How Sellers can prepare for a home inspection
Sellers: don’t price with the expectation of an increasing market
Recently, the market has mellowed as buyers retract. Home sales have continued to decrease for over 5 months as a result, leaving many real estate listings overpriced.
Buyers don’t see the same value as sellers these days which is causing properties to sit for longer, showing longer days on market in the MLS. Sellers contend that they “don’t have to sell,” thinking their perseverance will eventually get them what they perceive they deserve. This is because sellers think the market is stronger than it actually is and that it is still on an upswing which it isn’t.
If a home is priced well (without any wiggle room) and is popular with buyers, offers will come within 30 days. To make your home popular with buyers, simply price it using good sense as if no negotiations were necessary. In other words, price it at your “happy walk-number.”
Selling a home for the highest price relies on a seller being willing to sell at a price that inspires buyers to buy. We often hear sellers say, “I am not going to give my home away.” The translation of that to any real estate agent means, “I am not willing to sell my house for true market value because I want more.”
The reality is that real estate transactions happen when a buyer and seller agree on a price that both can live with. Neither Zestimates nor listing agents create value but an effective listing agent will prove value before taking an offer to contract. In order to attract buyers, one should start with a relevant listing price. The key to knowing whether you are priced relevantly is that you will not just get showings, you will get offers! To get offers flowing, the property’s price must be appealing to all suitable buyers. If more than one buyer recognizes value, then multiple offers can result, and a skilled real estate negotiator will locate the best buyer, meaning the one willing to pay the highest price—possibly above the list price. This process is called proving value.
However, I have recently observed that sellers are too reluctant to adjust their perception of the changing market dynamic. They believe that a strong second quarter GDP at 4.1% equates to eventual higher real estate prices. Unfortunately, the truth is that the market is fully-baked and with the exception of specialized bubble-protected areas, the prices are not expected to rise. All markets anticipate trends and prices shift as a result of anticipation. We are going on the ninth year of this bull market which has set a record. It has reached its peak and as everyone knows, what goes up must come down.
The future for home prices is not a bright one. What we see now is a turnaround in the 7-year seller’s market. Conversely, on the horizon we see rising interest rates (bad for buyers), reduced real estate inventory (bad for sellers), and record deficits, loan tightening, inflation and an imminent recession—likely within a year (bad for everyone).
Adding to the issue, websites like Zillow and Redfin may be falsely inflating property prices by using overly aggressive price algorithms. Some analysts believe that doing so artificially inflates home values. This happens because the algorithms track property listing views and “shares” from the site and then give weight to those data points. The more views and shares a home has, the more their forecasting pricing tool increases the “estimated value.” This is dangerous and could potentially add to a bubble effect since interest in a property does not always directly correlate to offers or a sale.
If you plan to sell your home, do not wait for the economy to boost your property’s value since that will not be happening! List it now, price it right and save some commissions in the meantime by choosing GetMoreOffers.com. Our Platinum PRO plan offers sellers full service with expert contract representation for a low flat fee.
When speaking with buyer’s agents as a flat fee listed seller, be respectful of them but at the same time do not take any crap from them either. If they are disrespectful throw them out of your home! If they attempt to bully or pressure you into a deal that is not at your terms smile and act like they are a child trying to get you to take them to a movie. Pressure is something to pass onto someone else but not absorb.
I can tell you what drives a buyer’s agent crazy is calling them for feedback or following them around the home when they are showing it to their buyers. That hate both. They want no one around when showing the home. Agents and buyers know what they are looking at. They want to speak freely to one another about the home comparing it to others. They do not want you to hear what they are saying.
As far as feedback goes there is nothing you can say to get an offer. A professional negotiator will never call a buyer’s agent and ask if they are presenting an offer UNLESS there is another offer on the table and then we do want that buyer’s agent to know that. That is correct, professional and helps the seller.
Our company does get feedback for our sellers at Altru Realty. But, self rep sellers (flat fee) should stay coy and act like they could care less about an offer coming. That is the professional way! Asking for feedback or asking whether an offer is coming is somewhat weak and in my opinion a counter by the seller. In other works you are desperate!
I have an expression, pass the pressure not the power. As a professional negotiator, I have many techniques but overall never allow anyone to pressure you because as a seller you have all the power. The listing agent has the next power level, then the buyer and lastly the buyer’s agent.
An example of this pressure is the drop-dead-date in an offer. All offers have a date on page one of the contract that states “if you don’t counter or accept this offer by 5:00 pm on x/x/x (date) this offer will be withdrawn. Well, 99% of all offers are DOA meaning too low so who cares if a low offer expires? I never do and this is a prime example of how a buyer’s agent will attempt to control you into a fast counter or they will threaten to withdraw their offer. Buyers never walk from a deal, they circle. This is a fake date and fake pressure. But, buyer’s agents and listing agents use the drop dead date as an effective tool to get a seller to counter. Countering is passing the power to a buyer’s agent. Maybe not a great idea. Read my book about this coming out late 2018 The Real Estate Sandbox.”
To learn more about flat fee MLS through GetMoreOffers.com or Altru Realty where we negotiate for you for just 1.5% at close, please visit our websites or call us 877 -232-9695.
Self-represented sellers on GetMoreOffers should always carefully weigh what they say to buyers’ agents. This includes whenever the seller is soliciting feedback which may or may not prove helpful.
You can’t always trust that negative feedback reflects the real reasons buyers don’t make offers. Let’s say the home has been shown fifteen times with absolutely no offers, and you have received seven different feedback comments, such as they didn’t like the floor or the location. That fact that there have been zero offers indicates that it’s not issues with the home itself but with the price.
In other words, the home is likely over-priced because all fifteen buyers walked away while only seven of them had negative feedback on various issues. Interestingly, sellers most often say, “It’s not my price because no one has mentioned price and everyone liked my home.” Had the price, however, been $10,000 lower, some or all of those buyer objections would disappear and possibly an offer would have been presented.
Some sellers long to hear positive feedback, but that’s rarely forthcoming from a skilled buyer’s agent. The savviest buyer’s agent will be less than forthright about offering overly positive feedback because they are working to get the buyer the lowest price and won’t want to give away any negotiating advantage.
Still, many sellers and listing agents alike view feedback as honest and helpful, but remember that the buyers’ agents are always negotiating against sellers. For example, a buyer’s agent may mislead you by giving negative feedback that the home is a more house than the buyer needs or maybe that it’s in the buyer’s top three choices, but in reality, the buyer thinks the home is the perfect layout, and it’s the buyer’s first choice of homes.
From a professional negotiator’s point of view, it’s not feedback a seller wants, it’s an offer. That being said, a seller should not ask if an offer is forthcoming unless there is another offer in play. Why? If you have another offer in play it’s appropriate to inform the buyer’s agent. Knowing there’s another offer may motivate the buyer to make his own offer or risk losing the home. But asking if an offer is coming without having another offer in play may be viewed as either too aggressive or too anxious which may then be interpreted by the buyer’s agent as meaning “Wow, this seller is motivated. We have the negotiating edge.”
So sellers beware. Before you speak to a buyer’s agent, remember that every time buyers’ agents hear something they can use against a seller, they will.
Some sellers have concerns that traditional agents boycott limited service listings by not showing them. There are a few ways that a Realtor® can tell that you are flat fee listed:
- When a listing is entered into the MLS, the broker must choose a classification to designate the level of service given to the seller. Most “flat fee” listings fall into the category of “Exclusive Agency-Limited Service” or just “Limited Service.” The reason this classification is different from “Exclusive Right of Sale” is that the flat fee MLS listing company does not typically represent the seller with regard to contract negotiations and the seller may sell to an unrepresented buyer and pay no commission fees at closing.
- It is usually the case that the seller takes phone calls directly for showings in a limited service agreement. The language in the MLS for Realtors® to “contact seller directly at…” can be a giveaway that the seller is flat fee listed.
GetMoreOffers.com, Florida’s largest and most trusted flat fee MLS listing company (now also available in New York) has sold over $1 billion in real estate since we started offering flat fee MLS to Florida consumers in 2005. So, the success of our sales proves that Realtors® do not boycott flat fee listings.
Do not believe buyers’ agents if they tell you that 2% or 2.5% commission will never work either. I have been a Florida real estate broker for 34 years and have worked in the flat fee MLS trenches for 13 years. I have seen commission offerings of as low as 1.5% actually work to sell houses in highly cosmopolitan cities. I have spoken to hostile Realtors®, grumpy Realtors® and happy Realtors® and I can say this without a doubt in my mind: agents want to earn a living just like everyone else and selling homes is what pays their bills. Whether the listing is limited service-flat fee MLS or a traditional-full service listing makes no difference. The money is green and spends the same. It is that simple!
The other very important thing to remember is that it is the buyers (and their perception of your price) that actually dictate whether you get showings or offers, not the listing type or commission. It’s the information age and buyers have access to the same listing data as the agents. So it’s impossible for a buyer’s agent to avoid showing a home to their buyer when the buyer is almost always driving the showings. In most cases, they become aware of the listing before their agent does!
Knowing that buyers’ agents have no control over the sale should give you more confidence about your flat fee listing. What many don’t realize is that there are really only two or three players in a real estate transaction that call the shots—and the buyer’s agent is not one of them. The buyer is the most powerful player because they have the money. A buyer is smart…and they are “perfect,” meaning they can do no wrong because without them, no sale happens. The seller is next in the power hierarchy, followed lastly by the listing agent (if they represent the seller; flat fee or self-rep sellers represent themselves).
This is my advice about selling a home using flat fee MLS: do not concern yourself with the chatter you may hear from Realtors® saying they won’t show your home if you don’t list with a traditional 6% agent or offer a 3% commission. Both are false statements and both are an ethics violations to boot.
Should you happen to come across a buyer’s agent who tells you that they will not show a property that they know to be flat fee listed, ignore them and move on. Sometimes agents will simply say this in hopes that you will be scared into listing your home with them.
If you wish to be listed in the MLS with an Exclusive Right of Sale listing agreement rather than Exclusive Agency/Limited Service so that your listing will appear identical to other full service listings, another option is to list with a discounted full contract representation program such as our Platinum level with Altru® Realty. Altru offers many other valuable benefits to sellers with the strongest contract negotiators in the real estate industry for just 1.5%. ALTRU® Certified Negotiators have one goal: to net you the most on your sale and with the best terms possible. To find out more, check out my videos detailing topics such as Home Selling Pricing Strategies, Biggest Real Estate Misnomer, Proving the Value of Your Home…and more by going to: http://altrurealty.com/Videos.aspx.
For more information and to sign up for one of our Flat Fee MLS Programs, contact Getmoreoffers.com at 1-877-232-9695.
A year for the records for everything but real estate. 2017 was pretty much in slow motion. New listings were few and buyers were picky to boot. I truly knew what 2017 was going to be like from the slow election-dominated news of late 2016. 2016 finished weak and there was absolutely not a single sign that 2017 would be anything but a repeat of 2016 with a bad attitude. I literally said in early January of 2017 that we had a bunch of work ahead of us and no real market gains. I was 100% correct! So what we did was to ignore the dogma of 2017 and focus on our many unique real estate brands and our new start-ups.
Knowing this, we forged forward and focused our resources on new products and getting ready for 2018. At GetMoreOffers, we made the best of it adding a few new key people to our already professional staff adding a highly talented digital marketing professional and laid the ground work for GetMoreOffers Generation II which we expect to be rolled out late 2018.
We also have decided to offer a free flat fee MLS listing in the Florida market. This new program should be released by February 2018 replacing the MLS Express plan.
Going back to real estate, the Florida market was mixed with some small gains in some cities and loses in others, like Miami. It was a tug-of-war between buyers and sellers with buyers ending up with a stronger position. It was all about price. Colorado remained super-strong.
GMO 2018 Real Estate Forecast
The future is bright for general real estate in 2018. GetMoreOffers is going to help sellers get their property listed faster and cheaper than ever before. Getmoreoffers.com is well-known all over Florida as the most reliable flat fee MLS listing service and now we will continue to forge the discount real estate market. Stay tuned for our next plan to be released in February.
Expect a brisk pace to real estate in 2018 as compared with the snail-like malaise that dominated 2017. A high consumer confidence in combination with aggressive lending will be the main driving forces for 2018. I see no political road blocks but a few bumps along the way to a more positive market tone and direction. The labor market should continue to tighten and drive more job transfers. This all spells out a clear path to more listings hitting the market. I believe looking back at 2018 we will say it was a year dominated by making a move now for my family and not waiting.