1. A picture is worth a thousand words but have you ever heard of a photo that was too good or too flattering? Well it happens in real estate. Because of the special lenses and fill in flash a talented photographer or real estate agent can make a photo of a house quite appealing. Rooms look bigger and walls look cleaner but there is a problem. When the buyers show up at the property they see the real thing and instead of putting on their creative home-makeover hats they are so emotionally disappointed that they dismiss the house without giving it a chance. Realistic photos, some could even argue poor photos, have a better chance to sell the property.
2. Is the real estate market back yet? The answer is it depends. There are hot markets like the Main Line, Exton, West Chester and Center City Philadelphia. And there are cold markets that are reeling from short sales and foreclosures that are pulling down the values of all the properties good and bad. The bottom line answer is that more than ever the good and bad markets are worlds apart. I call it the see-saw marketplace. When one market is up the other has to be down. It’s best to consult with a pro before picking a house that looks pretty. It might make more sense to ask what the percentage of distressed properties is in the zip code and save the hunt for a nice kitchen for the best areas.
3. What is the difference between a broker and an agent anyway? An agent in Pennsylvania is required to take 60 hours of classroom work and pass a test. Then they are qualified to list and sell residential and commercial real estate. A broker needs to take 300 hours of classroom work in specified areas of real estate (law, property management, Sales, brokerage management etc.) and they need to have gained documented experience in the real estate field with a minimum amount of 3 years of experience before they take a broker test. Agents generally can’t work for themselves they need to work for a broker. The broker is then responsible for the agents training and activities. All things being equal you can hire a broker to sell your house instead of an agent. It is a good way to make sure that this is not the agent’s first rodeo.
4. FHA 203 K Sounds complicated doesn’t it. It is an FHA mortgage that allows a buyer to buy a property up to $417,000 and to finance the repairs that the property needs over the term of the mortgage. Let’s say you find a house that needs a new kitchen and a new roof costing $25,000 for the repairs. Who has that kind of money sitting around? You do if you use a 203 K mortgage. Buy the house with a 203 K mortgage and finance (add into the mortgage) the $25,000 in repairs. This gets you a brand new kitchen and a new roof for about $100.00 a month in your monthly payment. Think of the houses that people pass on because they can’t afford to fix them up after they own them….hmmmmmmm.
5. Law of diminishing returns. Is a four bedroom house better than a 3 bedroom house? Ok is a 5 bedroom house better than a 6 bedroom house. How about 7 or 8 or 9? Is a ten bedroom house better than a 4 bedroom house? Don’t get fooled thinking that more is better. Bigger yards often make a house less valuable. In-Law quarters make a house sit on the market for a longer period of time. (few people desire them) there is such a thing as too many garages and too many baths and kitchens. Value comes directly from the demand in the marketplace. If you have never met someone who wants a 7 bedroom house you are not alone. If nobody wants one it has less value.
6. Open houses. Sellers always want agents to hold open houses. Agents would rather not. Agents know that houses do not sell because of open houses they sell because they are priced right. The odds of a buyer buying a house from an ad call including an open house is 1 in 400. So why do agents hold open houses? Because when a buyer comes into an open house they may hire the agent sitting on the open house to help them go out and find a house that suits their needs. (Cha ching) Sellers are always thinking their house is being exposed but in reality their agents ability to help the buyers find other houses is what may really be on sale on Sundays.
7. Sales and objections….If you ever find yourself trying to sell something to a potential buyer here is a great rule of sales to follow. It is not a true objection until they say it twice. New salespeople listen very closely for the slightest objection and then they address it quickly and sometimes effectively. For example a buyer may say…..”hmmm..this room is kinda small.” The salesperson starts overcoming the objection talking about how colors make a room feel small or the lack of furniture makes it feel small. An experienced and successful sales person would ignore the comment unless they heard it twice. Then they go into action addressing the objection. If they don’t follow this rule they find themselves at odds with the buyer and the tension will not help to make a sale.
8. Does your agent play well with others? Do they tell other agents about your listing after they listed the house for sale or do they try to sell it themselves and double their commission earnings? Signs that your real estate agent is out for themselves instead of working for your best interests are:
Suggesting that signs are unimportant. (16% of all buyer come from signs according to NAR)
Not sharing the commission that they charge you with other agents on the multiple listing service. Commissions and commission splits between agents are totally negotiable.
Making it difficult for other agents to show the house (no lockbox, listing agent must accompany all showings, limiting times for access)
Not returning calls or emails to other agents.
Suggesting that putting the property in the multiple listing service is unimportant.
The cost to sellers for this kind of poor marketing can be very high. Keep your guard up.
9. Professional Negotiations- It is important that you hire an agent or broker that understands professional negotiations. Sometimes the rules of negotiations are not that apparent when emotional buyer and sellers buy and sell houses. Some of the rules are Zen like. Take for instance this rule: the best way to win what you want in a negotiation is to make sure that the other party gets what they want. Yes mind boggeling….
10. The Pareto principle. Pareto was a mathematician who discovered that about 20% of all of our actions leads to 100 percent of our accomplishments or results. In real estate the principle is alive and well. About 5% of all of the agents and brokers are responsible for about 90% of all of the sales. The trick is to see past all of the branding and all of the noise to find a real estate agent who can be effective for you. I know one.
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