Initial Research: Lecture 5

Initial Research #1 ­ Check MLS Status

Before you write your listing contract, you need to do some prep work. Research the information so that when you open your form to type it out, you’ll have all the information at your fingertips. The 3 sources you will need to get information are: the MLS, Property Profile, and your Brokerage Compensation Chart.

First, check the MLS and make sure that the property is not currently listed. Are you thinking, “Why should I check the MLS? It’s not listed for sale, that’s why I’m going to a listing appointment.” But it is possible it has pending listing on that property.

Sellers may be unaware that they still have an active listing, or they may be unhappy with the current listing agent. Sellers may not have giving you all the information. The last thing you want to do is to take a listing, but then find out you can’t put it on the MLS because another agent already has it on the MLS.

Review any previous MLS listings of this property. Who was the agent? What condition was the house in when they purchased it? Have they listed it for sale since they’ve owned it? If so, what was it priced at? Why didn’t they sell it? Did the listing expire or was the listing agreement cancelled? These are all things that you’re going to want to discuss with the seller when you get to the listing appointment.

Initial Research #2 ­ Examine Property Profile

Print out a property profile. It outlines the tax records, legal information, and other data about the property. Here is a sample property profile. There are 3 areas of the property profile to verify: names of the legal owners, mortgages or liens, and the APN.

On the property profile, check the legal owners’ names. It’s extremely important to spell the names of the legal owners correctly on a listing contract. You may pull up a property profile and discover that the seller you are going to meet is not even listed as an owner on title. What if the owner is a corporation, or the property is in a family trust? Maybe a spouse owns it as sole and separate property. Before you spend time giving a listing presentation, you need to ensure that the sellers are truly the legal owners of record.

Look at the mortgages shown on the property profile. When did they take out the mortgage? What was the mortgage balance when they got the loan? That’s a fairly good indication of the current mortgage balance, depending upon how many years ago they got the loan. Check for any other liens that might appear, such as a HELOC or private mortgage. This is not a title report so most other liens will not show up.

You will need the APN (Assessor's Parcel Number) which is the property tax number. Lastly, I check to see when the property was last transferred, from whom and to whom. For example, if the current owners took possession via quit claim deed, that’s a red flag that there may be some potential title issues.

Initial Research #3 ­ Understand Brokerage Fee Schedule

Be familiar with your brokerage client fees. This is the list of fees and rates that your brokerage charges sellers. Your company may charge percentage rates or price ranges or flat fees, depending on what type of service is being offered to your seller.

Get the chart from your brokerage, and review it with your broker so that you can understand it. When you are sitting with the sellers at their dining room table, they will probably ask you for a discounted rate. You need to know how much you can negotiate your professional fees.

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