So, you have decided to sell your house. It can be for any reason. You may have outgrown your current house. You could be downsizing. You may be cost cutting and looking for a way to trim your mortgage payment and related property taxes.
It doesn’t matter why you want to sell your house. What matters is that you are able to sell your house in a reasonable amount of time. What matters is that you sell it for something close to fair market value.
This is where the value of an experienced and well-intentioned Real Estate Agent can be illustrated.
Sellers often have no idea what their house will sell for. Many simply look for other houses for-sale in their neighborhood, or houses for-sale that resemble their own, to make a guess at what their house is worth. Others may rely on the tax appraisal office to gauge what their house is worth.
Statistics show that people who initially overprice their house when they first begin to market the house, often end up selling their home for less than fair market value. Simply put, if your house is overpriced, people looking for a house in the price range you have advertised will look at homes in neighborhoods where most of the houses are in that price range.
In addition, with the scrutiny placed on Residential Appraisers, even if you do find someone to pay you above Fair Market Value, the house probably won’t appraise and the lender will not lend your buyer the funds you have agreed to at the current contract price.
There is value is having a Real Estate Agent. An honest Real Estate Agent will tell you up front that to sell the house for the most money in a reasonable amount of time, you must price the house appropriately.
In addition, Real Estate Agents can help ‘weed-out’ the ‘tire-kickers’.
Sellers who try to sell the house ‘For Sale by Owner’ often find themselves fielding dozens and dozens of calls from people asking if they can ‘rent to own’, if the seller will ‘owner carry’, or if they can let them see the house at odd hours.
This is where it gets interesting. There are many houses on the market and many more Real Estate Agents in need of building or maintaining an inventory of houses to sell. With this comes the danger of overpricing the house.
Inexperienced or unscrupulous Real Estate Agents can ‘cherry-pick’ recently sold houses to skew the results of a Comparative Market Analysis (CMA). In other words, as a seller you are being told by the Agent that he/she can get ‘X’ number of dollars for your house. This is a strategy sometimes utilized to secure your confidence and agree to list the house for sale with that particular Agent.
Then, after you have listed the house with that Agent at an inflated price, and there is little or no interest in your house, the Agent says “Let’s try lowering the price some, to see if we can draw some interest in your house”. If this is done quickly, there may be little damage. However, if you leave the house on the market at an inflated price for very long, potential buyers for your house will wonder why it has been on the market so long.
Just as damaging is the Agent that advises selling the house at significantly less than the market value. The seller walks away from the house ‘leaving money on the table’.
The safest route would seem to be interviewing multiple Agents and asking for CMA’s from each of them. In addition, sit down with the prospective Agent and ask them why they chose the various houses they did for purposes of the CMA. Alternately, you could pay for a ‘Fee Appraiser’ to appraise your house.
Do your homework. With the right Agent, selling a home can be a rewarding experience. As always, you can e-mail me with questions. [email protected]