Putting your house on the market can be an
emotionally exhausting task. You have to confront questions that involve not
only big money, but also an intensely personal asset - your home. Questions
like: What's my house really worth? Should I sell on my own to save the agent's
commission? How can I be certain I'm getting the right advice about listing,
negotiating, and selling smart in today's market?
Along with these tough questions, you come
face-to-face with some enduring myths about the home selling process. They're
so widespread that it's wise to know about them in advance. If you make moves
base on facts, not myths, you'll fare far better in the selling process.
MYTH: The real
estate agent will set the price for my home.
Agents don't set any price. However, they'll
suggest a price based on their assessment of not only your home but also the
current state of the market. Most agents are careful to suggest a range rather
than a dollar amount, and it is then up to you to accept or reject that
recommendation. Their recommendation is usually based on a rigorous review of
comparables - houses similar to yours that have sold in recent months.
MYTH: I should
always list with the agent who recommends the
highest selling price in the Comparable Market Analysis (CMA).
Wrong. The CMA is just one of many factors on which to base a listing
decision. The CMAs from several agents competing for your listing will probably
all fall within a similar range. But if one agent's CMA is significantly
outside that range - especially on the high side - don't make that the key
reason for giving that agent your listing. Go with the agent whose total
marketing presentation, track record, and rapport with you add up best.
MYTH: If I sell
my house myself, I'll net more money
because I won't be paying the agent's commision.
Many people look at the fee an agent stands to earn on a home sale and
wonder whether there's a cheaper way to sell. In some red-hot real estate
markets, where buyers are lining up outside your door with offers and competing
for your home, it's possible to do just that. But most markets aren't anywhere
near red-hot. Many are soft, sluggish, and slow (or steady at best) - the very
worst climate for solo sellers of For-Sale-By-Owners (FSBOs).
The experience of sellers I've spoken with in
the past year around the
Then there are the sheer practical aspects of
selling on your own. Do you have the time or the flexibility to show the home
during your regular working hours? That happens to be when many buyers want to
visit properties and spend time walking through them with their agent.
Another important flaw in the
I-can-save-by-selling-it-myself theory is that although you may think your
negotiating abilities will stand you in good stead when you deal one-on-one
with potential buyers, the odds are that you're mistaken. Face-to-face
negotiating in the kitchen or living room blows up more FSBO sales than almost
any other cause. Rather than having a cool, unemotional buffer - that is, an
agent - between yourself and the buyer, you're all alone, and the buyer's
demands almost inevitably get you steamed up. After all, the buyer's
negotiating strategy will always be to knock down your price by pointing out
every imperfection, real or otherwise, in your home.
The hard reality is that if you want to get
maximum value for your home, it makes little sense to fly solo. That's why a
lot of FSBOs come in out of the cold after a few weeks or months and list with
a professional.
MYTH: Homes
always appreciate.
Spoiled by real estate markets in which values
have been going up for years, many homeowners incorrectly assume that their
home will appreciate at levels far in excess of other investments. Yet real
estate, like every other important segment of our economy, runs in cycles. If
you bought a home at the top of the market cycle but sell it at the bottom, you
may end up taking a loss. On the other hand, you might have bought at the
bottom of the cycle and can now realize a significant gain.
In soft markets, sellers often believe they
are losing money. However, their losses are usually only imaginary, involving
money they were never going to get anyway. But because they had such high
expectations, they see themselves as suffering a loss.
MYTH: There's
no need to make sure I'm setting an accurate
and reasonable price for my home because I can always lower it later.
Sure you can. But in the meantime, you've blown
your chance of selling it within a reasonable time frame to buyers who would
have been interested if your initial price had been realistic.
Pricing too high - leaving too much padding
for later negotiating - is the surest technique for leaving your home dead in
the water for months or even years. And when you finally correct your asking
price to the true market level, you'll probably end up with a lower selling
figure than you'd have obtained by having a realistic price from the start.