{"id":653,"date":"2016-11-24T03:58:26","date_gmt":"2016-11-23T22:58:26","guid":{"rendered":"https:\/\/nohasslelistingblog.com\/?p=653"},"modified":"2016-11-24T03:58:26","modified_gmt":"2016-11-23T22:58:26","slug":"how-to-give-up-equity-or-what-not-to-do-as-a-seller","status":"publish","type":"post","link":"https:\/\/nohasslelistingblog.com\/?p=653","title":{"rendered":"How to give up Equity (or what not to do as a Seller)"},"content":{"rendered":"

The market is remarkably stable at this time despite some headlines in the past few months implying otherwise.\u00c2\u00a0 The \u00e2\u20ac\u0153Most Improved\u00e2\u20ac\u009d award goes to the luxury market \u00e2\u20ac\u201c with Scottsdale, Paradise Valley and Carefree all posting great improvements thanks to higher demand and lower supply (quite a reversal from the 2nd<\/sup> quarter).\u00c2\u00a0 No matter how interesting the luxury market is \u00e2\u20ac\u201c 93% of the sales occur at 500K or below.\u00c2\u00a0 Therefore a much broader\"travis-graphic-for-october-2016-s\"<\/a>
\nlook is required.\u00c2\u00a0\u00c2\u00a0 Michael Orr of the Cromford Report gives a very succinct summary of the market:<\/p>\n

\u00e2\u20ac\u0153Inventory in the higher sales ranges has fallen sharply over the last 3 months, as it tends to do every year. This means remaining sellers have much less competition. So far this has not resulted in much improvement in sales prices because it takes a very long time for lower inventory to feed through into pricing. In addition it is usual for inventory to rise just as strongly between October and March so we do not think the luxury market has escaped its problems just yet. If we end up with more luxury inventory in April 2017 than we had on April 2016, then luxury home pricing is likely to continue its current weak trend.<\/em><\/strong><\/p>\n

We are seeing a little more inventory at the affordable end of the market in certain areas. If it continues this should have a moderating impact on the high appreciation rates we have been seeing below $200,000. Buyers should also see a mild reduction in the number of competing offers for the homes they want. However the effect is currently only weak and could possibly peter out quickly.<\/em><\/strong><\/p>\n

The mid-range continues to enjoy healthy supply and healthy demand plus volume increases far in excess of the low or high ends. I see little to concern us in the market between $200,000 and $500,000 at the moment and for the next few months.<\/em><\/strong><\/p>\n

… in the short term the vast majority of our local housing market is looking unusually positive and stable.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n

In a stable market, it would seem easy to properly sell a home.\u00c2\u00a0 Yet, surprisingly, we find the same mistakes being made by sellers no matter the market.\u00c2\u00a0 Because we are in the position to hear these horror stories, let us give you a quick \u00e2\u20ac\u0153Reader\u00e2\u20ac\u2122s Digest\u00e2\u20ac\u009d version of a few pitfalls to avoid.<\/p>\n

 <\/p>\n

Accept a solicitation offer.\u00c2\u00a0 <\/strong><\/p>\n

The latest trend in exploiting sellers comes from \u00e2\u20ac\u0153direct to seller\u00e2\u20ac\u009d investors.\u00c2\u00a0 We\u00e2\u20ac\u2122ve all received postcards and solicitations from the \u00e2\u20ac\u0153We will buy your house\u00e2\u20ac\u009d gang.\u00c2\u00a0 Whether well-funded by Wall Street (Open Door) or simply a local investor, the basic formula is the same.\u00c2\u00a0 The promise is to save you money and time \u00e2\u20ac\u201c \u00e2\u20ac\u0153no commissions\u00e2\u20ac\u009d \u00e2\u20ac\u0153sell as-is\u00e2\u20ac\u009d and the promises go on and on.\u00c2\u00a0 The devil is in the details.\u00c2\u00a0 Commissions just get renamed \u00e2\u20ac\u0153fees\u00e2\u20ac\u009d and \u00e2\u20ac\u0153as-is\u00e2\u20ac\u009d just means swapping unhandled condition issues for large price deductions.\u00c2\u00a0 Often times the initial offer drops precipitously as inspections are done and the close date approaches.\u00c2\u00a0 After all, in any negotiation the party who needs the deal loses.\u00c2\u00a0 In this case, the losing party is the seller weeks from closing who suddenly finds themselves forced to agree to last minute changing terms.<\/p>\n

These investors are using the fact that many sellers are unaware that they can sell a home \u00e2\u20ac\u0153as-is\u00e2\u20ac\u009d through a traditional brokerage sale. Competition from multiple buyers (even if only multiple investors) will best protect seller\u00e2\u20ac\u2122s price.\u00c2\u00a0 The fact is investors who solicit benefit by the lack of competition for a home and misleading terms at the expense of the seller.<\/p>\n

 <\/p>\n

Not list your home on MLS (i.e. believe that both you and buyer can \u00e2\u20ac\u0153save the commission\u00e2\u20ac\u009d).<\/strong><\/p>\n

The primary reason sellers attempt to sell their home \u00e2\u20ac\u0153For Sale by Owner\u00e2\u20ac\u009d or use a \u00e2\u20ac\u0153Limited Service\u00e2\u20ac\u009d real estate company is to \u00e2\u20ac\u0153save the commission\u00e2\u20ac\u009d.\u00c2\u00a0 Although we fully understand the impulse (who doesn\u00e2\u20ac\u2122t want to \u00e2\u20ac\u0153save\u00e2\u20ac\u009d money?) the statistics tell a different story.\u00c2\u00a0 The most recent study of this was posted in ARMLS Stat:\u00c2\u00a0 \u00e2\u20ac\u0153When we test our model against MLS sales only, properties that were sold using a real estate agent via the MLS sell between 8.5% and 9.0% higher than properties not listed on the MLS.\u00e2\u20ac\u009d\u00c2\u00a0 <\/em><\/strong>Is it because agents just \u00e2\u20ac\u0153know more\u00e2\u20ac\u009d? Hopefully your agent in fact does know more (promise us you will select an experienced agent) but that is not the reason.\u00c2\u00a0 Go back to our first point \u00e2\u20ac\u201c it is competition for a home that protects value. That is the purpose of MLS \u00e2\u20ac\u201c to employ the 35,000 +\/- agents and their buyers to compete for the home. Secondarily, imagine for a moment why a buyer would select a \u00e2\u20ac\u0153By Owner\u00e2\u20ac\u009d home?\u00c2\u00a0 Since buyers don\u00e2\u20ac\u2122t pay the commission \u00e2\u20ac\u201c why would they care if the home is sold by a broker or by owner?\u00c2\u00a0 They would only care if they could \u00e2\u20ac\u0153save the commission\u00e2\u20ac\u009d.\u00c2\u00a0 But isn\u00e2\u20ac\u2122t that the very reason the seller is selling by owner to \u00e2\u20ac\u0153save the commission\u00e2\u20ac\u009d?\u00c2\u00a0 How do two people save the same commission?\u00c2\u00a0 Additionally, if you have only one buyer looking, have you really received \u00e2\u20ac\u0153top dollar\u00e2\u20ac\u2122 from the market \u00e2\u20ac\u201c or just that buyer\u00e2\u20ac\u2122s top dollar?<\/p>\n

 <\/p>\n

Bad Pricing<\/strong>.\u00c2\u00a0 Thanks to the internet, sellers and buyers have more instantaneous and, sadly, erroneous information at their fingertips.\u00c2\u00a0 This bad information has led to both underpricing and overpricing of homes.\u00c2\u00a0 \u00c2\u00a0Establishing pricing through an AVM (automated valuation model – for example Zestimates) while fun and interesting, is by no means is an accurate way to determine market value.\u00c2\u00a0 Algorithms cannot take in all the factors that make up pricing \u00e2\u20ac\u201c site selection, competition, property condition, variances in square footage, supply\/demand shifts, etc.\u00c2\u00a0 Ask yourself why after all these years lenders still require an appraisal \u00e2\u20ac\u201c where an actual person (gasp!) views the home and compares it to other sales.\u00c2\u00a0 There is simply no substitute for judgment.\u00c2\u00a0 Overpricing a home in the critical first three weeks can be a problem not easily overcome with reductions in the subsequent weeks and months.\u00c2\u00a0 Buyers can view \u00e2\u20ac\u0153days on market\u00e2\u20ac\u009d and make assumptions about whether this is a \u00e2\u20ac\u0153good home\u00e2\u20ac\u009d since no one else has purchased it, or exploit the seller\u00e2\u20ac\u2122s increasing desperation as the marketing time extends.<\/p>\n

 <\/p>\n

Hire an agent you can\u00e2\u20ac\u2122t fire.\u00c2\u00a0 <\/strong>This may be the least obvious of the errors, but it is an error.\u00c2\u00a0 Why would this matter?\u00c2\u00a0 Many sellers may be unaware that once they list with an agent, they cannot cancel the listing agreement \u00e2\u20ac\u201ceven if they are unhappy.\u00c2\u00a0 Being tied up in a 6 month listing agreement with the wrong agent (bad agent, bad marketing, improper preparation of the home, etc.) can not only rack up days on market but can eliminate the opportunity to sell during prime market periods waiting for the listing to expire.\u00c2\u00a0 Some agents will \u00e2\u20ac\u0153agree to cancel\u00e2\u20ac\u009d for a fee.\u00c2\u00a0 The best protection for you is obtaining the right to cancel at no charge as part of the listing agreement.<\/p>\n

While there certainly are other errors we could elaborate upon, we tried to hit some of the most common.\u00c2\u00a0 Want to know more?\u00c2\u00a0 As always, we are here to discuss your particular concerns.<\/p>\n

\u00c2\u00a0<\/strong><\/p>\n

\u00c2\u00a0<\/strong><\/p>\n

\u00c2\u00a0<\/strong><\/p>\n

\u00c2\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The market is remarkably stable at this time despite some headlines in the past few months implying otherwise.\u00c2\u00a0 The \u00e2\u20ac\u0153Most Improved\u00e2\u20ac\u009d award goes to the luxury market \u00e2\u20ac\u201c with Scottsdale, Paradise Valley and Carefree all posting great improvements thanks to higher demand and lower supply (quite a reversal from the 2nd quarter).\u00c2\u00a0 No matter how […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[],"class_list":["post-653","post","type-post","status-publish","format-standard","hentry","category-home-values","category-market-stats"],"_links":{"self":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/653","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=653"}],"version-history":[{"count":2,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/653\/revisions"}],"predecessor-version":[{"id":657,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=\/wp\/v2\/posts\/653\/revisions\/657"}],"wp:attachment":[{"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nohasslelistingblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}