Congratulations, you’re ready to sell your home. Since moving is stressful, and likely involves your greatest asset, we’ve assembled some a few tips to help you experience a smooth transaction, maximize your position as a seller, offset the stress, and offer an honest, transparent peek into the real estate industry’s secrets of buying and selling.
Be Careful With How Your Listing is Worded
Unless you’re selling an investment property or don’t care about getting the maximum price, certain common phrases don’t belong in your listing. Phrases like “as-is,” “price negotiable,” “divorce sale,” “bring all offers,” “must sell soon,” or “priced to sell” in the listing tell a potential buyer what position you’re in. It’s never smart to let the buyer know clues to your position as a seller, at least not initially; this erodes your leverage and puts the buyer in charge. For example, if the price truly is negotiable, let the buyer know this after they submit an offer, not before.
The Truth About Repairs and Remodels
Remodels are different than repairs because remodels are optional while most repairs are not. If a seller failed to conduct a $4,000 HVAC repair, a potential buyer may discount the home $7,000 due to the uncertainty and hassle of getting things fixed. Repairs should be conducted before a home is listed. For a home remodel to be worth it, it must pay the seller back at least the cost of the remodel, but this rarely happens. If $12,000 is spent on a bathroom remodel, a potential buyer will likely only value it at a fraction of that cost. Unless the seller is a DIYer and can save significantly on labor costs, most all remodels will only provide a partial return on investment. Ideally, a remodel should be done years before the home is placed on the market so the owner can enjoy the upgrade, instead of conducting the remodel just for the purpose of selling at a higher price. Remodels may provide a tax advantage when you sell, so consult an accountant.
Real Estate Agent Commissions
If you happen to hire a traditional real estate agent, he/she will likely require a 3% listing fee. But ask to negotiate this down to 2.25% or 2.5%. Here’s why…
Many agents get a new listing from a referral from another agent who can’t service the listing. The cost of a referral is typically 25%. So, if your agent normally would charge a listing fee of 3% but is also willing to pay 25% of this fee to another agent, that means if no referral is involved, the listing agent will still be happy to take the new listing at 2.25% (3% – 25%) instead of the traditional 3%. For a $500,000 home, this could save you $3,750! So, first make sure a referral is not involved in your listing and if your listing agent balks at 2.25% or 2.5%, explain the math to them or find another agent.
The Truth About Marketing
If a buyer is serious about finding their next home, how likely do you think they’ll rely on social media, late night TV advertising, word of mouth, or a mailer to introduce them to their dream home? Isn’t the most obvious marketing the internet, and specifically websites such as Zillow.com, realtor.com, or trulia.com? For home sellers, the only type of marketing that really matters is internet marketing because this is where 95% of a buyer’s home search starts. It used to be that only the real estate agents had access to the homes for sale. But now, with websites such as Zillow.com, a buyer can access tax history, days on market, price history, home features and facts, neighborhood and schools information, pictures, comparable homes, finance options, even an independent, estimated sale price. And if the seller wants to get as much as possible for his/her home sale, the more online exposure, the better. And that starts with the MLS, which will syndicate your listing to the most popular real estate websites.