Making the Listing Presentation
A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance$ 780.00 Termite inspection and treatment 300.00 Sales price 127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed? Property taxes for the year 1,745.60 Interest proration (paid in arrears)? Closing date June 30 What are the total expenses, rounded to the next highest $100?
- $10,900 - $10,800 - $11,800 - $10,100 $8,925 ($127,500 X .07)brokerage fee + $780 title insurance + $300 termite inspection + $892.50 documentary stamps ($127,500/100 X .70) = $10,897.50 round to $10,900.
A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance$ 780.00 Termite inspection and treatment 300.00 Sales price $127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed? Property taxes for the year $1,745.60 Interest proration (paid in arrears)? Closing date June 30 What are the seller's net proceeds, rounded to the nearest $100?
- $14,500 - $17,100 - $16,300 - $15,400 $28,900 equity - $10,900 expenses - $1,700 prorations = $16,300 sellers net proceeds
A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance $ 780.00 Termite inspection and treatment $300.00 Sales price127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed? Property taxes for the year 1,745.60 Interest proration (paid in arrears)? Closing date June 30 What is the seller's equity, rounded to the nearest $100?
- $20,000 - $16,300 - $28,900 - $29,000 Equity calculated by deducting mortgages from sale price. $127, 500 sale price - $98,601.60 mortgage balance = $28,898.40 sellers equity and round to $28,900
A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance$ 780.00 Termite inspection and treatment 300.00 Sales price $127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed? Property taxes for the year $1,745.60 Interest proration (paid in arrears)? Closing date June 30 What are the total prorations, rounded to the nearest $100? Will the prorations be added or subtracted from the equity?
- $900 subtracted - $1,700 subtracted - $2,600 added - $1,300 subtracted The answer is $1,700 subtracted. Property taxes for the year are $1,745.60. One-half year's taxes charged to the seller are $872.80 ($1,745.60 ÷ 2). Interest on mortgage = $98,601.60 × .10 = $9,860.16 per year; $9,860.16 ÷ 12 months = $821.68. $872.80 + $821.68 = $1,694.48 total prorations charged to seller; round to $1,700.
Making an effective listing presentation will result in a much higher close rate for listing appointments. Several conditions must be met to be successful.
- all parties on deed MUST be present - all forms must be ready for signature - licensee must know each step of presentation - licensee must have complete information - licensee must have completed CMA - licensee must be professional, on time, and organized
Listing presentation has five parts:
- build rapport with sellers - explain pricing, go over CMA - estimate seller's proceeds (seller net proceed form) - discuss why FSBOs don't sell homes - ask for the listing
When helping a seller price their property, a licensee should NOT
- discuss current market conditions, only in sellers neighborhood - ask for the order after the explanation - recommend a price before going over the data in the CMA - give the seller a range of values rather than a single value
Which part of the CMA shows overpriced listings?
- expired listings - withdrawn listings - sold houses - houses currently for sale
The final step in the listing presentation is
- explaining why they should use your firm - putting it into the MLS - asking for order (listing) - delivering CMA
The base of the pricing pyramid shows:
- fewer buyers because of higher prices - the number of buyers at the higher prices - many buyers at lower prices - many buyers because of higher prices
On the Seller's Net Proceeds Form, which proration should NOT be included?
- interest - rents, if rental property - insurance - property taxes
Where is the BEST place to make a presentation?
- living room sofa - on the outside deck - at the dining room table - in front of the TV
The reason it is not practical for a licensee to determine the exact prorations on the sellers net proceeds form when taking a listing is that
- most sellers refuse to list when they see prorations - the exact closing date is unknown - it takes too long - a mistake will likely lose the listing
The reason for eliminating cents and rounding to the nearest $100 on the Seller's Net Proceeds Form is to
- provide a cushion in the estimate - accomplish all of these - make the statement easier to understand - avoid giving the impression that the figures will be exactly as shown at closing
The components of the sellers equity section of the sellers net proceeds form include:
- sellers equity, prorations, sellers net proceeds - sales price, prorations, expenses - sellers equity, expenses, sellers net proceeds - sales price, mortgages, and sellers equity
The sellers net proceeds form has three major sections:
- sellers equity- sales price less the mortgage balance - expenses to be paid at closing - prorations- sales tax, interest, rent, HOA dues
Order of sellers net statement:
- selling price - deduct mortgage - sellers equity - expenses - prorations - net proceeds to seller
A broker is making a listing presentation to a FSBO. She completes the CMA and the sellers agree to accept the net amount shown on the seller's net proceeds form. She should be able to take the listing now primarily because
- she has completed all steps of listing presentation - the FSBOs should know they would not be able to sell - she has not gone over the reasons to list with her - the commission is included on the sellers net proceeds form, and the sellers have agreed to amount
If the sellers want to list the property before you have completed the listing presentation, you should
- suggest they think about it over night - politely request more time to finish it - take the listing - ignore and continue with presentation
The preferable approach to setting the listing price is to:
- tell seller max price at the beginning - find out what they need minus your commission - list price they want - go over CMA and find appropriate range of values
When explaining the current market conditions to the seller, one piece of information that would NOT normally be included is:
- the aggregate square footage of all listed homes - the month's supply of homes on the market - the number of homes sold last month - the number of houses currently listed
Which is NOT one of the three major problems in showing the property a FSBO might expect?
- the risk to personal safety from letting prospective buyers into the home - the likelihood that the seller will save the commission - it is hard to get buyers inside if the exterior is not attractive - the house is off the market when the seller is away
The reason most FSBOs won't be able to save the commission is that
- the seller may not know how to write a binding contract - they may show the house to an unqualified buyer - the may not understand how to help the buyer get financing - the prospective buyer is buying direct to save the same commission
When preparing the interest proration on a sellers net proceeds form, the BEST policy is to enter
- zero on the line, with a note that it can't be determined - one half month of interest - a full month of interest - two months of interest
Seven Step Service
1. what you expect, when you want to move, why are you selling. 2. pricing assistance 3. condition and selling recommendations 4. market your property 5. present offers and negotiate sale 6. transaction processing- financing, contingencies 7. get proceeds check- close transaction
A sellers equity is the same as the net proceeds from sale.
False
If a seller initially expresses disinterest in a listing agreement, you should not continue to pursue business.
False
It is all right to make a listing presentation when one of the parties who needs to sign is not present.
False
The licensee should go over the sellers net proceeds form before discussing the CMA.
False
A FSBO sign can adversely affect the sellers security.
True
Asking sellers to help you with measuring the house is a way to build rapport.
True
Asking whether the sellers would like you to try to get their home into the MLS as soon as possible is effective in asking for the listing.
True
Before making a listing presentation, you should have prepared a CMA to help you show the seller the fair value of their home.
True
Discussing the present condition of the property is a part of the home selling process time line.
True