Archive for the ‘Preparing To Sell Your Home’ Category

For Sale By Owner (FSBO) Myths (And a Couple of Facts)

Friday, June 17th, 2016

Updated in 2016…

With more than 90% of prospective buyers beginning their home search online and multiple web outlets for listing publication, it seems that more sellers would be bucking the broker’s commission and listing their property for sale by owner (FSBO). Cutting a commission by 3-6% could save thousands of dollars, but it would also put some real estate brokers out of business. At RealDirect, we recognize that the traditional method of selling real estate needs to adjust and embrace a new way of doing things in order to stay relevant. However, to many brokers who are wedded to a standard commission, the easiest way to keep money coming in is to use fear. Fear that selling with anyone but a traditional broker is hard. Fear that buyers’ brokers won’t show homes that are not listed with the big brokers. Fear that sellers won’t know how to price their property. While the list goes on and on, most of these fear tactics are inaccurate at best, and outright lies at worst. If you’re thinking about selling your home without a traditional broker (or a FSBO), we’d like to debunk some of the for sale by owner myths (and share a couple of facts).

Myths

Myth: If you don’t list with us, we won’t bring our buyers.

Fact: Buyers’ agents want to earn a commission. If their client says they want to see a property, agents will typically try to work out a deal. However, getting brokers and owner to agree to a deal can be tricky, with many of the large brokerages refusing to show homes where they do not have agreements in place. But by working with an FSBO like service such as RealDirect’s Owner Managed service, we take care of the agreement, so it will be easy for brokers to show your home. Plus we are members of the Real Estate Board of NY – which is the de facto MLS in NYC. Being a member of REBNY requires that you co-broke with all other REBNY brokers.

Myth: You’ll get more money if you sell with a traditional broker.

Fact: That’s just plain fuzzy math. First, this does not take into consideration that the net proceeds could be higher with alternative sales models because the closing costs are lower (i.e. commissions) even if the sales price is lower. But even if you do not take that into consideration, if the property is marketed to every possible buyer, as done with RealDirect, the sale will be highly competitive, and you will get the highest possible price.

Myth: It’s too much work for you to handle on your own.

Fact: Maybe. It depends on how much time you’re able to devote to showing and answering questions about your home. That’s why RealDirect offers different listing options which allow you to handle your own showings and open houses or have a licensed agent do them for you. Our platform has baked in marketing that covers all the mediums a traditional broker would use (and several they don’t). We’re available to negotiate for you, or you can handle it yourself. Because every situation and every seller is different, we don’t prescribe to a one-size-fits-all real estate model and we don’t believe in one-size-fits-all pricing. You shouldn’t have to, either.

That said, there are some scary things brokers will tell you that are actually accurate.

Fact: People won’t find you unless you’re in the MLS.
Your local MLS is what most buyers’ brokers use to find properties for their clients, and also where sites such as Streeteasy, Trulia, Zillow and others get some of their listing info. While it’s certainly possible to find a direct buyer by doing your own advertising, if you want to appeal to the widest buyer base possible, it is critical that your listing appear in the MLS. And being in the MLS (or REBNY database in NYC) will also help you with the next one…

Fact: You have to offer a buyer’s broker commission.
While you can forego paying 2.5-3% to a seller’s broker by listing your home “for sale by owner (FSBO)”, if you want brokers to bring buyers to your home, you have to be willing to pay their commission. You can opt to only show your home to direct buyers with a strict “no brokers” policy, but in doing so, you eliminate every single buyer who wishes to work with a broker instead of representing themselves – and that is the majority of buyers. And eliminating buyers from the buyer pool can result in a lower purchase price, and work against your sale.

So the key to successfully selling your home as a FSBO is to do your research, understand how the process works, realistically evaluate your level of time and willingness to do work, and make a decision you’re comfortable with. Scare tactics are just that. Don’t believe the “for sale by owner” myths.

How Real Estate Brokerage Commissions Work

Friday, April 24th, 2015

Before I became a real estate broker, I thought I knew how real estate brokers were paid. Listing brokers would simply split the commission with the buyer’s broker, and everyone took their money at the closing and lived happily ever after. And if there was no buyer’s broker, I figured the owner of the property would save the buyer’s broker commission.

Well, I clearly had no idea how it all worked. Here are some of the common misconceptions about real estate brokerage commissions, and the truth about how real estate brokerage commissions work.

1. Real Estate Brokerage commissions are way too high!
Actually I started RealDirect because of this myth, but eventually learned this was not, in fact, true. What I did discover, however, is that real estate brokerage commissions are almost always wrong. For every deal that closes in 2 weeks from when the property was listed, there are others that are on the market for a year and then get de-listed, only to be given to another brokerage. In the first case, the broker probably received a windfall for 2 weeks’ worth of work. But in the second case, a year’s worth of work was provided for free. So in all likelihood, any given deal is probably paying too much or too little to the broker.

2. Real Estate Agents can cut their commission to get a deal done.
While some agents will cut their commissions to get a deal done, not all can. Depending on the price of the home, the number of agents on the deal and the commission offered, it may or may not make sense to reduce the commission. And some brokerages have a blanket prohibition on this.

3. Real Estate Agent commissions are fixed by the brokerage.
Rarely do brokerages have fixed commissions – but they will often have minimums that they will take, and those are often tied to gross commission revenue rather than percentages per deal.

4. All Real Estate Brokerage commissions are 6%.
Commissions vary by region and company with some higher than 6% in low price areas with slow moving inventory, and lower in others.

5. Real Estate agents split their commissions evenly with their brokerage.
Commission splits vary dramatically between brokerages and even withing brokerages. There are 100% commission brokerages, where agents pay a fixed transaction fee per deal, and a monthly “desk fee”, and more traditional brokerages where the split is determined by how much business a broker does – i.e. the more business they bring in, the higher the split.

6. Real Estate Agents split the commission evenly between buyer’s and seller’s agent.
Listing agents offer what appears to be a 50:50 split, but it doesn’t have to be. Many listing agents are willing to pay more to buyer’s agents than they are getting for their listing.

7. If I don’t use an agent, the listing broker will make more money.
In many cases, listing brokers will keep the entire commission if the buyer comes without a broker. But some brokerages, like RealDirect, take a fixed commission or fee regardless of whether there is a buyer’s broker – so the seller gets the benefit of a direct deal, and not the broker.

8. If I don’t use an agent, the owner will save money, making my offer better to them.
While this is true for RealDirect, and for FSBO sellers, in most situations, as we have said above, the owner does not benefit from direct deals. So using a service like RealDirect for Buyers is the best way for buyers to gain an advantage on a purchase.

Kitchen Renovations for Resale: What You Get For the Money

Friday, April 24th, 2015

From a few hundred dollars for some paint and new hardware, to a six-figure gut renovation, updating a kitchen can be accomplished in a multitude of ways. Whether your kitchen just needs to be freshened up, or requires a complete overhaul, you’ll want to create a space that works for your own needs and adds to the resale value of your home. We’ve put together this guide to help you determine what your kitchen renovation needs really are and how best to accomplish your goals with an eye to resale.

Before undertaking a kitchen renovation, it’s important to assess your needs. Ask yourself the following questions:

What is my budget?
Does my current kitchen layout work?
What condition is my kitchen in? Can it be refinished, does it need to be gutted, or somewhere in between?

Once you have a clear picture of what needs to be addressed and how much you want to spend, you can move forward with your renovation project.

The Budget Kitchen Overhaul:
kitchen has functional layout, working appliances, cabinets & countertops in good condition
-paint walls
-paint cabinets
-change hardware
bonus – change out flooring, laminate, peel & stick, tile, add backsplash

Entry level renovation:
kitchen has functional layout, may need new appliances, countertops, floor
-paint walls
-paint cabinets
-change out light fixture
-new countertops (laminate)
-change out flooring
-add backsplash
-new hardware
-stainless steel appliances

Mid-range renovation
layout doesn’t work, nothing is salvageable
-new kitchen layout
-move plumbing
-midrange appliances
-rearrange cabinetry
-new cabinets (Ikea or Home Depot)
-new hardware
-new flooring
-new fixtures

High-end renovation
custom everything
high end appliances
architect design

http://www.remodeling.hw.net/2011/costvsvalue/division/middle-atlantic/city/new-york–ny.aspx

budget:
paint
flooring
backsplash
diy

low:
ikea cabinets
tile
stainless appliances

mid-range:
pre-fab cabinets
solid surface countertops

high end:
custom cabinetry
space reconfiguring

Top 10 Ways to Prepare Your Home for a Spring Sale

Monday, February 27th, 2012

April showers bring May flowers, but March prep work brings springtime home sales. Though it may seem too cold to be thinking about the spring real estate market, taking steps to prepare your home now will help you avoid the stress of a last minute rush to get ready. If you want to be in good shape when the weather starts to warm up, use these top 10 tips to prepare your home for sale in the spring.

1. Clean & Declutter
Make your move easier by beginning the packing process now. Clear out all clutter and remove items you don’t regularly use. Donate items that haven’t been used in the last twelve months, throw away items that are broken or damaged, shred and dispose of paperwork that is no longer needed, and move bulky pieces of furniture, holiday decor, out of season clothing and any other items you don’t need into a storage facility.

When you clean, pay attention to small details. Wash windows, dust blinds, launder curtains, dust baseboards, clean appliances, and straighten up the contents of your closets. Apartment Therapy has some great plans for getting your home clean and keeping it that way in less than an hour a day. (more…)

Tips for Selling Your Home During the Holidays

Tuesday, December 13th, 2011

While many people choose to remove their home from the market during the busy months of November and December in order to avoid dealing with showings, there are still active buyers during the holiday season. For homeowners who decide to keep their property listed through the holidays, there are some important tips for staying “showing-ready” while still being festive.

1. Keep decorations simple, elegant and minimal. Opt for ornaments in colors like silver and gold instead of red and green and choose white lights instead of colored to avoid clashing with decor. Setting up a small display of holiday cards on a decorative plate shows lifestyle without going overboard.

2. Be mindful not to obstruct light or views. If you have a tree keep it small so it doesn’t crowd your space. Don’t hang anything in the windows as it’s vital to maximize the amount of light coming through and to show off great views.

3. Don’t wrap doors. Your door is the first thing potential buyers see when visiting your home. If you feel the need to decorate it, stick with a small, neutral wreath.

4. Presents, if displayed, should be tastefully wrapped and stacked neatly out of the way. If presents are bulky or numerous, they should be stashed in a bin and removed from the apartment prior to showings. Shoving them in a closet can give the impression that the home doesn’t have enough closet space.

5. Make the most of holiday cheer by baking cookies and setting them out with festive napkins. Your apartment will smell wonderful and your potential buyers won’t leave hungry.

Buyers who are actively looking during the holidays tend to be serious about their hunt and ready to make a decision, so follow the above tips to make the best possible impression and get your home sold.

Photo via OiMax

“What’s That Smell?” – Prepare to Sell by Ridding Your Home of Odors

Tuesday, November 1st, 2011

When preparing to sell your home, you’ll remove clutter, clean up messes, touch up paint and do everything possible to maximize the visual appeal for potential buyers. But be sure not to overlook a key factor in maximizing your home’s appeal because it’s something you’re so accustomed to you don’t even realize it’s there. Avoid scaring off potential buyers because their first impression of your home is, “Ew…what’s that smell?” No matter how great a home looks, if it smells like pets, smoke, fish, mildew, etc., buyers are going to be turned off.

The first step to removing unpleasant odors from a home is to identify which odors exist and pinpoint the source. Because our noses become desensitized to the smells we live with, it is important to get a third party to do a sniff test for you. Ask a friend or family member who does not live with you to walk through the house and tell you if anything smells. Once you know what your buyer’s nose might pick up, the next steps are to pinpoint the source and get rid of the odor. Keep in mind that efforts should be focused on removing the offensive smells from the home, and not on covering them up. Air fresheners do not get rid of odors, they only mask them, and often their smell is every bit as unpleasant as the original odor. (more…)

There’s No Crying in Real Estate

Thursday, September 22nd, 2011

You LOVE your apartment. You carefully chose the perfect paint color and furniture for each and every room to make sure it created a Zen, feng-shui, chakra-aligning mood for you and all of your visitors. It deserves to be on magazine covers for being the most wonderful, perfect, amazing space ever lived in by a human-being. It’s the place where your oldest child took her first steps, the first place where you lived together with your spouse, it’s so much more than just walls and a floor. But, to your potential buyer, it may just be “an apartment.” One of many that they’ve seen. It doesn’t have sentimental value to them, or house their memories. They may not even be buying it to live in. It could be a pied-a-terre or a place for their adult children, or JUST an investment. Though it can be difficult, it is vital to the success of your sale to be able to remove emotion from the transaction. There’s no crying in real estate!

Or, at least, there doesn’t have to be.

It’s not a contest

Real Estate is not something you need to “win.” In an ideal situation, there’s some degree of give and take that results in a transaction which satisfies all parties. Getting angry with your buyer or acting out of spite can lead to a “tit-for-tat” mindset which can quickly ruin a deal. (more…)

Pricing Your Home

Monday, August 1st, 2011
realprice estimate

RealDirect's Real Price estimate can help you determine the proper price range for your home.

When considering whether to use a real estate agent or sell by owner, a common deciding factor is seller concern over determining the right asking price for their home. Sentimental value does not translate in any way to market value and sellers can struggle with pricing a property at fair market value without emotion involved. Additionally, sellers do not necessarily have easy access to all of the same data about comparable listings as an agent would have, nor have they seen all of the comparable properties on the market. The fear among sellers is that if a property is priced too high it won’t sell, but if it’s priced too low, money could be left on the table. Finding the right price for a property in light of all current market trends and conditions can be a daunting task for sellers who might like to list by owner, but armed with the right knowledge and tools pricing at fair market value doesn’t have to be rocket science.

The number one metric for figuring out the value of  a property is comparable listing data. This means collecting data from listings that have closed within the last six months which would be considered comparable. Ideally, they would be similar units within the same building. If this is not possible, then it should be listings located in close proximity (within a few blocks) in similar building types with similar amenities and unit square footage. It’s important to make an apples to apples comparison.  An apartment in a full-service hi-rise, should be compared to other full-service hi-rise sales. Brownstones should be compared to brownstones, walk-ups to walk-ups, and so on. It’s important to look at closed listings as opposed to active, as property owners can ask anything they want for their real estate, that doesn’t mean it’s priced well or going to sell. (more…)

How to Declutter Before Showing Your Home

Friday, July 8th, 2011

No matter how cozy, quaint or charming you find your apartment, when preparing to sell it is of the utmost importance to depersonalize and declutter the entire space before showing. Potential buyers want to be able to picture themselves in the home and visualize how they will live, work and make the place their own. This means getting all of your “stuff” out of the way so the space itself can shine, particularly in a city where “space” is at such a premium.

Winston Lidded Baskets from Pottery Barn make an attractive storage option.

This is a great time to trash, donate or sell anything you don’t want to take with you when you move. Consider throwing out items that are damaged or no longer useful. Clothing, furniture and household items in good condition can be donated to a non-profit organization such as Goodwill or Salvation Army and donations can add up to a hefty deduction at tax-time. Or consider having a stoop sale. It’s a great way to get rid of quality items and make some extra cash. Some space-hogging items to get rid of include books you’re done reading and bulky, oversized furniture you do not wish to use in your new space. When you’ve finished getting rid of everything you no longer plan to keep, it’s time to start looking for ways to store remaining items that are not essential to your day-to-day life. (more…)

Professional photographs for your listing

Friday, June 25th, 2010

While we all now have powerful digital cameras (some of us have them in our smartphones), we are reminded periodically that we still don’t take photos like the pros.  The NYTimes did a profile on pro real estate photographers and demonstrates how a pro photographer can have a huge impact on your listing.  Check it out here.