Pricing your home to sell

With the changes that have occurred in our market (Northern VA), there are still sellers who are hanging on to what I call improper pricing practices. Your home will not sell because of what you want to net, unless it happens to be in the range that every other house is selling for in your neighborhood. I am amazed at the number of people with property to sell who are basing their list price on nothing other than greed. Your house/property is not an endless supply of cash. It is not a piggy bank that you can pull all of the equity out of, then sell it and VOILA! Your equity is automatically replenished because you still want more out of it. If your equity was spent on the fabulous kitchen you now have...or the boat you have sitting in your driveway...it's gone. Buyer's don't have to pay more just because you are under the belief that you're supposed to walk away from the sale of a home with money in your pocket.

When I come across sellers like this, I walk away. I will try to educate them on how I reached the conclusion of where I would list their house. Instead of heeding my advice, they get mad at me. If I'm going to shell out $1500 for marketing, I want to make sure I'm getting a return on my investment. Having my sign in the yard on a property that won't sell because it's improperly priced makes me look bad and gives the seller false hope that they will actually get what they're asking. I'd rather walk away and have someone mad at me because I didn't take their listing then to have them mad at me because I mislead them. At least with them being upset because I didn't take their listing, there is hope that they'll come around.

If you're thinking about pricing your home above what the market dictates, you should look at your home from the same perspective we all look at the stock market. It's 1995 and tech stocks are cheap and HOT! You buy 1000 shares for almost nothing. They increase, then split. You don't sell. They increase and split again. You still don't sell. This goes on for the next two years. You have more stocks than you know what to do with, and they are still HOT! You wake up one morning and turn on the news. To your dismay, tech stocks are dropping. You don't panic like everyone else seems to be doing...you give it a month, the company will rebound. Over the entire month you waited, the stocks plummet. You call your broker...select the scenario which is most likely to happen:

a) Hey Joe, I want to sell those Acme-tech stocks. I know they're only selling for $3 per share now, but in late 1996 they selling for $195 per share. That is the price I want to sell them for. Make it happen buddy!

b) Hey Joe, I want to sell those Acme-tech stocks. WHAT!!! They're only worth $3 per share? No way dude! I paid more than that for mine!! Darn, I guess I missed the boat.

To properly price your home, you need to base it on comparable homes that have SOLD recently....not comparable homes that have currently LISTED. Your home will sell for what buyers are willing to pay. And "Make an offer" in the remarks does not work if your home isn't priced right.

Avoid Credit Scams

There's an old saying that goes 'desperate times call for desperate measures'. When it comes to repairing your credit desperate times still require a clear head. It may be tempting to give in to some of the scams that are out there but always remember...if it sounds too good to be true, you'd better believe it is!

Some scams to look out for are:

• Loans that require an advance fee. The company guarantees that no matter what your credit history, you will be approved for a loan. The catch? You have to pay a fee before they process the loan. The fee ranges anywhere from $100 to several hundred dollars. Reputable lenders do not approve credit without knowing what they are getting themselves into. They also don't charge fees in advance. These companies often use 900 numbers (which results in charges to your phone bill), direct mail, radio or local tv ads. They may also use a courier service to deliver in order to avoid prosecution by the U.S. Postal Service.
• Companies that offer to repair your credit. No one can remove information from your credit history, unless it is incorrect. Quite often, the companies charging outrageous fees to repair you credit are not doing anything you couldn't do yourself for free. If you do elect to use a credit repair company, you should not have to pay for services up front. You should be advised of your legal rights and how you can repair your credit on your own for free. Credit repair companies should never suggest that you create a new credit identity; this is illegal and you may be subject to prosecution.

Repairing one's credit is not difficult. It just takes a genuine desire to take the necessary steps to attain a good credit rating. Being a newer agent, most of my experience is with "credit challenged" clientele. Through working with people with less than stellar credit, I have learned a thing or two about getting back on the right track. I'd be more than happy to share my knowledge with anyone who needs some help.

Types of Agency

There are different types of agency, or representation in a real estate transaction. Designated representation means that the parties to the transaction (buyer and seller) are represented by the same brokerage, but each party has a different agent in that brokerage. For example, Ricky's Rockin' Realtors has a listing that Billy Buyer is interested in purchasing. Billy calls the brokerage...Ricky's Rockin' Realtors and asks to see the house. Andy Agent takes Billy to see the house and they sign an agreement to work together. Billy likes the house and decides to make an offer. The offer is submitted to Sammy Seller's agent...Lizzy Lister. Because Andy and Lizzy work for Ricky's Rockin' Realtors, and they each represent a party in the same transaction, they are considered Designated agents.

Dual representation means that both parties to the transaction are represented by the same agent. So if Billy Buyer contacted Lizzy Lister directly to see the home AND Billy Buyer and Sammy Seller agree that it's OK for Lizzy to represent both of them, Lizzy would be a dual agent. The difference between "regular" agency and dual agency is that Lizzy would act more as a facilitator. Lizzy could explain any part of the contract/transaction that Billy and Sammy didn't understand, but she could not divulge information about the transaction to either party (without consent), nor could she negotiate for either party.

A Recent FSBO Experience

The reason most people elect to sell their own home is to save money. Trying to save money is a good thing...but when you could end up in legal hot water because you want to save money...you may need to think twice.

I recently worked an FSBO transaction, and it was no walk in the park! Not because I did all of the work on my own, but because the sellers mistook services I did as a courtesy as representation. Whenever I reminded them that I wasn't their agent, they'd get angry with me. I don't do these types of transactions for the commission...I do it because I love a challenge.
For anyone thinking of selling his or her own home, I commend you. I equate selling a home on your own to defending yourself when you're on trial and you're not an attorney. Unless you have experience, it is not as easy as people seem to think. Selling a home is a full-time job, and there are numerous things going on behind the scenes that people outside of the profession don't know about.

A helpful tidbit (that may not seem so helpful) is to remember that you really are on your own. It's not a 'best of both worlds' type of deal. You don't get to reduce the commission AND have representation. If an agent brings a ready, willing, and able client, YOU are still without an agent. The agent should make sure that you understand the process, and all of the paperwork you sign. Keeping track of deadlines etc. is your responsibility. If you go into the transaction with the knowledge that whenever you need help you have to seek outside counsel, it will save tons of frustration for everyone.