Selling your home is no small matter, and small mistakes can lead to big losses. So who can you trust to do right by you or to give you sound advice? That’s what prompted me to start writing this column over a decade ago and why I archive all my columns going back several years at www.JimSmithColumns.com.
A couple weeks ago I wrote about an agent who has been very successful getting listings by claiming to have a buyer and offering to cut his commission in half if he sells it himself — but who admitted to me on the phone that he refers all buyers to an agent who’s not even in his own brokerage (earning a nice referral fee) and hasn’t “double-ended” one of his own listings since March 2017.
In another previous column, I instructed readers on how to verify agents’ claims of success by going to www.REcolorado.com (our MLS) and clicking on Find Agent > View My Listings > Properties I’ve Sold. I created www.FindDenverRealtors.com as a short-cut to take you directly to that agent search page on REcolorado.com. If any seller had searched for the above-mentioned agent on that web page, he or she would have known in advance that that agent had not provided the buyer for any of his sales in over a year. It’s so easy for an agent to claim he or she has a buyer for your house, and then say after getting your listing, “Oh, sorry, that buyer found another house. The timing was just not right.”
So, not verifying claims about having a buyer is the one of the bigger mistakes that I see sellers making. My suggested response to that pitch is, “Bring me your buyer and I’ll consider the offer. If I accept that offer I’ll pay you 2.8% commission, but I won’t list with you just because you claim to have a buyer.” Don’t be surprised, then, that the buyer “found another house.”
That brings me to the second mistake I see sellers make: accepting the first good offer you get. You should treat any unsolicited offer as the opening bid on your home. And keep in mind that anyone who offers to buy your house for cash without putting it on the market is doing so with the intent of flipping it and making a minimum 5-figure profit. Yes, he may save you something on commission, but only by putting your home on the MLS will you expose your home to the full universe of potential buyers and thereby get the highest price.
That brings us to the third mistake — not having an agent on your side. You don’t want to be the only party to a transaction who doesn’t know what he’s doing. Sellers without an agent typically still pay 2.8% to a buyer’s agent, and for a couple percent more would likely net much more by exposing their home to other buyers and their agents.
Once you’ve decided to have an agent on your side, we encounter mistake #4: not asking the right questions when interviewing listing agents. You can find my suggested interview questions in previous columns at www.JimSmithColumns.com.
Another mistake I see again and again is overpricing the home. In a wild and crazy seller’s market like we’ve been experiencing, it is tempting to overprice a home. But how do you know what the right price is? I’ve written about this before, but the short answer is to price your home based on previous sales, not on future expectations. It’s difficult to underprice a home, because a lower initial price is likely to attract more buyers and create more interest.
Have you ever attended an auction? Does the auctioneer start the bidding at what he expects to sell the item for? Of course not. He starts it low enough to get several bidders in the game, and then the price is bid up and up until only the highest bidder remains. That’s how I train our broker associates to sell homes.
It stands to reason that a higher number of motivated buyers will lead to a higher selling price. Asking buyers to submit their “highest and best” is the easy but usually not the most effective strategy for maximizing sales price. That would be like an auctioneer cutting off bidding after getting one bid from each bidder! I advocate telling buyers’ agents exactly what the current highest price is and going back to other bidders and asking them if they want to resubmit. This takes more work and a degree of patience, but it will not only get you the highest price for your home, it’s also the fairest way to sell a home in a seller’s market, something most buyers’ agents seem to appreciate.
After all, what buyer wants to find out that it he had only offered $2,000 more he would have won the bidding on a house he wanted to buy? At the same time, what seller wants to question whether he or she could have gotten more for their home if their agent had priced the home correctly and worked the multiple offers instead of recommending acceptance of the “highest and best” offer?
Take the time to visit my website of previous columns, and scroll down through the headlines. When you find a headline that speaks to you click on the date to read the column on your screen or to download a printable PDF of it. You could learn something that might save you lots of money and heartache.