Mistakes COST Home Sellers Thousands!

Listing Agent Mistakes

Sometimes I can’t believe the things that listing agents do, or fail to do, that cost their sellers time and money. 

If you need to sell your home, and list it with me, I promise that I will not make these mistakes, that I see regularly on our SoCalMLS: 

• Put a home on the MLS before it is ready to be shown.  If it’s not ready to see, it should not be on the MLS.  The damage that is done to the #  of days on the market will offset any chance that the right buyer will buy something else because he didn’t know your home was coming soon. 
• Put a home on the MLS without good photos of both the inside and outside.  Sometimes, agents put in 2 photos of the front, and maybe the back yard, but none of the inside.  It always makes me wonder if the listing agent didn’t have a key to get in, or if the inside is so ugly that it would be a turn-off to buyers. 
• Inaccuracies, or missing information in the MLS.  Wrong tract names, wrong HOA dues amounts, missing or incorrect assigned schools, missing critical info that buyers may search for that are “must haves” such as “ground floor bedroom” or “air conditioning.”
• Fail to make recommendations or point out the corrections needed to make the house show its best.  It needs to be neat and clean, neutral and un-crowded.  If the agent doesn’t have the courage to tell the seller that the house is dirty, crowded, smells bad, is cluttered, or poorly decorated, he needs to send in a stager.  Neutral paint (no wallpaper) and clean neutral flooring will add thousands to the final selling price.  Buyers typically guess the cost to remove wallpaper and change carpet at about twice what it will actually cost!
• Failing to point out the “details” that need attention and that buyers will focus on.  Just because the sellers are used to looking at it, doesn’t mean that buyers won’t see it.  Is the front door covered with dirt, spider webs, and have an old rusty doorknob?  What about the welcome mat?  Are your bathroom or kitchen faucets 25-year-old ”builder standard?”  What about the light fixtures?  Home Depot, Lowes, Walmart and Costco carry a lot of these reasonably priced items that are well worth investing in to increase or justify your value.
• Property descriptions that don’t tell about the best features of the property, or that are full of typos and spelling errors. 
• Property descriptions that include statements about special features, like “remodeled kitchen” or “fabulous back yard with view”, and then don’t provide the photos to show those features.
• Property descriptions that include statements like “now reduced” or “motivated seller”  or “won’t last long.”  I often see “won’t last long” used on homes that have been on the market 6+ months! 
• Property descriptions put in the “Agent-only” remarks section, instead of the public “General remarks.”  The potential buyers can’t see this – so it looks like nobody cared enough to even describe the property!
• Agent-only remarks that say “lockbox coming soon,” but the house has been on the market for 2 months!  If the lockbox isn’t on it the first day (which it should be) the remarks should say “lockbox to be installed “mm/dd” by 5 pm.
• No modifications to the listing in over 60 days.  The agent should be changing the remarks, or photos, or the price to refresh the listing at least monthly.  The agents who just “throw it in the MLS” and ignore it are not doing their jobs.
• REMARKS WRITTEN IN ALL CAPS – IT MAKES IT HARD TO READ AND MAKES THE AGENT LOOKS IGNORANT!
• In the ”Directions” field, put in the phrase “google maps” instead of saying something meaningful like “north of main, west of broadway, turn left on ….”
• Failing to return phone calls from other agents, or buyers who have questions about the property.
• Using a combo lockbox instead of an electronic lockbox.  In addition to providing more security for the property, the electronic lockbox will provide a record for the listing agent of which buyer agents have shown the property.  On vacant properties, where agents often don’t leave business cards, the electronic lockboxes allow the listing agent to check for feedback, or to monitor the number of showings to determine whether the home is even being shown.
• Failing to provide the seller (at the time of listing) with a reasonable estimate of their net proceeds.   When an offer comes in, the seller should be prepared to evaluate it and respond promptly. 
• Failing to keep the seller informed on conditions of the market and how his home stacks up in the competition.  If the market is slow, it should be expected that the listing agent provide a market update at least monthly.  If a price reduction needs to be done, it is better to do it sooner than later (or it will end up costing much more!) 

I’m sure this is not a complete list, so if you think of other mistakes, please add them for me in the comments section. 

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Should you Sell or Lease Your Orange County Home?

Decisions can be difficult

In Orange County today, as well as many other places, there are home owners who are going through the difficult decision process of whether to sell their current home, or lease it and wait for a better time to sell.  Some of these people have taken a job out of the area and will not be able to commute from their current home.  Others have reasons to move such as not being able to go up and down stairs any more, or not having the energy or strength to clean and maintain the house anymore. 

While nobody knows exactly what will happen in the future, it is generally expected right now that the current real estate downturn will continue for another year or two at least.  When trying to make this decision, it is a well worth your time to dig in to all the details and possibly consult with a tax expert to fully consider all of your choices. 

These are the steps that I recommend to my “maybe sell, maybe lease” clients:

1. Look at what it really costs to own the house.  Add all of your costs, such as monthly mortgage interest, property taxes, HOA dues, insurance, gardener, pool service, etc. 
2. Find out what amount of rent can reasonably be expected for a house like yours.   Ask a Realtor to run the lease comps for you, call around to apartment leasing offices, check on Craig’s List to see what others are offering at what monthly rate.   (If you are in Orange County, call me and I’ll help!) 
3. Check with your favorite tax expert about depreciation or any capital gains tax issues.  If moving out of a primary residence, you usually have up to 3 years to close a sale and still have the capital gains exclusion of $250K for single, or $500K for married home sellers.  (Who knows if this will stay in place with a new Congress and President?) 
4. Consider the hassle or cost of selling later, either with a tenant in place, or the cost of carrying it with no tenant income while marketing it for a few months until it closes.  There may also be costs to paint or replace carpet prior to being able to market the property after a tenant vacates.
5. Take a look at your current loan for both rate and terms.  If it was set up as a short term fixed rate that will reset to a higher rate later, find out exactly what that rate and payment could be in a “worst case” scenario.  If you are planning to refinance it prior to it resetting, it would be wise to try to do it while still occupying it yourself.  Non-owner occupant rates are always higher than for owner occupied!
6. Consider offering a lease-option.  There are many pros and cons to doing this, but sometimes it can work well for all parties.  

Other posts you may like :
Lease Options Explained 
Over Pricing Your Home

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Sellers – When you get an offer respond quickly!

In the current market, when a buyer makes an offer on a property, it is in the seller’s best interest to respond quickly.  The buyers today are not impulsive, frenzied, or in a panic to “buy now or be priced out forever.”  If any urgency is felt by a buyer, it is more likely based on interest rates rising.

The standard contract in California provides an expiration date of 3 days after an offer is signed.  That doesn’t mean that the seller should take their sweet time to make a decision.  I have seen buyers go through a careful thought process to first decide to make an offer at all, and then to come up with the terms and price that would make them happy with the results.  At the time an offer is signed, most buyers are looking forward to coming to a conclusion of their home search, and moving forward with their plans to move in, arrange furniture, get settled in, and basically get on with their life.

During the wait time, between offer and response, the buyer’s emotions may swing substantially while imagining the offer being accepted, rejected or countered.  Since nobody likes rejection, a defensive ”I don’t really care that much” attitude often develops.  At the same time, the buyer may also be mentally justifying their original offer and while it originally may have been a strategy to negotiate to a “middle ground,”  it can evolve into a “they can take it or leave it” decision.

While dragging out a decision by the seller, there is also the chance that another home will become available that will be more attractive to that buyer.

Sometimes, it is difficult to respond immediately because one or more of the sellers may be unavailable to review and consider the offer, but with email and fax machines available from almost any corner of the globe, availability should not be an excuse for long.  Unless the home is brand new on the market, the listing agent should keep the seller well-informed and prepared by having regular discussions about what to expect and how to respond.   Providing information to the seller about agent feedback, recent sales (the ones that buyers bought, instead of yours), new listings, local foreclosures, buyer activity level and interest rates should be an important part of a listing agent’s job. 

Several years ago, I worked with some buyers who submitted an offer on a newly-listed , but substantially over-priced property.  (We justified the offer price with recent comps, many of which my buyers had visited.)  The listing agent was in no hurry to help the sellers make a timely decision, but they eventually countered 3 days later.  By then, my buyers were mad that their offer was treated so casually.  They decided to keep looking, ended up buying a different house, and 6 months later the original house sold for $15,000 less than my buyer had offered! 

Sellers – You have had your home on the market because you said you want to move.  When an offer comes in, it should not be a surprise – that’s why you’ve let all these strangers come through your house.  When you get an offer, thank the buyer (no matter what, it’s still better than not getting an offer) and tell them whether or not you want to sell at the price they offered.  Dragging it out will only hurt you in the end!