You’ll find home selling tips for houses, townhomes, villas, and condominiums, scams to avoid, how to choose a seller’s real estate agent, what to put in your contract, real estate agent tricks to watch out for, and negotiating tips for dealing with tough buyers. We’ll also review sites like HomeGain, which help you locate a real estate agent in your area based on the marketing package that they submit to sell your house.
Many sellers have unrealistic expectations for their property value, especially on condominiums and townhouses. These types of property at least here in Florida do not hold their value very well, and very few of them appreciate. Often the builders of new condos and townhouses charge buyers too much money and when the buyer resells years later, they are shocked to see how much value their unit lost. They will have a hard time selling their condo, especially if the maintenance fees are high.
In the chapter on How To Buy A Used Home we tell you that sellers do not set the price, it’s the buyers and the market who set the price. We buy stocks all the time that drop in value and real estate can do the same thing. There are no rules of what appreciates or depreciates. Some sellers get the idea in their head that their house should sell for say $200,000 because they bought it a few years ago for $175,000. They may have bought the house when the market was hot, and in a soft market, their house may not be worth the asking price. A millionaire in Fort Lauderdale put one of his homes up for sale in 1999 for $12 million. A year later he lowered the price to $10 million. By early 2001, the asking price was $8 million, and still no sale. This is another case of a seller thinking they could set the price. The market was forcing him to lower the price. If you don’t price your property correctly to the market, you simply won’t sell it.
So how do you price your home?
There are three tools to use, a property appraiser, a listing real estate agent, and a list of recent home selling prices in your neighborhood. If you wisely chose your listing agent and they have experience in your neighborhood, they can guide you to a ball park selling price, then the appraiser will fine tune that number, and you can use a list of recent selling prices as a sanity check. The appraisal can cost $250 or more.
Pretty it up before you list it
Before you turn your home over to the listing agent, make sure it’s in it’s best form. First impressions count and the first thing buyers see is your front lawn and garden. Make sure your lawn and trees are fertilized about 2 weeks before you list the house. Make sure that the lawn is in good shape, and has a perfect edge along the perimeter, make sure the garden looks nice, with no weeds, and repair any cosmetic damage to the house that can be seen from the outside. If your driveway has oil stains, it could be time to reseal it. If you have a paver brick driveway like me, make sure it has a good fresh coat of sealant on it. It makes a world of difference. You don’t want any letdowns at all when the buyers drive up to look at the house. Try walking down your street and see what looks good on the other houses, and note what looks bad. Put yourself in the shoes of a buyer and list the items that make a house undesirable. Think curb appeal. Spending a few dollars on some flowers can go a long way. For $50 you can buy several bags of wood chips and a few trays of flowers and have your garden looking 100% better in one afternoon. Fertilize the lawn also. Give it curb appeal, and house buyers won’t just slow down and drive off, they’ll park and visit.
Replace your AC filter and any other filters that might be checked during the inspection process. Don’t leave black marks and scuffs on the walls, either clean them off or walk around the house with a can of paint and spot paint. You want buyers to see perfectly clean walls. Remove any excess rugs and furniture to make the rooms look bigger. If your house is empty, make sure the carpets are clean and vacuumed. If there are any stains, have them cleaned off. Do not let buyers in your house until you have clean carpets. You want your house to get top grades all around. It will give the buyer fewer things to complain about, and fewer items to negotiate the price down with. In short, pull out all the stops to make your house look as desirable as you can. Give the buyers every reason in the world to buy your house, instead of excuses not to buy it. Remember they are looking at 15 other houses, and your house better look nicer than 15 other houses, or it will not sell.
How to photograph your house
Don’t photograph your house with a car in the driveway. It’s a no brainer, yet I see idiots all the time with a car in the driveway for the photo. What were they thinking? You’re selling a house, not an SUV. Photograph your house on a nice sunny day with a few clouds in the background and no cars! No toys, no trash cans, close the garage door, just house and lawn. Take the picture at the time of day when the sun is shining at the proper angle to light up the entire front of the house. This usually means not taking the picture when there may be deep shadows on the front. Get a decent camera and take several shots of the house and choose the one you like best. Then print several to give out to your selling agent. Don’t rely on your agent to take the picture, most of them just don’t have a clue. I see too many Real Estate Agent ads with cars in the driveway. I’ll bet half those cars belong to the idiot who took the picture. Taking the photos yourself means you have more to give to a second agent if the first one does not work out. Then you don’t have to go through getting pictures taken of your house all over again and chance that they are done wrong again.
How To Interview And Hire A Real Estate Agent
Ask to see the Real Estate Agent’s marketing plan in writing, and have them clearly spell out what they will do to sell your house. You want much more from them than just listing your house on MLS and waiting for results, you want a full scale media blitz. By using popular home buying sites like HomeGain, you are pitting local real estate agents against one another to compete for your business. The agent with the best marketing plan wins. Since agents know that there are other agents competing for your business, you’ll get some aggressive marketing plans presented to you.
Remember you are in competition with lots of other sellers in your neighborhood, and you need to get the most ad impressions for your house. Get them while they’re hot. You want your house listed in the newspaper, local real estate classifieds, the free real estate listings in grocery stores, regional real estate listings, and online real estate sites. You want to pick up every free real estate magazine in the grocery stores and free roadside newspaper boxes, and see your house listed. Make sure your house is advertised with color photos wherever possible, and make sure it’s outlined in your Real Estate Agent’s marketing contract that there will be color photos.
You also want at least one open house in your agent’s marketing plan. Many real estate agents hate open houses because they claim it rarely results in a sale, and merely wastes their time. But it sure can’t hurt to have at least one. Buyers love open houses and half the fight in selling your house is just getting buyers to come look at it. The open house can pass dozens of prospective buyers through your house in one day. Who knows, maybe a bidding war will start, maybe nothing at all. But in the business world, the rewards come to those who take the risks. If you want to think up excuses not to sell your house, then you won’t sell your house. But you do need to use every tool in your arsenal to sell the house. It’s like throwing out several giant fishing nets, and one of them will product the catch of the day.
You want a lock box on the front door to hold the keys so real estate agents can bring their clients by the house any time. You want the maximum number of buyers streaming through your house, without them bending to your schedule. You also want a sign front yard sign. Many buyers get in their car and scope out neighborhoods for houses with “For Sale” signs. Make sure all these tips are itemized in their marketing plan. If not, or they try to verbally tell you “don’t worry, we do this anyway”, tell them don’t worry you’ll choose another agent. It’s nothing for them to type up a single page itemizing everything they will do to sell your house. If they won’t at least do that for you, what will they do for you? Your worst fear is the listing agent just adds your house to the MLS directory and you don’t hear from them again.
Real estate agent scams to watch out for if you’re selling the house yourself
You have an ad in the paper. Real estate agents call you like crazy, saying they have a “Re-Lo”, (relocation buyer), coming in from out of town, who is desperate to buy your house, as they love what they saw in the ad. The agent wants to see your house so they can report back positive comments to their phantom client who will supposedly buy your house. But what really happens is the agent shows up and slaps an excursive contract in your face and “promises” they’ll get their client to buy if you sign their exclusive contract. My friends were selling their house and 5 agents pulled this trick on them. There’s no buyer waiting in the wings, these are just loser agents who can’t get a seller to list their house with them the honest way, so they pull this scam, which they all learned at the same seminar. They are playing to your heart strings, telling you just what you want to hear: “I can get this guy to buy your house”. But there are 2 realities. First, they lied about having a buyer waiting in the wings. Second, no one in can promise that someone else will buy your house. Here’s how you unravel the scam when they call you. When they call you, tell them this:
“I’m on to your scam, you’re the 6th real estate agent to pull this trick on me so far, which frankly I find unimaginative, and I’m not signing an exclusive contract with you, nor anyone else. Furthermore, you can’t even come over to see the house unless you have this phantom buyer with you. Don’t even think about showing up alone, the buyer does not need you to view the house for them, they want to see it themselves.”
“You’ll never get that high of an asking price for your house”
This is one of the top complaints I hear from sellers about their agent. You would think the agent knows more about property values, but often the appraisal sides with the seller. Agents who pull this trick seem to want you to list your house for less to get a quick sale. My sister wanted to list her house for $210,000 but 3 different agents told her “they’ll never get that in a million years.” That is their exact words. These are professionals who are supposed to know their neighborhoods and prices. One agent wanted to list the house for $195,000. But a better agent had an aggressive and professional marketing plan and took the listing at $210,000. Luckily for my sister, the appraisal came in slightly higher than $210,000, leaving the other real estate agents in the dust. My sister also knew houses were selling like hot cakes in their neighborhood, and sure enough, it sold in 10 days, for $205,000 before the marketing plan even had a chance to be enacted on. The question is, why didn’t the other real estate agents know this? They knew, alright. They were just after the quick sale.
They would have cost the seller $15,000 in losses.
You should ask your seller’s agent specifically to outline their Internet strategy so that the largest number of potential buyers sees your house. Increasingly savvy home buyers are using online real estate listings to search for houses and real estate agents, like the site HomeGain. The big name Real estate agents tend to draw more buyers than independent agencies, although you can still get excellent service from an independent real estate agent. The big companies have big budgets for more ads to showcase your house in, and you cannot beat the value of their brand name recognition.
Stay away from long term contracts!
Don’t sign long term exclusive agent contracts. Any decent agent should have your house sold in 90 days in a good market. Of course agents will complain to me about this. But if they really are as good as the picture they painted for you, they should have your house sold in no time. With a 90 day listing period, you put the pressure on your Real Estate Agent to do some work and sell your house. Many of our friends who sold houses report that their real estate agents aggressively tried to shove long term contracts down their throat. Don’t let this happen to you! For more detailed tips on choosing and working with real estate agents, read How To Choose A Good Real Estate Agent. You’ll also find a great list of the top home buyer complaints about real estate agents, and a list of the top Real Estate Agent “sales gimmicks” to watch out for.
Have a good Internet marketing plan to sell your home
Many people don’t realize that just by adding your home listing to a regional online classifieds, it could get picked up by the major real estate portals sites like HomeGain. Big real estate portals are constantly signing deals with MLSs and regional home listings to display their listings when users of the portals search for a house. If your house is not in any of these internet deals, you’ll lose out. This is why it’s very crucial to see your real estate agent’s internet marketing plan, and to know what sites your listing will appear on. Internet listings are crucial to get your house sold, especially to out of town buyers who are unfamiliar with your area, and your listing is the only one they know. Real estate portals sites like HomeGain are good if you live in a questionable area where picky buyers in your city don’t want yourhouse, but uninformed buyers from out of town don’t know any better.
The problem with condos and townhouses
Condos and townhouses don’t usually hold their value very well, especially here in Florida. The reason is when they are sold brand new by the builder, they charge a lot of money for them. Later on when you sell them, you find the market just is not there for them, so you sell at a big loss. If you can buy a condo cheap enough, it will make a great little positive cash flow source for you by renting it out. Also, some condos have insanely high maintenance fees, also known as HOA Dues, and it’s difficult to find people willing to pay a lot of money for maintenance fees, as the perception among many home buyers is that maintenance is a waste of their money.
Homeowners Association (HOA) dues!
HOA dues can make or break your condo sale. High maintenance fees will prevent people from even getting past the MLS printout to come look at your condo. In some communities, monthly dues are $150 or more. One condo owner I know watched his monthly dues increase from $135 to $165 in 4 years. When will it stop? Most buyers we polled have a mental block of $150 as the maximum payment they are willing to make for their maintenance fees. If the fees are any higher, most buyers won’t even consider the unit at all. I can think of a lot better things to do with $150 per month. You could have a great home listed but stingy buyers won’t even get past the MLS printout to view your condo if they see over $150 for monthly dues. One community in Coral Springs had a monthly fee of $280! So what type of buyers are willing to buy homes with maintenance fees? Most likely buyers that have done it before and don’t mind. If your monthly fees are high, you might get one or two nibbles, but your odds of selling your home at all greatly diminish.
Seller Financing: Don’t do it. Keep It Simple, Stupid!
Some books recommend that sellers offer to provide seller financing to buyers in order to assist them in getting approved on a lower primary mortgage. Seller financing supposedly will help you sell the house quicker. But I disagree with this strategy, because I think it just adds too much unnecessary complication and way too much risk to your life, and you don’t get all your money at once. You’re not in the lending business so would you want to lend money to the buyer? There is a huge risk that the buyer will not pay you back, so don’t create problems for yourself.
Just think how bad you would feel if you gave the buyer a $5000 discount on the house, and provided them with seller financing, then they defaulted. Good luck ever getting your money back, as the 1st mortgagor is ahead of you in line with a lien. It’s not worth it. The laws that “protect you” are a joke. Just because you sign a contract with the buyers does not mean you’ll ever collect any money from them. No lawyer will help you get your money back, because it’s too small to mess around with. Just ask any landlord who had to evict a tenant how difficult it was. In the court’s eyes, you’re the criminal and they seem to have no sympathy for your situation. So the best way to avoid these situations is by not getting on the Titanic in the first place. You have to ask yourself, would you lend a friend of yours $20,000? Then why lend it to a complete stranger who will most likely leave you high and dry?
Here’s a sobering thought. A buyer who cannot afford a down payment and asks for you to provide seller financing most likely has a credit score lower than 650, otherwise they would have no problem getting good financing on their terms from a real lender. According to my credit report from Equifax, 71% of the people with a credit score from 500-550 will default on their credit. 51% of buyers with a credit score of 550-600 will default on their credit. These odds are way too risky for you and me.