So far I’ve experienced all the clichés in selling my house:  I had my inner turmoil over how to price it; I've wished for my ten extra minutes in preparing for a last minute showing appointment; and I've already received a seriously low-ball offer; so why should I be surprised that I almost got caught in the shower by an agent and her buyer! 

Yes, the appointment that wasn't supposed to show up for an hour walked in downstairs while I was getting dressed after having just showered.  One fewer red light on the way over and it would have been really embarassing! 

This time the lesson is not for me as a seller's agent; it is reinforcement for something I already know when working as a buyer's agent:   Make showing appointments and then stick to my schedule or call to confirm any changes! 

I've said before that a real estate agent should sell their own house every so often so they get the invaluable experience of going through the transaction from the seller's point of view.   As a real estate professional, I know why I ask sellers to do certain things.  I give them advice that I hope they will follow because my experience has shown that these things, whatever they are, will help a property get sold more quickly and for top dollar. 

The first discussion is usually about price.  If you set the price too low, you can leave money on the table - which is not in the best interest of a seller. But if you set it too high, it can be equally as costly.  Experience and studies have show time and time again that overpriced properties sit on the market longer, which costs a seller thousands in carrying costs, and often times end up selling below market value as buyers lose interest in a property that is stigmatized with being on the market too long.

Next comes showing the property.  In this area, electronic lockboxes are used to allow buyer-agent access to the property throughout the day with advance notice.  This means a seller must be ready for a possible showing every single day.  The property must be ready before the sellers leave for work every day; and it must be ready on those days when all they want to do is relax, take their shoes off and throw them in the middle of the room, and read a good book.

When you live in a house, no matter how hard you try, it’s going to get “lived in.”  And inevitably, then the phone will ring – good news, a showing appointment!  Can they come in a half hour?   If you listen closely enough, five minutes before the showing of any owner-occupied property, you can hear the cries of desperation asking for the coveted “Ten More Minutes!”   

I said I was going to do it and I officially did.  I listed my house, a townhouse actually, and in doing so I had to decide on a price. 

I know my neighborhood and the market conditions here very well.  Of course I live here which helps a lot, but I also sell houses here so I stay on top of things. Before I listed it, I had a price in mind based on a thourough examination of recent sales and the current market conditions. 

I'm glad I had to do this because one of the benefits of selling my own house is that I get to experience the process from this side.  I know where I need to price this house to sell it, so I priced it accordingly.  But it was hard to ignore the properties listed by the dreamers who haven't yet caught on to the slowing market; or who's agents haven't told them; or who haven't been warned about the mistake of overpricing, which Susan Pruden points out as Selling Mistake #1:

Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.

In the end, I priced it where I had to because I want to sell, and not just list my house.  And of course, I trust the advice and experience of my REALTOR®. 

In addition to enhancements we already provide over a standard online marketing system, we have taken the first step in upgrading our online real estate services further with the ability to create an individual web site for every property we offer for sale.  Each of these individual web sites will be accessed by using the physical address of the property as its internet address, for example "www.123MainStreet.Com"! 

Not  only will there be value in the online advertising, but these individual web sites will be used to increase the exposure of offline advertising.  The internet address will be included in every advertising piece for the property.  Interested buyers can then sign on to see more pictures, view the virtual tour, get a more comprehensive description, and schedule a showing appointment - all in one place.

Sellers will be able to easily remember and then give out the web site address to people they know who want more information on their property for a potential buyer.  And buyers can show non-local friends and family the property they are thinking of buying!

To see an example of what these new web sites will look like, point your browser to: http://www.5017nw12thway.com.  Click around, check it out, and feel free to leave feedback to let me know what you like or don't about it. 

Yes!

Click Here for Part One - The buyers

Part two focuses on Market Exposure:

Market exposure is the key to obtaining the best offer, the combination of the best price and most favorable terms, when selling anything. The basic principals of supply and demand are universal and apply equally to the real estate market as to the stock market, the retail market, the automobile market, and even the fast food market. The basic idea is this: The more ready, willing, and able buyers one can generate for an item, the higher its price and the faster its sale.

Think of it this way. If someone had an item to sell, what marketing method would produce the highest and best offer: A method that displays the item to 10 people, or a method that display the items to 1,000 people?  The rules of supply and demand dictate the latter, which makes perfect sense.

It's the same way with real estate. Real estate brokers and associates use marketing techniques that expose a property to a far greater number of ready, willing, and able buyers than an unrepresented seller can. Is there a buyer from across town that never drives the neighborhood? Is there a buyer from upstate who is relocating and has called a local REALTOR®? How are the buyers from outside of the country found? Have the local REALTORS® been introduced to the property and made aware of its availability?  And what about the buyer who called a REALTOR® on a similar property but didn't buy that one....  and what about the buyer who.... and what about the buyer who.... ?  How much more would one of those buyers have been willing to pay?

Full market exposure in the real estate industry means finding more than just "a" buyer for a property, it means finding "the" buyer, the one who is willing to pay the most and with the most favorable terms. Is that buyer in the little pond that is stocked with buyers who are looking for a bargain, or is that buyer in the big pond that is stocked with buyers who are ready, willing, and able to buy?

The final thought on how using a REALTOR® will net sellers money more money than it will cost is in the experience and knowledge of the professional. How much does it cost a seller to pay their mortgage and taxes one additional month? How much difference is there in interest rates on a seller's new home with just a few weeks delay in locking in their rate? What is the cost of putting a property back on the market when a sale falls through? And in contract negotiation, how much does it cost sellers who agree to terms and conditions in a sales contract they would not have accepted except they didn't have the experience of seeing those terms in action?

The answer is - it could cost thousands of dollars.  Hire a REALTOR® and make more money. If you don't- you may never know just how much saving the commission has cost you.

Part 1 of 2

Yes!

On the surface, it seems almost impossible, right? How can a seller give a percentage of the price away to a third party and still receive more money at closing than they would if they keep it all to themselves?

It's a great question, with a perfectly logical answer.

Studies have consistently shown that sellers who use the services of a real estate professional to sell their home get an average of 14% to 18% more money for their property than sellers who sell direct. This means that even after paying the real estate fees, sellers who list their property with a real estate broker pocket more money than unrepresented sellers.

How can that be?

That's another great question, and it too has a logical answer that consists of two main elements: Buyers and Market Exposure.

Part one will focus on the first element, the Buyers:

Buyers do not typically pay out-of-pocket for real estate brokerage services because the seller pays the fees out of the listing commission. Buyers get their broker's expertise of the area, they get access to all of the homes listed for sale in the MLS, and they use the broker's computer and gasoline to find their new home. They get all this in one place, and they get it for "free." And since most homes in the area are listed with a broker, they get access to most everything available for sale. Why then do some buyers skip all of the listed properties, all of those choices and free services, to drive around and look for "By Owner" signs? To save the commission! They want a deal. They know that the seller is not paying a listing fee to a broker, so they shop the limited number of houses being sold by unrepresented sellers in search of a property where they can save money on commission. The problem is that it's the same commission the seller is trying to save. The only way the seller will actually pocket more money is if he convinces the buyer to pay the commission savings to him. But since the buyer shopped the unrepresented seller specifically to save that money, it's a tough negotiating position.

In normal markets, buyers who shop unrepresented sellers are usually one of three types: Investors, bargain hunters, and looky-loos. A seller is not likely to receive the highest and best price possible from that kind of buyer.

Part Two, Market Exposure

Working in real estate here in South Florida I hear that question a lot lately. Our market turned on a dime. One day we couldn't keep listings active more than a few days before receiving multiple offers, and the next day there wasn't a single showing. It's confusing a lot of sellers, and they're wondering Where did they go?

Here's what I think. It's not a single event, like Hurricane Wilma; or a single cause like an increase in interest rates. I think it's a combination of several things that when added together remove significant number of buyers from the market, such as:

1. Price - As you probably know, prices have risen pretty dramatically. Fewer buyers will be able to afford to buy or be willing to spend the money. Also, at these prices, there is little room buy, improve, and resell for a profit, so there are fewer "investors" buying properties.
2. Interest Rates - As interest rates go up, even a little, mortgage payments go up. Fewer buyers are willing or able to pay the increase in their monthly payment caused by an increase in mortgage interest rates.
3. The Media - One word: "Bubble." Some people who have been thinking about buying get cold feet when the media goes on an on about the real estate bubble.
4. Hurricanes - Americans have short memories, so the weather itself is not likely deter people from moving to Florida. People are still relocating to Florida by the hundreds of thousand a year. But the insurance companies don't forget. Rate hikes because of the storms have the same effect as interest rate increases. It increases the monthly housing expense and that turns off or disqualifies a portion of the buyers
5. Taxes - I talked about this in a previous blog entry. Taxes are preventing many local residents from moving from one property to another, keeping them out of the housing market.

So what's a seller to do? (Don't be too surprised by my answer!) Turn the sale of your property over to a qualified professional REALTOR®, price your property realistically, and follow your REALTOR®'s recommendations for maximizing the curb appeal and showing quality. There is a lot of competition for buyers right now, so give them a reason to choose your property over the others.