Selling my first House

[Canadian FIRE]

Ok, I'm moving shorty here. (See my last topic) This will be the first time I sell my house. I'm trying to figure out how to set my asking price.

I'm in bit of a unusal housing boom here in NE BC. There are VERY few house for sale in town under the 200K mark (other than trailers) and I have done some significant improvements to my place. I bought it at 117K and I just saw a similar one list for 163K. I know the real estate agent wants to go higher for his commission, but I want to have this place sold fast. So how do you place all these factors to come up with a price? I don't want to leave money on the table, but I don't want to get greedy. Please HELP!

Thanks,
CF

 

[brewer12345]

If I were in your shoes, I would probably pick a good agent and then rely heavily on their expertise. A good agent undoubtedly has a much better idea of teh market than you could likely acquire.

 

[TomSimpsonAZ]

Your home is worth 1 dollar less than whatever a very similar home is listed at right now.

 

[Nords]

I know the real estate agent wants to go higher for his commission, but I want to have this place sold fast.    So how do you place all these factors to come up with a price?  I don't want to leave money on the table, but I don't want to get greedy.  Please HELP!

Pricing your home will depend on the comps, but do the math from the agent's perspective.

If they underprice your home and they sell it in one day, the 6% commission required very little labor on their part. Say it sold at $150K and their company's cut is $9K.

For a "fair" price of $160K the agent is only looking at an additional 6% of $10K-- $600. They'd rather underprice a second client's home than try to squeeze $10K more out of yours.

Of course if you pay the agent another $1000-$2000 to attractively "stage" the home and improve its "curb appeal", in agent lingo that $1-2K is known as "pure profit". Staging is the ultimate cure-all for everything that you've screwed up in your home, which is clearly keeping the agent from being able to sell it. It's suggested much more frequently than actually reducing the agent's commission home's price for a quick sale.

If you feel that it's necessary to have an agent, then interview several of them and expect a listing price near the neighborhood comps. I'm not sure that all the staging pressure is necessary for a quick sale but if the agent keeps "adding on" things then I'd be tempted to list elsewhere. If you go "For Sale By Owner" then pick a neighborhood listing price or work an appraisal deal with the buyer.

 

[gtmeouttahere]

If you've already decided to use an agent negotiate a commission price and let the professional decide what your house could sell for. It sounds like you are in a good market and people will pay when there is a housing shortage. Take full advantage of that.

So what if your agent gets a few hundred more bucks if you put 8-$10,000 more in your back pocket.

Also, in my experiance, if you go for sale by owner, you will be blackballed by other agents and it usually doesn't pay NOT to use one unless you have experiance valuing property. Which it doesn't sound like you do. What usually happens is you end up low balling and losing way more money than it would have cost to use an agent plus a lot more effort on paperwork etc.. that you could screw up.

#1 is find a good agent you can trust, ask around for referalls from friends and interview them, you are paying them well, they are working for you and are your employee.

Good luck!!!

 

[virginia]

I agree with TomSimpsonAZ. I recently sold my condo. I asked just under what other folks were selling theirs for that were exactly the same condo as mine. They asked 243k for theirs. Theirs was on the market for 4 months. I asked 239,500 for mine figuring the under 240k was what would sell it. I had an offer in 8 days, and I basically got the same thing for mine that they did for theirs - except I didn't wait four months, and I would have spent the additional money on the mortgage waiting for it to sell anyway.
Good luck!

 

[Canadian FIRE]

If you've already decided to use an agent negotiate a commission price and let the professional decide what your house could sell for. It sounds like you are in a good market and people will pay when there is a housing shortage. Take full advantage of that.

So what if your agent gets a few hundred more bucks if you put 8-$10,000 more in your back pocket.

#1 is find a good agent you can trust, ask around for referalls from friends and interview them, you are paying them well, they are working for you and are your employee.

Thanks everyone for your ideas. I've decided that I agree with Gtmeouttahere's advice. Find a good agent and give a little trust. The agent I'm bringing in for the walk through has a fantastic local track record. Everyone I talk to likes the guy and speaks well of him. Also he is so involved in the market he can most likely keep me from making a mistake.

I will keep in mind the idea of $1 less than a very similar place. My problem is finding that reference point. The one place listed at 163K doesn't have new siding, furance, hotwater heater and new roof.

I'll let everyone know how it turns out after we list the house next week.

CF

 

[nnkrealtor]

I would recomend getting an agent you can trust. However if you really don't want an agent then get an appraisal. They cost about $400 and price the house about 2k-5k below appraisal and advertise it as below appraised value. Show the appraisal to potential buyers. Also if you get an agent don't talk the commission down because then it won't sell. Say you only list it at 4% Other agents simply won't show a house that is only offering them a 2% split.

 

[CCdaCE]

What's wrong with payin' $300-$400 for a professional appraisal, and then goin' from there.  

As far as the other "closing paperwork", I have no idea about that.

-CC

 

[Texas Proud]

Maybe check the laws of you area..

In Texas, by law the RE agent is an agent of the SELLER, even if you are the buyer... if you tell the agent something like 'offer him this, but I will go higher', he should tell the buyer... if the buyer asks, he has to tell him.. so, both agents in a deal are your agents...

Now, if you want to buy, you can pay for your own 'buyers' agent but you pay them on the side.

 

[gtmeouttahere]

Also if you get an agent don't talk the commission down because then it won't sell. Say you only list it at 4% Other agents simply won't show a house that is only offering them a 2% split.

That all depends on the asking price. In CF's post yes, CF will probably not talk the agent down. High end, yes you could. Anyway I simply don't buy that your house won't sell if you lower the commission, some money is better than no money and if there is buyers they'll do the deal, trust me. What's the saying about a bird in the hand...

Most unscrupulous realtors will tell you just that to keep their commision high. I think it is all BS. Realtors just don't like it when you FSBO. Thats when your house won't sell.

 

[gtmeouttahere]

One more thing about appraisers...They are all over the board on value from my experience... Especially in a hot market.  I never trust a appraisal and they are pretty generic when your talking about a living, breathing market.  Only the agent will know what to do w/the price and a lot will depend on the area the house is in.   Appraisers are great for refinancing not much else IMHO.

Sounds like you found a great agent CF...good luck.

 

[nnkrealtor]

Most unscrupulous realtors will tell you just that to keep their commision high

Well think about this... Considering that you are in a luke warm market area...
An agent has a buyer looking for a 3BR 2bath house in xyz area. Now that agent searches whats available with 3BR 2baths in xyz area and comes up with 5 houses to show. 4 are offering a 3% split and one is offering a 2% split ... yes that 2% house will get shown, but it will almost always be shown last unless that buyer specifically asked to see that house. If that house is always shown last then odds are that potential buyers are going to like one of the first 4 and not want to see anymore hense that house will be shown the least of all 5. I am not saying that it should be that way but that is the way it is.

If you are at the grocrey store to buy a bag of apples and one bag has 6 apples for $2.00 and another bag has 8 identical apples for $2.00 which one are you going to buy? Same principle.

 

[cute fuzzy bunny]

Last time I bought a house I found two online that my realtor hadnt shown me. Turned out they were the two I ended up deciding on. With another realtor getting the 2% commission, which I imagine is why she didnt show them to me.

Turns out she got nothing. Bad choice.

But I think buyers agents have to work pretty hard with a lot of clients. When I'm buying, if you've shown me six houses and I'm not interested in buying one, either I havent done a good job of explaining what I want, or the realtor isnt listening.

 

[nnkrealtor]

Cute,

You are right... Communication is key. Its funny though, I have had several buyers who tell me exactly what they are looking for, and months later when they don't like any of those and I decide to show them something totally different they end up loving a house that is the exact opposite from what they told me they were looking for in the first place.... Its a strange career.

 

[Canadian FIRE]

Well the agent arrived last night. Overall I'm just happy to be mostly done my renovations on this place (getting a place staged is a pain in the butt).

I managed to use get him to lower his fees. So I'm only paying about 4.8%. I'm happy with that.

The agent thought an acceptable range for the place would be 169K to 174K. Since I'm in a hurry to sell I went with 169,900 as list price.

I just got off the phone with the DW and we have a sign on the front yard and a showing at 6:30pm. Then tomorrow we have a showing the the local agents. So I think I made the right choice by going with our agent, I think I can really have this place sold within the next two weeks.

I'll keep you all updated on the drama.

CF

 

[vic]

Maybe check the laws of you area..

In Texas, by law the RE agent is an agent of the SELLER, even if you are the buyer... if you tell the agent something like 'offer him this, but I will go higher', he should tell the buyer... if the buyer asks, he has to tell him.. so, both agents in a deal are your agents...

Now, if you want to buy, you can pay for your own 'buyers' agent but you pay them on the side.

I believe that if you decide to go through a realtor as a seller in TX, there is typically a 6% commision for the realtors (3% buyer's agent, 3% listing agent) on the table paid by the seller unless negotiated otherwise in advance.

Of course a listing realtor would like to be the only realtor involved in the deal and represent both parties because then he/she gets all of the commission. Once you have decided on a house, it is absolutely useless to bring in a buyers agent to just sit there and hold your hand while filling in the blanks on the contract.

We like to deal with no realtor whatshowever but with the seller instead. However, tomorrow we will close on a property listed by a realtor. It was a dirt cheap super hot deal that I picked up within minutes of being on the market. I offered the asking price AND told the realtor that she could be our buyers agent. Now, that means double commission for the same amount of work. Other offers that were considerably higher than ours that came in minutes later were ignored. We had other similar experiences with realtors. I would never even think about a buyers agent once I have made my selection.

Vicky

 

[Brat]

If the listing realtor fails to present all offers they can have legal problems, big time!

 

[gtmeouttahere]

Well the agent arrived last night.  Overall I'm just happy to be mostly done my renovations on this place (getting a place staged is a pain in the butt).

I managed to use get him to lower his fees.  So I'm only paying about 4.8%.  I'm  happy with that.

The agent thought an acceptable range for the place would be 169K to 174K.  Since I'm in a hurry to sell I went with 169,900 as list price. 

I just got off the phone with the DW and we have a sign on the front yard and a showing at 6:30pm.  Then tomorrow we have a showing the the local agents.  So I think I made the right choice by going with our agent, I think I can really have this place sold within the next two weeks.

I'll keep you all updated on the drama.

CF

Good job CF, looks like you are already ahead.  Nicely done on the commission too.  I had my doubts in your price range but looks like you did it!!! Keep us informed on your progress, good luck.  

It's just me but I would pick a number in the middle of the price range he gave you.  It shouldn't make that big of a difference in the sale time but could give you more money to pay that commision and you'll walk away w/more...just my 2 cents..

 

[gtmeouttahere]

If the listing realtor fails to present all offers they can have legal problems, big time!

Agreed!!! Don't be bullied by unscrupulous realtors!!!

 

[nnkrealtor]

If the listing realtor fails to present all offers they can have legal problems, big time!

That is 100% right. Listing agents must present all offer to the seller IN A TIMELY MANNER.

 

[CCdaCE]

So I'm only paying about 4.8%.  I'm  happy with that.

The agent thought an acceptable range for the place would be 169K to 174K.  Since I'm in a hurry to sell I went with 169,900 as list price. 

Someone REALLY has to explain to me why the agent(s) need to make EIGHT THOUSAND DOLLARS to sell a house. What magical services are they offering other than walking someone through a house. When I bought my house, it was beyond me how realtors can command these fees. Mine made several hundred/hr. It was beyond me why.

-CC

 

[Canadian FIRE]

Vic, I should clarify.  The fees are 6% on the first 100,000 and 3% on the rest.  If another agent brings in a buyer they get half.  I averaged it out to get the 4.8% and assumed a selling price of 165K.

So we had two showings last night.  One at 6pm and the other at 6:30pm.  I got a call from the agent at 8:36pm.  Both showings went well and they placed offers.  We had a little bidding war and I got a final offer of $177K if I included my brand new fridge and stove (they cost less than 2K).  So I got over my list by 7K and had an offer in 3 hours and 36 mintues from the first showing.  Taking out my current mortage and the agent fees (about 4.7% overall) I should net about 60K on the sale.  Talk about your good investments!!  I put down 8K and dropped in 15K over the last two years and I'm still making 37K in pure profit.

I feel I got my money's worth from the agent. I thought my place would go for 150K, he got me a extra 22K.

Thanks for all your suport and ideas.  You guys really helped me keep my head on my shoulders during all of this.

CF

 

[Nords]

Someone REALLY has to explain to me why the agent(s) need to make EIGHT THOUSAND DOLLARS to sell a house.  What magical services are they offering other than walking someone through a house.  When I bought my house, it was beyond me how realtors can command these fees.   Mine made several hundred/hr.  It was beyond me why.

Shucks, on Oahu the gross take on a median-priced home, $600K, is $48K. If the house sells on the first Sunday afternoon then technically the salary rises to several thousand an hour.

Well, the short answer is "They don't." Look at the rise of the fixed-price realtors like Help-U-Sell & "Assist2Sell".

The long answer is that they don't make the money for selling the house. They make the money by being ready to keep the entire deal from getting incredibly $#@%ed up by buyers & sellers who don't know what they're doing. If you're standing around trying to find something for your realtor to do then you don't need one.

But it's like fixing your car or cutting your hair or doing your own surgery. If you could diagnose the problem, acquire the parts and the special tools, and find the time then you wouldn't need those "overpaid" professionals either.

 

[Canadian FIRE]

But it's like fixing your car or cutting your hair or doing your own surgery. If you could diagnose the problem, acquire the parts and the special tools, and find the time then you wouldn't need those "overpaid" professionals either.

Nords - Overpaid professionals. You mean like engineers! I current get paid a gross amount of money to tell dumb buyers that the product is fine and its the operator who screwed things up.

It's only overpriced if you can do it yourself and still pay someone else.

CF