When a home is for sale, the emotional connection can have a negative influence on judgement. Home-owners forget that they have become property-sellers. Yet, they are in the business of selling a product that happens to be their home.
Seller and Real Estate Agent Must Become Business Partners
Once sellers realize that listing agents become their partners in the business of selling a property, they must understand that paying a commission does not put the burden on the agent alone:
- Sellers must offer a product that will appeal to buyers
- Agents use all available marketing tools and professional skills
The sale commission varies with countries. It is between 5-6% in North America. As a comparison, in the U.K. it is between 2-3%, plus hefty taxes such as the current 17.5% VAT (Value Added Tax). Some real estate agencies market their services at 2% on the web, often with the support of a magazine earning advertising revenue as compensation.
A seller should know that a commission can be negotiable. And, in some cases selling and buying agents might secure a sale by sharing a narrow difference between counter-offers.
Selling a Home Privately Might Require Legal Services
Whereas real estate brokers will protect their clients' interest, another option is to sell privately. Selling a home online can be very effective depending on location and demand. However, a real estate attorney will be needed if a legal issue arises, or the seller might find legal services online.
In case of doubt, rights and obligations can be checked in the real estate section of institutions such as the American Bar Association, The Canadian Bar Association, or their equivalency in the country of sale.
A House Sells When it is Prepared for Sale
Experienced realtors know that more than half of the houses are sold before the buyer gets out of the car. A property should be ready for sale before it is listed. And, curb appeal is as important as interior appeal.
In most cases, a house with cosmetic or structural problems will be priced below market value. Structural problems should always be disclosed, or they might abort a sale upon inspection. Furthermore, guides on home-staging tips and professional stagers can greatly enhance the qualities of a home.
When a Lower Offer Leads to a Profitable Sale
A property lingering on the market raises a red flag to agents. Pride is an emotional obstacle to selling and can be a costly mistake since the cost of owning a home is only terminated with its sale. When an offer is refused, the house remains on the market, with its costs:
- Mortgage payment
- Home Insurance
- Property taxes
- Homeowner association fees (when applicable)
- Maintenance expenses
Below is a simplified scenario for refusing a lower offer:
- Asking price: $800,000
- Monthly cost of ownership: $3,000
- Offer refused: $785,000
- Difference between asking price/refused offer: $15,000
- Cost of ownership over 3 months: $9,000
- Cost of ownership over 5 months: $15,000
Accepting the low offer would have been a better decision since the seller did not gain anything after five months. If the intention was to downsize to a $500K property and invest the balance, an additional cost would be the interests lost on that investment.
The other factors for considering a low offer are a lower commission to pay, and tax implications on capital gain. In a buyer’s market, the seller should think twice before refusing an offer.
Marie-Claude Arnott has been a home-owner and property-seller in several countries.
Marie-Claude Arnott - Marie-Claude Arnott writes about topics that interest her, from experience and with passion.
