To maximize net proceeds while minimizing problems, sellers must understand how to operate in today’s hyper-active, seller’s market.

Do firsthand research – visit open houses in your neighborhood. This will give you some idea of what other sellers are asking for similar homes in your area, how many buyers are out looking, and which types of buyers may be interested in your property. You will also have an opportunity to meet real estate agents holding open houses. Think of this as your screening interview, a first step in finding an agent to represent you. Not every seller will have the time or inclination to attend open houses, but those who do will get a better perspective on the market.

Hire a Realtor before making major selling decisions. Some sellers spend money on improvements that may not give them the return they envision. Conversely, other sellers do not invest in areas that could be fruitful and result in a faster sale.

I often meet sellers who tell me they wished they had talked to a Realtor earlier. With the information I provided, they would have made different choices on how to go about selling their homes. Most sellers do not sell often enough to fully understand the intricacies of the process. This is particularly true of those who are selling and also buying a replacement home.

Unless it is an emergency, allow sufficient lead time to prepare for selling. The time needed varies with each seller’s situation and the condition of the property. Even if you are not sure exactly when you will sell, it is advisable to talk with a local, experienced real estate professional. A good agent can be invaluable in helping you plan your move.

Think of the house as a commodity. If it looks its best, it will sell for a higher price. This is why, except for fixer-uppers, “staging” a home for sale pays dividends. Take the time to paint, clean, work on the landscaping, and make the house shine. Most importantly, get rid of most of your “stuff;” doing so will make the house appear more spacious. This does not have to be expensive. Talk with your agent before doing any costly remodeling.

How to handle offers. Is it preferable to look at offers as they come in or to wait until after the broker’s tour and first open house? The rationale for waiting a number of days before reviewing offers is that the property will get full exposure which, in a hot market, may result in multiple offers. Some sellers who have been set up by their agent to expect multiple offers, however, will be disappointed if they do not materialize.

Each situation should be assessed individually. For example, recently I had a listing which sold in three days and closed in three weeks. The sellers decided to “play it by ear” as far as when offers would be presented. A couple wrote a contract and wanted it to be heard right away; the sellers agreed to listen.

As it turned out, the contract was above the asking price even though no other offers had been written at that juncture. The buyers, nonetheless, had wisely concluded that the sellers would have no incentive to accept their offer at that early stage unless it was over the list price. The buyers’ large down payment and quick close were also attractive to the sellers.

Escrow was smooth and uneventful, and the sellers were delighted. Would it have been better for the sellers to have delayed for what might have been higher offers? Perhaps, but what if they had waited for a better offer and these buyers had an unexpected last minute problem with the loan? Or, the buyers decided to renegotiate the price after their inspections? Or, the buyers did not close at the agreed upon time? All these are the risks that must be weighed against the benefits of a strong offer in hand.

There is not necessarily one right way to operate in every situation. Your agent should thoroughly explain the options and allow you to decide. Remember, if you choose to look at an offer before the home has had full exposure, you can reserve your decision for a number of days if the bid is not strong enough.

Pre-sale reports can save time, money and aggravation. As a seller, you can either wait to be surprised by a buyer’s inspection reports or be prepared with your own. Top agents advise their sellers to order a pest control (termite) report and a home inspection before marketing the property. In most instances, the investment will be around $500. Allow at least two weeks to have the inspections and receive written reports. Additional time may be needed to deal with specific items highlighted in these documents.

If the inspections reveal only minor issues, you will be relieved. On the other hand, if expensive problems are uncovered, you can investigate and evaluate the most cost-effective approaches to correcting them. This is much more difficult while in the middle of an escrow.

Pricing is an imprecise art. Pricing is always tricky, especially in a rising market. In my career, I have had many listings sell quickly which other brokers thought were priced high. In other cases, some listings which I and other brokers thought sharply priced sold lower than expected.

Some sellers subscribe to the theory that the agent who gives the highest price likes the property the most. Other sellers think they should hire the agent with the most “accurate” price, based on other agents’ opinions.

Pricing in an escalating market is like trying to hit a moving target. Although it is one of many points to consider in choosing an agent, don’t make pricing the key factor (unless the agent’s price indicates he or she is out of touch with the area).

Should you price on the low side to encourage competitive offers, or is listing higher, but not above market, a better strategy? The answer depends on the home itself, its location, the state of the market, and your motivation.

Selling before finding a replacement. Unless you have the resources to buy another home without selling your present one, selling and buying involves some very anxious moments. To decide whether you should first find a home you want to buy, answer this question: would you be willing to accept a contract on your house contingent on the buyer selling his property?

I would not recommend it in this market. There are plenty of buyers out there who will make non-contingent offers. If you wouldn’t be enthusiastic about receiving a contingent offer, why should another seller be excited about yours?

Most sellers today are finding a buyer for their present home first. This makes them attractive buyers on the other end. Usually, this entails a combination of a longer close of escrow and a seller rent back. Make sure you are working with experienced agents on both ends of the transaction who know how to coordinate the details. When interviewing agents, ask them exactly what they would recommend to have the outcome be acceptable for you.

Final thoughts

If you understand the nuances of a seller’s market, it will work to your advantage. As the saying goes, timing is everything. Do not take today’s hot market opportunity for granted.

Related Articles: Hot Market Tips: Buyers; Sellers' Do's and Don’ts, Part 1 and Part 2