10 Things Every Seller Should Know

By: Randy McCreith

1. Think Like A Buyer!
2. Understanding the Market
3. Presentation is Powerful; Part 1: Marketing
4. Presentation is Powerful; Part 2: Advertising
5. Presentation is Powerful; Part 3: Home Staging
6. Price, Price, Price
7. Patience is a Necessary Virtue
8. Gambling with Your Biggest Investment
9. Commissions Part 1: Who Gets What?
10. Commissions Part 2: Are Realtors® Paid Too Much?

1. Think Like A Buyer!

In any kind of sales, products do not sell just because someone had a great idea, or because someone wants to make a lot of money. Products sell because someone figured out what buyers want; how to provide it, package it, and present it. Prices change frequently because someone is keeping tabs on what buyers are willing to pay. They adjust to the competition so that their product is selected and sold. Selling your home is really no different. When considering a sale, ask yourself these questions:

• Why did you buy your house? This is likely the same reason others will buy it. Make the most of that!

• What bothered (or bothers) you about your house? It could also be an obstacle for buyers. Can you remedy the issue (i.e. cosmetic fixes) or is it something unavoidable (i.e. easements, gravel road, or the way the home sits on the lot)? If it is the former, consider improving it prior to listing (see the sections entitled "Presentation is Powerful," parts 1 & 3).

• How do you judge other homes when you go to Open Houses or tour homes with your Realtor®? Buyers will judge yours similarly.Can you anticipate some of the objections? How can they be minimized?

• Buyers today are savvy! They have more information, literally at their fingertips, than anytime in history. They know true value and are unlikely to be fooled by any seller. Do you know as much as they do?

We can help. We work with all kinds of buyers and have for years. We know how they think and react, and what they want; let us give you the value of our experience!

2. Understanding the Market

We live in a market economy. The real estate marketplace is not fictitious nor a fabrication. It is an indisputable and powerful economic force with which to contend. It is more science than art; more objective than subjective. If you understand it, you can prosper. If you do not, it has the proverbial upper hand on you. Uneducated decisions inevitably cost more than just money; in a constantly changing market, lost opportunity and wasted time can have far greater consequences.

Realtors® live everyday in this particular marketplace; it is our job to understand the market we work in. Trust us to help give you informed advice. It is in both our best interests to get your property sold for the best price in the shortest amount of time (see section 10: Commissions Part 2).

3. Presentation is Powerful

Can a hole-in-the-wall diner with a world-class chef have excellent food? Of course. But… would you choose to spend a special or formal occasion there? It goes without saying that a restaurant combining great food with an elegant atmosphere would be the likely choice. In the following three sections, I'll highlight the importance of presentation when selling a home.

Part 1: Marketing

There is a strong subjective element to selling a property. Effective marketing floodlights the best about your property, meets your buyers at their special occasion moment, and forms an attraction to their dreams and desires. Without ignoring the mind, effective marketing appeals to a person’s emotions. Psychologically, people tend to ‘buy emotionally' and 'justify the purchase rationally’. There are many ways to promote your home to the purchasing public and to express its features in light of the benefits to a buyer.

We believe in the use of smart marketing, and are always developing our skills to improve on our presentation. We believe in using cutting-edge products that deliver the highest quality marketing materials while imparting a clean and classy representation of your home to the buyers considering it.

4. Presentation is Powerful; Part 2: Advertising

Advertising is about exposure. It's about targeting the right buyers; the ones which might be best suited to your property. It's about exposing your property to the widest audience. Though Realtors® cannot manufacture buyers, we can, and in fact it is our job, to proactively go and find them.

Much of the advertising in the real estate industry is nothing more than a cloak for advertising the agent. Other times, advertising is produced in excess and without regard to effectiveness as a gimmick for overwhelming you with information and obtaining your listing. We believe in making our advertising targeted and effective for you.

We look forward to showing you the trends and explaining why some of it is effective and some of it is not.

5. Presentation is Powerful; Part 3: Home Staging

Often ‘flipping’ a house (upgrading a fixer) merely involves cosmetic updates combined with a better presentation. People make a lot of money this way! The same principle applies when selling, even to high-end homes.

• If you stage your home, you are more likely to get better first impressions and reactions from showings. This may mean a quicker and better offer for you.

• If you de-clutter, your home will be more sale-able and its feel will be enhanced. You are making the move anyway, so consider packing and storing items that won't effect your ability to function as usual (i.e. decorations, excess furniture, appliances not commonly used, etc) during the time your home is on the market.

• If you de-personalize (take down family photos, personal keepsakes, etc), buyers will have an easier time picturing themselves living there.

• If you complete projects and make repairs (that will come up during negotiations in a home inspection anyway), you will likely get a better price and save money (in concessions & repairs) later in negotiations.

• View your home with your 5 senses turned on to ‘sensitive’; potentially you could eliminate objections or issues before they arise.

Keep in mind, all work is not created equal. We can provide you with resources and help you choose which issues would be most effective for your success.

6. Price, Price, Price!

You've heard the real estate battle cry, "Location, Location, Location." That is the cry of a a buyer. As a seller you have no control over this! As a seller the power you have to wield is, "Price, Price, Price." This is your mantra!

An opportunity to get the quickest sale at the highest price is at the very beginning of a listing. This is when you will have the most showings and genuinely interested buyers. It is also the time you have the most leverage. But if you price your home unrealistically up front, you run the risk of turning off a lot of very good potential purchasers. Later, you will chronically wrestle to achieve a strong price and presence. Too often opportunities are squandered because of over-pricing.

If you did your best to prepare your property for sale, present your property in its best light, expose it widely in the marketplace, and had a reasonable amount of showings, then the only other issue (that is within your immediate control) is the pricing. The market will speak and is speaking clearly: Competitively price your home. A good value sells. This does not mean that an over-priced property will not sell, but statistics show that it will likely be at a deflated price after a longer period of time.

We will keep you fully informed about feedback and changes in the marketplace. We can help you with creative ways to improve your competitive advantage and your value proposition.

7. Patience is a Necessary Virtue

Nobody sells a home for the joy of the experience! The process can be intrusive, unpredictable, turbulent, and frustrating. It is, at times, fraught with personal offenses, anxiety, fear, and disappointment. As Realtors® with extensive background in customer service, it is our desire to minimize these experiences for you. Though we cannot control the market, the timing, or the offers which come in, we can and will work wisely for the best results for you.

We have learned to be patient and tolerant with all parties in a transaction (including, but not limited to, other Realtors® and brokerages, other clients, inspectors, lenders, title and escrow officers, etc), yet we will be unrelenting and persistent specifically for your interests. We will not give-up until the job is done nor will we compromise our promises to you. If at any point during the listing we find that we cannot do the best job for you, we will resign our services and set you free to pursue a better alternative.

8. Gambling with Your Biggest Investment

Having endured through the negotiations of hundreds of transactions (each one seemingly unique with challenges and threats), I am a true believer in real estate representation. In my past, I chose to sell ‘For Sale By Owner’ two times. Once I was successful (but settled for detrimental terms & conditions), and once I failed (and lost two years of opportunity on a very valuable property).

At 51 years old, I have finally learned that it is better to trust trail guides, consult travel agents, hire an attorney, respect teachers, follow proven models, listen to those who are experienced in their field, and utilize the expertise and resources of those who know more than I do. Selling a home is one area in which people sometimes underestimate the value of hiring a professional in the field. The industry is constantly changing. Realtors® are required to keep up with the changes. Contract are long and complicated. Disclosures are there for your protection. The absence of any number of these things could mean money lost (trust me, I've been there twice!) and increased risk for legal exposure.

Don't gamble on your biggest investment. Let us guide you from start to finish, marking the milestones, minimizing risks, and solving the problems.

9. Commissions Part 1: Who Gets What?

All commissions are negotiable by law; there can be no collusion. Commissions are taken out of the sales price as a seller expense (Buyers usually do not have to directly pay any commissions to work with an agent). Usually two brokerages split the money, and then each brokerage splits their side of the money with their respective Realtors®. (Rarely does all the commission go to one person.) The four parties then pay all their business expenses and operating costs. What is left over is profit for income or further business development.

All products and services have a significant percent of sales commissions (of some kind) built into their pricing. In real estate however, it is right up front and public. The percentages for our industry are often 5-7% to sell a home. Frequently 2.7% of a 6% commission goes to the Buyers brokerage and agent, and the remaining amount of 3.3% remains with the listing brokerage and agent who have greater expenses because of advertising costs. This is typical; it is not fixed. Each individual brokerage (often the agent) determines what percentage they must charge in order to run a successful real estate practice.

10. Commissions Part 2: Are Realtors® Paid Too Much?

The answer can be both yes and no. The answer is determined by the individual agent you hire.

The answer is yes if he or she:

1. does nothing to improve the likelihood of your property selling over and above what you could have done yourself (i.e. quality marketing materials and advertising campaigns).
2. cannot skillfully and diplomatically negotiate on your behalf.
3. does not deliver results (generate showings, leads, offers etc).

The answer is no if he or she:

1. does their work responsibly, keeps you out of trouble, protects your investment, gets the job done for you professionally, and spares you much anguish, time and expense.

Skilled Realtors should be able get you more money, negotiate more effectively, and represent your interests well. They also provide valuable intangibles like peace of mind, and allow you to keep focused on what you do best.

Sometimes even a deep commissions discounter is too expensive!

Consider this also:

• Our industry is commission only. Unless we successfully sell, we have no income!

• We are 'independent contractors' who are self-employed. We have no salaries, no ‘benefits’ and no bonuses. We pay for everything required to run a business, including our own continuing education. When comparing ‘apples to apples,’ it is necessary to compare a non-slef-employed person's pay, the costs of all benefits and perks, the taxes their company pays, and all business expenses.
• Is insurance too expensive? Is an attorney paid too much? Does a BMW cost too much? In one sense we will all lament: yes; but we still choose to pay. Perhaps that is because we have learned (many times the hard way) that the saying is all too true: we get what we pay for.

We trust that you will find the information provided here helpful as you consider selling your home. These are only a few of the many questions that a seller may have, so if your questions weren't answered here, please feel free to contact us any time.