by Bob Schwartz, CRS,GRI, real estate broker
Copyright � 2000/2001 This material is subject to copyright and any unauthorized use, copying or mirroring is prohibited.
In my 27+ years of residential real estate career, I�ve seen homeowners make mistakes that in hindsight have cost them thousands! In my opinion, even in today's hot market and in this neighborhood, huge potential profits have been lost through mis-steps made by the sellers. This report is to enlighten future sellers and hopefully increase overall neighborhood home appreciation.
This real estate report is divided into two parts. The first part is comprised of statements/questions than most homeowners mis-understand concerning the sale of residential real estate.
The second part of the real estate report, are my opinions/answers to the questions posed in the first part.
#1. Hire an out-of-area real estate agent. When buying at a new housing development, almost always the salesperson will imply that if you have to sell your current home, they will work a �special deal,� i.e., insure you�re at the top of their selection list, throw in some builder upgrades, or even offer you a lower commission, if you list with their affiliated firm. See answer A.
#2. Sell the home yourself. Sounds good; what could be so difficult? You�ve had garage sale experience, so why not save the commission and do it yourself? See answer B.
#3. Use a �discount� brokerage. Let�s get that home in the MLS and still save up to 50%! See answer C.
#4. Use a �friend in the business� or relative who just got their real estate license. See answer D.
#5. Use the agent that claims to sell a �house-a-day� and has their full color picture on buses and billboards. To spend this kind of money on advertising they must be the right choice! See answer E.
#6. Call a major real estate firm in the area to have an agent come and evaluate your home. It�s a big local firm; must be a conservative way to insure the best possible price! See answer F.
#7. Interview a few agents and select the one who projects the highest price or lowest commission rate! Since all real estate agents are the same, why not hire the one that shows up with the most expensive car? See answer G.
#8. Believe that putting your listing on the internet, like hundreds of thousands of other listings, will really attract some capable, ready buyers. See answer H.
Copyright � 2000/2001 This material is subject to copyright and any unauthorized use, copying or mirroring is prohibited.
ANSWERS
A. No matter what anyone tells you, residential real estate is a VERY localized market! This inevitability equates to a very simple truth: Local firms sell more properties within close proximity to their offices than out of area homes.
Plus, there is a BIG difference between looking at sold prices on a computer print-out and actually having seen the prior comparable sales. This in-depth knowledge of comparable sales can only be provided by a local area specialist. It is invaluable in proper pricing and may insure that the appraiser will concur with the actual contracted sales price.
Lastly, if a San Carlos property is listed by a Rancho Bernardo office, how often will it be advertised? Will the motivation be for a quick sale since it likely will be the office�s only listing in the area? Will the seller get any benefit from the majority of potential buyer calls/traffic this office may generate for a home in the Rancho Bernando area? Also, see �C� below.
B. Even if you had the time, knowledge, and expertise, chances of coming out with more cash than with a traditional real estate firm are slim. The vast majority of For Sale By Owners are doing so for one simple reason. . . TO SAVE THE BROKER�S COMMISSION! On the buyers side, the buyers who are looking for FSBO�s are typically speculators and others whose main motivation is to find a �steal� and get a reduced price because the seller is NOT using a Realtor! >From national studies, it has been shown the typical FSBO buyer DISCOUNTS the seller�s asking price by eight percent! With BOTH buyer & seller trying to save a commission fee, this type of sale is very hard to accomplish. Typically, over 90% of all FSBO�s end up listing their properties. Occasionally, some will pay a lower commission to the buyer�s broker who brings them an offer. Many times, the seller in this situation does not realize that the agent they are paying is representing the BUYER only and they are NOT represented even though they are paying the agent!
C. The simplistic, though accurate, answer here is �You get what you pay for!� The answers to A & B above also apply here! Proper pricing, staging, and marketing are keys to achieving top dollar. Advice on proper procedure for drafting counter-offers, negotiating tactics, and escrow supervision, are all vital for insuring that the sale actually closes and no key details were omitted that could otherwise come back during or after escrow, to sidetrack the sale, or possibly end up years later in a costly legal action.
Does a cut-rate commission really provide all the same services? Are some key services omitted or is the quality of the services the same as that of a name-brand full-service real estate practitioner? Many times I�ve seen homeowners get a discounted commission and in hind-sight see that their property actually sold for thousands below the potential that could have been obtained.
Beware: Most professional real estate agents know all the 'discounters.' Knowing there will be little or no representation for the seller, the Buyer's agent could end up doing work for both the buyer and seller for half the pay. They value their time too much to even show these properties! In California, the standard offer is also the contract and escrow instruction. A mistake here could be VERY costly! Once the offer is signed, usually only agreement on both sides can change any of the terms. A lack of knowledge ("I only wanted to pay a limited amount of repairs,") won't cut it! There are more pitfalls such as language regarding the loan contingency. If the Seller finds out just days prior to the close, that the buyer could not qualify for the loan, there goes approx. 45 days of lost marketing and guess what? In most such cases the Buyer would be entitled to a full refund of their deposit!
Yes, save a little commission, and stand to lose many times that savings in loss of potential market price and/or, market time!
D. If you�re not happy with your friend�s or relative�s performance how do you fire them? The real bottom line is that with one of your life�s largest monetary transactions you really should get the best possible representation!
E. All �mega-agents� are like small real estate offices. They have a group of other agents who work for them. The sales activity is credited to the �mega-agent� and not the individual agents in the group. Many agents in this group do not have the experience or knowledge of the �figure-head� agent. Typically, after the initial listing appointment, the client ends up dealing with underlings for the balance of the transaction.
The negative to this approach is the loss of personal/individualized attention and expertise applied to each sale! To many �insiders� this mass-production approach is thought of as a system for generating a large number of sales, while sacrificing the individual care many astute clients consider vital.
Think about it! California, with a myriad of real estate laws, makes any real estate sale the most complex of any in the U.S. Myself and most top producers, only handle a small number of real estate transactions at one time. It is just common sense that to provide the highest form of individualized expertise to each client, one individual can only handle a handful of clients at any one time.
For potential sellers, whom do you think is more concerned about achieving the maximum possible price: a �mega-agent� who just considers your sale number 131, or a local neighborhood Realtor who has been active in the area for years and considers each sale as having a direct impact on their own neighborhood property?
I have two assistants that help me but I personally handle all aspects of every transaction. Yes, from the start to the finish, my clients know that my 27 plus years of real estate experience is being focused on their needs. Whether buying or selling, they are certain to get the best possible price within their time frame, and added value of in individualized attention with less worry.
So, if you would like to end up as one of the real estate sales statistics the �mega-agents� boost of completing every few days, or embrace the mass-sales concept, the �mega-agent� concept may be the way to go. Less potential price, less individual attention, less expertise!
F. This is a very frequent mistake. The truth of the matter is that it is always the individual agent you select that will determine the final outcome of your real estate experience! While major offices offer the support top producers seek, but they also offer the training necessary for the newer agent just entering the business.
The top real estate producers rarely handle individual office calls. Newer agents take �floor time� and answer office calls. Just calling in to a real estate office to have an agent work with you will often assure you of a less experienced individual.
G. Perhaps the biggest mistake potential homeowners make! Every year, in every neighborhood, I see a number of huge price reductions. Many of these, in my opinion, where due to the fact that these homeowners where more motivated by �pie-in-the-sky� price projections than common logic!
Whether motivated by inexperience or lack of scruples, projecting a unrealistic high sales price may very well guarantee the listing. Considering that the listing is a contract for a specific time period, your property is �tied-up� for this period. With little or no activity on an overpriced property, as time slips by, the seller is usually forced to reduce the price. With the vital initial marketing sidetracked by the improper pricing, many sellers have to reduce the price below what it would have been with a proper marketing approach.
Overpricing can turn your home into what I refer to as a �stepping stone home.� This is where your overpriced property is shown many times, not with the intent to sell it, but to show the potential neighborhood buyer, that compared to your home, another area property is a better buy. While many �step-through� your home, they will purchase one of the realistically priced neighborhood homes competing with yours.
As to hiring any agent, there are vast differences. Do you know the differences between an agent and a broker? Knowledge and experience! California has very different licensing requirements for agents and brokers.
Do you know what the C.R.S. after a Realtor�s name means? Certified Residential Specialist! This is the highest national professional residential designation! Knowledge, successful completion of specialized courses, years in residential real estate and the documentation of over 150 closed transactions are all requirements required for nomination for this prestigious designation. If you have a choice, who would you like to represent your interests?
H. All M.L.S. listings are placed on the Internet. Here in San Diego, at any time period, there are thousands of home listings. So, the question a homeowner should ask is NOT if their home will be placed on the internet, but how their home will be made to stand out from the many other listings!
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My multi-award inning web site www.brokerforyou.com
� I receive appx. 5,000 visits (not 'hits' but actual unique visitors) per mouth (most agents get about 50)
� Learn about my unique Easy Exit listing guarantee! Why tie up your residential property
for many months?
� How to have your home on �San Diego�s Best Buys�
� How your property can have its own full web page and individual address with multiple color photographs, with cards to tell interested parties, co-workers, and others to visit the site and view features of the home
� Ask about the �MILLENNIUM DISK.� This is a multi-media Internet presentation (on a 3.5� floppy disk) of my clients properties and other selected agents best buys. This presentation is utilized by a very select group of San Diego�s top Realtors! Its truly innovative- Ask me how it reaches unlimited potential buyers.
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� If you are selling a condominium in California, request my free money-saving report Now!
Well
there you have it. Eight steps to sell your home for LESS! I hope that if you
are still reading this, you have found this information useful. Being
a Certified Residential Specialist, I�m always happy to refer both buyers and
sellers to other Certified Residential Specialists throughout the country.
Please feel free to contact me for information on a C.R.S. in any area you are
considering. - This is a FREE service to my website visitors.
Acting on the correct information and selecting the best qualified Realtor to represent your interests is the real key to achieving top dollar for your property within your time frame.
Happy Marketing
Cell: 619-300-8819 Home office: 619-286-5604
Postal address: Bob Schwartz c/o Brokerforyou 7966 Laurelridge Road San Diego, CA 92120
Copyright � 2005 This material is subject to copyright and any unauthorized use, copying or mirroring is prohibited.