Aug 10, 2004 12:54
After a ton of work getting the house ready I put it up for sale a bit over a week ago. Only two people visited it (other than drive-bys) but one made an offer that I accepted.
I listed the house for less than I expected and I accepted an offer less than I had hoped. I also spent more time and money getting the house ready than I expected. That's all frustrating but at least I learned some things:
1. Getting a house ready to sell is simply painful. There is no way around it. It takes lots of time and money.
2. The real estate business is slimy, slimy, slimy. I feel like my agent was very honest but he still has to make a living and that means his interests aren't the same as mine. Some examples of slime:
a. The seller's agent wants to sell the house as quickly as possible, not necessarily for as much money as possible. HE typically gets 3% of the price as commission so increasing the price by $1000 only puts $30 into his pocket.
b. The buyer's agent wants to purchase a house as quickly as possibly. He doesn't want to get the price as low as possible. Quite the contrary. He typically gets 3% of the final price so he benefits from a higher price.
c. Agents score a huge win if they can represent both the buyer and the seller because they get 6% of the price. That means that a buyer's agent is much more likely to push houses where he represents the seller. I believe this somewhat extends to companies as a whole -- a Century 21 agent is more likely to push Century 21 houses.
d. Buyer's agents aren't actually paid by their client. They are paid by the seller. There's an inherent conflict of interest no matter how fair the agent trys to be. To list a house on MLS you must offer at least 1% of the price to the buyer. If buyers only acted in the best interest of their client then no seller would pay more than that 1%. Instead most sellers offer 3% and some offer bonuses on top of that.
But back to things I learned:
3. I went with an small firm (basically an individual) and was able to negotiate paying him 2% instead of 3% commission. However in general I would go with a larger firm for reason 2c above.
4. I had a hard time making some decisions when fixing up the house because I didn't really trust my agent. Of course he wants me to paint everything and replace all the carpets -- that's just money out of my pocket and it helps him sell the house more quickly for more money. I should have gotten a second (realtor) opinion on more things. I ended up replacing the carpet (about $3000) against his advice because everyone else I talked to said I should.
5. House repair isn't as difficult or scary as I imagined. I ended up doing all sorts of handyman type work that I had never really done before. Was it worth saving the money? Hard to say. Contractors are hit-and-miss. I spent about 8 hours pruning trees that I could have paid someone else $150 to do. One person told me $400 to fix a water-stained ceiling but I did it in half an hour costing about $20 in supplies. All in all it was worth it because I gained a lot of confidence in those skills.
6. Next house I sell will be by owner. There is a Dummy's Guide to Selling Your House by Owner. For $100 you can list on MLS. That still requires at least 1% for the buyer's agent but that's much much less than 6%. True, the slimy and even moderate agents won't show that house, but that's just the way it goes. (I can see a buyer's agent thinking he is justified that he expects 3% and won't show houses that pay less than that). I can always choose to go through a realtor later.
Regrets:
1. I wish I had sold the house months ago. I wasn't using it much although my brother was paying some rent so it wasn't a total waste. Still, it was expensive to keep around. Plus the housing market got worse over that time.
2. I wish I hadn't let my realtor let me get so concerned about my lack of garage (the garage was converted into a room -- technically it was never a garge since it had been built that way but it used the same floorplan of a house with garage). He was all gloom and doom that my house would never sell. I didn't let it bother me for a long time until he showed me MLS listings of other converted garage houses that took many months to sell and ended up selling very cheaply. The thing is, my house had a greenbelt in the backyard and that's in very high demand. It's true that more people are going to be turned off by no garage than turned on by greenbelt, but it's my instinct that the people who must have a greenbelt are willing to compromise on the garage. That is my market. I want someone who is willing to pay extra for the greenbelt and if he wants to talk me down because there isn't a garage then I can accept that and it's a wash. Instead my agent had me pricing the house lower.
3. I was too eager with the first offer I got. The buyer's agent had some song and dance about how the client already had another house lined up to buy and needed an answer by that evening, etc. My agent wanted me to accept the offer straight out (it was $5000 lower than my asking price). That seemed crazy to me but instead of making a reasonable counter offer (like lowering my price by $1000) I ended up lowering my price by $3000 and then acceping the final offer at $4000 below my initial price. I'm not all that regretful.. I had intended to go down at least $1000 would have been happy with $2000. On top of that this person wants to close fast, which is good for me since I'm not living there. If that saves me 1 month of mortgage that's worth over $1000 to me. Plus if she actually was going to take another house and I lost her as a buyer it really might have taken more months to sell. Still, I feel like my agent should have been better at getting me a good price. I had to fight him to put in the counter offer which got me an extra $1000.