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 These days many home owners are attracted to the idea of
selling their homes themselves and saving the 4% to 6% typically charged
by Brokers to sell their house for them. The idea that homeowners can
sell their own homes is not new, and with the Internet, homeowners have
access to a wide variety of online marketing tools to help them sell at
a better price.
Despite the advances in
tools available to homeowners to sell their own homes, Brokers still
eventually sell the vast majority of homes originally listed for sale by
owners. This section of The Home Investor looks at why this is and
considers whether homeowners should go to a broker directly instead of
trying to sell privately.
The price a home can
command on the open market is actually a function of the number of
qualified buyers that see the home; the more buyers the higher the
potential price the home can command.
For example, suppose there
are 1000 buyers looking to buy in the market right now in your town. Of
these 1000, 20% are looking in your price range. If only ten percent of
these 200 are looking at for-sale-by owner properties, there are
potentially twenty buyers looking at your property. To attract the
attention of these twenty buyers requires heavy advertising because they
are also looking at homes presented by brokers. If one out of the twenty
buyers decides to place an offer, the buyer will want to get the home at
a discount because there is no brokerage fee to pay on the sale.
However, brokers can bring 200 buyers to see the home and, using the
same ratios, have twenty offers to choose from to get the best possible
price.
Before considering whether
or not to sell privately, it would benefit most homeowners to consider
the pros and cons of using a professional broker. In considering the
pros and cons, remember to weigh the cost of time! Many Brokers provide
a wide array of services to their clients beyond selling the property in
question. For example, a broker will typically provide the following
services not available to the private individual selling their own home:
-
Listing
the property on a Multiple Listing Service
-
Pre-qualifying
buyers
-
Independently
negotiating the deal
-
Assisting
buyers in selling their own property
Multiple Listing Service
The Multiple
Listing Service (MLS) is a huge database of properties offered for sale
through brokers. Real Estate Brokers use this database to research
property values and to locate homes suitable for buyers looking for a
new home. Access to this database is what draws many buyers to Brokers
to help locate their new home. In addition, many buyers like the ability
to work through a single professional to setup appointments to view
homes; a buyer can make one phone call and their broker can setup all
their appointments for them.
Because so many buyers
work through brokers, professional Agents can frequently sell homes at a
higher price than a homeowner selling on their own; brokers are already
working with a steady supply of buyers looking for homes.
Trying to sell a home without inclusion in
the local Multiple Listing Service cuts out a large percentage of the
buyers in the market. (It is also worth noting that brokers pay each
other to sell their listings; when a broker agrees to sell a home for a
reduced commission, they have very little to offer other brokers and so
these houses are not promoted as heavily by other brokers to their
buyers. Seller Tip: don’t skimp on commissions).
Pre-qualifying Buyers
As a professional in the
Real Estate field, brokers are able to ask buyers questions about their
financial background and means to purchase a home. Buyers feel
comfortable answering these questions with a broker (and homeowners often do
not want to be in the position of having to ask such personal questions
of prospective buyers). Because brokers spend their time with buyers,
they want to spend their time wisely, which means typically only
spending time with buyers ready, willing and able to buy now. This is
another reason so many homes are sold through brokers.
Negotiating The Deal
The broker plays a key
role as the intermediary between buyer and seller. The broker helps to
arrive at a compromise deal that meets the needs of both seller and
buyer, with the best deals being where both parties feel they have
succeeded in getting a good deal.
As a seller, it is
extremely difficult for a homeowner to negotiate a deal with a buyer
without getting emotionally involved. A professional broker is a paid
negotiator; they have typically negotiated many such contracts and can
easily come up with suggestions on compromises because they have no
emotional involvement in the process. (Seller Tip: A
skilled negotiator can save a seller thousands of dollars).
Assisting Buyers In Selling
Where a buyer
has a home to sell in order to finance the purchase of a new home, the
professional broker can immediately step in and help the buyer sell
their own home. Before making an offer on a home, a broker can take a
listing agreement with a buyer to show the seller that the buyer is
serious about selling their home. This approach helps the seller to
realize the offer is credible.
Time Is Money
Beyond these exclusive
services, Brokers will typically take much of the legwork out of selling
a home:
-
Providing
a professional and independent assessment of what needs to be done
to the home to get the best price on the market
-
Arranging
professional photographs of the home’s exterior and interior
-
Creating
professional web-pages for the property
-
Creating
professional marketing flyers
-
Writing
advertising copy to attract buyers
-
Advertising
the home online and in papers
-
Sending
out direct marketing materials on the property
-
Arranging
yard signs and directional signs
-
Setting
appointments to show the property
-
Marketing
the home to other brokers in the area
-
Running
Open House showings of the home
-
Helping
answer buyer questions regarding the home
-
Being
on-call for buyers 24x7 through messaging/pager/voice mail
-
Bringing
buyers around the home
-
Arranging
for a home warranty program
-
Obtaining
copies of the deeds from the registry
-
Obtaining
copies of the Assessors records for the property
-
Arranging
for home inspections
-
Attending
home inspections
-
Helping
to resolve issues as they may arise prior to closing
-
Attending
the final walk-through
-
Attending
the closing to help ensure everything runs smoothly
All of these factors can make a substantial difference in
selling a home at a higher price.
In addition, your local Home Investor Specialist will provide advice
and guidance on fixing up a home to sell so as to generate the fastest
sale, highest price and greatest profit!
What brokers may not tell you
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