Selling Home
Ten Things Your Real Estate Agent
Won't Say
1. "I'm throwing a party in
your open house."
One of the first things your real estate agent will
suggest when you put your home on the market is hosting an open house, so
potential buyers can casually check out your property on a weekend
afternoon. Open houses are not the best way to find a buyer
according to a National Association of Realtors study that found their
success rate is a mere 2%.
Why have an open house? So you real
estate agent can gain new clients. The open house is important to your
broker because it provides him or her with a database of clients.
Some real estate agents even
disagree with the concept of an open house, preferring to match clients
with appropriate buyers. At open houses, you get all kinds of people. Some
are considering selling their own places and others are just browsing. All
are perfect pickings for a broker looking to grow his or her business. The
broker devotes a couple hours of a weekend and expects returns.
2. "My fees are not engraved
in stone."
Brokers like to make it sound as if
their fees not negotiable, but that's not the case. In a brisk market,
when brokers fiercely compete for properties they can unload fast, many
will lower their fees. One broker in the South says he lowered his fee by
a full percentage point because of high demand for good properties and he
needed leverage. Sellers should definitely shop around for broker's fees.
Negotiate. Ask for a discount when selling one place and buying another.
If you're in a particularly desirable neighborhood with a house that will
be a hot item and draw a lot of traffic for an open house, use that to
your advantage. An agent will use the flow of people to get more
customers. It never hurts to ask, some will consider lowering the
commission if you make a request.
3. "Several people have made
offers on your home."
Think you've had no offers? Maybe
you've had a few you don't know about. The broker you hire to sell your
home is legally obligated inform you of offers on your home.
Unfortunately, some don't. Perhaps
he thinks the offer is insultingly low but more likely, the broker is
trying to get a higher price for his own purposes and holding out for a
larger commission. Or maybe your broker is waiting for a co-agent to bring
one of his other clients to make an offer so he can keep the full 6% to
himself.
Insist your broker inform you of all
offers. The decision is yours to make and should not be left to your real
estate agent. Be adamant that the promise to disclose all offers be
present on the listing agreement drawn up when you hire the broker.
4. "I repeat everything you
say."
You have found your dream house and
call the broker listed on the For Sale sign. That's how a lot of buyers
find their real estate agents. The broker will, in turn, happily show
other houses, asking about your needs, laughing at your jokes. It's easy
to get excited and forget whom you're dealing with: someone else's agent.
Brokers are duty-bound to provide their seller's information that can help
them get the best prices for their home. If you tell the broker that
you're willing to pay $300,000 but want to offer $250,000, they will pass
that on to the seller. They have to.
Your real estate agent may suggest you get
pre-approved for a loan. Your loan approval will tell a broker whether a
buyer ca
n afford a $300,000 house instead of the $200,000 home
they are looking to purchase. When somebody asks for a pre-approval find
out whom they're representing. If they represent someone who is selling
their home - or someone in their brokerage does - they shouldn't have it.
A broker cannot be impartial when it comes to making money.
5. "Whose side am I on?"
The past decade has brought about an
explosion of the buyer broker, agents who work strictly in the buyer's
interest. Negotiating for a fair price on a home and helping a buyer avoid
pitfalls along the way. But does it always unfold so nicely? No. It isn't
always true that buyer brokers are less commission-hungry. Many buyer
agents are just that. They get about 3% of the sale, which is the same
amount any broker typically earns. Buyer brokers are focused on closing
the sale and getting the commission, so it's often in their best interest
to see you pay as high a price as possible.
Here's the bad news, some brokers
who call themselves buyer advocates work for a brokerage that also
represent sellers. If an agent sells an in-house listing they can qualify
for a bonus. Does that sound impartial? Find a broker who has no such
conflicts of interest, who pledges to help you get the best deal possible
and has no ties to sellers' agent. You may be able to find an agent that
works on a fee structure rather than on commission.
6. "I don't know anything
about zoning."
Real estate agents love to encourage
your big ideas, like removing trees to enhance a view, or even squeezing a
rental unit out of a roomy garage. These projects are meant to happen once
the deal is done and your broker is out of the picture.
For example, one buyer bought a
dilapidated house with a beautiful piece of property on a marshland. His
broker told him that he could fix the house up however he wanted. So he
put up a $10,000 workshop and pulled down trees. He also filled in some of
the marshland. Now the town is making him put things back because of
environmental zoning regulations. Remember, check with your local zoning
commission before you buy into your broker's creative thinking.
7. "I won't let the
inspection kill the deal."
If a broker is selling a house, he
is trying to sell the house. He will tell you all about the new kitchen,
the big closets, the heated garage. He will never mention the termites or
flood damage. You should worry about the features you broker keeps quiet
about.
You rely on the home inspector, who
thoroughly checks the house before you close the sale to notice those
things. And he will - if he's an impartial party. Realtors provide
potential homebuyers with recommended home inspectors. That list will most
likely include inspectors who will rubber-stamp the house in return for
repeat business. Many inspectors who work outside those lists butt head
with the real estate brokers. Hire your own inspector. Make sure you get
an objective inspection.
8. "I don't have my law
degree but watch me act like I do."
Many brokers will add clauses to
your contracts and agreements that are outside regulations. Most states
strictly regulate the contracts used in real estate transactions,
requiring the use of boilerplate agreements that offer little room for
creativity. Real estate agents frequently cross the line by adding
amendments and clauses. Their additions can have consequences, but they
want to keep the sale going.
For example, it's fairly common for
a house to close on one day but possession doesn't happen until a later
date, in which case the buyer rents the house back to the seller for that
period of time. If this agreement clause is worded improperly, the buyer
could end up liable for damage done by your "rental tenant." Other
examples include purchases of non-real-estate items and owner carryback.
Getting an attorney is worth the legal fees. Have you contract reviewed
before you sign.
9. "My web site
is a waste of time."
The National Association of Realtors states that over
50% of house hunters look on the web. Sellers might assume that a
broker with a web site is tech savvy and can make a sale
happen. But you need to look beyond a well-designed home page to make sure
your agent has good content.
Some agents post houses that sold
long ago because they are attractive homes that bring people in. It's a
bait-and-switch-style ploy. This can upset people when they find out that
the property's not really available. A broker that advertises
properties that are already sold doesn't have enough inventory to keep his
roster full.
You should also make sure that a
site is easy to navigate. Test out search engines and see if you can
easily find your broker. One of the important aspects of a broker's site
is the local information - schools, recreation facilities, commuting
options, maps - which attracts people who are thinking of moving to the
community.
10. "You can sell you house
on your own."
Brokers like to create an air of
mystery about selling homes, insisting that the process is complicated and
best left to professionals. But almost 20-30% of homeowners sell their
houses themselves each year. The key is a properly priced and advertised
home that will sell itself. Sellers should plant a yard sign and post
online ads with local sites. After all, broker commissions can get in the
way when it comes to the inevitable negotiations between buyers and
sellers. Usually, the quibble occurs over a 5-10% difference, which is the
broker's cut of the sale price anyway.
The most common mistake among
self-sellers is the price. Don't over price your home and be careful not
to ask to little. Consider hiring an appraiser to help you set a
price. Also take into account the condition of the real estate
market. With low interest rates the asking price can be 10-15% above the
appraisal. In a weak market, price at or below the appraisal.
