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1. What is a seller’s market?
What this means for you, as the seller, is that you hold more leverage in the negotiation. Currently, Kansas City is still a seller’s market. Properties typically sell for asking price, or above.
Sellers also make fewer concessions to the buyer (i.e. repairs, helping with closing costs, etc.). A seller’s market is the perfect time to sell your home, but be cautious of being too greedy with the listing price. Overpricing can be the kiss of death.
2. Can I trust the online home valuations I see on Zillow, Trulia, or Redfin?
In a word, no. These sites are good for home hunting, but not so great for giving you a proper home price evaluation. Occasionally they’ll be dead-on, but they tend to skew higher because this ensures visitors will come back to their website.
Which website would you go back to? The one that says your home is worth $710,000 or the one that says $620,000?
That’s why you need a qualified Realtor in your market to come see your home in person and evaluate five elements:
a) Current market conditions
b) Condition of your home
c) Improvements made and/or needed
d) General neighborhood
e) Specific location (where in the neighborhood)
3. Should I try to save money by selling my home myself? For sale by owner (FSBO)?
You can, but will it be worth it?
90% of FSBO homes eventually end up in the hands of a real estate agent. And the ones that do sell, sell for 18% less than a professionally listed home on average (www.realtor.com/advice/sell/why-fsbo-sales-fail/).
So, while you may save 7 or 6% on commission, what good is that when you’re losing 18% of the purchase price?
Also, sellers usually sell due to life circumstances: new jobs, family matters, job loss, divorce, relocation, etc. Those can be stressful enough, without worrying about getting your home sold.
A commission is worth paying –
4. What is the typical commission? Is it negotiable?
And now for the taboo subject of commission... Let’s just get it all out there, shall we? Commission is paid by the seller, and it is a percentage of the final purchase price. This percentage is then split between the listing and selling agents.
The commission is negotiable, but the vast majority of homes sell with 6 or 7 % commission. (watch out for the realtors who charge an addition fee, sometimes called office/admin. fee. That fee usually goes to the agent to help pay his or her fees.
On the flip side, if you have a multi-million dollar property, a 4% commission isn’t unheard of since the purchase price will be so large.
However, you want to be careful of lower commissions on typical properties. For better or worse, when a buyer’s agent sees a 2% commission listed in The MLS, chances are that home is going to the bottom of the pile. While some may think that’s greedy, just think if someone came to your job and asked you to do the same amount of work for less.
The old adage is true: you get what you pay for.
5. Should I overprice my house to allow for negotiations and/or lowball offers?
This is a common misconception some sellers have.
A well-priced home will fly off the market, many times for higher than asking price - especially in our current market.
The kiss of death for any home is when it languishes on the market for months, and this often happens simply when the price is too high.
All the marketing and open houses in the world will not move a house for $1.5 million, when it’s truly worth 1 million.
In this market, you don’t need to worry about low-ballers. If an offer comes in considerably under asking, and the home has been on the market for less than 60 days --- just reject it and move on.
6. What should I do to get my home ready for selling?
I’m a firm believer in the old saying, “keep it simple stupid."
Don’t overthink it. Do the basics:
- Deep Clean (no obvious stains anywhere)
- Fresh Paint (in a neutral color)
- Tend to the Yard
Yes, kitchens and bathrooms sell houses, but people have very specific tastes. What you think is a great kitchen remodel, may turn potential buyers off.
Overall, it is better to save that money for any changes to your future home.
7. The buyer’s home inspection came back with a laundry list of repairs, what am I responsible for?
The buyer can always walk away if they aren’t satisfied with the inspection results. Usually, a problematic home inspection opens a new negotiation. If the repairs are major you may choose to lower the price, or agree to credit the buyer a certain amount to make the repair themselves.
On the flip side, there is no need to worry about typical wear and tear. There is very little new construction in these days, and very few homes are perfect.
There are also certain loans (FHA, VA) which require that the property meets certain standards. With these loans, you may be required to make some repairs before the deal moves forward.
Another option is always selling the house “as-is” and state that no repairs will be done -- but that can be a red flag to a buyer’s agent.
8. What should I disclose about my home to potential buyers?
As much as humanly possible!
There is no upside in hiding any facts about your property. There are innumerable inspections, specialists, hazard reports, sales histories, and permits on file --- so if you know there is a major issue with your home, be upfront about it. Otherwise, you will just be disappointed later when the sale falls out of escrow.
Or worse, if the buyer finds out you misrepresented or purposefully omitted facts, you can get tied up in litigation, even years after the sale.
Honesty is the best (and ultimately least expensive) policy.
9. What happens if the appraisal is too low? Or too high?
This happens occasionally.
Coming in high is becoming more and more rare. After the 2008 mortgage crisis, appraisers are much less likely to stick their necks out and appraise a property for more than the contract price – even if they can justify it with comps.
If it comes in low, then negotiations open back up. You, as the seller, can agree to reduce the price to appraised value. Or the buyer can agree to pay the difference out of pocket. You can also dispute the appraisal (but this is relatively tricky). Sometimes, a sale will fall out of escrow if no compromise is found.
10. How do you plan on marketing my home?
By pricing it correctly.
An underwhelming answer, but it’s the truth. Yes, for $1 million+ properties, some targeted marketing is useful. But in the end, it doesn’t matter how many glossy pages you buy in a trade publication, or the number of online ads that are purchased --- if the property is overpriced.
Many agents make overblown promises of secret, proprietary marketing tactics that only they can bring to the table. In reality, tactics are pretty universal from agent to agent. However, the honesty of the agent behind the marketing, is not.
It's a seller's market. If it's priced right, it will sell. Simple as that.