Tips for Home Sellers from Toby Tobin
Home buyers care only that the house will work for them, and at what price when compared to other houses they have seen. That’s it. Here’s more advice you may not have heard before.
PALM COAST, FL – December 21, 2015 – When home sales involve educated sellers, buyers and real estate professionals, the outcomes are more likely to be positive. Regardless of the reason for selling your home you will want to maximize the selling price while minimizing the hassle, and in the shortest possible time. Here are some hints that will help you do that.
Selling (or buying) a home is likely the largest lifetime financial transaction undertaken by most people. Yet, the deck is stacked against most sellers. The average time between moves is about seven years, not frequent enough to become proficient at buying or selling. Interstate moves are more common today. Real estate laws are state specific, so the knowledge you gained from past experiences elsewhere may not apply in Florida. That’s why you need an experienced agent/broker. For Sale By Owner (FSBO) is more often “For Sale By Optimist.”
Picking an agent/broker
Pick a highly qualified and experienced real estate agent. Hint: this agent is probably not your closest friend, your brother-in-law, your mother, your neighbor or your boss’s wife. Maybe, but not likely. The transaction is too important to entrust to anyone but the best. Mixing an inexperienced agent with the emotional complications of a friendship/business loyalty relationship is a recipe for disaster. It could cost tens of thousands of dollars and screw up the relationship at the same time.
Today, there are simply too many nuances to manage during a selling process to entrust the task to a novice. Find out which agents are most active in your area. Interview more than one. Ask about their past experience and make sure they are knowledgeable about your community, particularly if your property is in a gated, amenity-rich community. Issues such as deed restrictions (rules), association fees and mandatory club memberships can sink a sale.
Ask how the prospective agent/broker will market your home. Beyond listing the property in MLS, what else will they do?
- Will they advertise the listing on national websites or targeted publications?
- Will your agent (or an associate) be present at all showings?
- Where and how often will your property be advertised?
- Will your agent hold a brokers’ open house? (These are good.)
- Will there be an open house for potential buyers? As a rule, general open houses benefit the agent more than they benefit the seller. Agents will pick up buyer or listing leads more often than they will undercover potential buyers for your home. There is no place for a general open house for high-end properties. They are counter-productive in that market segment.
- If your home will be empty, will the agent arrange staging? Check out the credentials of the stager and ask for references.
- If you will be out of town, who will be responsible for periodic inspections?
- Will your agent/broker commit to regular update meetings or conference calls with you? They should.
- All post-showing reviews should be shared with you on a timely basis. Reviews highlight issues that need to be addressed.
What is the term of the listing agreement? Don’t expect too much from your agent if you are unwilling to give them at least six to nine months to procure a contract; longer if your home is unique and/or high-end. Trying to negotiate a lower commission percentage is generally counterproductive.
If you can’t find an agent who is willing to commit to as much in advertising and promotional activities as you want, be willing to contribute towards these and other up-front costs. Remember, the agent gets paid only if the transaction closes. Perhaps your agent will agree to net a pre-agreed portion of your expenditures against the commission at closing.
What should the listing price be? Your agent’s recommended listing price should be based on recent comparable sales. Do not be influenced by the listing price of similar properties, especially if they have been on the market for a while. By definition, these properties remain unsold. Properties that sell most quickly are properties that are “priced to sell.” Ask your prospective agents to show you how they arrived at the recommended listing price. Hint: Take off your "Happy Ears." The agent that suggests the highest listing price may not be the right choice.
What will you do if there is a tepid initial response to your listing? When and under what circumstances will you reduce the price and by how much. Think about these decisions ahead of time and agree with your agent what course you will charter. It will minimize emotions and avoid indecision down the road.
Think like a buyer
Look at your house dispassionately. Try to put yourself in the buyer’s shoes. Ask a trusted friend to help you on this step.
Remember, the buyer isn’t going to drive up the driveway into the garage and enter the house through the garage, the way you do. They are going to park at the curb (hence the term “curb appeal”), then enter through the front door. You should drive around the block. Drive by your house slowly and pretend to be a buyer. Do it again from the other direction. Do you like what you see? Honestly? Look at the neighborhood. How does it look? Then park in front of your house and think like a buyer. What do you see? Is it a turn-on or a turn-off? Is the landscaping attractive and well kept? What should be changed/fixed? Take notes.
Enter the house through the front door. What is your first impression? If you or a family member is a smoker or if you have pets, you will probably not notice the lingering odors, but non-smokers and non-pet owners will. This can be a real turn-off for some. So too can clutter and family memorabilia. Clutter makes it difficult for a buyer to imagine their furniture and accessories in your space. Take more notes.
By the way, a good agent should make the same critical analysis. Compare notes with your agent. Decide what should be fixed or replaced, then get it done before listing your home.
Don’t fall in love with your asset.
It’s been your home for several years, but to the buyer, it’s just a house; one perhaps of several properties that met their search criteria. The buyer cares only that the house will work for them and at what price, compared to other houses they have seen. That’s it.
The buyer does not care what you paid for your house. The buyer does not care what you think your house is worth. The buyer does not care whether it was you, on your hands and knees after work each day for weeks, that laid the tile and hardwood floor. The buyer does not care that all your children learned to swim in your pool. The buyer does not care how much money you need to net from the sale.
Seller-initiated home inspections
Get your home inspected. You know the buyer is going to order an inspection. Buyer inspections give them power. Anything a buyer’s inspection uncovers can be used to torpedo a sale or to give the buyer additional bargaining leverage to extract concessions from you. If there is something there, it’s always best if you discover it and deal with it in advance. Plus, you can show any prospective buyer your inspection report and list of remedial actions you have already taken. By doing this, you are preempting the potential buyer’s bargaining tool.
Timing a home sale
Sellers don’t always have control over the timing of their listing. Job, family and health changes can be compelling. But if you do have a choice, your house will probably sell more quickly during the peak season. All markets are local, each having its unique peak season. In Palm Coast and Flagler County, more closings occur in the months March through August. Keep in mind that closings typically occur a couple of months after the sale contract is signed (meeting of the minds between buyer and seller). Thus, the months of peak selling activity are from January through June.
If you have flexibility, January is the best time to list in Flagler County. The increased number of sales signals the presence of more buyers and a better chance of a quick sale.
While closings are seasonal, prices are not. Prices are driven by longer term trends. Right now, the market is rising. Waiting a while will likely result in a higher selling price. But most home sellers become buyers. If you hold off on selling, you will likely have to pay more for your next home. An expert once told me, “The only two prices that matter are the price you pay for your first house and the price you get for your last house. Everything in between is simply shifting assets.”
Get out of the way
Stay away from the showings (and take your pets with you). You may know more about your home than your agent, but you are NOT the best person to manage the presentation. I’m a licensed real estate professional, yet I engaged another agent to handle my last home sale.
Require that your agent present all offers. To a ridiculously low offer, I generally recommend a counter-offer at, or near, the listing price. Doing this will keep the negotiations alive while, at the same time, putting the prospective buyer on notice that your willingness to negotiate has limits and that you have given serious consideration to pricing. If the prospective buyer’s reply is another lowball offer, reject it promptly.
Real Estate Matters
Be sure to listen to my weekly half-hour radio show, Real Estate Matters, every Sunday morning at 9:00 on WNZF News Radio where I discuss a wide range of real estate topics. Listen on 1550 AM or 106.3 FM or streaming live at https://player.listenlive.co/36561. Past shows can be found at https://www.flaglerbroadcasting.com/wnzf/#archives.
If you need help finding the right agent/broker, I can help. I’m licensed and have been a referral agent for years. It will cost you nothing. I will be compensated by the referred broker only if a sale closes. (386) 931-7124 or Toby@GoToby.com.
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