Top 6 Real Estate Secrets
#1: Open houses don’t work.
Open days are a thing of the past. Years ago, when you wanted to sell your home, the only way buyers could see the inside of your home was to invite them to view your home through an open house or to schedule an appointment with the agent listing your home. Now, if a buyer wants to see his house, he can simply go online, to any of a dozen sites, and see the inside of his house without ever leaving his living room.
The truth is, open houses don’t work! Real estate agents hold open houses not to sell your home, but to get additional clients looking to sell their homes (including your neighbors). The fact is, you’re more likely to win the lottery than sell your house with an open house in most areas.
#2: Marketing is job number 1.
If you’re selling your home, the real reason you hire a real estate agent is marketing. A real estate agent’s job is to attract as many qualified buyers to your home as possible so that you can sell your home for the highest price. Marketing is the cornerstone of the Real Estate business and a Realtor who does not know about marketing is not worth the commission. Many real estate agents avoid marketing and try to confuse homeowners with internet terms and the size of their business, all of which mean nothing to the actual sale of their home. Here are the things you should keep in mind:
* When hiring someone to sell your home, first make sure they are a real estate agent and ask to see their real estate agent card. There is a big difference between estate agents and estate agents. Real estate agents cannot list your home on the MLS, a database of homes for sale by participating real estate companies.
* Make sure you select a real estate agent who really understands marketing: proactive marketing. All agents use the internet, so it’s not a big deal. All listings are likely to be on Realtor.com and Zillow. Ask your agent to do a SWOT analysis for you, find out if he works full-time as a real estate agent, and ask him what he does that does NOT involve the internet to sell your house. Find out how long they have been realtors and ask to see 3 houses sold in each of the last four years. In a very short time, you will be able to classify the wheat and the chaff.
* Don’t be fooled by the most common secret. An agent will mention that he works for a big company and therefore her house will get more hits on the internet. This is not true, in almost all cases any house listed by a real estate agent will appear on the website of every real estate firm in the area and also on most national websites. So even if you list her house on “Mom and Pop Realty,” her house will appear even on the real estate websites of the big companies.
#3: Discount Brokers/Limited Service Brokers May Be a Good Choice.
Regardless of what the industry (including realtors) tells you, these companies have a seat at the table and serve a vital role in the industry. Let’s be honest: everyone is a little frugal, and if you could find a cheaper alternative to paying a real estate agent, you would. Sometimes discount brokers/limited service brokers can save you money.
Here are two specific instances where we refer our clients to limited service/discount realtors:
Scenario 1: You have a house for less than $120,000 (don’t be jealous, Californians and New Yorkers).
Real estate is a business and agents are people who depend on that business to pay their own bills. Therefore, if your agent works for a company that takes a portion of the commission (in many cases 30-50%), the agent must determine if selling your home is a good business decision. Let’s look at the numbers:
* House price = $120,000
* 3% commission (on listing side only) = $3600
* Less Signature Division (35%) = – $1260
* Less tax (25%) = – $900
* Less marketing = -$800
* Leave a net commission of $640, to the agent
If the agent only nets $640 on the deal, how much time can you reasonably expect him to spend selling your house on your behalf? In this case, using a limited service broker could save you over $2,000 on the listing side after deducting the cost of the limited broker’s fees and expenses.
Scenario 2: You are in a super hot market.
If you’re in a market that’s so hot all you have to do is put up a sign in your front yard, then limited service is a good option. They list your home on the local MLS system and buyers just show up. INCREDIBLE! The key to making this work is to have your home appraised before you call the limited-service brokers to make sure you’re selling your home for the right price. Once you get a contract from a buyer’s agent, hire another agent or attorney to help you with the details on an hourly or flat rate basis. The key is to make sure you only accept contracts from buyer’s agents. If you’re not sure what that means, get clarification from your state. (I can’t give you all the secrets!)
#4: All agents are NOT the same.
Like any industry, there is a range of skills within the real estate world; However, many people believe that all agents are the same. I suggest that when interviewing agents, ask for contracts to be sent to you ahead of time and prepare a series of questions for them to answer. If you are in North Carolina, here are some questions I suggest:
* What is dual agency? And do you practice dual agency?
* What is the difference between due diligence and earnest money? And what happens if a buyer cancels the contract?
* Am I required to make repairs to my home, or is my home sold as is?
* Show me my home marketing plan, not a generic presentation.
#5: Some agents will try to “buy the listing.”
This is when an agent convinces a homeowner that they can sell their home for significantly more than market value. This tactic is successful when an owner uses money to select the agent. The intention of the agent is that the owner signs the contract of sale under the auspices of an inflated sale price, and then the agent will constantly lower the price of your house until it actually sells.
#6: Homes For Sale By Owner (FSBO) do not save money or time.
The company’s line for agents is that they will help you buy any home; however, most brokers do not like to deal with FSBO properties. First of all, Real Estate is a FOR-PROFIT job. Homeowners selling their own homes have made the decision not to pay a real estate agent, but their agent doesn’t work for free. Therefore, as a buyer, if you choose to consider FSBOs, you need to have a discussion about who is responsible for paying the commissions. In many cases, you, as the buyer, may be responsible for paying deal fees in addition to closing costs and down payments.