Thursday, April 21, 2016

My Advice to Home Sellers

My Advice To Home Sellers
By Jim "Gymbeaux" Brown, April 15, 2016

I recently retired from the real estate business with over 33 years service as a sales person, manager, Team Leader, Broker and Trainer.  I have read over a thousand books on sales and motivational subjects.  I tell you the reader this because I want to give credibility to what I am about to say to you the homeowner who is considering selling their home.

Should I try to sell my home myself as a For Sale By Owner?  Absolutely not.  You have less than a 10% chance of selling your home yourself.  Why?  Because studies have shown this to be true for at least the last 30 or more years.  Let's say YOU are a home buyer and you are coming into town on a house hunting trip.  You answer the question, how many For Sale By Owner homes do you honestly think you will be looking at?  Most buyers on home hunting trips work with licensed real estate agents therefore those agents are going to work primarily within the multiple listing service to find the right home for the buyer to both see and buy.  That means they will NOT be showing your home that you are trying to sell.  I recently had knee replacement surgery and I went to a surgeon with a great reputation and had the surgery done.  If that surgeon needed his own knee replaced, do you think he would do the surgery himself - absolutely not.  He would go to another reputable surgeon.  Most For Sale By Owners actually know very little about selling real estate and are blinded by their desire to save a commission.  Yet if you think about it, most buyers who select For Sale By Owners are also trying to save the commission cost.  It is usually impossible to have two winners in this situation.  Therefore the sellers ends up selling for much less than anticipated and ends up working for him or herself without compensation for doing so.  Even more importantly, consider that we live in a "sue happy" world where people will sue for anything hoping to receive money at someone else's expense.  Homeowners who try to sell their own homes open themselves up to these type of people who probably know more about selling homes than then homeowner does.  My advice?  Leave it to the professionals.

There are dangers involved in selling your own home.  Being the anxious home seller, it is extremely doubtful that you will have access to any background information on people who want to see your home.  Are they qualified to buy?  Are they really buyers or are they potential criminals looking to see what they can steal from you or even do you personal harm.  This stuff does happen and to think it does not happen in your area makes you even more vulnerable to people who want to take advantage of you.  As an example, A car approaches and a potential buyer comes to your door to see your home and you are eager to show it to them.  While you are showing them your home, a second car approaches and they enter your home and tell you that they will wait in the living room while you show the other buyers around the home.  Meanwhile they are literally making themselves at home in your home going through drawers and medicine cabinets while you are preoccupied with the other buyers who oftentimes are working together with the couple waiting.  When you work with a licensed real estate agent, hopefully the agent did what they should and thoroughly question the potential buyer so they know who they are and what they want but more importantly that they can actually afford to buy and ARE qualified to buy your home.  When you let anyone into your home, you have no idea if they are qualified to buy your home; not good.

Should I work with an agent from a small independent company?  The better question is can an agent from a small independent company sell my home?  The answer to the second question is yes, that agent could sell your home if all things fall exactly into place.  When you work with a small independent company, the listing agent has two, three or maybe even ten agents to share the information on your home.  When you work with an agent from a larger independent company, that agent can share the information with far more agents who hopefully are all working to help their fellow agents sell their listings.  But wait, there is a difference between being an "independent" company and being a "franchise" company.  Actually there are a great many differences but there is one HUGE difference that a homeowner should know?  Referrals!  When you place your home on the market with a franchised company/agent there are hundreds or in some cases THOUSANDS of real estate agents all around the country/world who deal with home sellers who are moving.  Hopefully one or more will be moving to your area and when that occurs their listing agent immediately calls an agent within the same franchise to help their sellers become buyers in YOUR area.  You have increased the odds of finding a buyer for your house.  I once worked for a real estate company that had only three agents of which I was one.  Yes we listed properties and did have some success in selling those properties but it would have been so much easier if I could list a property and then come back to the office with all the excitement of a having a new listing and then sharing the information with all the agents in the office.  In my case it was two other agents.  I managed an office with 105 agents.  You do the math.  I would take my chances of having one of the other 104 agents having a buyer that matched my new listing.  It is all about the math.  What homeowners do not see is the training provided by the larger companies, independent or franchised but especially the franchise companies.  Training makes all the difference in the world regarding the quality of a real estate agent.

Does the actual agent I choose to work with make a difference or all they all pretty much the same?  Oh boy, here is where I will make a lot of enemies of real estate agents.  YES!  YES!  YES!  The agent you choose to work with makes a HUGE difference and could either help you sell your home or hinder the sale of your home.  There is no substitute for experience and training with the key word being training.  A great many agents who get their real estate license terminate any additional training other than what is required to keep their license active.  Frankly that type of training in my opinion is extremely poor and usually has nothing to do with actual sales.  You want an agent who seeks out training opportunities to become better at what they do and are expected to do.  You want an agent who attends their company's annual convention/family reunion where they not only receive some of the best training available in the business they also have an opportunity to build relationships with agents from around the country who could possibly send them buyers that could be interested in purchasing your home.  Here is the most important difference in the world and I will address it in the form of a question to you the homeowner.  Do you know anyone, family, fellow employee, neighbor, who you do not like?  Of course you do otherwise you would not be human.  Your dislike could be for any number of reasons, the actual reason doesn't matter; you simply do not like them.  How many real estate agents are there in your area?  Could be hundreds or thousands in larger cities.  Do you think every real estate agent likes every other real estate agent?  The answer is NO!  Not just NO, ABSOLUTELY NO!  Why is this?  It could be something as simple as personality differences.  More importantly, a lot of agents make it extremely difficult to work with them?  Why do they do this?  Some feel they are better than anyone else.  Their opinion of sales ability may or may not be true; usually not as true as they think.  They may not follow-up with their fellow agents.  They may let things fall between the cracks causing sales to be loss and take no responsibility for their action or failure to act in a timely manner.  They may make appointments to show your listing(s) and then fail to actually show up with no advance warning or explanation.  There could be any number of reasons most of which you will not know or possibly never know of.  One of the most important questions you should ask of a potential real estate agent is "how well do you work with other agents and can you prove it?"   What kind of answers do you think you will get if you actually called other real estate agents and ask them how well you work with agents?  When you do pick an agent, will the agent tell you what YOU WANT to hear or what YOU NEED to know; there is a huge difference?  In all  my years in the real estate business I have never known a seller to get opinions from an agent's previous customers on the agent they think they want to do business with, except one.  It was because of his call, I earned the listing on a million dollar property in Mississippi.  My customers said I was brutally honest with them.  If you are an agent reading this, will your customers say that about you?  Will other agents say that about you?  If not, exactly what ARE they saying about you?  A real estate agent's reputation should be as good as gold.  If not, find another one.  Here is another thought to consider.  What if I call the company broker/manager and ask him or her to make a recommendation from one of their agents.  Think about that for a moment.  How many agents are there in the company?  You want this person to recommend one of them?  Why would that broker/manager hire an agent if he or she felt they could not recommend them?  If the broker/manager did not believe in the ability of all of his or her agents, either the agents should be terminated or the broker/manager should be terminated, probably the latter.  My advice would be to find an agent and ask for references.  You will be shocked at how few agents will have a list of references at their fingertips; that alone should be a clue.

What will my agent do to hopefully sell my home?  This is by far my favorite subject because as I learned very early in my sales days, it was to learn to separate yourself from the masses of real estate agents.  How do you do this, you meticulously work to develop a list of very specific tasks that you will perform on EVERY one of your listings regardless of price and then be able to provide sellers with that list.  I would then make the assumption that the sellers will be interviewing other agents for the their listing and I would suggest to them to ask the others agents for their list of activities they intended to perform.  I would also ask them to promise NOT to give my list to other agents they may interview and explain that those agents should do their own homework.  There was no way another agent was going to be able to match my list - I made certain of that.  At one point I had over 200 action items on that list.  If you the seller were to ask most real estate agents what they will do, and if they did not have a written list, you would be lucky if they could name ten such actions and if you interviewed 4 agents you would get the same list of 5 to 10 actions from them; but not from me.  That is the point,  You, as an agent should want to know your points of difference and sellers should want to know them as well.  Not only what separates you from other real estate agents, but also what separates your company from other real estate companies in the area; there are differences.

What are my options if I don't like what my real estate agent is doing or not doing?  Sadly, most real estate listing agreements offer very little options for sellers to terminate the agreements.  Most real estate agents are not empowered by their sponsoring real estate brokers to independently terminate a listing agreement meaning the agent must first get the permission from his or her broker before it can be terminated.  It does not have to be that way.  A very good real estate agent will provide you with a means of terminating a listing agreement and if you get a really good agent, the agent can terminate the agreement without the specific approval of the broker.  My advice would be to modify the listing agreement to reflect that you want a way out of the agreement if you are unhappy with the performance of the agent.  The agent may not like it but it is your contract and you can add or subtract anything you wish.  This brings me back to the list of actions I would take on every one of my listings.  I would explain to sellers that if they ever felt that I failed to do what I said I would do, I would give them the right to unconditionally terminate the listing.  I did, however, ask that they first talk it out because they may not be aware of everything that I have been doing.

What if it is not a good time to show my home when asked?  My advice - never take that approach, never.  Home buyers are oftentimes in town for only 3 to 4 days to find their next home.  If you refuse to let an agent show your home, you may never get another chance of these particular buyers ever coming back.  It is really that simple.  Do whatever you must to enable an agent to show your home whenever possible - PERIOD!  But having said that, I would be extremely hesitant to let anyone see your home, with or without an agent, where they did not make an appointment to see your home through your agent or your agent's company.  Do not let people see your home who simply show up at your door.  Instruct them to call your agent or your agent's company.  If you let anyone into your home you could be at risk.  If an agent just shows up at your front door and asks to show your home to buyers, that is extremely unprofessional and should not be permitted.  They may or may not be licensed real estate agents.

Should I reject offers to purchase on my home?  NEVER!  NEVER!  NEVER!  As bad as an offer may be, ALWAYS make it your policy to make the buyer REJECT your response (counter) to their offer - ALWAYS!  Simply put, always make the other guy reject the offer, not you.  Secondly, never take the position of being insulted over an offer you feel should insult you probably because of price.  Welcome every offer no matter how bad it may at first appear.  Find common ground you may agree on and then counter those portions of the offer you don't agree on but NEVER SIMPLY REJECT IT - make the buyer reject it even if you counter at full price.

What should I disclose to a buyer?  EVERYTHING!  PERIOD!  If you hold anything back, it WILL come back to haunt you.  In fact if you are ever taken to court over something you withheld and NEW about or should have KNOWN about, the court could go so far as to rescind the sale meaning you get your home back and you pay all the costs of doing so.  This is different in each state which is one more reason to hire a licensed real estate agent to represent you.  You can sell a home with a defect as long as you disclose it.  When in doubt disclose.  But what about things that are not factual but relate to the home like someone committing suicide in your home.  My advice would be to consult your attorney and my additional advice would be to disclose it whether the law requires it be disclosed or not.  Yes, you may lose a sale, but would you rather go to court and be required to defend your decision not to disclose it?  Personally I have turned down listings where sellers would refuse to disclose such incidents not factually related to their home but that could be very important to a buyer.  I preferred to lose the listing than later going to court.  I felt I was not representing my sellers appropriately if I took the listing over my objection to disclose even though in my state disclosure was not required.  A common term used to describe such properties is "stigmatized properties", I actually had a Stigmatized Addendum to the Listing Agreement that gave specific permission to disclose whatever it was that stigmatized the property (suicide, violent crime, etc.).

Should I get a home warranty?  ABSOLUTELY!  Would you buy a car without a warranty?  NO.  Why would anyone buy a home without a warranty?  When the air conditioner goes out at 2:00 AM, do you want your buyers calling you or the home warranty company?  It really is that simple.  Later in my career I would not take a listing if the sellers did not also purchase a home warranty program; I felt it that important.

Should I get a home inspection?  This is not as clear but it should be.  Most sellers wait until there is an offer on their home and then the BUYER purchases a home inspection.  Most home inspectors feel a certain need to find discrepancies in the home in order to justify to the buyer the cost of the inspection.  They will deny this but my experience has shown that most home inspectors create a lengthy list of discrepancies, most of which are very minor but discrepancies nonetheless.  Then the buyer wants the seller to fix or repair all of the discrepancies both minor and major.  That is just the way it is.  There is an alternative.  You, the seller, get the home inspection done as part of your listing process.  Find out what is wrong with your home, if anything.  Fix what you can or want to and then list the remaining discrepancies on your disclosure report and price your home accordingly.  You and your agent can then use the existing home inspection as a selling tool.  The buyer can either accept the inspection report as is or they can purchase another one which I seriously doubt they will do.  Therefore my advice to home sellers is to get the home inspection done as you list or prior to listing your home.  Why wait until you think you have sold your home only to discover there is some work that needs to be done.  A lot of buyers will use the inspection report as a means to cancel their offer either because of the items on the report or simply because they have "cold feet" and want out of the agreement.

Final thought.  Selling your home could and should be made a great deal easier when you work with a qualified real estate agent.  Failure to do so opens the door to unscrupulous buyers and other people involved in the sale of your home.  Various real estate studies have shown that the number of real estate contracts that actually close, meaning they sell, are in the high 90% range when licensed real estate agents are involved.  When you consider this plus the fact that 80% to 90% of all buyers work with real estate agents should indicate that it is in your best interest to work with a qualified, licensed real estate agent.  In my opinion, selling your own home is like walking a high wire without the benefit of a net in case you fall.  It is really that simple!

But wait!  There IS a difference between a "licensed real estate agent" and a "REALTOR."  When you see the term "REALTOR", it means that the licensed real estate agent is a member of a local Real Estate Board of REALTORS (real estate agents).  Not all "licensed real estate agents" are members of local Boards.  Why is that important to you the home seller?  It means that REALTORS subscribe to the REALTOR Code of Ethics and that means there are protections built into the Code to protect not only sellers but also buyers and the general public plus it defines acceptable behavior between fellow REALTORS.  My advice would be to always work with a REALTOR as compared to a licensed real estate agent who is NOT a member of a Board of REALTORS.  It also means that your REALTOR subscribes to a Multiple Listing Service (MLS) and that definitely aids in the selling of your home.

No comments: