Maximizing home profit

Asked by Bryan, Havertown, PA Wed Oct 31, 2007

We would very much like to move before we have another child (probably in the next year), but getting enough profit out of our current home (owned just 1.5 years) is going to be tricky. Obviously, doing a FSBO on both ends (no agents involved) would be ideal from a purely financial perspective, but I'm wondering how realistic that is given a slower market these days. Perhaps we could avoid an agent on our end, thus saving 2.5-3%, but again, I wonder if even that's realistic. How helpful is it to spend the roughly $500 to make your own MLS listing?

I feel like we need to both find ways to maximize our sale price and minimize our purchase price. I'm an idealist, and we'd really like this, so I'm not giving up yet! Any advice you can give would be very, very welcome! Thank you all for your help and wisdom!

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7
PAT Russell, Agent, LONGVIEW, TX
Thu Oct 22, 2009
"Saving" a commission is always the first thing that a Homeowner thinks about. But, you must realize that A good Realtor will earn that commisssion by bringing you a Buyer, one that is Qualified for a Loan. As a Seller, you may not feel comfortable asking a Buyer some of the things that a Realtor will ask, like Credit, etc. Agents know many Lenders that will do a good job and can refer the Buyer to several for them to make their own choice. Remember: EXPOSURE. That is the key as well as Pricing correctly. With a Realtor, you can gain the highest exposure possible and also, many buyers that come into the area, do not really know that area and what homes are selling for.....what do they do? They call A Realtor. And lastly, a For Sale By Owner gives Buyers that they can BARGAIN on the price much easier than with your Realtor being there to help negioate the deal. In my opinion, not just because I am a Realtor, but if I were just a Seller, I want all the advantages that a good Agent can bring to the table for me. Good luck and hope all works out well for you.

PAT RUSSELL pat_can_sell@live.com
REALTOR
UNITED COUNTRY TEXAS PROPERTIES
GILMER, TX.
2 votes
Joan Braunsc…, , Morris County, NJ
Wed Apr 7, 2010
You do realize this question is almost 2 1/2 years old.
I really do wish they would make the original question date in bold type.
0 votes
Michael Russ…, , 75006
Wed Apr 7, 2010
Your first challenge is to find what the approximate market value is for your home. If you're skipping on Realtor representation then have an appraisal for market value performed. You don't know what your options are until you know what it's worth. It's important to mention that you do have another option. Lease this one and buy the next. Best of luck
0 votes
Rich Schiffer, , 19081
Mon Nov 5, 2007
Bryan, I find that whenever we make decisions, we get the best results when we know the facts. Let me offer you a few facts that might help you evaluate your options.

1. The median selling price when using an agent is 16% higher than when homes are sold directly by an owner. (According to the National Association of Realtors, Home Buyer and Seller Survey, 2006) Even if you paid a 7% commission, that is still 9% more in your pocket.

2. If you sell on your own, you must pay for all the advertising and marketing materials. (This expense is normally paid for by your agent or broker, should you use one.)

3. Buyers buying direct from an owner typically expect to pay (and intend to pay) less. (see item 1, above)

4. Selling on your own usually takes longer than with an agent. This results in additional taxes, interest, utility bills, insurance, and potentiall additional travel expenses back and forth if you move before the marketing of your home is complete.

5. Without an Realtor, you may have to engage an attorney to prepare or review contracts for you. This is likely to cost more than a Realtor's services would have, and attorney's fees most often will be billed to you even if that sale does not go through.

When buying a home, and using a Realtor as your "Buyers Agent", you are free to negotiate your contract with them, just as when you hire them to market your property. It is possible to structure your contract with them so that you pay nothing out of your own pocket. A Realtor, with their available resources and local market expertise, will also be able to save you money in the negotiation process on the purchase of your new home.

So, I think you can see that your original question had a flawed premise. (Which I think you even hinted at when you said, "but again, I wonder if that's even realistic." In fact, using a Realtor on the Selling side typically nets you more money, and using a Realtor on the buying side costs you nothing, and potentially saves you money on your purchase price.

For an article about the "Value" of working with a Realtor, please see http://activerain.com/blogsview/98782/A-REALTOR-s-Worth

As always, I wish you luck in selling your home. If you need any other questions answered, please don't hesitate to contact me.
0 votes
Keith Sorem, Agent, Glendale, CA
Wed Oct 31, 2007
Bryan
I think you should try it! I don't know your market, so I am free to offer my advice! (Despite my National Asspociation of Realtors' code of ethics that prohibits me from suggesting advice beyond my "sphere of business'
But if I can help my client save a buck...let's go for it! I know nothing of your market, your home, Yur situation....let's offer FREE ADVICE!

Are you high? or .......
I need to post this thread somewhere...but one more time....
Buyers use a Realtor "because we work for free".....90% of the time!
Buyers view the home that they purchase over 90% of the time.....
So why would I exclude 90% of the buyers 90% of the time!?
To save the commission! Of Course.....
In an MLS listing you still pay the buyer's agent side....2-4%...
So what do I save....
I pay a flat fee to the listing a set amount....
Forget that this is a real estate question:
I want to max my profit
Exlcude 90% of the buyers
Exclude 90% of the agents
Get those remaining to pay OVER MARKET
Persuade their agents that my price is Market
Persuade their appraiser that my price is Market
Persuade their lender that it's a "fair" price.

Great...sounds good to me.
0 votes
Mike Kelly A…, Agent, Santa Rosa, CA
Wed Oct 31, 2007
Bryan, There are companies out there who charge you $500.00 to put your home into the MLS and thereby giving you exposure to other Realtor/Licensees/companies in the real estate community. You can then offer 3% or more to to the selling office and differentiate your property from the thousands now on the market.
I find these companies don't really have a vested interest in YOUR success as they get their $500.00 and walk. You're on your own with getting it priced right, marketing, filling out and providing all required disclosures and addenda, networking with the Realtor/Licensee's showing your home and following up with them. Also any buyers you attract you'll need to be able to show your house, overcome objections, negotiating the contract,close them on the sale, get them to write a contract, get a deposit, get a deposit increase, schedule all inspections, negotiate any/all inspection items, make sure they are kept on track with their loan, hope they aren't secretly trying to sell a home and understand the process as YOU'VE explained it to them and then make sure they have applied for a loan, obtained loan approval, ordered and received the appraisal, get loan documents into escrow and close the sucker!
You could also have a Realtor/Licensee represent you in the Listing and purchase of the new property and work out a mutually agreeable discount program. Folks selling their homes either price them WAY to high and end up loosing a home they try to buy or pricing them way to low; costing them Thousands of $$ in the process. I've been doing this for 28 years and still practice daily. I'm constantly in a learning-based mode for my profession. I've been through three cycles similar to the one we are now experiencing. This is NOT rocket science--however you are gambling with one of the largest investments most folks make in their lifetime.
0 votes
Josh M. Boggs, Agent, San Antonio, TX
Wed Oct 31, 2007
Bryan: What you are looking at is quite an uphill battle. Realtors have been around for over 100 years and in this day and age, don't you think we wouldn't be around anymore if we weren't worth more than what we charged?

Your question is basically the same kind of question that was asked before here on Trulia. You may want to check it out here: http://www.trulia.com/voices/Home_Selling/What_are_the_advan…

In my opinion, you may want to find a highly reputable Realtor that specializes in your market area and have them provide you with a CMA and a timing analysis. If your equity position won't allow you to walk away with money in your pocket or worse bringing money to closing... then perhaps you may want to think about delaying your move if that is possible.
Web Reference:  http://www.jmbsa.com
0 votes
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