Answers for Home Sellers
- The Nine Deadly Mistakes to Avoid When Selling
- 14 Powerful Questions To Ask Before You Sign Anything
- Buying Up In A Down Market
- How To Get Top Dollar In Any Market
Mistake #1 - Pricing Incorrectly
Every seller wants to realize as much money as possible when he sells his home. But a listing price that is too high often gets the seller less than a price that is at market value. If your house is not priced competitively, people looking in your price range will reject your house in favor of other, larger homes for the same price. At the same time, the people who should be looking at your house will not see it because it is priced over their heads! Overpricing usually increases time on the market, and that adds to the carrying costs. Ultimately, many overpriced properties sell below market value.
Mistake #2 - Failing to "Show case" the Home
Buyers look for homes, not houses, and they buy the home in which they would like to live. Owners who fail to make necessary repairs, who don't spruce up the house inside and out, touch up the paint and landscaping, and keep it clean and neat chase buyers away as rapidly as Realtors can bring them.
If you were selling a car, you would wash it, or maybe even detail it to get the highest price. Houses are no different.
Mistake #3 - Using the "Hard Sell" During Showings
Buying a house is an emotional decision. People like to "try on" a house and see if it is comfortable for them. It's difficult for them to do that if you follow them around pointing out every improvement that you made. It may even have the opposite effect you want, by making them feel they are intruding on your private space.
Resist the temptation to talk the entire time a buyer is there, and let them discover things on their own. Try a tasteful sign to point out some hidden amenity that they might miss.
Mistake #4 - Mistaking Lookers For Buyers
For Sale By Owners always get more activity than houses listed with an agent. No question about it. Realtors will only bring qualified buyers, and these will be fewer than if you open your front door to every one who walks down the street.
A qualified buyer is one who is ready, willing, and able to buy your house. We find that most people who go looking at For Sale By Owners are just starting to think about moving. They may be good buyers, but they're just 6-9 months away from being ready. They don't want to bother an agent yet, so they call the "By Owner" ads to get a feel for what's available. They may have a house to sell first, or may need to save some more, or may have credit that needs fixing. When everything is in place, that's when they go out looking with a Realtor.
An agent will ask a buyer how much he can really spend for a house, how much he has to put down, how good his credit is, how much he can pay each month, how much he will realize (realistically!) when he sells his present home - and about a dozen other questions like that. But unless your Realtor finds all the facts first, you must ask all these questions before the buyer crosses your threshold. Otherwise, you may have a parade of Sunday afternoon shoppers with a dream of owning a home some day.
Mistake #5 - Not Knowing Your Rights & Obligations
Real estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through, or cost you thousands for repairs, inspections, and remedies for title defects. You must be certain which repairs and closing costs you are responsible for. You must know whether the property can legally be sold "as is", and how deed restrictions and local zoning will affect the transaction. If there are defects in your title, or if your property is in conflict with local restrictions, you or your Realtor must remedy them, or you might have to pay plenty.
Mistake #6 - Signing a Listing Contract with No Way Out
Many times an agent will have good intentions about marketing your house, but circumstances can change. There might be a death in the agent's family, or the agent may decide to quit the business. In these cases where the agent couldn't or wouldn't perform, you should have the right to fire your agent. In some companies the broker will assign your listing to someone else in the office, someone new in the business that you didn't personally select. Always protect yourself by getting a guarantee of performance with the right to cancel.
Mistake #7 - Limiting the Marketing and Exposure of the Property
The two most obvious marketing tools (open houses and classified ads) are only moderately effective. Surprisingly, less than 1% of homes are sold at an open house. Agents use them to attract future prospects, not to sell the house!
Advertising studies show that less than 3% of people purchased their home because they called on an ad. And if a machine answers, most callers just hang up without leaving a message.
The right Realtor will employ a broad spectrum of marketing activities, emphasizing the ones he believes will work best for you. There are dozens of more effective ways to find buyers than just open houses and advertising. By the way, he or a trained member of his staff will be there every time the phone rings. Did you know that most calls come in during business hours when sellers are away at work, and most home showings are between 9:00 and 5:00 Monday through Friday?
Mistake #8 - Believing that a Re-fi Appraisal is the Market Value of Your Home
An appraisal is an opinion of value for a certain purpose. If the lender wants to lend you the money, they are motivated to have the appraisal come in high. The appraiser may ignore foreclosure or distress sales in order to justify the high value. But a real buyer in the real world will not ignore these properties. They are your competitors when you try to sell.
I can't tell you how many ridiculous re-fi appraisals I've seen. Don't make the mistake of thinking that the value you were told 6 months ago when you refinanced is what a real buyer would pay. Ask your Realtor for ALL the solds in your area, then decide.
Mistake #9 - Choosing the Wrong Realtor, or Choosing Him for the Wrong Reasons
It's likely that you don't interview people very often. And yet in order to find the Realtor who is right for you, you may interview several. The quality of your home selling experience is dependent upon your skill at selecting the person best qualified.
It's interesting that in the real estate business, someone with many successfully closed transactions usually costs the same as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a higher price at the negotiating table, selling in less time, and with the minimum amount of hassles.
The world is populated with Realtors who are wrong for you. For example, the housewife who sells an occasional house because she needs a little pocket change, or the insurance salesman who believes he can handle two careers. Or perhaps your cousin George, who really needs your business.
The sale of your home could well be the most important financial transaction you have ever been involved with. The person you select can make it a satisfying and profitable activity, or a terrible experience. It's your home, and your money. The choice of your Realtor is up to you. Make that selection carefully.
- What is your guarantee?
- Do you personally answer all phone calls on the property?
- Can we cancel the listing if we're not happy?
- Do you have a personal assistant?
- If you don't call me back within 24 hours will you take $50 off the escrow?
- May I see your resume or personal brochure?
- What systems do you have in place that will keep you in constant contact with me during the listing and the transaction?
- Are you fully automated with your own personal computer, FAX machine, copier, pager, voice mail, etc.?
- What is your average market time vs. other agents' average market time?
- What professional designations do you have?
- I want to give my home the advantage of the latest marketing strategies. How much time & money do you invest each month in professional training?
- Can you give me a list of your clients who have closed escrow and can I call them?
- Why are you personally motivated to sell my house?
- Why should I list with you rather than any other agent who is calling on me?
Let's face the facts, there aren't many buyers out there. And to make matters worse, nowadays, if it's not on sale, people won't buy it! Whether it's a necktie, or a car, or a house, if it's not on sale, the fish just aren't biting!
I'm no different than you are, when I sell my property, I want the best price I can get for it. Since the market is down right now, the best bet is to wait until things pick up again. Or... IS IT?
I wish I had a nickel for every time I've heard someone say
"We're going to wait until the market improves"
Since there are hundreds of sellers with the same idea, think for a second what will happen when they all jump into the market at the same time. But that's another story.
Believe it or not, the smart money is moving RIGHT NOW! If you want to know why, you can read on, or you can throw this letter away and forget the whole idea. It might cost you if you do, but no big deal, it's just tens of thousands of dollars.
A good look at the "good old days"
Remember when we had a seller's market? Sure, you could sell your house quickly and at a good price. But then you had to find one to buy. There weren't many properties on the market then, so most likely you couldn't find the one you really wanted. But you had to live somewhere, so you settled for the house on the busy street instead of the cul-de-sac you wanted. Or the one that needed repairs instead of the newer home that you wanted.
By the time you decided to make an offer, you found out that someone else had already bought it! In fact, there were THREE other offers, and the winning one was for more than the asking price! Remember? So it was back to the streets to find another one. Then when you finally did buy one, you hoped like heck that the interest rates wouldn't go up while you were in escrow, costing you more every month or maybe causing you not to qualify for the loan at all!
That was the "better market" that people are hoping will return again!
Can we talk?
Prices are down 10% in the past year, and interest rates are the lowest in 20 years! The experts are saying that buying up in a down market is the best thing you can do. Let's look at some numbers to prove it.
Assume that you wanted to move back in '89. The market was great then, wasn't it? Your house was worth $160,000 then, but now it's only worth $144,000. But the house you wanted to buy was priced at $220,000 then, and now you can get it for $198,000. So both houses went down 10%, but look, the house you want to buy went down $6,000 more than yours did. That's the "hidden equity" gain that experts talk about when you buy up in a down market.
Now think about this, when the prices go up again, it works in reverse. If you don't buy until then, the bigger house you want will have gone up $6,000 more than your present house did. So, either you take $6,000 out of your savings account to increase the down payment, or else you can get a larger loan to the tune of $50 more per month.
Here's a side by side analysis, assuming for the sake of argument that you owe $100,000 on the house:
|1989 (Seller's market) Rate @ 10.5%||1996 (Buyer's market) Rate @ 7.5%|
|Sales price of old place:||$160,000||$144,000|
|Price of new place:||$220,000||$198,000|
|Monthly P I:||$1,464||$1,078|
|Total Monthly Payment:||$1,714||$1,303|
So when's it better to make your move, in a seller's market, or in a buyer's market? You tell me!
The same house will cost you $411 LESS per month today than it did in the "good old days" when you could have sold your house for more. I don't have to tell you what that adds up to in 30 years, do I? What the heck, I'll tell you anyway, it's
Part of the savings is because the interest rates were a lot higher back when the economy was soaring! The fact is, if the market improves, then the interest rates will rise also. The Federal Reserve makes sure that you can't have it both ways!
Did I make my point? Am I communicating? There is so much misunderstanding about the market that we are in today, and I don't want you to lose in the long run. Don't focus on the fact that your house isn't worth was it was 4 years ago. Instead, look at the big picture and consider whether waiting until the market improves is really in your best interests. It's something to think about, isn't it?
The Fact Of The Matter Is....
1. Price Fact
THE BEST CHANCE FOR SELLING YOUR PROPERTY IS WITHIN THE FIRST SEVEN WEEKS. STUDIES SHOW THAT THE LONGER A PROPERTY STAYS ON THE MARKET, THE LESS THE SELLER WILL NET.
It is very important to price your property at a competitive market value right when you list it. The market is so competitive that even over-pricing by a few thousand dollars could mean that your house will not sell. It's interesting, but your first offer is usually your best offer. Here are reasons for pricing your property at the market value right from the start in order to net you the most amount of money in the shortest amount of time.
An overpriced home:
- Minimizes offers
- Lowers agent response
- Limits qualified buyers
- Lowers showings
- Limits financing
- Nets less for the seller
80% of the marketing is done when we decide at what price to list your home. If you are unwilling to list at current market value, you would be better off not putting it on the market at this time.
2. Clean Fact
MOST PEOPLE ARE TURNED OFF BY EVEN THE SMALLEST AMOUNT OF UNCLEANLINESS OR ODOR WHEN BUYING A HOME. SELLERS LOSE THOUSANDS OF DOLLARS BECAUSE THEY DO NOT ADEQUATELY CLEAN.
If your house is squeaky clean, you will be able to sell your home faster and net hundreds, if not thousands of dollars more. If you are planning on moving, why not get rid of that old junk now so that your house will appear larger? Make more space. Odors must be eliminated especially if you have dogs, cats, or young children in diapers or if you are a smoker. You may not notice the smell, but the buyers do! Most agents have a difficult time communicating to their sellers about odor. If you employ an agent to get the most amount of money for you, please don't take offense if he must confront you about odor problems.
3. Access Fact
TOP SELLING AGENTS WILL NOT SHOW YOUR HOME IF BOTH THE KEY AND ACCESS ARE NOT READILY AVAILABLE. THEY DO NOT HAVE TIME TO RUN AROUND TOWN ALL DAY PICKING UP AND DROPPING OFF KEYS. THEY WANT TO SELL HOMES!
The greatest way to show a house is to have a key! When your home is being shown, please do the following:
- Keep all lights on
- Keep all drapes and shutters open
- Keep all doors unlocked
- Leave soft music playing
- Take a short walk with your children and pets
- Let the buyer be at ease and let the agents do their job
4. Paint & Carpet Fact
PAINT IS YOUR BEST IMPROVEMENT INVESTMENT FOR GETTING A GREATER RETURN ON YOUR MONEY.
Paint makes the whole house smell clean and neat. If your house has chipped paint, exposed wood, or the paint looks faded, it is time to paint. If your carpet is worn, dirty, outdated, or an unusual color, you may need to seriously consider replacing it. Many houses do not sell because of this problem. Don't think that buyers have more money than you have to replace carpet. They don't. They simply buy elsewhere.
5. Front Yard Fact
YOUR FRONT YARD IMMEDIATELY REFLECTS THE INSIDE CONDITION OF YOUR HOUSE TO THE BUYER
The Dallas area has a good climate, therefore outdoor activities are important. People enjoy their yards. Make certain that the trees are trimmed so the house can be seen from the street. Have the grass mowed, trimmed and edged. Walkways should be swept. Clean away debris. Remove parked cars. This all adds to curb appeal. If a buyer doesn't like the outside, they may not stop to see the inside.