Jack Lees - Expired V2 Book

HOW TO SELL YOUR HOME AFTER YOUR LISTING EXPIRES

Jack Lees

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. DISCLAIMER AND/OR LEGAL NOTICES: While all attempts have been made to verify information provided in this publication, neither the Author nor the Publisher assumes any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress that the information contained herein may be subject to varying state and/ or local laws or regulations. The reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including advertising and all other aspects of doing business in the United States or any other jurisdiction is the sole responsibility of the reader. The Author and publisher assume no responsibility or liability whatsoever on behalf of any reader of these materials. If your property is currently listed with a Realtor, please disregard this notice. It is not our intention to solicit the offerings of other brokers. Printed in the United States of America

Table Of Contents

Why Your Listing Expired And Didn't Sell

Use The 80/20 Rule

Why This Rule Matters With Hard-to-Sell Homes Why It's So Easy To Sell Your Home For Less Than It's Worth

Real Estate Horror Stories

Is Your Real Estate Agent Meeting Your Needs

Finding A Great Real Estate Agent

Housing Market Changes

Getting Your Home Sold, Faster

10. First Impressions: Presentation Is Everything

11. Details Win Home Sales

12. Increase Value With Simple Upgrades And Repairs

13. Why Good Pictures Matter

14. Common Negotiation Mistakes

15. Negotiation Tips And Tricks

16. Challenges In Selling Your Home: What Are Your Options? 94

CHAPTER 1 Why Your Listing Expired and Didn't Sell

Your well-kept and decently priced home was on the market and expired. So, what went wrong? Chances are, there was more than one factor at play. But just because your home expired, doesn’t mean you can’t sell it. Don’t give up! Read on to learn:

1. Home-selling mistakes that can cost you; 2. The worth of a good real estate agency; 3. Changes you can make to increase your chances of selling; 4. And negotiating and closing the deal.

First, let’s take a look at the most common reasons for unsuccessful listings:

• Price • Condition • Presentation

• Lack of Showings • Housing Market • Location

• Marketing • Your Agent

#1. PRICE

It seems obvious, but price is one of the key points for a make- or-break deal. Listing your home correctly and strategically—at the right price and the right time—works like a magnet. It attracts 2

customers.

Call a real estate expert to understand current market prices and how other properties are selling in your area. If you’re not convinced, you can contact other real estate experts for confirmation; second opinions never hurt. In any case, don’t just listen to and take the advice of one expert. If you find out that prices are higher than you anticipated, and you’re in a hurry to sell, don’t set a price too low. It’s a myth that a lower price means a quick sale. That’s not always true, and it can be dangerous, costing you in the end. A too-low price can have many negative consequences, such as: • Incorrect evaluation of your house — A low-end price is considered suspicious, and buyers might think you want to hide serious problems. As a result, potential buyers pay extra attention and become suspicious. • Negotiation of the final price — Suspicions on a low- priced home lead to lowball offers, and if you’re in a hurry to sell, you will lose a lot more money than you expected. Further, as soon as your home is listed, changing it to a higher price later might lead to no sales. So you’re either stuck with the low price or don’t get a buyer. Knowing how important prices are, let’s look at some research. This will give some intel on how to set the right price.

Range Estimated House Value vs. Suggested/Preferred Selling Price

< $200,000 = $197,000 < $300,000 = $297,000

< $500,000 = $497,000 < $800,000 = $797,000 < $1,000,000 = $997,000 < $1,500,000 = $1,497,000 < $2,000,000 = $1,997,000

You can guide your price based on the above table, but it’s best to leave it to an expert. Don’t take a risk on something as major as a house sale!

#2. CONDITION

Condition mainly has to do with appearance; it’s the first thing that captures the eye of any potential buyer. Maybe your home didn’t appear to be in good enough condition. Your house should be sparkling clean; don’t leave a mess or clutter in your home or in the yard. Make sure the air is fresh, and the lighting shows off your house’s best features and unique qualities. Even outside, everything should be in order and arranged accordingly. Take care of any upgrades, repairs, modification, etc., before putting the house up for sale. You don’t have to make repairs or modifications yourself, unless you’re a D-I-Y expert. Call a professional and make sure everything’s in good shape. It’s worth the small cost, as prospective buyers will take you more seriously and be more likely to offer you what your home is worth. One room in your home that’s worth updating is the bathroom. Think of updates to the bathroom as an investment. You want people to see themselves using that room every day, and not whatever unpleasantry is distracting them. An outdated or unfinished or unclean bathroom might drive buyers away—even if they like the rest of your home. Be sure it’s in its best shape!

Bathrooms, along with kitchens, can be deal-breakers (or makers).

#3. PRESENTATION

Maybe you skimped on the presentation of your home. Presentation is about first impressions. First impressions are critical and can make or break a sale. You want to attract buyers, and the biggest attraction is a well-presented property. After all, your house isn’t the only one for sale, so you can’t act like it’s the only choice. You’ll be competing with numerous properties—all with different advantages and challenges. You want people to see your home and think “Wow! This is where I need to live.”

Presentation is everything, as you’ll see in another chapter.

#4. LACK OF SHOWINGS

Have you seen other homes and properties comparable to yours selling after a short time on the market, receiving the asking price or higher, yet yours remained on the market and expired? Why didn’t people look for your house? Why did nobody seem interested? A lack of showings could be an indication. You need people to actually come see your home—showings—in order to make the sale and seal the deal. Perhaps you didn’t use a professional real estate agency, while the successful home sellers did. Real estate agents worth their salt will get your home not only listed but seen! This can make all the difference. A professional might be just what you need. If they can get you more showings and a higher price, you won’t even worry about

their commission.

Today, people make purchases based on what they see online. They check ads, pictures, prices, then compare, and only later decide to call for (or order) a few of them. Professional agents have an established Internet presence and access to networks and information that you likely don’t. Online sales sometimes come with small loan calculators. Potential buyers will check the price, use the loan calculator, and consider whether the offer is feasible.

#5. HOUSING MARKET

Your home is subject to housing market prices. There’s both supply and demand, and your supply (your home) will sell only if there’s demand for it. The market can change anytime. It’s influenced by several factors, such as: • The national economy: If people are concerned about the future, they don’t spend money and the real estate prices drop lower and lower. • The local economy: If your location is in a good economic season, and it has some important universities, consistent job opportunities, good schools in multiple places, and a sound infrastructure, then it’s a perfect opportunity for a higher selling price. If the market is offering plenty of homes, it means the buyers have more choices, and yours must appear to be a higher-quality property, at a better price. In that case, it’s difficult to sell for a good price in a short time—especially if you do it by yourself. However, if you call an agent to sell your property, your house will 6

be advertised in the best possible locations, including many real estate websites. If you’re selling an expensive house, you can advertise in niche publications that target doctors, lawyers, and other well-paid professionals. Or, if you’re selling a single-story ranch house, market it in publications servicing senior citizens appreciating the architecture. Bonus Tip: To improve the presentation of a property, update rooms like kitchens and bathrooms, then create some “highlights,” such as an LCD TV and some furnishings. Buyers are attracted to properties by seeing themselves living in that space. So, features like big flat screens and new comfortable furniture are worthwhile investments. (And then you get to take those new items with you when you move!) Another tip is to have your house available to open showings as much as possible, to any potential buyers. Then, you can arrange details with your agent.

#6. LOCATION

Perhaps you didn’t consider location when you first put your home on the market. It’s ideal to be located near the city, or at least near public transportation. Location matters. Highlight all the potential positive aspects of your home’s current location. For example: • If you’re near a cute downtown area, then mention the holiday season—the small shops, music, lights, events, and people, all creating a perfect Christmas atmosphere. If the buyers have children, they might consider this a great experience. Family-oriented activities foster a sense of 7

community and happiness. • Is your house close to the ocean or sea? That’s ideal during the summer and other warmer months. Play that up! You can explain how relaxing outdoors, walks, swimming, surfing, running, and outdoor sports are favorable in the hot season. • Does your view include mountains and forests nearby? Talk about it! Many people are drawn to these types of landscapes and exceptional views. • Is your house close to several schools? Many parents will be interested in having their choices of schools nearby. • Is it close to supermarkets, biking trails, stadiums, or downtown? All things to consider when considering your target buyer. You must discover and highlight the positive parts of your estate and use them to give value to your sale, attracting different buyers for different reasons.

#7. MARKETING

Many people are afraid of marketing and find it overwhelming, which can actually prevent them from selling their home. But marketing doesn’t have to be scary. If you’re an expert marketer, you already know the tips and tricks to find buyers, to communicate with them, to use the right words, to advertise properly, and so on. If you’re not an expert yourself, don’t pretend to be one. Just call the real experts!

#8. YOUR AGENT

A real estate sales professional helps you sell your house without your involvement. In fact, you pay them because they operate only for your best interest. Some people choose to forgo hiring a real estate agent altogether to “save” money, when, in reality, it costs them in the long run. The agent is, first, an expert professional marketer who knows and uses marketing tips and tricks. A good agent will do many things, including: • Hire a photographer to get some professional pictures of your estate. • Look for potential buyers and keep them engaged. • Network with many brokers and agents to increase the number of potential buyers. • Use the web and other tools to create a virtual tour for the purchasers. • Provide answers to buyers’ questions immediately and manage the visits of your house. The agent will also become an expert on your property and ask you questions to know the best features of your home and to increase the probability of selling at a higher price. Further, the agent is able to understand the character/nature of potential buyers only after a few phrases, and then they can use the best way to communicate with them. This is a key point, because too often, if you use the wrong words, you lose the potential buyer. Communication is very important. The agent also knows how to set up the visual aspect and presentation of the property. They know what to look for in prospective sales, and they can approach buyers professionally.

POINTS TO REMEMBER:

• Homes sit on the market and expire for many reasons. • Price, condition, presentation, showings, the market, location, marketing, and the agent are all factors. • Learn what may have contributed to your home expiring and not selling, and what you can do differently.

CHAPTER 2 Use The 80/20 Rule

The key to the successful home-selling approach is a revolutionary finding discovered by an Italian economist. His name was Vilfredo Pareto. The most important thing we can learn from him is the Pareto principle, better known informally as the 80/20 rule.

The 80/20 rule applies to all aspects of life.

In 1906, Vilfredo found an intriguing correlation. He noticed that 20 percent of the pea pods in his garden held 80 percent of the seeds. Studying the seeds prompted him to take a closer look at this ratio. In one of his initial discoveries, he realized that 80 percent of the land in his area was owned by 20 percent of the people. After detailed study, he observed this ratio held true in many aspects of life. The Pareto principle—or the 80/20 rule—is a result of his findings.

The 20 percent is vital, and the 80 percent is trivial.

For example:

• 80 percent of your income is derived from 20 percent of your work. • 80 percent of a business’ income is derived from 20 percent of their customers. • 80 percent of your value to an employer is derived from 20 percent of your work.

You might wonder what all of this means. In a nutshell, it means some things are substantially more important than other things. In other words, things aren’t equal. Approximately 20 percent of what you do matters. The other 80 percent is insignificant. How can you apply the 80/20 principle to selling your home? Understanding this concept can save you time in selling your home. Unfortunately, many sellers buy into the false idea that more is more. They completely ignore the Pareto principle. Now that you know what the 80/20 rule is, you’re probably wondering how it applies to selling your home. When you use the 80/20 principle in selling, you stop trying to sell people on the entire home. Based on the rule, only 20 percent of your home’s features are important. The remaining 80 percent are trivial. That’s because they are the same features many other homes in your neighborhood have. Instead of focusing on those trivial features, you need to focus on the vital features. When you sell your home, focus on unique features to grab the attention of buyers. These features make your home different from other homes. These features will make it easier to sell your home for the full asking price. Let’s look at a few real-life applications and examples of how the 80/20 rule can have an impact on selling your home.

POINTS TO REMEMBER:

• According to the 80/20 rule, approximately 80 percent of effects come from 20 percent of causes. • Following that principle, buyers will focus on 20 percent of your home’s features. The other 80 percent are probably 13

common to other homes.

CHAPTER 3 Why This Rule Matters with Hard-to-Sell Homes

Imagine a buyer in the market for a three-bedroom, two- bathroom home. The agent found him five houses to preview. Each meets his general criteria, and is located in the area he hopes to live. He and his agent drive out to look at the five houses. They all have very similar features. The prices are comparable. In theory, you might think the buyer will have a hard time deciding between houses. But no matter how similar they may seem, no two houses are exactly alike. In real life, however, that’s not the case. The 80/20 rule comes into play. Imagine four of the houses don’t have a pool, but one does. He isn’t aware of this, though, because the agent didn’t mention it. The buyer sees the four houses that don’t have a pool. He isn’t particularly interested in any of them. Then he sees the fifth house and the pool! Suddenly, he is ready to make an offer. He may even pay full asking price, even though this house is more expensive than the others.

THE 80/20 RULE IN ACTION: Buyers focus on unique features

His offer isn’t based on the 80 percent of features this house shares with the rest. Instead, his bid is based on one unique attribute: a pool. The 80/20 rule predicted the sale of this house. 16

Unfortunately, much time was wasted in finding the “perfect house.” Had the agent known to look for the 20 percent difference, this may have been their first stop. As a seller, you can use this rule in your favor. Draw attention to unique characteristics of your home. Here’s a real-life example. A real estate agent had a client visit from out of town. He didn’t have a list of criteria; he just liked the area. She drove him from house to house. In each case, this buyer suggested offers 10 to 20 percent below the asking price. He would not budge. She began to worry; the whole day was turning into a big waste of time. As the sun set, they stopped at one last house. It did not have a lot of curb appeal (attractive from a distance). It was not a good- looking home. She was out of options. Nevertheless, this house managed to break the tough negotiator down. He was suddenly willing to offer the full asking price! You might wonder what set this house apart from the others. It wasn’t because he appreciated ugly houses. Nope. The 80/20 rule kicked in again.

THE 80/20 RULE IN ACTION: Buyers pay more for unique features

This agent and her client had spent the whole day looking at houses that shared 80 percent of the same features. He didn’t care about any of those details. A bedroom was a bedroom as far as he was concerned. He fell in love with the one remarkable feature of this house. This ordinary home had something special. As you walked into the great room, there was a large window. The house sat atop a hill

with a gorgeous view. And to top it off, the sun was setting below the distant tree line. That view sold the buyer. The other 80 percent could be improved. He didn’t buy the house because he liked the floor plan or the number of bedrooms and bathrooms. His decision was completely based on the hill and view. That view caused him to stop negotiating and offer full price on the spot. Such is the power of the 80/20 rule! Learn how to tap into this rule, and you will not have to settle for less than your asking price. Leverage a unique selling point. Buyers who fall in love don’t haggle over pricing; they make good offers.

THE 80/20 RULE IN ACTION: Buyers search for unique features

In some cases, the 80/20 rule even helps people make a sale without conducting a showing. This is a huge time saver. The house in this next example had languished on the market for months. Unlike the previous house, this place was not ugly. Rather, it was a brand-new custom custom-built home. But nobody seemed to care. It sat on the market for seven-plus months without a single offer. The builder was baffled. His fancy new house wouldn’t sell. He ended up firing his agent and hiring a new one. Fortunately, the new agent knew the importance of finding that special feature. He drove out to give the house a thorough investigation. What he found changed everything. The house had a gorgeous five-acre yard. Other houses being sold in the area were all on one- to two-acre lots.

Not only was the yard bigger, but it was more private than other

lots available. The new agent focused on marketing the five acres. He mentioned details and a description of the house. But the lot, not the house itself, was the focus. In no time, his phone rang! A buyer was relocating. He had noticed the house was for sale, but it hadn’t caught his eye before. That changed when he learned it was built on a five-acre lot. Suddenly, he was very interested—so interested, in fact, that he submitted an offer from 1,000 miles away. He had never even seen it in person. He was afraid someone else would buy it before he could, and he would lose out on the perfect house. That sale happened in 45 days. The builder was amazed! His house had been on the market for nearly eight months without so much as a nibble. Suddenly, it was sold. Purchased sight unseen, all because of the 80/20 rule.

Here’s another example about how a yard affected a sale:

A buyer once paid extra for a townhouse simply because of its location in the complex. Most of the surrounding homes didn’t have a yard. However, a few shared a large half-acre “yard area.” One of the owners whose townhouse backed up to this yard area was able to sell his townhouse for a higher price. It set his property apart from others on the market. His home had a characteristic shared by fewer than 10 percent of the others. He had the only available listing offering that feature. With this easy point of difference, the house sold for a higher price. Another townhouse seller (in the same complex) found a different unique feature. He didn’t have a yard, but he was still able to use his location to his advantage. His property backed up to a lake and

fountain. That extra feature helped him sell his townhouse quickly, and for a great price to boot.

SELLING TO INTERESTED BUYERS

Don’t create an advertisement similar to every other house in the area. Instead, turn a spotlight on something different, something unique, something special, about your home and property. You will attract interested buyers—interested buyers will want to come see your home and are often willing to pay full price. As a result, you’ll stop wasting time showing to people who are not interested in your home specifically. Instead, you’ll be showing your home to buyers who are motivated to make a purchase. You won’t have to show quite so often. You also won’t have to sift through lowball offers from apathetic buyers. Less stress for you! With that in mind, it’s important to highlight your home’s most attractive and interesting features. Compare your home to other houses in the neighborhood to see what makes yours different.

POTENTIAL UNIQUE FEATURES

Each house will have its own unique features. You may already have some in mind for yours. If not, these ideas should help: • Hilltop views are an excellent defining feature. Like the example from earlier, a high vantage point comes with a spectacular view of the surrounding area. • Maybe your home looks out on an open field frequented by wildlife. Many people would appreciate that view. • Your house might even have an unobstructed view of the sunset. That would interest potential buyers. • Patios are another great feature. Maybe the rest of your 20

neighbors don’t have patios, or their patios are smaller. That vital feature could help you sell your home. • Location is something else that can set your property apart from others. (Not your addressed location, but rather your location compared to the surrounding homes.) • You might have a unique backyard. If you have a larger backyard than your neighbors do, use that to your advantage. A shady backyard can also help you sell your property, as can a fenced-in backyard, which will appeal to buyers with children and/or pets. • Finished basements, spacious attics, walk-in closets, kitchen islands, large garages, nearby ponds or fountains, and swimming pools are all features that can help homes stand out from the others. Look for the 20 percent difference in your own home, and find a way to market it. That’s how you’ll get results. You can’t just throw the information into your listing, though. You have to take the right approach.

POINTS TO REMEMBER:

• No matter how similar they might seem, no two houses are exactly alike. • Buyers search for, focus on, and pay more for, unique features. • Unique features could be almost anything—a big lot, great view, pool, finished basement, even a distinctive yard or patio. • Look for what makes your home unique, and then advertise that to potential buyers. This strategy will help you attract interested buyers.

CHAPTER 4 Why It's So Easy to Sell Your Home for Less Than It's Worth At a certain point, many home sellers feel like throwing in the towel. “I’m just going to drop the price and get rid of this house,” they think to themselves.

Fortunately, reason (usually) prevails.

The temptation to “throw in the towel” tends to increase the longer your home sits on the market. It even happens to highly intelligent people. Here’s an example: In 1997, entrepreneurs Larry Page and Sergey Brin were looking for a buyer for their Internet search engine. They called it BackRub. The two were seeking $1.6 million for the new online portal, and were working a deal with Excite, a popular search engine at the time. The problem for Excite was that BackRub was far too effective a search engine. Users were finding what they wanted and moving off the site too quickly, which would be bad for Excite’s advertising business. Page and Brin cut the price dramatically by more than 50 percent. They offered to sell BackRub for $750,000. Excite considered the offer, but ultimately balked. There was no deal. BackRub’s co-founders decided to commercialize and release the product themselves. First, they renamed it. 22

They called it Google.

Less than 20 years later, Google is now worth roughly $360 billion. Excite was eventually sold to Ask.com. Bottom line: Fight the temptation to drop your price. Just because something isn’t selling does not necessarily mean it isn’t worth the price you’re asking. That clearly was true for Google, and it’s probably true for your home, as well. While the buyer of your dreams hasn’t yet emerged, it certainly doesn’t mean they won’t. Selling a home for top dollar fast is actually pretty simple. You just have to find the one person who’s willing to pay more for your home than anyone else. If they want it more than anyone else, then they will be willing to pay a higher price than anyone else.

What Stops “Perfect Homes” from Selling

Have you ever thought the following? “Why won’t anyone buy my house? It’s a great house!” Fortunately, there’s an answer to this question: “You can’t throw a great product out on the street and expect people to gobble it up.” This rule applies to inventions, homes, and even movies. Yes, even great movies need to be sold! Here’s an example of a great movie that didn’t do well when it was first released. On September 23, 1994, the movie, The Shawshank Redemption , was released to the world. Adapted from a short story by legendary author Stephen King, the feature film centered on a pair of imprisoned men.

The film, based in a prison but built on the idea of friendship, hope, and dreams, was nominated for seven Oscars and won more than a dozen awards. The film was immediately a critic’s favorite. Over 20 years later, The Shawshank Redemption is now considered one of the greatest movies of all time. In fact, on well-known and respected website Internet Movie Database (www.imdb.com), it’s ranked as the best movie in cinema history, ahead of the likes of The Godfather, The Good, the Bad and the Ugly , and Schindler’s List . Another movie came out that year. The Flintstones , a live-action remake of the 1960s cartoon show, starred John Goodman, Rick Moranis, and Rosie O’Donnell. The Flintstones , perhaps needless to say, was not nominated for Best Picture at the Oscars. “It falls flatter than a granite slab,” noted a national film critic. Though the film was praised for its costume and set design, it also won “Razzie Award” for Worst Female Performance and Worst Screenplay, and was a nominee for Worst Movie of 1994. Its IMDb.com user reviews are roughly half of what The Shawshank Redemption receives, and it’s rated by users as one of the worst movies of the 1990s. A team of salespeople masterfully marketed The Flintstones to its targeted demographics. The result? The film grossed $131 million in the U.S. and $358 million worldwide. That’s the power of targeted marketing. On the flip side, the people at Universal Studios, who promoted The Shawshank Redemption , admitted they couldn’t figure out how to sell the movie to the public. They had a great product; they

just didn’t know how to sell it.

It grossed only $28 million in the U.S. box office and $60 million worldwide. It ranked 51st in box office success in 1994—two spots behind In the Army Now , starring Pauly Shore. Look at those numbers, then look at them again. Still don’t believe good marketing and salesmanship matter? The folks at Universal learned their lesson—even the best products need to be “sold.” Is your home a great product that wasn’t marketed properly? You just have to find the one person who’s willing to pay more for your home than anyone else. If they want it more than anyone else, then they will be willing to pay a higher price than anyone else.

POINTS TO REMEMBER:

• Many sellers get frustrated and reduce their price prematurely. • If your house isn’t selling, it means you haven’t found the right buyer yet—the buyer who wants your home enough to pay top dollar. • Having a great product (house) isn’t enough. • Whether you’re selling films or houses, you can’t beat the power of targeted marketing!

CHAPTER 5 Real Estate Horror Stories

Life is stranger than fiction, even in real estate. Thanks to the Internet, there are thousands of stories out there detailing anything and everything that can go wrong with a real estate deal. Some things are scarier than a listing expiring. Maybe an agent takes a bunch of lousy pictures or takes two or three days to return calls. Other times, mistakes are made that cost new owners thousands of dollars. Still other times, the stories can get downright weird and scary. Just imagine finding out the home has an infestation, or was the scene of a crime, and your agent didn’t mention it. Or maybe your agent screwed up with an appointment, and suddenly buyers are checking out your home while you’re in the shower. If you’re a seller who’s wondering what kind of problems to look for when hiring an agent and listing and selling your home, here’s a handful of stories to show just what could go wrong if you’re not on top of things.

THE DEVIL IS IN THE DETAILS

A couple was trying to unload a vacant rental house in Reno, NV. The home was on the market for four months with a number of showings, but no one was biting. Finally, after realizing the home was going to foreclose if something wasn’t done quickly, the owners made the drive to Reno to see what was going on. What they saw was more than a little surprising. On one of the main walls in the house was a giant, 12-foot-long painting of the devil—something that would certainly turn away prospective

buyers. So, what should have happened here?

Before allowing any showings, during an initial walkthrough of the home, the agent should’ve called the owners immediately about the “giant devil,” giving them a chance to paint over it, resulting in a much quicker sale and far fewer awkward moments for the agent, not to mention a payday. Ultimately, the agent was fired and the owners returned to renting out the property.

BREAKING BAD

File this one under the “what you don’t know can hurt you” department. Ms. Turner had owned her Tennessee home for two years before deciding to sell. It was only then that she found out that a previous owner was a meth cook. What she didn’t know cost her—a $16,000 decontamination process fee! In this case, Ms. Turner’s agent could simply have done some research on the home and its history. He would’ve discovered that the home had been auctioned off by the state or been in foreclosure due to the meth cook likely going to jail. A little digging would’ve uncovered the reason and allowed the agent to warn any prospective buyers.

HURRY, ALREADY!

What do you do when you want to sell a house quickly? You price it low. What does your buyer want? A lower price. What does the buyer’s agent want? An even lower price. What about your agent? He/she should be aiming for a higher price, both for a higher commission and, more importantly, to make you happy. Mr. Foust, who was trying to sell his home quickly, had a different (and unfortunate) experience. Rather than try to negotiate a better deal, his agent chose to join the buyer’s agent in encouraging Mr. Foust to accept a lowball offer. Why?

He was putting his own interests ahead of his client’s. He wasn’t interested in negotiating the best deal; he simply wanted to sell the home as quickly as possible, rather than risk the listing expiring and not getting paid at all. As you can see, agents don’t always bring their “A-game” to a given sale. Whether through an honest mistake, negligence, or working for their own interests, these kinds of mistakes can lead to expensive and time-consuming problems for sellers and buyers alike. Remember, it’s the agent’s job to work for—and not against—their client. The good news is that, despite these (and many, many more) stories, there are good, professional, and effective real estate agents out there — agents who work for you and will help you get the best deal possible for the sale of your home.

POINTS TO REMEMBER:

• Unfortunately, things can go horribly (and expensively) wrong in real estate. • Educate yourself and do your research first. • Consider whether your agent is part of the problem or solution .

CHAPTER 6 Is Your Real Estate Agent Meeting Your Needs

If your home expired after sitting on the market, there’s a good chance your real estate agent fell short. Much of the home-selling and home-buying process depends on the agent. With tough competition and an unpredictable economy, it’s important to note a few key factors in selecting the right real estate agent who will meet your needs and guarantee you a profit. Many home sellers hire new-to-the-business real estate agents, perhaps because they know them personally, or through a referral, or because their commission rate is lower. However, what a newbie might offer in giving you a “deal” or a “personal touch,” they generally lack in experience and quality.

COMMON MISTAKES OTHER REAL ESTATE AGENTS MAKE

• They don’t devise business plans or strategies. A specific business plan and marketing strategy should be created for your house. • They tend not to specialize. Fresh real estate agents tend to go for buyers/renters first—not sellers. They do this before moving on to listing homes, after they’ve completed just a few transactions without specializing. As a home seller, you need a marketing and budget plan, which less- experienced agents might not be able to provide. • They don’t use the best closing team. Good real estate agents choose the most effective team players to seal the 30

deal and then receive credit and referral to continue their success. • They refuse to invest in marketing, thereby failing to build a name and reputation for themselves. • They don’t focus their marketing efforts on the most effective areas. Sphere of influence, networking, and social media are some of the biggest areas for agents to tap into, and newbies aren’t always aware of this. • They choose the wrong brokerage for the wrong reasons.

PRECAUTIONARY STEPS TO TAKE AS A HOME SELLER

Always follow these steps before hiring your agent!

• Review the “Standard Agency Agreement.” Never sign a contract unless you have ensured your basic rights are protected. • Follow your gut about whether you trust your agent. Interview them to test their knowledge, skills, and abilities. • Always insist on a written quote guarantee. • Never pay any money in advance for any reason. The money exchanges hands after the sale. • Consider the agent’s customer-service skills, which are critical in this business.

WHAT TO LOOK FOR IN A REAL ESTATE AGENT

We’ve talked about newbie real estate agents, as well as precautionary steps to take, but what should you look for when hiring a real estate agent? You obviously want someone who knows what they’re doing, has a good reputation, is reasonably

affordable, and has a friendly demeanor, but there’s more to it.

For instance, you can’t just pick an agent based on a high quoted price and low commission rate. Review every agent to find the most professional one based on their backgrounds and history, so you can limit any challenges or problems when dealing with them in the future. • Honesty is an important quality of a real estate agent. An honest REALTOR® would be willing to share some of their good and bad experiences. • Professionalism is another trait to look for. A professional real estate agent takes care of their image (both in presentation and reputation) and prioritizes and respects others’ time. A professional agent should also be very organized, personal, and responsive and provide any needed updates. • Real estate agents should possess strong communication and negotiation skills. They represent you, the seller, and must keep your best interests in mind, and need to be able to communicate the right information and negotiate a deal. • Creative marketing is key for a successful Realtor®. How can you sell a home unless it’s marketed effectively? A great real estate agent must sell a home using a unique perspective that’s different from others, and must be able to use creativity in finding alternatives when facing any difficulties. • Housing market knowledge is also important. They should be able to provide relevant marketing strategies. The best agents can help you determine the highest possible price for your home while considering current market

conditions and your desire to sell. • Is your real estate agent personally connected? Realtors® should be able to provide several lists of services and business recommendations, such as real estate attorneys, mortgage consultants, and more. • Is your real estate agent connected online and through social media? It’s the digital age, and if a Realtor® doesn’t have an online presence, they’re either too new to the game, or too “old school” and unwilling to keep up with technology. People search for listings online, not via newspapers. Social media (Facebook, Twitter, Instagram, YouTube, LinkedIn, personal websites) can be a powerful tool in the real estate business, helping agents expand their reach, network, visibility, reputation, and more. Don’t even consider hiring an agent without an online presence and connections. • Real estate agents must show commitment to the client. They should be reliable, responsive, communicative, attentive, and always after your best interests, not their own personal motivations. You need to be on the same page. They need to know that if you make money, they make money. It’s that simple. If an agent doesn’t show commitment to you, it’s time to move on. • Problem-solving skills are something else to look for. Your agent should be a creative problem solver who can help you with financial tasks and advice, provide a Comparative Market Analysis, and help you navigate any challenges that could arise. It’s so important that you’re satisfied with a Realtor’s® services. You are not only investing your money, but also time. Your real estate agent should be able to sell your home with the highest possible 33

return while meeting all your expectations along the way.

Keep reading to learn more about finding a great real estate agent in the next chapter.

POINTS TO REMEMBER:

• Not all real estate agents are equal or even good at their jobs. • Consider whether your agent has been meeting your needs and expectations. • Learn what to look for in a great real estate agent and consider hiring somebody else who will sell your home faster and with great profits.

CHAPTER 7 Finding a Great Real Estate Agent

There’s a saying that if you want something to be done right, you have to do it yourself. While in some cases that might be true, there are others for which you need the help of a professional. A great real estate agent who can market and sell your home is a perfect example. Their commission rate might seem daunting at first, but a great agent will streamline the process and obtain you the best possible deal on the market. Also, they will GET YOUR HOUSE SOLD. Hire a great agent, and get the deal closed. The minor cost involved with a professional real estate agent is more than worth it. We’ve discussed whether your current or past Realtor® is or was right for you, and meeting your needs. We’ve talked about what to look for in hiring a new real estate agent to help you sell your home faster and at a price that meets or exceeds your expectations. But how do you go about actually finding and hiring one?

FINDING A REAL ESTATE AGENT: DO YOUR RESEARCH

As mentioned, don’t go with someone who’s promising high quotes while offering low commission rates. Further, just because your best friend’s parents are real estate agents, doesn’t mean they’re the best choice for you. That being said, referrals and recommendations are a great place to start. Talk to people you know who have had excellent 36

experiences in selling their home: on the market, a few showings, some great offers, and a sold sign. If your Realtor has a Broker's license, that means they have gone through extensive training beyond just having a sales agent license. They may have greater insight to get the job done. Then check with the state’s regulatory body/licensing authority; they can provide you with information about whether the agent is licensed, as well as other important information like their disciplinary and award-winning track record. Next, check for credentialing. Real estate agents’ credentials include: • CRS® (Certified Residential Specialist)—means the agent has completed additional training in handling residential real estate • ABR® (Accredited Buyer’s Representative)—indicates that the agent has completed additional education in representing buyers in a transaction • SRES® (Seniors Real Estate Specialist)—shows that the agent completed training aimed at helping buyers/sellers in the 50+ age range. If your agent is a Realtor®, with a capital R, that means that they’re a member of National Association of REALTORS® (NAR) and is pledged to support its specific code of ethics.

CHOOSING A REAL ESTATE AGENT: WHAT TO ASK

Now you’ve found a few potential Realtors® whom you think might be right for you. But how do you decide? By interviewing them and asking the right questions, as well as avoiding certain mistakes.

Pay attention to their answers. Anything that seems “off ” is a red flag. Interviewing prospective agents is necessary before signing any contracts or other paperwork. Ask the agent if they’re professionally familiar with your home’s location, general area, and neighborhood. If they give vague answers, don’t shy away from asking more specific questions to test their knowledge. Give the prospective agent your projected timeframe and ask them if and how they can work with that. Don’t let them decide for you or suggest changes. Ask them to provide you with statistics, a marketing plan, and marketing strategies that fit within your timeframe. Ask the agent about their availability and how that factors into your timeframe. Will they be able to be committed and dedicated to you during the home-selling process? Establish communication guidelines and ground rules together. Ask about the agent’s marketing strategies. Does it match your needs? As a seller, you need to be informed about how exactly your house will be sold, what makes a direct mail campaign appropriate or not, how often and when it’s best suitable to advertise, how to market your property online, and more. Finally, hire an agent who is not only interested in making a sale, but also understands your needs and will have your best interests at heart. The way the agent answers these questions should help you decide if he or she is the one you want to sign with or not. An agent that takes the time to talk to you and make sure you get all the information you need is usually an agent that will consider your transaction as important.

Be mindful of your communication skills and how you ask these questions. Tread carefully, particularly around more experienced Realtors®; they might be insulted at some of your questions. If you do online research beforehand, you can use what you found as part of your interview process to show that you’ve done your homework. You don’t want to insult or offend an agent to the point where you lose the relationship you want.

CHOOSING A REAL ESTATE AGENT: AVOID THESE MISTAKES

When choosing and hiring a real estate agent, avoid the following:

• An agent that agrees with every crazy thing you suggest. A good real estate agent should be professional, tactful, and gently steer you in the right direction. • Believing all real estate agents know the same things. Remember, do your research! Not all agents are equal in terms of the knowledge, specialties, and education. • Choosing to work with a family member as your real estate agent. • Hiring the first real estate agent you interview or the first real estate agent with an impressive presentation. • Picking an agent who promises to keep your house as an “open home” for a long time. • Choosing an agent based exclusively on the number of houses sold in the past year or just because they conveniently suggest the highest price for your sale.

HIRING A REAL ESTATE AGENT: MAKING IT OFFICIAL

So, you’ve found the perfect Realtor® for you, but now you need to make it official. Before signing anything, read these tips. 39

Any professional agent will give you the chance to review the documents you must sign a day before. Be sure to ask up front! For example, as a seller, you need to look over the Agency Disclosure, the Listing Agreement, and the Seller Disclosures. Your agent should also be able to supply you with a written list of referring vendors, such as mortgage brokers, home inspectors, and title companies. That should help speed up the process. If you see the word “affiliated” anywhere, ask for details because there might imply the existence of some extra costs. All fees are negotiable. The charged percentage is different from one agent to another. Finally, remember to consider what happens if you change your mind after signing the agreement. Find out the company’s policy on canceling agreements, whether any penalties or costs are incurred, and whether any other clients tried to do the same. Your investment in hiring an excellent real estate agent is worth it.

POINTS TO REMEMBER:

• Finding and hiring a different real estate agent can take a lot of time and effort. • Your investment in securing a fantastic Realtor® who suits your needs will be well worth it when you can sell your home for a price you’re happy with.

CHAPTER 8 Housing Market Changes

Over the last decade or so, real estate has taken some heavy blows in the values of houses, due to the incessant fluctuation in the value attached to homes and a sometimes-unstable market, causing a setback to investors in real estate. At the start of the last decade, there was an unprecedented increase in the prices of real estate, resulting in the burst of the real estate bubble in 2006 and the beginning of an even greater financial crisis. A deep fall in the prices of real estate followed immediately, with the Case-Shiller Home Price Index losing 33 percent from its 2006 apex to the 2012 nadir. Investors flooded back to real estate, knowing full well that getting in at this lowest point could be very lucrative for them. Since the start on the recovery of housing in 2015, there has been an annual 10 percent increase in price on the national real estate market, according to the Case-Shiller Home Price Index Report. This rapid price increase has greatly reduced home inventory in the real estate market because most potential sellers are very careful in taking part of what seems to be a buyer’s market. This can be very frustrating, especially for first-time home buyers faced with a double threat of banks being cautious of lending to any new individuals and homeowners reluctant to sell while there is a good prospect of a price increase if they just hold out a little while longer.

The most recent changes in the housing market is that, essentially,

in layman’s terms, it’s easier to buy, but harder to sell. This means that if your home languished on the market for so long that it expired, that you need to consider what you need to do to change that. Part of that involves determining the potential factors involved, and part of that involves using strategies to help you sell your home faster, and at a great price. One housing market change is in the seller’s favor: the “digital shift.” Gone are the days when real estate experts were exclusively in charge of real estate-related information related, and they held it very secretly so that potential sellers and buyers had to consult them for this “secret” information. But the Internet has changed everything. How? For one, it has streamlined the entire home-selling and home-buying process, using just a few clicks of the button. Consider the following: • Nine out of 10 home buyers depend on the Internet as their first and primary source for home research; of these 98.9 percent still employ the services of real estate agents. • 52 percent of prospective buyers use the web as their top step when searching for homes (instead of newspaper classifieds, magazines, or directly seeking an agent). • 20 percent of searches related to real estate are done via mobile devices. • On average, 11 searches are performed online before home buyers decide on further action. Use the power of the Internet as part of your strategy to sell your home faster and for more, instead of letting in languish on the market and then expire. For example, the Internet is a great resource for doing research, finding a great Realtor®, posting your listing online, and generating more interest in your home. 43

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