The Science of Selling a Home
By: Jimmy Eaton, Broker-Realtor
I totally empathize with the home owner that desires to sell his/her house "by owner" in the hopes of saving money and retaining as much equity as possible. Sometimes a sign in the yard and an ad online can get the job done. However, most of the time and in normal market circumstances, the attempt is futile. I also appreciate the home
seller who realizes that time is of the essence and wants to get their home sold in a methodical, timely manner getting the best price possible. With over 1,000 homes sold and 15 years of experience, I've been a prolific listing agent throughout Utah and have refined the selling process down to an exact science. Of course the popular adage in real estate stills remains true: Location, location, location. Getting more specific, there are 5 factors that must be appropriately and actively employed to sell any home.
1. The Condition of the Home. A home must be appealing and emotionally attractive to a buyer. If there is too much work to do to get it to their liking, a buyer will move on to another home. Some floor plans and structural features aren't what a buyer is looking for and there is nothing a home owner can do about this. But generally, the condition of the home interior and exterior is in the power of the home owner to prepare, fix, or improve upon. If the condition of the home is superb, upgraded, and has all the desirable features, it will certainly be set apart from the competition.
2. In a normal healthy market, a home must be priced well to sell. After analyzing the data of "Homes Sold" and those currently under contract to sell, the home owner and I can effectively zero in on a price that the home will sell at. Also, after reviewing the "Active" and "Under Contract" homes currently on the market in the home owner's price range and area that compare to his/her home, we can clearly identify the competition and see where others are priced. With both of these data, I then advise the home owner not to be at the bottom of the price range. A home owner must also take into account that most offerors will ask lower than the asking price in a normal market, and usually ask for their closing costs to be paid. To anticipate and absorb this, I advise my sellers to be priced about 2% higher than the median price in the range. If a home is priced too low, then the seller will quickly sell but really leaves money on the table. If a home is priced too high, a seller will lose the fragile introductory period to the market and end up costing a seller more in time, energy, mortgage, and opportunity lost. More importantly, it runs the risk of becoming "stale" on the market or stigmatized leaving buyers questioning what are the problems with it. With me, we'll price the home correctly.
3. The Commission to Agents. When a home gets professionally listed on the market, the home owner is essentially hiring the listing brokerage to manage and employ all of the other real estate agents to sell the home they have exclusively listed. Although the National Association of Realtors Code of Ethics does not promote price fixing of any form, the customary commission pay-out is 6% (split 3% to the listing brokerage and 3% to the selling brokerage). My personal practice has been to lessen my side of the fee as a listing agent to get my seller clients more equity. The Buyer Agent Commission (BAC) is the part that should be carefully analyzed and understood as an incentive to sell a home. A home owner should be at par with the traditional 3% BAC. If a home seller is offering 2% and the other 4 homes in the area are at 3%, the buyer agents will certainly be more persuasive with their buyers to purchase another home. What's more, if you offer a $1,000 bonus for a full-price offer, the buyer agents will be enticed that much more.
4. The Marketing of the Home. A home owner must expect nothing less than Full Service marketing for his/her home if they are paying out substantial commissions. Unfortunately, "Full Service" isn't interpreted the same with all agents. Also, the home owner must understand two intangible concepts when it comes to marketing his/her home:
a. Listing agents spend most of their time, effort, and money marketing to buyer agents behind the scenes. Many prospective sellers say, "go find me a buyer". Unfortunately, there is no MLS of profiles for buyers on the market. Homes, not buyers, are what are being marketed and purchased. Agents have advertised themselves and have contracted with buyers, and both are aggressively and regularly marketed to by me as the listing agent. b. Much of the time, effort, and money spent in my marketing have been occurring even before the home seller's particular home ever gets listed. The dollars I spend in Search Engine Optimization of Google terms, my websites, social media ads, mailers, magazines, past clients, agent marketing, lead capture, post cards, etc. all have built up my brand/reputation and my own pool of clients. So when I list a specific home, I already have momentum in my marketing and am simply putting the new listing at the forefront of the public eye. Concisely stated, my Full Service marketing (and that of my agents) makes it to where every single buyer and buyer agent shopping in a home seller's price range and area at a given time will know about his/her particular home for sale.
5. The Salesmanship of the Agent. The listing agent a home owner hires must be passionate about the home he/she is about to sell. He/she must also be able to communicate, ask fact-finding questions, follow up with buyer agents, get second showings, and actively explore opportunities to get the home shown. Strong negotiation skills are rare. The listing agent must be able to discern different personalities and buyer interests and then respond accordingly. He or she must have mastered the principles of negotiation and use it to the advantage of the home owner, considering every term of an agreement, the sales process through closing, and protecting the home owner's interests. I've developed and refined this skill set and do my best to understand then close every buyer/or buyer's agent that goes through the home for sale. I've been formally educated with an advanced Masters degree in business and marketing. As a broker, I have much more training and knowledge than the average agent. But my years of experience and the amount of transactions I've managed have helped me develop the exact science of selling a home. I personally invite every home owner looking to sell his/her home to call me at 801-404-0900 and commence the selling process today.
