Misconceptions about Listing Agents in Real Estate Misconceptions About The Sale Process And What A Listing Agent Does & Doesn’t Do When it comes to listing a home for sale, there are some misconceptions about the sale process and what a listing agent does and doesn’t do to facilitate getting the property to an act of sale. MISCONCEPTION #1: The Listing Agent “Sells” The House No agent, no matter how good they are, can “sell” a house to a buyer. No buyer is going to let any agent “sell” them an item costing hundreds of thousands of dollars unless the buyer sees value in the property and therefore wants to buy it. In truth, the house must “sell” the house. This is because once a buyer sees the property, the buyer will probably get into a “comparison shopping” mode comparing the seller’s home with all the other homes the buyer has seen and then make the decision to either buy or not buy based on those comparisons. The price the buyer will pay will also be based on the comparison of the seller’s home to the other homes (i.e., the “competition”) on the market. The seller’s home must stand on its own! I will offer suggestions that will make your home as attractive as possible to a prospective buyer. MISCONCEPTION #2: The Agent Determines The Value Of The Property Although an agent may “interpret” the value of the seller’s home based on current market data, the agent by no means determines the value of the property. In truth, the value of the property is set by two people - the buyer and the lender’s appraiser. The first person to set the value of the property is the buyer. What is the buyer willing to pay for the house? Again, this price is usually based on the buyer’s comparison of the seller’s home to the other homes on the market. But, let’s say a buyer is willing to pay much more than is indicated by the current market data (i.e., recent sales of comparable property). This is where the lender’s appraiser steps in to give his opinion of value of the seller’s home. The appraiser is there to help ensure that the lender (who is the actual client of the appraiser even though the buyer pays for the appraisal) does not lend too much money on the house. Think about it – if you were lending your own money as a mortgage on a piece of property wouldn’t you want to make sure that if the borrower defaulted on your mortgage that you could sell the property for enough money to recover the amount you lent the buyer? So, even though a buyer may be willing to pay X for a house, the appraiser may say it’s only worth Y and that limits the value of a seller’s home. MISCONCEPTION #3: The Agent’s Main Job Is To Get A Good Offer On The Property Many people think that an agent’s primary job is to get a good offer on the property. This is not correct. The agent’s main job is to get the seller to an act of sale - not to just get a good offer on the house. If you look at the sale process like a baseball game, then getting a good offer is only like getting to first base. The real goal is to get the seller to home plate – an act of sale! Getting to 2nd base is getting through the property inspection phase of the process. Getting to 3rd base is getting through all the other issues related to the sale process such as helping ensure the buyer gets the loan, dealing with repairs, dealing with tenants, etc… A good agent will “bulletproof” the transaction so as to dramatically increase the chances of the seller not only going “under contract” but also going to an act of sale! I will offer suggestions and strategies that will significantly increase our chances of getting to a closing! MISCONCEPTION #4: The Highest Offer Is The Best Offer & An “All Cash” Offer Trumps All! The best offer is not always the “highest” offer or even the “all cash” offer. More often than we’d like, the highest offer or the “all cash” offer falls through. Again, a good agent is able to offer suggestions that will help “bulletproof” the transaction to dramatically increase the chances of going to a closing. It’s important to remember that if that initially accepted offer falls apart, then the seller’s property could now appear tarnished or stigmatized to some degree to subsequent buyers. They may feel that they no longer have to submit that “highest & best” offer. Maybe they can now offer something less. They may ask themselves “What’s wrong with that house? Why didn’t the first buyer want it?” The seller’s home may no longer be the shiniest apple in the barrel – it may now have a little bruising on it! There are contractual clauses I can suggest and other services that I can provide to bulletproof that initial offer to help make it work and get us to home plate – the act of sale! MISCONCEPTION #5: There Is No Problem With Reducing The List Price Later On! Studies by the National Association of Realtors coupled with our own experience over the years has shown clearly that a seller has the best chance of getting the highest offer on his home during the first week or two of being on the market. After that the seller’s home begins to move towards the bottom of the home apple barrel and the home isn’t quite as shiny as it once was. In a balanced market or in a seller’s (i.e., strong) market the market will speak to the seller fairly quickly in the form of inquiries, showings and/or offers or lack of offers. In a buyer’s (i.e., soft) market it may take a little longer. However, in any event the average days on the market statistic for the seller’s neighborhood is a very strong barometer for how well the seller’s home was positioned when it first came on the market. Pricing too high initially and then later reducing the list price will in most cases result in the property taking longer to sell with the seller getting a lower sale price! The importance of pricing the property correctly at the beginning cannot be overstated! This fact has been proven time and again! I will provide market data information that will assist you in making an informed decision regarding the initial list price you establish for your property – one that will help ensure that you receive the most money for your home! Terez Harris NOLA Real Estate Group - Your Source for FOR SALE BY OWNER Tips. Our goal is to provide you with all the information you will need to sell BY OWNER! If you do decide to use a Realtor, we hope that you will consider us!
Posted on: Sun, 07 Sep 2014 20:06:41 +0000
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