All should be considered when selling a home, even the most important of home selling tips, which is to detach emotionally: When a house is for sale, the home-owner becomes a property-seller, yet most of the decisions are linked to a personal connection to the home; this can have a negative influence on judgement. A few tips will help the seller focus on his goal, which is the sale of the property.
If anxiety lurks, rights and obligations can be checked in the real estate section of institutions such as the Canadian Bar Association, the American Bar Association, or their equivalency in the country of sale.
The Realtor and the Sale Commission Agreement
The seller must understand that the sale of a house is a business partnership with the listing agent, therefore paying a commission does not put the burden on the agent alone.
The responsibility of the seller is to offer a product that will appeal to buyers. The agent’s is to market it through his expertise and professional services.
Commissions vary with countries: It is usually 6% in North America. As a comparison, the sale commission in the UK is 2-3%, plus hefty taxes such as the current 17.5% VAT (Value Added Tax). Some real estate agencies market their services at 2% on the web, often with the additional support of a glossy magazine, earning advertising revenue as compensation.
Another option is to sell privately, as selling a home online can be very effective; depending on location and demand. However, professionals know best when an issue arises; besides, a realtor will defend his client’s interests.
Lastly, a commission can be negotiable, and in some circumstances, selling and buying agents might secure a sale by taking care of a narrow difference between counter-offers.
The Importance of Preparing a House for Sale
Prudential states that “more than half of the houses are sold before the buyer gets out of the car.” A property should be ready for sale before it is listed: Exterior appeal is as important as interior appeal.
If cosmetic or structural problems exist, the seller must be prepared to sell below market value. Guides on home-staging will help the owner identify cosmetic flaws. Hiring a professional home-stager will increase the appeal of a home, although structural flaws should be disclosed.
A House Sells When the Price is Right
A property that lingers on the market raises a red flag to agents: Pride is an emotional obstacle to selling, and can be a costly mistake, since the cost of owning a home is only terminated with its sale. When an offer is refused, the house remains on the market, with these costs: Mortgage payment, insurance, property taxes, homeowner association fees if applicable, and maintenance expenses.
Below is a simplified scenario for refusing a lower offer:
Asking price: $ 800,000
Monthly cost of ownership: 3,000
Offer refused: 785,000
Difference asking price/refused offer: 15,000
Cost of ownership over 3 months: 9,000
Cost of ownership over 5 months: 15,000
Accepting the low offer would have been a better decision, since the seller did not gain anything after five months. If the intention was to downsize to a $500K property and invest the balance, an additional cost would be the interests lost.
Another reason for considering a lower offer, is to factor in the lower commission, and the tax implications on capital gain. In a buyers’ market, the seller should think twice before refusing an offer.