Use a REALTOR
Many times a homeowner will try to sell their home themselves in an attempt to save money. What they don’t know is that REALTORS generally obtain sales prices anywhere between 10-20% higher than what For Sale By Owner (FSBO) properties generally reap. This more than covers their commission, and is the result of many factors. One of the more important ones is access to the Multiple Listing Service (MLS), the online database of all homes for sale by REALTORS. Homes listed in the MLS have superior exposure to the public AND to the entire REALTOR population working in your area. So, because many REALTORS work with Buyers frequently, or even exclusively, if your home isn’t in the MLS, you’re missing out on the largest pool of potential buyers there is. Another factor is the REALTOR’s training and ability to negotiate. When a buyer sees a FSBO property, usually they know the seller is cutting corners trying to save money… and they want to get in on the good deal too. If you have a REALTOR representing you, the REALTOR will undoubtedly negotiate the best price possible. Lastly, there are many laws regarding selling a home, and when you do it yourself, if you miss something or fail to follow an important law, you could easily find yourself on the receiving end of an unwanted lawsuit. A good REALTOR will be trained in local, state, and federal laws and will steer you clear of dangers that could result in later litigation.
Trust Your REALTOR
Don’t be offended by this, but many homeowners think they know more about selling a home than their REALTOR does. This is comparable to telling your Doctor how to treat you for a serious illness. REALTORS are frequently highly trained, very skilled, and tremendously experienced. They buy and sell homes every day. Like with your Doctor, don’t think you know more about real estate than your REALTOR. Now you may know more about your home, and that’s fine… its’ always a great help to educate your REALTOR on the particulars of your home, upgrades you may have installed, features that may not be common to other similar models, and also repairs, insurance claims, and problems with the home that may not be immediately noticeable. Please take note, almost all states require owners to disclose all known facts regarding their home, good and bad, so don’t try to hide the fact that you had a massive plumbing leak a few years ago and filed an insurance claim for repairs. This will get found out eventually, and if you fail to disclose known problems, you could end up legally liable for concealing the information and any damages or expenses the buyer suffers as a result.
Don’t Make Expensive Upgrades Just Prior to Sale
There are differing viewpoints on this, but I personally don’t like seeing owners spend thousands of dollars upgrading their home just before selling it. Some people may think it’ll make the home more attractive and desirable… and this truly may be correct; but if you pick colors or features that don’t appeal to a wide range of buyers, you may end up shooting yourself in the foot with your own bad decisions. If your home needs upgrades, just reduce the price accordingly. Once, I saw a home where the seller installed brand new ROYAL BLUE carpet throughout the whole house. He said he bought it because the old carpet was shot and the blue carpet was on sale. Well, I’m sure it was. Nobody except maybe a San Diego Chargers fan or member of the Court of King Arthur’s Round Table wants royal blue carpet through their whole house. Every buyer who came to see the home pretty much walked in and right back out as quickly as possible. This was wasted money and ended up costing the owner far more in the sales price than what he spent and (thought he) saved on the ugly carpet. If you plan on upgrading the home, consult with your REALTOR, or possibly even an Interior Decorator first. Make sure your upgrades appeal to the general population and aren’t so narrowly appealing that only one in a hundred people will like it.
Don’t Overprice Your Home
This is a tricky subject. Sometimes homeowners hire a REALTOR because they promise a ridiculously high sales price, but ultimately fail to deliver. A really good REALTOR will show you, on paper, what your home is worth. They will perform a “Comparative Market Analysis” (CMA) which generally includes homes similar in size and quality to yours, in your general area, that (1) are FOR SALE, (2) PENDING SALE (in Escrow), and (3) a CLOSED SALE. “For Sale” prices are often the least accurate. Anyone can ask anything, but it doesn’t mean they’ll get it. “Pending Sale” properties sometimes shed a little more light on accurate pricing, because they will reflect the home’s listing price at the time the offer was accepted and Escrow was opened… but pending sales are still pending and you never know if the owner conceded any rebates, paid for any of the buyer’s expenses, or agreed to a lower price in the contract. “Closed Sales” are generally the most accurate because REALTORS are usually required to post the FINAL sales price of the home and to list any concessions that were made to the buyer in the MLS, so other REALTORS can see it. Homeowners aren’t going to have access to this information on their own, as most of it will be contained within the MLS itself. If your REALTOR recommends a price, strongly take their advice. A good REALTOR will even walk away from a listing if they feel the owner’s price goals are not realistic. If your REALTOR walks away from the table, consider that BAD JU-JU.
Don’t Force Open Houses
Another tricky subject… some REALTORS love open houses, while others absolutely hate them. Either way, there is generally no argument among REALTORS that most people who visit an open house are already working with their own Buyer’s Agent, and the open house is only making that Agent’s job easier by not having to schedule a private viewing of the home themselves. Some REALTORS like open houses because they’re actually marketing themselves to the people who walk through the door who don’t already have their own REALTOR… they want to engage that buyer to help him/her/them find the home they’re looking for, which many times isn’t yours. It’s a marketing technique used by many REALTORS, and sometimes very successfully. But make no doubt, open houses do not sell homes. If a buyer sees your home online, or if their REALTOR pulls it from the MLS to show them, trust me, if they’re interested, they’ll find a way to see it one way or another, irregardless of your open house.
Avoid the Buyer During ALL Showings
If a REALTOR schedules a private showing of your home for their client, DO NOT follow them around, and NO talking… unless they ask you a question, keep quiet and out of the way. Hawking over the buyer is a huge turn-off and can generally cause them to want to get out of there as fast as possible. Don’t be offended, but the buyer doesn’t want to talk to you, or maybe just doesn’t have enough time to chat. They don’t want you telling them about your décor, why you picked whatever paint color, or what you like or dislike about the neighborhood. THAT is the job of the buyer’s REALTOR, not the yours. So if you have a showing, just take a walk around the block, go get a burger, or just sit outside and out of the way until they leave. If you do choose to say anything, just thank them for coming; but keep the conversation extremely limited… and don’t ask them whether they like the home or not. Don’t talk about yours or their kids, or what ideas you have for them to improve the home. If they like your home, you’ll get an offer soon enough. If they don’t, you won’t… and don’t sweat it. Now, if you have twenty showings (or even worse, no showing), and no offers, discuss it with your REALTOR. There may be a problem you’re in denial about, and, again, should trust the advice of your REALTOR.
Respond to ALL Offers
Many times, a buyer will attempt to “low-ball” the owner on their first offer, trying to see how big of a price break they can get. Sometimes REALTORS and the homeowner both get offended by low-ball offers. Recognize every offer is an opportunity. If the buyer low-balls you, counter-offer back with a price or terms that you’re more comfortable with. Sometimes the negotiations will work in your favor, sometimes they won’t, but you’ll never know if you don’t try. Also, be aware that many cultures have it in their nature to “haggle prices” with everything. They do it naturally, not intended to offend or cause heartache. If you get a low price, counter back with something you think is fair. I’ve seen counter-offers go back and forth up to a dozen times before the deal is finally reached, so don’t ignore any offer. Always respond. If the buyer doesn’t take your deal, again consult with your REALTOR, make sure everything is “in line”, make adjustments as necessary, and keep on going. In real estate, everything is negotiable.
Provide Timely Disclosures
Once your offer is accepted, an invisible clock starts running. Your REALTOR should know every detail of this clock. Certain things must be done in specific time-frames to avoid delaying or jeopardizing the sale. Most, if not all, states require sellers to provide the buyer with specific an detailed disclosures on the home, letting them know of any problems, repairs, taxes, Home Owner’s Association dues, insurance claims, etc.,… the list can be fairly long. No matter how long your list of disclosures, time is of the essence. A delay in providing disclosures can extend the buyer’s time to “walk away” from the deal without losing their deposit. Generally, after a period of so many days (sometimes between 7 to 21), the buyer must, in writing, fully commit to the deal. If you’ve delayed, or even worse, failed, to provide necessary disclosures, it extends the buyer’s window to walk, and could ultimately result in a failed deal and weeks of wasted time. Nothing is worse than having your deal break down three or four days before your escrow is due to close, causing you to start over, all the way back at square 1. That’s every REALTOR’s nightmare.
Don’t Sweat the Small Stuff
Many times, during the initial inspection period, after the offer has been accepted, the buyer may have the home checked out by a professional home inspector. While opinions on this subject differ, I’ve heard many professional inspectors say they feel obligated to find “something” wrong with the home in order to justify their service. Or, on the other hand, an extremely diligent and experienced inspector may find things that truly need to be repaired. When this happens, buyers usually submit a “Request for Repairs” to the seller. While these requests are generally not binding, if they are asking for a few small items to be fixed, it’s probably in your favor just to take care of them. If the buyer has a long list of repair requests, consider addressing the significant ones and maybe say no to the smaller ones. If your AC is broken, and one light switch doesn’t work, it’s probably important to fix the AC and just leave the light switch for the buyer to deal with later. Taking care of at least some repairs makes the buyer feel respected and that you’re serious about providing them with a safe, functional home to live in. So again, when you get a list of forty repairs, maybe take care of some of them, but perhaps not all of them. If their request contains anything that is legally required, such as smoke detectors, or water heater straps (in many states), you have no choice but to comply. In any case, if in doubt, again, this is a great time to consult your REALTOR.
Leave the House Maid-Service-Clean
Once the deal is closed, it’s closed. But nothing insults a buyer more than receiving keys to a dirty home. Put yourself in their shoes. Now they’ve got to move in… and you may be doing the same thing on the other end yourself. And if you sold your home to buy another one yourself, unless that next home is brand new, never lived in, you’re probably going to want to receive it clean too. The moving process is hard enough; nobody wants to spend extra time cleaning your dirty stuff (this includes toilets). Make sure EVERYTHING is clean. I usually recommend hiring a professional cleaning company to handle this for you. Not to be sexist, but sometimes sellers do what I call “Man Clean”, which can be vastly different from “Woman Clean”. If you don’t understand what I mean, you’re either single, or you haven’t experienced buying your first home with a wife. I clearly remember when I bought my first home, I had to use the toilet and didn’t think twice about it… but my wife shrieked when she went to use it herself. She then spent the next day and a half cleaning toilets, sinks, floors, appliances, light switch plates, windows, and just about everything in sight. As a first-time home buyer, this was not cool. Give the buyer your respect by providing them with a move-in ready, “maid-service quality” clean home… whether you hire the professional cleaner or not. Just don’t turn over the home dirty.
There’s a lot more that could have been written about here, but (1) I only have so much time to write, and (2) I need to save material for future blog posts. If I left anything out, use your best judgment in how you proceed with selling your home, or email me. If you have any questions, always, always, always consult your trusted REALTOR for advice. And if you fall victim to any of these mistakes and end up not being the “perfect” home seller, don’t say I didn’t warn you ahead of time. As professional REALTORS who specialize in the listing and selling of homes, feel welcome to contact us with questions at any time. We thank you for your trust and consideration.