Q: Does the amount of time I give the REALTOR® to sell my home make a big difference?
A: Not always- but understand that many times a salesperson will do some research on you and your home. If an agent finds that you entered into a short listing agreement, they may interpret that as a sign of anxiety to sell- in which case the agent would naturally recommend trying a lower than normal offer for your home.
Q: Won’t the REALTOR® work more quickly to get a home sold with a short-term listing?
A: A long-term listing will actually help your home sell more quickly than a short term listing. Not only does a short term listing imply that you are anxious to sell- encouraging low-ball offers- but real estate is a dollars and cents business which means that no money is spent until all the risks are weighed. Let’s say for instance- you list your Las Vegas real estate for 3 months- and two and a half months have gone by. When your real estate office chooses which Las Vegas homes to run in ads they would choose listings that will be with them for a longer period of time. The office has no way of knowing whether you choose to extend your listing period or not. Therefore they bank on a sure thing.
Q: Won’t I save more money by selling myself without a REALTOR®?
A: No. You may try to sell your Las Vegas real estate without a REALTOR® to save a commission- but are you really saving a commission? Let’s take a close look at all the key players. We have our seller, who like anyone else wants to save some money so they decide to sell their home without the use of a REALTOR®. Then we have our For Sale By Owner Shopper, who decides to forego using the services, expertise, equipment, negotiating skills, connections and knowledge of a real estate agent- in order to what? Again- save the commission. Are we talking about two separate commissions here? No- there’s only one commission. And serious For Sale By Owner Shoppers only shop For Sale By Owner to save this commission. They find a For Sale Buy Owner Property that they can live with and knock the commission right off the top of the price. In this situation- you didn’t really save a commission- you just gave it away. Would you rather give this money away to a total stranger or enjoy the benefits of letting an agent handle all of the details? That is why most Las Vegas homes for sale have agency agreements.
Q: Does it make financial sense to sell your home without a REALTOR®?
A: Yes. If all you did was put a sign in front of your house and the first person to drive by offered to pay you full price for your home- then Yes- selling your Las Vegas real estate yourself does make financial sense if you were asking market value for your home. The fact of the matter is that very few properties actually sell as a result of the sign in the lawn- the majority of sales come from the various contacts that real estate agents make amongst each other and in the real estate community- such as through networking, advertising, delivering flyers, postcards, sending emails etc. Any one of these channels can find that one special buyer- but your odds increase drastically by taking a shotgun approach. By placing a few classifieds, running ads in homes magazines, placing your property on the internet, putting a sign in the yard, creating brochures, networking, through sales meetings, intranet, and direct mail, REALTORS® are able to maximize the exposure of a property and find the most qualified buyer willing to pay the highest price for their Las Vegas homes for sale. All of these expenses are necessary to obtain the full market value of a home. And since better than 95% of all properties are sold by real estate agents this fee is already included in the price of the home- it is not tacked on top of the value of the Las Vegas real estate.
Q: Can’t I list high and come down later?
A: Yes you can- but there are many drawbacks to doing so. You see- pricing your home for anything higher than market value will actually cost you money, time and headaches. One reason for this is that an overpriced listing will actually help to sell more reasonably priced properties in the Las Vegas real estate market. Buyers will shop around and if there are similarly priced properties in the same area, they will see them all. If your home is overpriced, the buyer will be disappointed in what they see, but in turn will be impressed with the apparent great value of a properly priced property when compared to yours.
Another drawback to pricing your property at higher than market value is that the first few weeks that your home is on the market is the most critical time. You are the new kid on the block- and buyers that have been waiting for new listings to become available will come to see your home. These are the most qualified buyers because they are just waiting to find the right property, they are already working with an agent, and more than likely are completely approved for their loan. If your home is overpriced, the buyers looking in that price range will be disappointed in your home and will buy something else. But the real loss is that the buyers in the price range that your home should really be in may not even look at your home because it is something they don’t qualify for. Consequently, your home languishes on the market until you bring the price down to a more realistic figure. If these buyers haven’t purchased something else yet, they will wonder why your home hasn’t sold in all this time. Your home is now what is known as shopworn or stigmatized property. Buyers will be asking themselves why your home hasn’t sold and what is wrong with it? So you will find yourself lowering the price again from the true market value of your home in order for the home to sell your Las Vegas real estate.
Q: Should I wait to find a property before I put mine up for sale?
A: Probably not. It is common to fear you might sell your home before you find a suitable one to replace it. However- this very rarely happens and unless you are looking for a unique property, this will probably end up costing you thousands of dollars. Let’s say for instance you find the right property this Sunday at an open house- this is the house- you have to own it. Let’s also assume that the seller is asking $175,000 for the house. You probably want to try to negotiate the price downward a little. Well- now you have two jobs. You need to talk him down off his price- but you also need to convince him to take his home off the market and risk not selling it, while you put your home on the market, find a buyer, qualify him and get it closed. Your seller will probably agree to wait a couple of months- but he’ll more than likely want you to pay full price for his home. So now, you’re out a $5,250 price reduction (going by the 3% national average) but in order to sell your home in two months you now need to get aggressive and price your home for a short sale. Let’s say your home is worth $100,000, and to get it sold in two months, you probably need to sell it for $94,000 (going by the national average of 6 months to sell).
In this situation, waiting to list your home cost you $11,250 dollars. This is what finding a property before putting yours on the market could cost you.
Q: Won’t another office list my home for a higher selling price?
A: Without a doubt. But the key point to keep in mind here is the following: Agents don’t establish price – the market does. The only thing that determines the market price- is what a buyer is willing to pay for your property. Many agents list properties at one price and expect to sell them at a completely different price. This is what is known as buying a listing. What this does is excites the seller into signing a contract and a few months down the line the seller is shown the facts and asked to drop the price down to market value. At this point your Las Vegas real estate is shopworn and will fetch less than it would have if priced right initially.
Q: Should I consider FHA or VA buyers?
A: Absolutely, but you must keep in mind that most government loan programs require stricter inspections and qualification guide lines. Many people fear that their homes will have to undergo costly repairs. This is not the case – as you are never obligated to make any repairs unless you wish to accept the offer. Many times, these government insured buyers will offer to pay you more than your asking price to offset any type of inconvenience to you. It is wise to prepare your home (or be willing to) for these loans as by simply doing so, you open the door to a whole new market of buyers- nationally, half of all properties are sold through government financing, here is why. Buyers have three options to purchase your Las Vegas real estate.
They can pay all cash- which very few buyers have the luxury of doing so. They can buy owner financed homes which very few sellers have the luxury of offering. Or they can go to a bank which offers two types of loans: a conventional with 5 to 10% down payment, or a government insured loan with 3% to no money down. Clearly the latter is a more appealing way to purchase for most buyers- and by stating that you will not entertain this type of offer you are essentially eliminating a vast number of potential buyers. We recommend that you consider every offer and weigh out your pros and cons with me, your agent. However, by stating that you will not entertain FHA or VA offers, you may be excluding 20 or 30% of buyers on the market (nationally- 50% of buyers use government financing). You should at least look at all offers and together with me and decide whether or not the offer makes financial and practical sense.
Q: What if I’m not sure if I’m ready to sell at this time?
A: If you know you want to sell your home, putting it off may be costly. The sooner your house sells, the sooner you can get into a new home. Waiting could bring drawbacks that are unexpected. For instance, interest rates may go up- a little jump can be make a costly difference. The price of your future home may go up. New construction homes tend to appreciate at a rate of 10% per year. Your home may be worth less. If you find your future home right away, you may incur vacant monthly expenses; or you may wind up making double house payments. You may find yourself making additional costly repairs. I am not saying that these things will happen- just that they might.
Q: Why is Commission important?
A: The marketing fee or commission is the most vital part of the marketing plan because this is precisely what sets the enthusiasm for cooperating brokers. Since commissions are negotiable, we’ll talk in terms of averages. Let’s say an average commission for a certain area is 7%. The fee is normally divided evenly between the selling office and the listing office. Let’s trace the path of this 7% just for illustration purposes. In a $100,000 home, the commission would be $7,000 which is split up between both offices- $3,500 for the listing office and $3,500 for the selling office’s effort in securing a buyer. This $3,500 is then divided between the office and its respective agent. On the listing side we’ll say $1,750 (50% for illustration purposes) for the office and $1,750 for the agent. From this the agent must pay taxes, MLS fees, expenses incurred on advertising and promotions, desk fees, etc. The agent that procured the buyer would be a similar situation- where their $1,750 would go to pay taxes, MLS fees, expenses incurred with client, time, gas, meals, brochures. All of the sudden, what started out as being a large 7% commission has now dwindled to a near 1% commission. This is why it is crucial to offer at the very least the average commission for your area. It is even highly recommended you consider offering a 1% higher than average commission for the sale of your Las Vegas real estate. A one percent raise in the commission translates into a 14% raise to the real estate agent’s paycheck.
Q: Why do some brokers say they will sell my home at a lower commission?
A: This is a good point to look at. What you need to ask yourself is did they say they would put it on the market at a lower commission, or did they assure you that they could sell it charging a lower commission, because there is a tremendous difference. If you just want to have your home on the market, 5% is a great number – 3% is even better but if you want your property sold in a timely manner, a standard commission or better is required. Many properties that expired and never sold were properties that were offering a smaller commission incentive to cooperating brokers. And by offering a smaller commission to the buyer’s agent, they are likely to just skip past your Las Vegas real estate and show other properties.
Q: What are the odds of selling my home myself?
A: The National Association of REALTORS® (N.A.R.) conducted a study that found 70% of all people who see homes for sale can’t buy your home because they have frozen equity- in other words, they must sell their home before they buy. Only 11% of them can’t afford what they are looking at. Approximately 15% of people who see homes for sale prefer to rent. Only 4% of people are actually ready, willing and able to buy your home. A Las Vegas real estate agent’s job is to weed through potential buyers and pick out that four percent that is ready, willing and able to buy now. For Sale By Owner sellers should consider these odds closely. It is one of the reasons that over 90% of For Sale By Owners eventually list with a Las Vegas real estate agent.