When thinking about selling your home, there is a myriad of things you need to think about, so let me give you a little free advice.
We have all watched House Hunters and all the DIY Flip series, but those are very rarely true in real life. It is very important to work with a reputable, experience real estate agent to help you. One that is very knowledgeable and well known in your area, will walk you through the process. But here are just a few things you need to know before you get started.
The 3 Things
There are 3 things that impact the sale of a home.
As Is, Not Really
In the 1-4 Family Residential Contract, there is a box that says the buyer accepts the property ‘AS IS.’ This is one of the most misunderstood boxes in the contract. It means that when the contract is signed the buyer accepts the property ‘As Is’ but the contract also provides a provision for the buyer to get an inspection. Upon receipt of the inspection report, the buyer may come back and ask for repairs or a reduction in purchase price, so you are not really selling the property ‘As Is.’
If a seller wants to sell the property ‘AS IS,’ and is not willing to do any repairs, the listing agent must disclose that information in the listing, and the property needs to be priced accordingly.
People are always asking me what I ‘charge’ to list a home. There is technically no real industry standard, but in my market, most will have a 6% listing, however some agents offer a lower percentage. This means that 6% of the sales price of the home will go to the agents that negotiate and manage the transaction. It is typically split between the listing broker and the broker who represents the buyer. While that may sound like a lot of money, it covers a lot of things, so make sure and discuss with your agent what services are provided. Keep in mind, you get what you pay for, so a lower commission may mean you get a lower level of service.
While I can’t speak to other agents and their commission, I am a full service agent, which means I offer a variety of services to my clients. When deciding to sell your home, interview agents, and ask them about their services and how the commission works. Many people are unaware of what goes into the sale of their home, so a full understanding of the process and the cost to sell, is crucial.
Overprice vs Underprice vs Just Right Price
The pricing of a property can be tricky. Some sellers will want to price their property high, thinking that buyers will negotiate it down. However, most buyers I have worked with, are uncomfortable with that strategy and will rarely want to lowball on a house. Because of that discomfort, they may not even go see a house that would be perfect for them, if it is priced too high. Overpriced properties often languish on the market for months and the seller eventually drops the price enough to get interest, ending up selling for much less than was originally anticipated.
Underpricing a property can generate a lot of interest and sometimes bring a bit of a bidding war. However, it doesn’t always work out best for the seller. The belief that pricing a property low will allow fora quick sale can backfire. Buyers may become suspicious that something is wrong with the property and avoid it altogether. So a really good strategy is a….
Just right price. When a property is priced properly, it usually will sell quickly and sometimes gives the buyers an impression of a good value. This may generate multiple offers, but usually allows for a much less stressful listing, leading to the perfect buyer.
To Stage or Not to Stage
Sellers are often confused by staging. If you have a really nice property, that will bring a price above the median sales price, then staging always works to your benefit. Professional stagers charge a fee, and may have a warehouse full of items to supplement your décor if needed. However, most sellers cannot afford that kind of expense, so what should they do.
Multiple Offers vs The Offer
In this market, many believe that multiple offers is a really good thing. However, it is often very stressful and can be a very hard decision. At the end of the day, you only need one that gets you to your goal. The highest offer is not always the best offer, so having a realtor explain the terms clearly, and provide a side by side comparison, makes decision easier. Some agents will hold onto the first offer, hoping to get other offers in. I have found that often that first offer may be the best offer, so presenting that to the seller early on may save a lot of difficulties. But it is your decision, so talk with your agent about the process and what is best for your situation.
When vs Why
Some people have to sell for a variety of reasons. Either a job change, family situation, loss of income or some other reason is driving their decisions. The when and why is not an issue in these situations. But many people are thinking of selling, partially because the market is high and, because they want to make a change for another reason.
There are two parts to this decision, then when and the why. One may drive the other. When to sell depends on your circumstances. If you have kids in school and they want to finish out their education in that district, then your when, will be at graduation. However, if you want to move to a different district to benefit your kids, then your when may be now. So one will always drives the other.
Sell High and Buy High
Keep in mind that when you sell high, you will buy high. When you buy low, you will sell low. Those are facts that can’t be changed. In an active sellers' market, you may get premium price for your home, but you will probably pay premium price for your next home. Wrap your mind around that from the beginning. You will not be able to get a ‘deal’ unless you pay cash for a fixer upper and usually investors grab those up before they hit the market. Connect with your lender before you list to determine what you can afford before you list your home. Putting your house up for sale before finding out what your lender will allow, may often bring disappointment and upset. Or you may be strapped with a house payment higher than you want. Do your homework before you decide to sell. A conversation is always free and will save you a lot of issues later.
I hope this insight will help you while you are trying to decide if you should list your home or not. If you aren’t sure, give me a call. We can discuss it and I’ll be glad to answer your questions and maybe help with the decision.
I'm always available to give you a little free advice.
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