1. Why haven’t I been able to sell my house?
Due to my high success rate, many expired listing sellers approach me with the question: “Why can’t I sell my home?” There’s no definite answer but I can tell you why it is that I’m able to sell my listings. Whether or not a house can be sold depends on three main factors; 1) Price, 2) Condition of the property, 3) Real Estate Agent. The most common mistake made by sellers is confusing the sale of a property with the sale of their home. This is because that personalized home has been molded to their taste and holds many precious memories. To the seller the home is priceless and worth every penny of the listing price whereas to the buyer it is merely a property not yet worthy of the title “home.” Only from a strictly objective point of view will a seller accurately evaluate the value of the property in the current market. When looking at a house I consider the community market, the conditions and prices of homes pending or recently sold in the same community. This is important for getting a grasp for the value of the property and its competition especially when the market is flooded with listings. Out of 10 listed properties it is likely that only one home will be sold. A seller concerned only with the amount they want for the property and not where they stand in comparison to other properties will never sell their home. To ensure a sale the property must stand above the competition offered at the same price so if there is only one buyer who desires a home in that community, yours will be the best pick.
2. Is it a good idea to start your asking price a bit above the market price and drop it if we have problems selling it?
This is definitely not a good idea. Statistics have shown that the most reasonably priced properties are the ones that sell within the first two weeks after going into escrow. Agents typically check the most recent listings first and those at a fair price will sell first. The longer you wait to lower your asking price the more your chances of selling will decline. The people looking at the property will not be serious buyers but browsers. Homes just listed are in the golden period when there’s the highest potential for sale at full price. There are two main reasons why a seller prices their property higher than advised. The first is that the seller doesn’t believe their agent priced the property at market value. The second is because they hope for the buyer who wants the property enough to pay more. It is crucial to find an experienced real estate agent familiar with your area. When asked to make an estimate in an area I’m unfamiliar with I’m reluctant to do so because another agent would be better. Different communities have different model houses with different views and different school districts. These homes would need to be priced differently. For the communities I work with on a regular basis, I already know the floor plans and whether or not the houses are better than competing ones. I also possess knowledge of the details of each sale and the pros and cons of each property. The advantage of having the right agent is to get the right pricing in order to avoid costs from an unsold house.
3. Do you know how much money are you losing if your house is unable to sell?
There are many sellers who believe that it isn’t important to not sell their home immediately and that they can take their time. They don’t think it’s a big deal because they aren’t losing anything. From my perspective this is the wrong mentality. Until you sell your home you’re still responsible for property taxes, home owner association fees, and maintenance fees. Property tax can range from $600 to $700 a month. A seller is losing money particularly in the case of a vacant house. A $500,000 house can rent for up to $2,300 per month. In the current real estate market where prices are dropping constantly, your property could lose anywhere from $3,000 to $6,000 a month which means you are losing an estimated total of more than $7,000 every month. A house that is unsold for three months costs the owner $21,000. Most sellers want to sell their home for $20-$30,000 more than the suggested price. A better route would be list the property at the suggested price and sell it as soon as possible. It’s called opportunity cost. If you wait until a few months later to lower the cost, you’ll still be asking above market value and unable to sell your home. It’s a vicious cycle.
4. What are the standard ways of finding out my property’s value?
The two standard ways of discovering a property’s value are C.M.A. (comparative market analysis) estimates and appraisals. C.M.A. estimate is the process of estimating a property’s value based off of comparable sales in the same or similar neighborhoods. This type of estimate is done by an agent and can include an on site evaluation. An appraisal is similar to the C.M.A. but instead it is done by a certified appraiser for a fee of $200 to $300. Appraisers also use comparative techniques to analyze a property but they include a set of guidelines that affect a property’s value such as a certain value for every square-foot and added values for certain types of upgrades.
5. What determines how much a home is worth?
A home is ultimately worth the price that is paid for it. Aside from that amount, all other values are really just an estimate. Depending on the conditions of the market such as the supply and demand, the amount buyers are willing to pay for a property varies. Given the market’s conditions, when a buyer and seller can agree on a price for the property, that price would represent the property’s worth. An estimated value can be attained through an appraisal or a comparative market analysis. A hired professional makes an appraisal based off of comparable sales, the condition of the property, and several other factors. A comparative market analysis is pretty much less formal appraisal your agent can do for you by comparing to recently sold properties in the same and nearby neighborhoods and checking the prices of recently listed properties.
6. Is there anything important I need to know about estimates or appraisals?
Time is always of the essence with property values. It does not matter whether your property’s value is appraised or estimated, it will not hold forever. Because the market is constantly fluctuating, your property’s value will not remain constant. A property’s value is highly dependant on supply and demand. It is also important to know that the agent giving you the highest estimate is not necessarily the most qualified agent to sell your property. Everyone would like to sell their property for more but some agents will give higher estimates as a form of “buying” listings. You should choose an agent you know that is experienced and reliable and then have that agent make an estimate for you knowing that you can trust them.
7. What is the difference between C.M.A. estimates and appraisals?
Normally a seller would request an agent to do a C.M.A. estimate for their property. A seller would want to know what an agent thinks their property is worth based on the agent’s experience and familiarity with the area and the current market. A buyer, on the other hand, usually hires a certified appraiser because it is requested for by the bank. When a buyer applies for a loan to purchase a home, the bank will ask the buyer to get the property appraised. This is because the bank will only loan out an amount consistent with what the property is appraised to. Both methods are accurate but sometimes the value estimated by an agent and appraiser can differ greatly. That is because an agent based their estimates off of what they think the property can sell for based on the market’s current status. An appraiser appraises a property based off of previous sales without taking the market’s direction into consideration. Depending on the market, an appraised value can either be a good amount higher or lower than an agent’s estimate.
8. What are the most important factors when selling a house?
Three factors that are crucial to selling a house are price, condition, and exposure. The first step is to price your property correctly. In order to set a fair market price, you’ll want to use comparative sales information and discuss with your agent the conditions of the market. After you’ve decided on a price that can attract buyers, you’ll want to make sure your property is in selling condition. It is important to repair any obvious cosmetic defects that could turn away buyers. When that is done, make sure your property is given an adequate amount of exposure. Even if you have a fair asking price and a nice looking property, you won’t attract any buyers if your property is not exposed. Your agent should have various methods of advertising your home (flyers, newspapers, magazines, etc.).
9. Why would I need an agent to help me sell a home?
It is always possible to put your home up for sale by owner. The problem with doing so is that most people do not have the required knowledge, expertise, and understanding of real estate in order to successfully get through the transaction process. A large portion of failed escrows result from sellers who are unable to close the deal because they cannot handle the problems that occurred. An agent can maximize your our chances of closing a deal by helping you perform all the necessary paperwork correctly and anticipating any problems that might arise, and making sure the buyer does not get too much leverage to back out of a deal. In addition an experienced agent has connections to resources you normally wouldn’t have and they will already have a standardized form of advertisement techniques which increases your properties degree of exposure.
10. What is the best way to find a suitable real estate agent?
You can begin by asking people you know who have recently sold or purchased a home to refer you. Also try looking around your local area for any advertisements of agents who cover your area. After you’ve generated a list of names, interview each of these agents and take some time to decide who is most suitable for you. It is important that your agent has a good reputation and that their area of expertise is the one you are interested in. An agent who has actively concentrated in one area will typically know specific details of that area and be aware of every little change that occurs. Hiring an agent with that type of knowledge and experience provides you with the greatest opportunity to complete a satisfying transaction
11. Will the amount I sell my house for be similar regardless of which agent I hire?
Hiring different agents will get you different outcomes. This is not only referring to the purchase price of your home but also your degree of satisfaction, the effectiveness of the transaction process, and many other factors. Every agent has their own way of doing things. One agent might have a vast number of advertisement techniques such as posting your house in various magazines, newspapers, and web sites while another agent might think that posting your property on MLS is adequate. Your property’s exposure will differ significantly depending on which one of these agents you choose. Some agents are also more experienced or familiar with the transaction process than others. An inexperienced agent could end up making a mistake that results in failed escrow. This would not only waste your time but would affect you greatly if the sale of your house was urgent. Closing a deal does not depend on your abilities or just your property’s, the agent you choose is extremely important.
12. If I am unhappy with my listing agent can I terminate the contract?
If it states in the contract that you can cancel if you are not satisfied then you can. Otherwise your normally cannot unless you can prove an agent’s breach of duty. This means that the agent is now doing the necessary standardized steps required to sell your home. Most established companies, however, give their clients the right to back out of a contract if they have a fairly reasonable basis for doing so.
13. Do I have to disclose information about my home?
Disclosure can protect you from facing a lawsuit. It is required in most provinces for sellers to fill out a form disclosing material facts about their homes. Material facts are details about a property’s condition, legal status, and various other components. A few examples of material facts are mold or mildew in the home, damages in the wood from insects such as termites, leaks in the roof, etc. If the necessary material facts are not disclosed, an agent can also be held accountable especially if they had prior knowledge of it.
14. Who gets the furnishings when a property is sold?
It depends on the type of furnishings. Any fixtures or personal property that is permanently attached to a property such as built-in furnishings usually stay with the property unless specified otherwise in the sales contract. Anything that is not permanently attached is negotiable. Example of such items would include appliances such as washers, dryers, refrigerators, etc.
15. Will I be able to sell my property if I Have an Average Asking Price?
Your current asking price given the property’s conditions places your property at an average to a bit above average standing in terms of value, however, in the current real estate market only the sellers with the top one or two valued properties will actually sell their property. Even though your property’s home value is at an average standing, it still won’t sell. It is possible that after all the highest valued properties sell, your property will have a chance but that is highly unlikely because new properties are constantly entering the real estate market. Because people are aware of our declining real estate market, they might put an even lower asking price on their property then your previous competition. In order to sell your property you must beat almost all your competition at any given point in time. If you are unable to sell your property now and new listings enter the real estate market, your situation won’t get any better, you still have to beat out your competition and if you are planning to sell at the same price as before, it can put your property in an even worse position since the new listings will most likely have greater values than the top properties from before. You will end having to price your property at an even lower price then the asking price I recommended in the beginning.