A home-owner must turn into a property-seller to price it right, prepare it well, and consider a lower but more profitable offer
When a home is for sale, the emotional connection often has 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 must 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
Real estate brokers know best and will defend their clients’ interests, yet another option is to sell privately. Selling a home online can be very effective depending on location and demand. However, real estate attorney will be needed if a legal issue arises, or the seller might find legal services online.
If anxiety lurks, 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. You can find out more about selling a home abroad on this site.
A House Sells When it is Prepared for Sale
The Prudential states 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, the seller of a house with cosmetic or structural problems must accept to sell below market value. Structural problems should always be disclosed, or they might abort a sale upon inspection. Furthermore, guides on home-staging tips, or a professional stager, will help 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.
Other reasons for considering a low offer is to factor the lower commission and the tax implications on capital gain. In a buyer’s market, the seller should think twice before refusing an offer.