Unit 5: Marketing Property
When preparing a comparative market analysis for sellers, brokers should include A) nearby comparable homes that have recently expired. B) nearby comparable homes that have sold in the last six months. C) all of these. D) nearby comparable homes that are currently listed.
The answer is all of these. The CMA should help the broker and the sellers in determining the list price of the home, so all activity that has taken place in the market should be taken into account. Properties that have sold tell you what buyers will pay, properties currently listed show you the competition, and properties that have expired tell you what buyers will not pay in this market at this time. Including all of these types of properties will provide the most balanced view for pricing.
At the open houses for both brokers and potential buyers, which of the following reports, if they have been received by the seller, should be available for distribution? A) All of these B) Radon inspection report C) Termite inspection report D) Home inspection report, including a comment sheet disclosing the repairs that have and have not been made
The answer is all of these. The disclosure of all of these reports, with comments on any work performed to remedy defects, can be used to build confidence in the property and the seller.
Open houses A) are only attended by represented prospective buyers. B) are only attended by those who are serious about purchasing a home. C) require little planning to be successful. D) are best attended when supported by the property's advertising schedule.
The answer is are best attended when supported by the property's advertising schedule. Brokers should never just put together an open house last minute; they should thoughtfully plan and coordinate the open house with the property's advertising schedule. Open houses are also a great way to find unrepresented potential buyers because buyers who are represented usually do not attend them and instead rely on their broker to set up private showings.
Advertising selected for a property should ALWAYS A) include online and print components. B) attempt to attract potential buyers at every price point. C) be accurate. D) be paid for by the broker.
The answer is be accurate. An advertising plan should be customized for each listing, so it is unwise to say that a specific advertising component should always be used. Advertising in any form should always be accurate. The advertising may be paid for by the broker and/or the sellers; this should be discussed before listing the property.
Which of the following is NOT required to be in writing, but is considered good practice to have in writing? A) Repair budget B) Listing agreement C) Both the advertising budget and repair budget D) Advertising budget
The answer is both the advertising budget and repair budget. State law requires that the listing agreement be in writing; however, nothing except prudence and professionalism requires that the marketing plan and its components, such as a budget, also be in writing. Putting the marketing plan in writing, particularly the portion about expenses, will result in fewer misunderstandings about the allocation of cleaning, repair, and advertising costs between the seller and the broker.
What can happen when the listing price is substantially higher than what is reasonable and competitive in the current market? A) The property will attract the interest of more buyers who are looking for relatively more expensive homes. B) The sellers will get more money for their property than sellers of comparable homes. C) It will weed out buyers who would have made a lowball offer. D) There might not be very much interest by buyers at that price point and the property may not sell.
The answer is there might not be very much interest by buyers at that price point and the property may not sell. You may miss the market by unrealistically overpricing a property. Interest will not be stimulated in enough potential buyers and the property may develop a stale reputation.
To help sellers understand the importance of curb appeal, brokers should A) bring the sellers outside and show them the property as if they were potential buyers seeing the home for the first time. B) take photos of the front of all of the comparable houses listed in the CMA and compare them to the sellers' house. C) tell the sellers that a photo of the home's exterior will not be included in in the MLS listing if they do not fix the curb appeal. D) provide a list of landscaping companies and suggest they get the opinion of a third party.
The answer is bring the sellers outside and show them the property as if they were potential buyers seeing the home for the first time. This usually convinces sellers that they can increase the curb appeal without spending much money. Usually sprucing up the landscaping with new mulch, trimming plants, keeping the grass cut, evaluating porch decorations and furniture for suitability, and painting the front door is all that is needed to freshen the curb appeal.
A medical research complex, a large hospital, and several specialist physicians are near a residential subdivision where many of the doctors and other employees of these businesses live. What would be the BEST way for a broker who has acquired a listing in this neighborhood to find a buyer? A) Host a city-wide broker open house B) Withhold the listing from the MLS C) Advertise in the city's newspaper D) Execute a direct marketing campaign targeted to the employees and doctors of the nearby medical facilities
The answer is execute a direct marketing campaign targeted to the employees and doctors of the nearby medical facilities. Direct marketing campaigns can be very expensive (e.g., finding addresses, creating the letter or mailer, having it printed, postage, etc.) and often have a very low return. However, a well-targeted direct marketing campaign, like the one described in this question, can be very effective.
When helping the sellers establish the listing price, the broker should develop a range of values that is A) exactly what the sellers want to receive for the property. B) reasonable and as accurate as possible to reflect market conditions and trends. C) within 125% to 130% of the broker's estimate of the best listing price. D) optimistic, yet not too far above a reasonable and accurate listing price.
The answer is reasonable and as accurate as possible to reflect market conditions and trends. Overpriced properties are difficult to sell and can cost the seller and the broker time and money. Pricing a property unrealistically high to cater to what is desired by the seller is always a losing strategy.
When preparing their home for sale, sellers should consider A) reducing the amount of furniture to make it easier for prospective buyers to imagine themselves living in the home. B) maximizing the amount furniture in each room to demonstrate how much can fit into each space. C) leaving the yard and landscaping alone so it appears as natural as possible. D) giving the home a lived-in look and having family photographs and personal items on display to make the home appear warm and cozy.
The answer is reducing the amount of furniture to make it easier for prospective buyers to imagine themselves living in the home. Since the goal is to make the home look attractive and welcoming to potential buyers, personal items such as photographs and awards should be minimized and excess furniture should be removed to improve the flow of the rooms. The yard, landscaping, and front entrance should be neat and tidy to make a good first impression.
Staging is preparing a home for sale so that potential buyers are able to imagine themselves living in it. Sellers will typically have to take which of these steps to stage their home? A) Make any necessary repairs and install new appliances B) Remove personal touches and declutter possessions and furniture C) Declutter possessions and furniture and remodel any bathrooms that are more than 20 years old D) Remove personal touches and buy new furniture for the main living spaces
The answer is remove personal touches and declutter possessions and furniture. Staging a home for sale can usually be done at a nominal cost. In most cases, extensive remodeling or purchasing brand new furniture is not necessary or cost effective. Cleaning, decluttering, and removing personal items can be done for almost no cost and go a long way in helping buyers to visualize themselves living in the home.
When gathering data about sold and expired listings for a CMA, how far in the past should brokers typically look? A) Six months B) One year C) Two years D) One month
The answer is six months. Although a six-month history is typical, some parts of the country experience such fast appreciation of homes that using data that is six months old would be too outdated. Brokers must use their knowledge of the local market and the local, state, and national economic situation to properly ascertain when data, especially sold listings, become outdated.
A broker suggested that a seller remove personal items, decorations, framed pictures, and trophies from her home and also recommended that she remove items from countertops, thoroughly clean the bathrooms, and generally remove clutter. What is this seller doing? A) Presenting B) Steering C) Staggering D) Staging
The answer is staging. Staging is preparing a home to sell by decluttering, cleaning, and rearranging furniture to show off the home's features. It also includes removing personal touches to help potential buyers visualize themselves living in the home.
Which of the following is NOT a benefit of using a multiple listing service (MLS)? A) Prospective buyers with access to MLS listings will be able to quickly compare a large number of listings, thus narrowing their search. B) The property is guaranteed to sell more quickly and for a higher price. C) Prospective buyers with access to MLS listings are typically already working with a broker and may be better informed about the market conditions and comparable listings. D) The listing details and notice that the property is on the market will be available to all member brokers and, potentially, their clients.
The answer is the property is guaranteed to sell more quickly and for a higher price. There is no guarantee of a faster or higher-priced sale by using the MLS. The MLS greatly increases the property's exposure to the marketplace, resulting in a much greater chance of finding a suitable, qualified buyer for the property.
When the broker presents the marketing plan to the sellers, what else should the broker be ready to explain to them? A) How to determine the closing date B) The sale process C) How to find renters if the house does not sell D) The closing process
The answer is the sale process. Explaining the sale process to the sellers will help avoid potential misunderstandings in the future. It may also help to get the sellers on board to assist the broker with the selling effort. The other options do not need to be discussed at this time, but it is a good idea for the broker to be ready to explain them when the sellers are farther along in the process.