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Vital information to help you sell your home
Selling your own home (FSBO)
Selling your own home works best in a Sellers Market (when there is a shortage of housing); however, in a Buyers Market (when there are more houses than there are buyers), it’s a tough proposition even for savvy sellers. Unfortunately, advertising is very expensive and only reaches a small percentage of the buying public.
Do you need an agent?
Well over 90% of all existing houses are sold through real estate brokers and agents. In the Dallas/Fort Worth area there are over 10,000 agents who are part of the Multiple Listing Service (MLS). The MLS is the most powerful advertising tool for the seller.
Informed buyers will be working with a real estate agent because that agent is free to them; the seller pays the real estate commission. Those informed buyers understand that they need someone to be on their side of the fence in the real estate transaction. They DO NOT want to work with the seller’s agent because they know that the seller’s fiduciary responsibility is to see that the seller comes out ahead.
An agent is important when you consider that selling a home is a very complicated process. Whether you have lots or very little equity, the sale of your home can impact your finances as well as your emotional well-being a lot more than you might imagine. A good agent can lead you down the selling path so you can avoid the thorns.
When is the best time to sell?
When you price your property correctly, any time is the best time to sell. Obviously, there are times of the year when there are more people looking to buy a house. Probably the slowest time of the year is the period between Thanksgiving and New Year’s Day. But in a large market like the Dallas/Fort Worth area, there is a constant flux of buying and selling. There is never a day of the year when someone is not placing an offer on a property, even if the seller does not respond for a day or two.
Is location really that important?
For the seller, location is NOT important. Unless you own a mobile home that you can transfer to a better location, you’re stuck with your current location. It might be a very desirable location, and it might be one that’s not as desirable. What matters after location is condition. Location and condition will determine price.
How is a home’s value determined?
Professional real estate appraisers use the prices of recent home sales (comparables, or comps), replacement cost, and property condition to come up with the value of a particular property. Real estate agents and taxing districts typically use comps and property condition for coming up with the value of a property; it’s a quicker and simpler method of determining value. Lenders rely exclusively on the value set by professional appraisers. Builders rely on construction costs and the cost of land to set a minimum price, but are forced by comparable sales in the area to set the final selling price of their homes.
Value is NOT determined by what local sellers are asking for their property. In the end, it is buyers who set values. If a sellers’ neighbor sold a similar house as the sellers, and that house sold for $200,000 a month ago, and it’s a Buyers Market, it’s not likely that anyone will pay more money for the sellers’ house. The buyers have set a value for the time being; naturally, time is in the sellers’ favor since prices seem to eventually continue with their upward trend.
Is listing with a BIG company really that important?
Since informed buyers don’t want to work with sellers’ agents, the most important factor in the sale of a house is the buyers’ agent. Those buyers will be loyal to their agent, whether it’s a one person operation, or an agent that’s part of a large organization. The critical job for the sellers’ agent is providing experience and knowledge in making certain that the sellers get the most money for their property at the close of escrow; in other words, work with the buyers’ agent to the benefit of the seller.
Large offices boast about their large advertising budgets. The advertising budget of, and the number of agents in a real estate operation does not mean that the listing agent will be able to procure a buyer any quicker than any other agent that’s part of the MLS (the North Texas Real Estate Information System).
What’s important to sellers is the experience of their agents, and the ability of those agents and their teams to make the sale happen smoothly, to the benefit of the sellers.
What are the costs of selling a home?
In addition to a real estate commission (which is normally split equally between the sellers’ agent and the buyers’ agent), there are typically selling costs as follows:
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