14 Important Facts You Need To Know Before Selling Your Home
1. You are limiting your exposure to potential buyers (less than 10% of what a good real estate broker will generate) which theoretically means your home will take ten to fifteen times longer to sell on the market.
2. The longer a home is on the market the lower the selling price is. Why? Because most buyers think that if the home has not sold after this long… there must be something wrong with the home.
3. The selling/buying process begins AFTER the buyer leaves your home. Most sellers think that all it takes is for someone to see their home, fall in love with the great decor and the offer automatically will follow. Remember that the buying process begins after they leave your home. If a real estate sales representative does not represent the buyer, and they are looking on their own…they usually leave the home and start to talk themselves out of the buying process. Real estate professionals are trained on how to overcome buyers remorse–a very common occurrence.
4. Because of the limited exposure you will very likely end up with a lower selling price. Remember, in order to generate the highest price possible for your home… selling means exposure. You need the maximum exposure possible, to generate the highest price possible.
5. Most buyers find it extremely awkward to negotiate or even to talk directly with sellers and therefore avoid FSBO properties.
6. Lack of negotiating experience and lack of pertinent information often will result in a lower selling price, or worse yet, a bungled contract and possible lawsuits.
7. The majority of qualified buyers are working with experienced real estate professionals.
8. Many serious buyers will pass by a FSBO home merely because they recognize that it is not in the real estate mainstream, this can some times make them wary.
9. As most local buyers now retain an experienced real estate sales person to represent them as their buyer-agency, you will probably be negotiating against an experienced professional.
10. Expected savings in broker’s fees will also be greatly reduced if you offer a selling commission to entice real estate sales representatives to bring potential buyers.
11. If you are planning to use a Lawyer to help you negotiate the offer, then your lawyer’s fees will be considerably higher.
12. Only real estate sales representatives have access to the up-to-date market information. News reports cannot approach the timeliness or specificity available to real estate sales people. Further, real estate sales representatives are involved in home sales much more frequently than the average homeowner is. This familiarity leads to a degree of expertise that provides an edge on negotiating and successful selling.
13. You only pay the commission to the real estate broker, if they successfully sell your home at the price you are happy with.
14. Accepting an offer is one thing, ensuring a safe and successful closing is quite another. Real estate transactions usually always have problems on closing. At times, expecting the Buyers and Sellers Lawyer’s to fight it out or resolve the problems, can sometimes mean the deal is lost. This is the time that your experienced real estate professional, can be the most important. Your Real Estate professional can act as a great mediator. Lawyers MUST act only on their client’s instructions and are not paid to negotiate.
MARKET VALUE AND THE LISTING PRICE
The listing price is a key component of the valuation and sale of a property in the marketplace. The closer the list price to market value, the more likely that a higher sale price will be realized within a reasonable period of time. A list price at or close to market value will attract the most umber of serious buyers. A heightened demand will usually translate into a higher selling price.
A buyer, upon seeing a well price property, will become anxious to make a good offer before anyone else realizes the property’s excellent value. As a result, it will be the seller and not the buyer who will be able to negotiate from a position of strength. Therefore, under normal circumstances, it is very likely that the buyer will pay top price to get the property before anyone else does.
While there are no absolutes concerning listing prices, it is generally recommended that the list price be no more than 2-3% above the estimated value or value range. If the estimated value is $190,000, then perhaps a list price of 195,000 should be recommended. Of course you should also look at your competition in determining the proper listing price.
Often, sellers misunderstand the process of determining a listing price. You can often hear them say LET’S LIST THE PROPERTY 10% HIGHER JUST IN CASE WE GET LUCKY or WE NEED TO LIST THE PROPERTY 10% HIGHER TO LEAVE ROOM FOR NEGOTIATIONS. In both cases, a listing price 10% higher than the market value could very well be overpricing the seller’s property. If the list price is indeed too high, then the seller’s property will probably be eliminated by the serious buyer who otherwise would have considered buying it. In fact, serious buyers may either not look at the property at all or will use it to justify buying another property that is much better priced in comparison.
Of course, a user may still make an offer on an overpriced property. However, in these situations, it is the buyer that will be in a position of strength in the negotiations as s/he will be aware that they will not be in competition for the property. Indeed they may be the only offer that comes along. As a result, they will ofter be able to negotiate a price at the low end or below market value (depending on how long the property has been on the market and how frustrated and desperate the seller has become).
Some sellers will counter the argument that the listing price is too hight by saying ‘YOU CAN ALWAYS LOWER THE LISTING PRICE LATER’. The problem here is that a property will after a time suffer the the problem of MARKET STALENESS. As the weeks drag on, fewer and fewer buyers will look at the property. Buyers will often ask how long a property has been on the market for and be very suspicious of a property that has been listed for a while. Even where a property is finally realistically listed after nine months of marketing, buyers will make remarks such as THERE MUST BE SOMETHING WRONG WITH HOME, ITS BEEN ON THE MARKET SO LONG or THE PROPERTY HAS BEEN ON THE MAKET SO LONG IT MUST BE OVERPRICED or THE PROPERTY HAS BEEN ON THE MARKET SO LONG, THE SELLERS MUST BE DESPERATE. The end result is often that an overpriced property is on the market longer than necessary and the price received is generally lower than it would have been if it had been listed realistically in the first place.