10 Things You Should Know Before Selling Your Home
David Bartels, Broker of Help-U-Sell Full Service Realty in Westlake Village, California, unveils 10 key pieces of information that prospective home sellers should consider before selling.
Irrespective of the external variables impacting the global economy at this time, the resilience of the US real estate market is very much on show. A recent Reuters poll illustrated the apparent insulation of US house prices to the non-negotiable economic shutdown that has badly undercut activity across a wide spectrum of industries due to the ongoing pandemic. While a robust real estate market is encouraging, we can’t be complacent at this critical juncture.
We must acknowledge the legacy issues that have hindered the progress of the sector, and highlight areas for improvement. For too long, real estate agents have held an overly advantageous position in the market, propped up by a smoke and mirrors framework that disempowers individual homebuyers and sellers. Here are ten things you should know before selling your home:
The level of tact involved in the marketing of homes by real estate agents remains suspect. Put simply, most agents put a house in the MLS and pray that they find a buyer. This arbitrary rolling of the dice is highly inefficient, given the objective at hand. There are other ways to expose a house to prospective buyers, such as paid ads to a target audience on Facebook that can very often yield superior results.
In anticipation of negotiations, sellers will often price a home high with a view to leaving room for negotiation. Imagine you have a house that you ideally want to sell for $400,000, so you price it at $410,000 to give yourself some breathing space with respect to a potential round of negotiation. This approach might seem wholly reasonable, but this is inherently problematic because if a buyer is searching for homes up to $400,000, they will not see a home priced at $410,000.
Typically, sellers price their home with figures ending in 9’s – so $399,000 for a $400,000 house and so on. This is great for buyers looking to buy property up to the price of $400,000, but for buyers looking for homes specifically in the region of $400,000-$500,000, they simply won’t see the house listed. In this instance, the proper price for maximum exposure is $400,000 as it would be included in searches of homes up to and beyond the $400,000 mark. No ambiguity, no missed opportunities, just transparent, actionable data.
I don’t think it’s irrational to suggest that generally speaking, agents’ main priority is to represent their families. Their main objective is to figure out a strategy to get you in escrow and close the transaction as swiftly and as seamlessly as possible. Keep that in mind during your next consultation.
You might pay 5% of the sales price to sell your home, but that could represent 25% of your equity. For example, 5% of $500,000 is $25,000. Imagine an original $400,000 purchase price, and subsequent sell price of $500,000. Here we have $100,000 in equity, with a cost to sell of $25,000, or in other words, 25% of equity.
Many agents will tell you your house will sell for a higher price than other agents can facilitate as a means of securing the listing agreement. Then when showings and offers fail to materialize, they will pressure you to reduce your asking price to attract a buyer. Agents know that they must be the listing agent when the house sells to get paid for selling the house. The first step is to secure the listing, so sometimes they’ll tell you what you want to hear and hope that you soften your position based on results.
While this might sound jarring to some, I would argue that the agents don’t actually sell homes, they market homes. Houses sell houses. Buyers either connect with a house or they don’t. The agent’s role in the process is to market the home and represent you in the transaction. Buying a house is an emotional process justified by logic. If a buyer does not have an emotional connection to the house, then it is hard for them to justify buying it and an agent is not going to "sell" them into buying it. If a buyer loves a house, they will find ways to justify buying it and even pay much more to get it. As a result, the agent’s role is to market a house to drive as much traffic through the front door as possible.
The same argument could be made about Open Houses – these are actually staged to generate buyer and seller leads for the agent. Statistics show that only 4% of buyers come from hosting an open house. However, almost every agent holds an open house. Why? Because the main benefit is not to sell the house, but to sell the agent and to create opportunities for the agent to meet potential buyers and sellers.
The marketing of each home should be viewed in a silo and tailored accordingly. For example, a ‘horse zoned’ property marketed specifically to buyers looking for horse zoned properties will naturally yield better results than a horse zoned property advertised to a broad community of buyers that have no interest in horses.
Speaking of mis-directed advertising, way too often, flyers simply end up in a flyer box, allowing them to become lost in a sea of miscellaneous marketing material. If the objective is to get potential buyers inside the house, then flyers outside in a flyer box defeat that purpose. Flyers outside promote the agent, flyers inside the house and available to those who tour the home, serve as vehicles to provide more information to interested parties.
Buying a house is now very much a digital process. Today, more so than ever, buyers are engaging in remote communication with agents via applications such as Zoom and FaceTime. With regards to the marketing of homes on digital platforms, professional photos, intuitively, attract higher levels of interest. The key here is quality over quantity – more photos doesn’t always yield more interest from buyers. The objective is not to sell the house over the internet, the objective is to create interest and give people motivation to go see the house in person. As a pro-tip, I would encourage sellers to change their cover photo on a weekly basis to freshen the ad to have a better chance of enticing prospective buyers.
David Bartels – one of America's Top 100 Real Estate Agents and President of Help-U-Sell Full Service Realty.