Selling or buying a home seems to be wrapped up in a mystical unknown art that only highly trained Realtors taking 6% of the Sales Price or more seem to understand.
Honestly this is not true and the fact that Realtors haven’t been forced to offer their services at fixed rates vs a percentage of the sale price is probably one of the most egregious acts in all business transactions.
The fact is many people go into a real estate transaction believing that their realtors have their best interest in heart. The truth is often they don’t and the listing price and offer process can often take tens of thousands of dollars of profit from sellers or limit the rights of buyers.
The worst part is after the sale happens or doesn’t you are likely to thank them for their work not even understanding how much money you just lost.
Get it straight the faster a Realtor can flip your home and move on to the next one is always in their best interest.
Seller agents won’t suggest you hold out for that $20,000 mark down that could mean a new car to you and only $600 in their pocket and because buyer agents are splitting the profit it is the same way on their end.
Initial Offers
So what do you need to know about Listing Prices and counter offers?
Everything,… but in reality think of your sale as you would the sale of your car or stuff at your yard sale.
If you want to sell your car for the best price you should do a little research. Look online for prices and hit a few local dealers. Understand the market and what you can expect if you were the person trying to buy your own car.
This is one step Seller Agents almost never take a home seller through. Sure they may give you a list of comparable homes and photos but do they bring you around your area to visit these homes so you can see what Your Own potential buyers have already seen when they come to your home.
In this way you can set the right initial sale price for your home.
Should you set it at middle, low or high based on other homes in your area after you really understand what visiting those homes and living in them would be like.
Offers and Counter Offers
Once you have set the exact perfect price for your home (which is never the case) you are likely to have offers on your home for less then your listing price.
Almost every transaction will include offers lower then the value you want to get unless you set the price of your home artificially low and announce it as a fixed price for a fast sale. Buyer not accepting Offers is the Term.
If you do accept an offer you should not get personally offended or involved in the offer you should factor the price offered vs your willingness to wait for a better offer.
Offers lower then the full asking price do not bind the seller.
On the other hand if someone offers your full price then the sale goes through. That is unless you set a time period where you can accept higher then asking offers.
Counter Offers
When ever an offer is made that is below your asking price you have the option of accepting it or countering their offer with another price or setoff.
Set-offs may include things like including furniture or appliances.
If you make a counter offer and the buyer accepts it then you are bound to the new deal.
As the seller you should never expedite your sale at your own expense. Many buyers will try to force deals but remember they are not paying out of pocket for the full price of your home in cash. The adjustment to their loan will be a minimal monthly amount and if the markdowns are miniscule they may not even be noticeable.
As the seller you are looking to get a profit above your purchase price.
The money you deduct over the value of your loan will be felt much harder by you when you look to put a down payment on your next home.
In other words the buyer asks you to cut $25,000 from your asking price and include $10,000 worth of appliances you were going to take to your new home.
As the Seller you are out $35k in the deal.
As the buyer if you do not get that $35,000 markdown and pay full price the amount you will pay every month in your loan payment may only be $20.
Final Thought
Always remember that your Realtor really does not care how much you make on the sale as long as they get their percentage.
They really don’t
If you lose $20k or if they get your a $20k markdown on a home it is not a big deal to their bottom line.
On the other hand if they have to spend two more weeks or months showing your house or trying to find you a place to buy then they are likely to lose a lot of money from not being able to work on other deals.
This is the truth.
The only other option you have is selling your home on your own and not accepting bids that include setoffs for the buyers realtor fee.
On the other hand it is very difficult to sell a home on your own.
There are a number of resources to do so including services that will list your home in MLS services to announce your sale to all realtors in your area.
In the end going it alone will still mean the use of a Lawyer and hopefully a realestate lawyer if you can find one.
It may sound harsh but until realtors all accept a fixed fee for making transactions go through … considering they use predefined forms and higher education if any is not really required for the job … It is always important that as a seller and even a buyer you fully understand the Listing and Offer process in your own mind and never defer to anyone if you feel your best interests are not being served.