider some of the things that you can do something about to optimize the appearance and condition of your house. Try to take a look at your house with an impartial eye. Does it look as good as it possibly can?

Consider the "first impression" made - we all know that first impressions are important. In the real estate business, this is referred to as curb appeal. Is the front of the house neat, tidy and attractive? Is the driveway in good repair and reasonably clean and stain free? What about the landscaping? Are there plants that need to be pruned, replaced, or removed? Does the yard need a little fresh gravel, and is it weed free? Could the addition of a few plants make a big difference in curb appeal? These things really do make a difference with many buyers.

Next, take a close look at the rest of the exterior of the house. It's funny how we see it everyday, but may not really take notice of things that strangers or guests may see. How is the paint job? Roof tiles need replacing? Is the trim in good condition? Broken windows? Sagging gutters? Take a long critical look at everything in sight.

Then take a slow walk through the interior of the house - just like prospective buyers might do, and evaluate the condition of the walls, ceiling, the floor covering, doors, windows, countertops - everything. What could be done to clean-up, fix-up, or improve the inside of the house that won't cost a fortune?

Naturally, you will always have to weigh the advantages and disadvantages of anything that you might do that has a significant expense or effort associated with it. Things like landscaping, painting, new carpet or other floor covering.

For example, depending on the condition (and color) of the carpeting, you will have to decide whether it makes sense to go ahead and replace it or make an allowance in the asking price, or announce that you will offer a "carpet allowance" of x number of dollars to be credited to the buyers at closing. This is an example where it can be a tough call. Suppose you recognize that the kids and the pets, and ordinary wear and tear have taken their toll on your floors and you decide to go ahead and have really nice carpet installed. And then, you get some buyers in that love everything about the house, but they really want a super plush light beige carpeting and padding of a different type than the lovely green Berber carpeting you just had installed. You are probably not going to be inclined to offer them a carpet allowance after having just spent the money on new carpeting. Well, perhaps then they decide they will just keep looking. On the other hand, if the carpeting is in such bad condition that it is a real distraction from the rest of the house, you may have trouble getting anyone interested. It really can be a tough decision. Each case will have to be decided upon individually. Whatever the condition of the floor covering - it must be clean.

Regardless of cost, any items in disrepair that are going to convey need to be repaired, refurbished, or replaced as necessary. These things are likely to be discovered during the inspection period anyway, and by contract, the buyer will have the right to request the repairs - if they are refused, they can option out of the contract without losing their earnest money. Do you really want to go through that kind of frustration and disappointment? It will generally be easier and even less expensive to make all necessary repairs in advance. Keep all of this in mind when you set your sales price and when you consider accepting an offer.

Among the least expensive of things that you can do are simply a general straightening and cleaning up. Go ahead and pack away most of the things that may clutter your home that you can live without for the next month or two. All of those family photos, memorabilia, magazines, or whatever it may be in your home that are not going to help sell it. Oh yeah, you may like that "lived-in" look and that "homey" feel - but very few other people are going to like it - and even if they say they don't mind it, it still distracts them from the house itself and it doesn't permit them to easily visualize their own stuff in those spaces. Yes, I know, you may still have to live in it while it is for sale, but you will benefit by making sacrifices in comfort and convenience by minimalizing your "stuff" and "presence" so that potential buyers, regardless of their tastes will be as favorably impressed as possible.

How about all those odors lingering in your house? Wait a minute, let's stop right there. DON'T TAKE THIS PERSONALLY!!! Yes, this has been your home. It obviously is the way you prefer to live, but - you want it to be somebody else's home now, don't you? The potential buyer needs to be able to make it their home in their minds as they are looking through the house. Whether they do it consciously or not - all home buyers do it. Keep the distractions to a minimum. In fact, try to depersonalize this entire transaction - no matter how hard that may seem to be. I'm not trying to insult you or hurt your feelings, I am trying to get your house sold as quickly as possible for as much money as possible. That's what you want - isn't it?

OK, back to the odor issue. As an example, I personally have trouble cooking dinner without using about 10 cloves of garlic and an onion or two. And, come to think of it, I really like anchovies too. It smells great while it is cooking (to me at least), but it sure can leave some foul lingering odors after the fact. When I sell my house the next time, I will have to plan to live without my favorites for a while - if I want to sell in a timely fashion. Perhaps worse in many people's minds than cooking odors are pet and smoke smells. Do whatever you can do to eliminate these smells. Understand too that each of us becomes accustomed to the odors we live with and we may not even be able to smell them any longer. It's called sensitization by the scientific types. Try to get someone else to give you an honest, impartial opinion about the way your house smells if there is any question. Seriously! If odors are a big problem, it may be necessary to hire a professional to rid the home of things like smoke and pet odors.

Speaking of pets, let's consider the possibility of how their presence may affect the sale of your house (beyond the odor issue). Again, this can be another sensitive area to talk about - however, let's talk about it anyway. Many pet owners are understandably very attached to their animals - often times they are truly "part of the family". Pets can provide an extraordinary level of companionship and be immeasurably important to our mental and physical health - no doubt about it. But...are they going to be detrimental to the sale of the house? Each case will have to be evaluated on its own merits. There are also people who do not care for animals - there are even some that do not want to be shown houses that have animals in them. You will have to consider the advisability, affordability and livability of the possibility of kenneling your animals while your property is for sale.

In addition to the "turn off" they may be to some people, there are other possible negative aspects to think about. What happens if the pet runs out the door as agents and prospective buyers are coming in and out? What happens if they bite someone? Everyone can be as careful as they can reasonably be and these things still happen.

Bottom line is, the presence of a pet is almost never going to help sell a house. It's your pet and your house - you will be the one to decide what you are going to do. But at least give some thought to what the best thing to do is under your circumstances.

Moving on, the so-called standard wisdom in the industry is that a furnished house shows better than an empty one. Well, if it is nicely furnished like the model homes in a new home subdivision - yes that can have a positive influence on buyers. Many homes are tastefully decorated and appropriately furnished and are appealing - or at least not distracting - to home buyers. However, many of us have tastes or budgets that do not measure up to those standards. There have been many houses that have sat on the market much longer than they should have and ultimately sold for much less than they could have - simply because the house did not show well.

Another important consideration is security. Make certain that all valuables are put away in a safe place. Minimally, out of sight. Preferably in a safe or other locked cabinet - or even in a bank's safe deposit box if appropriate. There are a lot of "no-brainers" here: money, jewelry, checkbooks, mail, etc. Prescription drugs should also be taken out of medicine cabinets and hidden away. Even though most real estate agents are sensitive to this issue and do their best to watch over the people they are showing your house to, they can be distracted or fooled by someone intent on taking your possessions.

PRICING YOUR HOUSE TO SELL

Now that you have your home ready to sell, let's consider how to go about establishing the list price. On this issue, you have several choices. You can pick a number out of thin air and hope for the best (yes, people do that). You can grossly overprice your home and hope that some fools come along without the advice of a Realtor and write you a check. Or, you can consult with a Realtor for a no cost comparative market analysis (CMA) and get their professional opinion. And, if you are willing to spend a few hundred dollars, you can hire a certified, independent residential appraiser and have a formal appraisal conducted. Which of these do you think makes the most sense?

Consider this: any listing real estate agent wants you to get as much as possible for your home - the amount of their commission check depends on it. Be wary however, of an agent that suggests a list price significantly higher than everyone else. Yes, that higher price may be very attractive to you and it is what you want to hear - but is it going to happen? Or, is that agent just trying to get the listing, knowing that after you get few or no showings, and a couple of months have gone by, they can talk you into lowering your price to where it should have been in the first place. In the mean time, they have your listing under contract and who knows - those fools may stumble by.

Some homeowners rationalize overpricing their homes by thinking that if someone really likes their house, they will make an offer and then the negotiations can begin. Yes, that could happen - but it doesn't very often. Overpricing can and does keep people from even seeing your home.

Let's look at one of the reasons that can happen. Suppose the true market value of your home is $165,000. You decide that you want to try to get $180,000 just because you want to try - after all, why leave money on the table? It goes on the market and into the multiple list system (MLS) at $180,000. Mr.&Mrs. Buyer are working with Ajax Agent and they are preapproved by their lender to purchase a home priced up to $168,000. Their agent conducts a search for homes that otherwise meet their criteria and are in the price range of $150,000 to $175,000 - an appropriate range to look in, based on their qualification. It happens that in all other ways, your property is perfect for them. Unfortunately, your listing doesn't even show up in the search and they never get to see it.

Though it is true, in our market, that almost everyone today wants to negotiate on the price of a house, the fact is, in Tucson, houses that sell within 30 to 60 days of listing, sell for about 95% of list price - on average. So, if the true market value of your home is $165,000, then increase that by 5% to $173,500 and be willing to negotiate a little if needed.

Another thing that happens with some buyers and agents is that, if they perceive that a property is significantly overpriced, they feel that the sellers are unrealistic and are not likely to negotiate price in good faith. They simply move on to the next property.

It is true that, "it is easier to lower your price than to raise it", but how many potential buyers have you missed or turned-off in the process. If you have difficulty deciding what the true market value of your home is, then it is reasonable to start high - but have a planned schedule of price reductions scheduled to occur every couple of weeks until you start getting showings and hopefully an offer agreed upon.

I know that there is another scenario that can happen as well. Suppose you price your home at $173,500 and you sell it the very same day that it is listed. Well, there are several possible reactions to that. You can become angry at your Realtor and accuse them of giving your house away for too little. You can kick yourself in the rearend for months or years to come. Or, you can thank your lucky stars that you had the great wisdom and fortune to prepare and price you home correctly and, it happened that just the right buyers saw your listing come on the market, ran over to see it, made a full price offer so that they wouldn't lose it to a possible higher bid. No one will ever know for certain, but the latter case is probably the truth.

Could you have gotten more money? Isn't that always the question? It is possible. How much longer would it have taken? Who knows? What will it cost you every month that your home doesn't sell? How important is that to you?

Let me tell one more story about price. I was once asked to come to a person's house to list it for sale. I had known these people for a couple of years and they knew me and trusted me. It was pretty much a guaranteed listing. Well, we had a nice chat after I arrived and we began to talk about why they wanted to sell their home and what their plans were, and then I asked, "What price did you think you wanted to establish as your List Price?" Now, understand that I had already done a fair amount of research and had found that the price of the home, based on some very good comparable sales and my knowledge of that particular market, ought to be somewhere in the neighborhood of $200,000 + or -, depending on amenities, improvements, etc. Well, their answer was that they wanted $250,000 for their house. Surprised, I asked what made them feel that their house was worth that much more than all of the other comparable houses around them that had recently sold. Their answer was simply that "That's what we have decided that we need so that we can buy the new house that we want." Well, that is simply not the way it works. At least not normally. Oh, you might get lucky and have some fool stumble in and not know anything about the property values in the area, absolutely love the house, not have a Realtor - or have a Realtor that isn't too sharp or has no ethics. Or, the buyers may simply have more money than brains.

You must understand that no matter how important the "net" may be to you (and I understand perfectly why that is true) it has nothing to do with the sale price or value of real estate. Real estate values are largely a function of supply and demand, just like everything else.

Well, the house sat on the market for nine months without a single offer. There had been a surprising number of showings - even though it was grossly overpriced. I believe that, in this case, the location was so desirable that many people felt that the house must be extraordinary on the inside to justify the higher price. It wasn't. And once people found that out, that kept moving.

The range of emotion the owners went through during that nine months was incredible. From unjustified optimism, through anxiety, even to the point of physical illness, dejection, and finally anger and distrust - it is a common story that is told. At the end of the nine months, they were still convinced that the price wasn't the issue - they just needed to find the right company to market the house.

Well, it just so happened that about a month or so after that listing agreement had expired, I was working with some out-of-town buyers who really wanted to buy a home in this subdivision to use as rental / investment property. We looked at everything that was listed, but they could not find what they wanted. I knew that the house that didn't sell was a good possibility for them - but it was no longer for sale - they had not relisted it yet. I did mention it to my buyers and told them that I would ask the owner if they were still interested in selling and if a showing was possible. The arrangements were made and, to make a long story short, the sale was consummated at a price of $195,000.

Had the seller originally agreed to list the house at a proper market value, I am confident that it would have sold within weeks.

SELECTING A REALTOR AND COMPANY

The next step then is to select the person and company that you want to deal with and who will represent you and your best interests through this entire process - whether it goes smoothly or you encounter many challenges along the way. My best advice is to make sure that you are compatible with the agent you choose. There should be an obvious level of comfort and trust with this person. You should never feel pressured into working with an agent or dislike anything about them. Everybody has their own taste and preferences in who they can work with. Be cautious of anyone that makes a lot of grand promises - you are likely to be disappointed. Spend some time looking for a good match.

Let us diverge slightly for a moment and talk a little about the two terms that are used throughout this presentation: Realtor and real estate agent - I am using them pretty much interchangeably - for the sake of variety and readability, but there is an important distinction to make. In order to become licensed, you must satisfy certain educational requirements and pass two licensing exams - one for the State and one for National - a process that many people find rather frustrating and challenging. In order to maintain that license there are further continuing education requirements (24 hours every 2 years) and a few other hoops to jump through. Being a Realtor is an additional distinction. That designation means that you belong to the National Association of Realtors (NAR) and their local chapters, in this case - the Arizona Association of Realtors (AAR) and, the Tucson Association of Realtors (TAR). The Realtor designation means a lot of other things, but perhaps most importantly to me, it means that the person subscribes to the Realtor Code of Ethics. When you employ a Realtor, know that they are bound by that code and - by law, they owe you - their client - what's known as Fiduciary Duty. And, by definition, fiduciary duty means the following:

Note the acronym formed by the first letters of those words: CARLOD - this is not to confused with another expression, some will be familiar with: BOATLOAD.

In addition, the concept of fiduciary duty encompasses the requirement for Fair Dealing, Honesty, Good Faith, Competency, and Full Disclosure to all parties.

Another factor to consider and fully understand is the legal concept of agency. Agency is the legal relationship created by a principal (either a Seller or a Buyer) and a real estate broker (to include any associate licensee of that broker, often called agents or salespersons) when they have chosen that broker to act on their behalf, or under their control, in business or financial transactions and in this case, the selling of real estate. Further, by law, agency creates a fiduciary relationship (as discussed above) with certain duties, obligations and high standards of trust, good faith, and loyalty. Note that the payment of a fee or commission does not create this agency.

In many parts of the country, still today, real estate agents only have an express agency relationship with the sellers of real estate - not the buyers. This is true because the only written agency agreements have typically been the Listing Agreements for the sale of property. In many parts of the country, when a buyer engages a real estate agent to help them find and purchase property, they typically do not execute a Buyer Broker Agreement and therefore do not have an expressed agency relationship. In other words, real estate agents actually only work for the sellers - whether it was their listing or not. Buyers could not be treated as clients, only as customers. This is an important distinction - and one that many people have not really understood.

This was also true in Arizona until in recent years, a new distinction was made regarding a real estate agent's responsibility to their clients. We now have three types of agency possible: seller agency, buyer agency, and dual agency. Seller agency is created when a Listing Agreement is completed on a property for sale. Buyer agency is created when a Buyer Broker Agreement is completed with the intent of purchasing property. And, dual agency can be acknowledged and permitted by either type of agreement.

Enough about Realtors for now. I just want to suggest to you that I think it is very important that you seek professional assistance when you are a home seller. And, I am suggesting that at least part of that assistance come from a Realtor - not just any ol' real estate agent.

You may also find it beneficial to seek the advice and counsel of other professionals, like an accountant, and/or an attorney, and/or an appraiser. Find people that you like, that you feel are knowledgeable and competent. People that you can work with, spend many hours with, and ones that will truly put your interests first.

THE LISTING AGREEMENT

Okay, you've prepared your home for sale, you've decided on the list price, you've selected a Realtor that you like, let's get this thing sold.

In Arizona, the Arizona Association of Realtors provides a contract known as an Exclusive Right to Sell Listing Agreement. This is a three page form that contains all the terms and conditions of the agreement between you and the real estate company (called Broker) and you regarding your offer to sell your property.

You will have to decide on the term or period of the contract. Very often this time period is six months, but it can be for any length of time that you and your Realtor agree to.

The contract must contain a full and legal description of your property - in addition to the street address. Your Realtor will help you with this part.

You will identify specifically what personal property and what fixtures are considered part of the property and what is not included in the sale. Unless otherwise noted, fixtures are by default included. A fixture is defined (for real estate purposes) as an article or item (e.g., bookcase, plumbing, track lighting, bath towel bars, etc.) that was once personal property but has been so affixed to real estate that it has become real property. Generally, the test of whether an item is a fixture as a result of its method of attachment depends more on the firmness of its installation than on the damage that might be caused by its removal. The fact that removal leaves a dirty or unpainted spot is irrelevant. If an article is determined to be a fixture, it passes with the property even though it is not mentioned in the deed.

Yes, this can be a problem area. Different people can easily view things differently. The best advice for sellers is to ensure that anything that might reasonably be construed as a fixture by a buyer, be specifically identified in the listing agreement as personal property - if that is the sellers' intent. As an example, some homeowners will purchase and install an expensive chandelier to replace the cheap one the builder put in the dining room. The homeowners plan to take the expensive chandelier with them when they move and put the old cheap one back in its place. This is certainly their prerogative. However, if that fact is not clearly identified in the listing agreement and again in the sales contract - the item will be considered a fixture and must convey with the property upon its sale. Perhaps the smarter thing to do would be to swap the chandelier prior to offering the house for sale.

Personal property can be made to convey with the house also. For example, a refrigerator is simply plugged into an electrical wall outlet. Is it a fixture? Well, custom in Arizona treats it as personal property. Title (or ownership) to personal property is evidenced and transferred by way of a bill of sale, as contrasted with a deed for real property. Items of personal property can become the object of dispute between buyers and sellers, most often due to whether an item is considered a fixture or due to the seller's attempt to substitute a similar item.

Identifying as descriptively and accurately as possible any questionable items (e.g., appliances, light fixtures, cabinets, shelving, window treatments, etc.) up front in the listing agreement and again on the purchase agreement will certainly help avoid most disputes.

You will establish the listing price or the price that you are offering to sell at. Very often this will be done with the assistance of a "Current Market Analysis" based on comparable sales in your area provided by your Realtor.

Next, you and your Realtor will negotiate what the brokerage fee or commission is going to be. This amount, almost always expressed as a percent of the final sale price is negotiable - it can be any amount or percent agreed to by the property owner and the Realtor - subject to the approval of the broker. It can be 10% (typical on land or lot sales), it may be 7% (my starting point for negotiation), it can be 6.5%, it can be anything.

On line 38 of the contract you will have to determine a time period (typically 30 to 90 days) that you agree to "grandfather" buyers that were shown your property by a Realtor after the expiration of your listing agreement.

On page 2, line 57 you will be asked to agree to authorizing compensation to Buyer's Agents.

Line 65 asks for acknowledgment of Dual Agency potential.

Lines 69 and 71 will define your agreement on signs and other forms of advertising.

And line 73 allows your election of placing a keysafe on your home to allow ready access by Realtors to show your property.

You may choose to offer a prepaid Home Warranty to the buyer on line 78.

All other terms and conditions are defined in this document. It is the ENTIRE AGREEMENT (line 136). It supersedes any other written or oral agreements. If it is not specified in this contract (or its specified attachments or addenda) it does not exist in the eyes of the law.

DISCLOSURE

Perhaps the second most important piece of paper that also carries significant legal implications is what we call the SPDS or, Seller's Property Disclosure Statement. The seller(s) must complete this form - in your own handwriting. You must answer all of the questions completely and honestly. Withholding any known information can have dire consequences.

MORE PAPERWORK

There are additional forms to complete as well. There are a couple of forms to be completed regarding the Home Owners' Association (HOA) if there is one. This is simply a communication requested from the HOA regarding dues, assessments, services provided, and any other information that could be of interest to prospective buyers.

COMMISSIONS

There are several things to consider about the commission you agree to pay on the sale of your home. Let's be perfectly candid. You want to pay as little as possible. Your Realtor wants to make as much as possible. It is the truth - there is nothing wrong with that. How much is it worth? How much can you afford? What do you expect to get in return for it? What is your Realtor willing to do in exchange for it? How is the commission going to be split between the listing agent and the cooperating agent that brings the buyer? These are all questions to be discussed openly with your Realtor.

There are local customs that tend to influence what commission rates are. There are individual differences about Realtors that shape what they feel they need or want. There are differences in the level of service (time) and advertising (expense) between Realtors and their companies. And of course, there are now a growing number of discount brokers. Do you want discount service or full service when it comes to something as important as a real estate transaction?

Will the amount of commission you agree to pay affect how quickly and how much your home sells for? It certainly can. Would the amount you get paid to do a job affect how hard you work at it? Or, how much money you spend on advertising? Why would you think that Realtors are going to be any different in that respect?

MARKETING / ADVERTISING

These two terms are often used interchangeably, however they are not really the same thing.

Marketing is the grand scheme of things (demographics, statistics, perceptions, etc.) related to identifying who the "target" (or "possible") market is and advertising is what you do to try to reach that market. Generally speaking, the marketing for real estate is done by the company or brokerage - in my case, Long Realty Company. They are the ones who develop the company image and foster the goodwill and trust in the community. They have the large marketing campaigns all over southern Arizona to develop name recognition and to try to educate the public about the level of integrity and competence of its agents. They decide what the right company colors are and run the television ads and all of the rest of the media exposure. They take care of deciding what public relations activities there should be, which charitable activities (e.g., Long Realty's Care Foundation) to participate in, etc., etc., etc.

Advertising for a given property is basically the responsibility of the individual listing agent - though there may also be some support from the corporate level too. There are many, many things that are constantly being done to market and advertise on the part of Long Realty and every active agent working for them. Consider some of the ways your home may be advertised for sale by your Realtor, including: Multiple Listing Service (MLS), Just Listed Post Cards, Flyers, Yard Signs, Directional Signs, Target Mailings, Agent Office Tour, Previewing, Newspaper Ads, Long Realty magazine, Website listing, Open Houses, Showings, etc. Let's look at some of these in more detail.

KEYSAFE

One of the things you will have to decide upon in the Listing Agreement is whether or not to have a keysafe placed on your home (normally hung on the door handle or on an exterior water pipe) that will hold the key(s) necessary for other licensed real estate agents to have access to your home so that they can show it to their clients.

Yes, this decision can cause some trepidation. The best advice I can give you is that houses that are not on keysafe are often overlooked by agents because of the trouble and inconvenience associated with gaining access by appointment.

At the very least, talk this issue over with your agent and try to be flexible about it.

REALTOR SIGN-IN SHEETS / INFORMATION BOOK

One of the first things your Realtor should do is to place a notebook or folder containing a Realtor Sign-In Sheet in an open and obvious location in your home. For example, on the dining room table or kitchen counter top. Wherever it will be obvious and locatable by visiting agents is fine. In addition, there should be a copy of the completed SPDS form and a copy of the homeowner association's CC&Rs. Any other useful information that might be of interest to prospective buyers and their agents would be great too. Also, plenty of copies of the descriptive flyer that your agent prepares about your home.

OPEN HOUSES

Boy, there are some strong feelings about this aspect of advertising? Some people want them some people don't! Do open houses sell properties? Sometimes they do, but the truth is - most houses are sold as a result of a real estate agent showing houses one at a time to buyers. Does that mean you shouldn't want open house held at your home? NO! You never know what method of advertising or exposure is going to work. If you can deal with the circumstances that come with open house, by all means do it!

Understand that you will have to be absent for the entire time period (local custom is typically from 1:00 to 4:00 pm on weekends - but you can hold open house anytime , any day and be effective). You will probably have nosey neighbors coming in to look at your house. However, understand that those nosey neighbors sometimes find that they like your house, or the lot that it sits on, much better than theirs and they buy it! Or, they may have friends or relatives that want to move near them (believe it or not). And some of them are just plain nosey.

There will also be some people who have nothing better to do with their time than tour open houses to get "decorating ideas". This just blows my mind, but it is true. One of the not so nice terms used for some of these type people is that they are just "looky-lews". Occasionally though, looky-lews actually turn into buyers.

Another reason that people tour open houses is that they want to look at houses on their own without a real estate agent badgering them or they simply don't understand how helpful a good agent may be to them. I have also heard that some real estate agents will tell their clients to go look at a bunch of open houses until they can decide what it is they are looking for?? Unbelievable perhaps, but true.

It also happens that some real estate agents will stop at other agents' open houses because, for one reason or another, this house didn't show up in their search for a particular client, or they just want to check out the competition, and lo and behold, they find that your home is just perfect for their anxious-to-buy clients.

It should go without saying, but always make your house as neat, clean and attractive as possible for an open house. You might even consider baking some chocolate chip cookies (or some other treat, like home made bread) just prior to the open house. This is not only a pleasant treat for the open house guests (and Realtor), but will send a pleasant and inviting aroma into the air.

Every real estate agent has their own approach to conducting open house - some refuse to do it. Others go to great lengths to advertise and do all kinds of creative things. The important thing is to understand is that, regardless of any possible negative aspects, open house is one more opportunity for the right people to be at the right place at the right time to buy your house.

AGENT SHOWINGS

Most typically, a purchase offer will come as the result of another agent showing the property to their buyer client.

Unless the house is vacant, the buyers' agent is supposed to call in advance to schedule a showing time that the occupants can live with. Sellers should try their best to accommodate such requests. Understand that buyers are sometimes limited on their time available and other times just difficult to work with and/ or just demanding.

It also happens that sometimes the buyers agent will have made an appointment and then not keep it, or simply be running behind schedule. Buyers are sometimes brought to the house at the appointed time and for one reason or another, tell their agent that they have changed their mind and are not interested in seeing the house.

It can be very difficult, if not impossible for the buyers agent to juggle talking with their clients, driving, reading a map, shuffling the listing sheets, etc., etc. and sometimes they don't make all of the phone calls regarding running late, and/or canceling showings that they should.

From the seller / occupant perspective all this seems very rude and inconsiderate, and I agree - but just know that it can and will happen and try to not let it upset you too much.

One more point. With very rare exception, the only way your home is going to get sold is for someone to come into the house, look it over, and make an offer. How many people will look before someone buys it? Anywhere from the first person to the last. It may take hundreds of showings. Realtors wish they knew the answer - but we don't.

It is much better for the occupants to be absent during showings. If that is truly not possible then at least stay out of the way. Limit your engagement and conversation with the buyers agent and the buyers. If asked questions, try to answer as accurately as possible.

PURCHASE OFFER

Sooner or later, someone is going to want to buy your house. In very rare cases, your listing agent may find a Buyer and write the offer - in which case a dual agency will exist. Another agent working for the same Broker may find a Buyer and write the offer - in which case a dual agency also exists. Another Broker's agent may bring the offer in from a Buyer. The Buyer's agent may request / demand to present the offer to you themselves, or in many cases the offer is just faxed to the Listing Agent and they present the offer to the Sellers.

The offer that is written will contain a deadline for the sellers to respond. Depending on circumstances, this is typically 24 to 48 hours. If one of the parties is out of town or otherwise not readily accessible, their Realtor may request a longer response period. Once the offer has been presented to you, you have a number of options. You can choose to laugh at their offer. Occasionally Sellers will dance with joy because of the offer. Sometimes Sellers get red-in-the-face angry at offers (and at real estate agents). Once again, you have to try to depersonalize this as much as you can. We are dealing with a large financial transaction - it really is in your own best interest to try to minimize emotional responses.

Ultimately, you can choose to decline their offer. You can accept their offer. Or, you can make a counter offer.

This may sound like 3 choices, but it is really only 2. A counteroffer is really an act that declines the previous offer and makes a new offer. If the counteroffer is rejected, there is nothing left - you do not revert to the previous offer. So on any counteroffer keep in mind that the other party is relieved of any previous commitment - whether they be buyers or sellers.

Though not lawfully required, you will typically see included with the offer some earnest money or deposit. The amount can be anything. Often it is in the range of 1 to 2% of the anticipated purchase price. Some new home developers are now requiring 3% earnest money. For example, on a $100K house, the earnest money might be $1,000 to $2,000. If you choose to, it could be $50 or, it could be $5,000. It can be almost any amount. This money is often applied to and becomes part of the Buyer's down payment at closing. Keep in mind, this money and the amount of it, really serves several purposes. It helps create a legally binding contract and it communicates to the Seller, the Buyer's degree of interest and commitment. The amount of earnest money can affect a decision on the part of a Seller to accept the Buyer's offer or what their counteroffer may be. Understand that when a Seller accepts an offer to purchase, you are effectively removing your property from the marketing and sales process. The public and real estate agents are put on notice that you have a buyer, and unless something falls through on the deal, the house is going to be sold. Knowing that things can happen to Buyers, Sellers often want a little assurance that the Buyer is not going to be frivolous and walk away from a deal, forfeiting their earnest money. If the amount of earnest money seems too little, Sellers can make a counteroffer asking for more.

Keep in mind that virtually everything in a real estate transaction is negotiable. Decisions need to be made. It is probably in the best interest of everyone involved to keep emotions out of this process - but that is sometimes very difficult. Again, this is a stage of the process where a Realtor can really help you a lot. There are many, many possibilities involved in the negotiation strategy for selling a home.

Once an agreement between the parties is reached, the clock starts ticking. TIME IS OF THE ESSENCE. - A very powerful legal aspect of the contract. There are a number of events that must occur on a specific timetable. All kinds of things, depending on the circumstances.

Escrow gets opened within 48 hours.

The earnest money check gets deposited.

Contract rules.

What is Escrow? Well, in a way it is conceptual thing but it is an agreed upon involvement of yet a third party (actually a fourth party: 1) seller, 2) buyer, 3) real estate broker, 4) escrow company) - independent and neutral - in this transaction to ensure delivery of the property to the given party upon fulfillment of stated conditions and consideration.

Normally, within a 10 day period (can be modified to any time period agreed upon in the contract) the following must occur (if desired by the buyer):

Title Search and Commitment for Insurance,

Home Inspection,

Termite Inspection, and

All pertinent information needs to be discovered and confirmed:

Assessments, cable TV provider, environmental factors,

fire protection provisions, HOA specifics, utility

providers, flood plain designation, tax information,

school information, zoning, etc., etc., etc.,

Financing needs to be firmed up,

Appraisal needs to be done, and

Repair Requests must be submitted.

TITLE INSURANCE

Title insurance - two words - pretty simple? Well, most of us know, at least generally, what insurance is - it is protection against loss - but when used in real estate discussions, do we really understand what title is? Title is the word that identifies the ownership, i.e., the valid and legal possession, control, and use of real property (real estate). We also have title ownership of vehicles. The status or condition of title for real estate is established and determined by written public record and is evidenced by a document known as a deed (remember Monopoly?). However, a deed is not the complete story of the status of ownership of real property. To have that, one must also have what is known as an abstract of title - which is a condensed written history of all transactions affecting the ownership of a given property. Things like mortgages, deeds of trust, wills, liens, foreclosure proceedings, tax sales, and other matters of interest and concern that may have been recorded concerning the rights of parties that have some interest in the property in the past or currently. Well, it should be becoming evident that this issue is not a simple one. What is important to the seller and buyer in a real estate transaction today? Simply that good or "clear" title (unclouded) is being transferred. This is of concern to both parties - seller and buyer.

How do we deal with all of these issues and concerns? Today's practice is to purchase insurance to protect all parties' rights to possess, use, and transfer real estate. Title insurance was first introduced in the late 1800s and currently provides ownership protection on more than half of all real estate in the United States. What do we need protection from? Well, things like unpaid taxes, previous mortgages, judgments against previous owners, improper delivery of a previous deed, incompetence or lack of capacity of a grantor, a lack of signature of a spouse, mechanic's liens, easements, court actions, forgery, confusion due to similar names, or errors other records. The list of possibilities is quite long.

Title insurance companies perform examinations or searches of title by reviewing the chain of title (history of ownership) and scrutinizing the abstract of title (a condensed written history of all transactions affecting the ownership of a given property) to first produce a title insurance commitment which lists the status of title, including any matters of public record which could lead to a claim against the property. The commitment will also provide for the offer to insure the subject property - identifying what is covered and what may not be covered. This document should be reviewed and understood. Your real estate agent will be able to assist you with this. It is possible that a title defect will be found and the seller will have to take some action to clear the title. For example, pay a delinquent tax bill or resolve some other matter. Then too, no matter how thorough the search, or how competent the examiner, there may be something that is not found or discovered during the title search. Any defect not revealed or "hidden" will also be covered by the title insurance as provided for in the policy. Title insurance then, assures that your interests in the property are protected - as long as you own it. If a claim does arise against your property out of the past to threaten your ownership, the title company will protect you. It is important to note here that, unlike other types of insurance (such as auto or homeowner) which protect against future events, title insurance only protects against things that have already happened.

Title insurance companies have the responsibility to defend your title against any such claims for anything that occurred prior to the date of conveyance from the seller to the buyer (the date of closing or recordation), even in court if necessary - at their expense. Any covered claim will be dealt with, disposed of, or you will be reimbursed, exactly as your title insurance policy provides for.

As with almost all types of insurance, there are limitations and exclusions. For an additional premium, title companies may issue different forms of extended coverage for normally excluded title defects regarding rights of parties in possession, questions of survey and unrecorded liens.

Unless the real estate is being paid for with cash, there will actually be two title insurance policies necessary. The seller will provide an owner's title insurance policy for the benefit of the buyer. And, the lender will require the buyer to provide a lender's title insurance policy for their protection.

In Arizona, it is customary for the seller to pay for the owner's title insurance policy. After all, the seller is the party that still owns the property and is responsible for conveying a clear title. The buyer will normally bear the burden of paying for the lender's title insurance policy. The buyer's lender is the party that will require that they be covered as well - for the amount of the loan. Therefore, since the loan amount is most often less than the value of the property, the lender's policy will cost less than the owner's policy. However, as with almost everything else in a real estate transaction, these points are negotiable. The cost of each title insurance policy is paid for with a one-time, single premium - paid at the time of closing. There are no annual payments or other continuing costs.

HOME INSPECTIONS

Though the current practice is for the buyer to have a home inspection performed after a purchase offer is accepted, it may be beneficial for the seller to have it done beforehand. Again, this may raise the comfort level of prospective buyers. And it may help the seller avoid any surprises about the condition of the property. Any structural or systematic defects found during a buyer's home inspection offer an opportunity for them to demand repairs. If the seller does not agree to the repairs, the buyer can rescind his offer.

TERMITE INSPECTIONS

Again, termite inspections are typically done by the buyer during the ten day inspection period, after there is an accepted offer. Normally, this is not a big deal. If evidence of termites exists, appropriate treatment is performed, the seller pays for it and there is no problem. However, if there is a serious pest problem, wouldn't it be nice to know about it in advance? Sellers may want to have their own inspection performed beforehand.

Upon completion of the buyers' inspection, they will fill out a Buyer's Receipt of Documents & Contingency Removal form. This is their communication to the seller of their acknowledgment of receipt of all necessary discovery information and their request for repairs, if any.

APPRAISALS

And once again, it is most typical for an appraisal to be performed as a basis for the buyer's lender in evaluating whether a loan should be made or not and if so, in what amount. However, it may be worthwhile to have the appraisal done up front as a selling tool - especially if the value of your property cannot be readily determined by using comparable sales data.

Keep in mind though that the appraisal a seller has done is probably most often not going to be acceptable by the lender - unless you happen to have chosen an appraisal company that is approved by that lender. Every lender has their own vendors that are acceptable to them.

HOME WARRANTIES

You may consider offering to pay for a Home Warranty as part of your offer to sell your house. Many buyers see this as a big plus. It offers them the assurance that the major mechanical systems and the appliances are covered for at least the first year. If you do not offer one, there is a good chance that the buyers will request that you pay for one. You do not have to, but it can become a sticking point in the negotiations.

STRESS TEST

This is the time period - between a fully accepted contract and closing - that can be the most stressful. Deals can fall apart. Sellers and buyers are naturally at odds. Further negotiations can take place via Addenda and Repair Requests. Hang in there! This is where real estate agents really earn their money - keeping deals from falling apart if at all possible.

MOVING DAY

As the closing date approaches, another reality is going to set in. You are going to have to move. Another major effort. I can't help you with that one. No, I don't own a pickup truck. And yes, I really have a bad back. Even if I owned a pickup truck and I didn't have a bad back, my sentiment would be precisely expressed by a bumper sticker recently spotted:

"YES, THIS IS MY PICKUP TRUCK.

NO, I CAN'T HELP YOU MOVE."

At an agreed upon time shortly before the scheduled closing, the house must be vacated and the house must minimally be "broom clean" - preferably a little cleaner than that.

A final walk through inspection should be performed by the buyers to ensure that everything is still in good condition and that all terms and conditions have been met.

CLOSING / RECORDATION

Upon the satisfaction of all terms and conditions, the two parties to the transaction: the seller(s) and the buyer(s) can then execute the final agreements, collect and pay their monies and seal the deal with signatures. This is all conducted by the selected escrow officer.

However, in Arizona, unlike many other states, the deal is not really done until it is recorded. Keys to the house are not delivered and money is not given until this event occurs. Sometimes this means a day or more delay after signing. If closing occurs on Friday afternoon, then recordation may not occur until Monday morning. It can be further delayed by any number of events: holidays, weekends, mistakes in lender packages, all sorts of possibilities. The escrow company must verify the funds coming from the lender and the buyer. Escrow officers do the best they can, but are often at the mercy of the lenders, banks, county office hours, computer systems, the clock and the calendar. At the time of your signing, the escrow officer should be able to tell when they expect to record, pending any unforeseen circumstances or events.

This lag can be the source of a lot of problems - so be advised that this is the way it works. Horror stories over this issue abound. Allow yourself some flexibility around the closing date. Do not spend the money until you have it!

TA-DA!

Piece of cake - nothing to it - easy as pie - smooth as silk - hopefully these expressions will abound on closing day. I hope this discussion has been useful and helps you have a fuller understanding of the home selling process. As always, I am available to help. If you have any questions, or if I may be of service, please do not hesitate to contact me.

DISCLAIMER

John P. Hale is owner and Designated Broker of Touchstone Residential Realty, Inc., 2485 West Tom Watson Drive, Tucson, Arizona 85745.  He has been a residential real estate agent in the greater Tucson Metropolitan area since 2000.  In addition to being licensed as a Broker rather than a salesperson, John holds the following designations awarded by the National Association of REALTORS^®:  ABR – Accredited Buyer Representative, ASR – Accredited Seller Representative, CRS – Certified Residential Specialist, and GRI – Graduate Realtor Institute.  And, John is among the very few that have been named, MRE – Master of Real Estate by the Arizona Association of Real Estate.