Here’s the funny thing about this seller’s market: Some sellers are unsure of how to handle their potential windfall.
They’re sure they want to reap a huge amount of money for their home. And, they’re sure that they’d prefer to sell within a minute of listing their home.
But because the market is so hot in so many places, and sellers have been regaled with stories of other sellers’ success, some sellers have fooled themselves into thinking all they have to do is breathe the words “house for sale,” and buyers will line up in front of their door.
It’s that kind of thinking that can keep a house listed for months without a single offer.
One agent says she dreads going on listing appointments these days because whenever she walks into a seller’s house, she sees a smirk on their face, as if they know everything there is to know about selling a house.
“Educating sellers today is tough because they hardly see the need to use an agent. And if they do select an agent, it’s usually because the agent has promised them a ridiculous amount of money for their home,” says the agent, who asked to remain nameless. “The problem is, when even one of these sellers gets a pie in the sky price, it ruins it for the next 10 listing appointments.”
“I’m taking listings and my thinking is to price it fairly, even if fairly seems like a huge number. But I always ask the seller if he’ll feel bad if the property sells for full price. And they often say yes, so I bump the price a notch,” explains 20-year real estate veteran Elizabeth Ballis, a broker with Coldwell Banker.
“Those of us who have done this for a long time, and take the profession seriously and like to sleep well at night are having a hard time right now,” Ballis said. “Right now, I’m in a situation where someone paid $300,000 for a property last July and it sold in a multiple offer for $425,000.”
“The real problem is that people are so desperate to buy something, they’re willing to pay more than where the market should be. Appraisals are off, too, and that makes it hard to comp this stuff out,” Ballis said. “I wouldn’t deny anyone their appreciation, but $125,000 in seven months is a little extreme.”
As a seller today, you need to be aware of two important things: First, today’s buyer is extremely savvy and knowledgeable. They’ve had to educate themselves about the market in order to compete. Second, most home buyers won’t (or can’t) overpay for a home.
Many sellers have also begun to seriously consider selling their own homes, without the help of a licensed agent.
New discount brokerage firms, like Econobroker.com, allow you to list your home on your local multiple listing service (MLS) for as little as $500. For the same fee, the company will also provide you with the sign for your front yard.
Other Internet sites, like Owners.com, will list your home on their for sale by owner (FSBO) site, but also give you an opportunity to be referred to an agent should you not receive any offers. Owners.com offers a free trial period for listings, so if you do indeed sell quickly, you’ll get the service without paying for it.
The problem with selling your own home is that many states require sellers to give buyers certain pieces of information, such as a written seller disclosure statement or termite inspection. Your listing agent will help you meet these state requirements, or you can contact your state real estate commission or department for the forms you need to comply with the law.
If you think you can sell your own home quickly, you should do try it, most veteran brokers say.
The problem is, most sellers are ill-equipped to sell their own home. Either they’re too emotionally tied to the property, don’t have the market skills necessary to do the job right, can’t look objectively at the home to remove all unnecessary clutter, or simply don’t have the time.
“We bring a lot to the table,” said Ballis. “that’s not to say that we’re not well paid. But we do a whole world of things for the seller once the contract is written. We get you through your inspections, help negotiate with the attorneys, and gather the pieces together for the closing.”
“You could just hire an attorney for $1,000 to handle the whole thing. But the attorney won’t be there on the phone every day holding your hand, working with the buyer to get them approved, and doing the other things that need to get done,” she added.
Ballis used the one listing she has been unable to sell since November as an example. It’s an expensive townhouse in a fun neighborhood, but when it was built, about 10 years ago, the developer only thought its future residents would have one car. The missing second garage space has proved to be a huge problem.
“We’ve had 95 showings since November. The house isn’t overpriced. It looks great, and it’s normally not that hard to sell these,” Ballis offered. “But selling a home is what you do 24 hours a day, 7 days a week. These sellers have their own jobs. And if you go to a meeting instead of showing your house, you’ve just missed out on a large part of your market.”
Published: Feb 28, 2000