Believe it or not, when buyers are out shopping for a new home they are looking for reasons NOT to buy your home.  It’s true.  Think back to when you bought your home.  You went out on a tour of homes with your realtor to look at 10 to 15 homes per day in the hope that you could narrow the list down to 2 or 3 potential finalists, right?  So, in order to increase the likelihood of making the buyer’s final list you need to minimize the negatives.

Drive-Up Appeal:  This is critical.  Like they say, you don’t get a second chance to make a first impression.  Mow the yard, rake the leaves and trim the trees and shrubs.  If it is the off-season over-seed the yard with rye grass and plant a couple of clusters of annual flowers in the flower beds to give the yard some color.  If the flatwork on the front porch is severely worn and cracked you might consider installing pavers or slate tile over it to dress it up.  If the house needs paint go ahead and have it painted.  If one of the screens is torn, have it replaced and address any other minor repairs that are readily apparent.

Light, Bright & Airy:  The first sense that is impacted when entering a home is the sense of smell.  Make sure it is pleasant and inviting.  You could use fresh cut flowers, cinnamon sticks, scented candles or “plug-in” air fresheners to set the tone.  Make sure all of the rooms in the home are well lit by stepping up the wattage on the bulbs you typically use, especially in the high traffic areas and keep the drapes or blinds open during the day to take advantage of natural ambient light.  Clean out your closets by packing your off-season clothing or take your unused items to goodwill.  Go ahead and pack a lot of your knick-knacks and seldom used furniture to make each room appear more spacious.  Have the carpets cleaned, patch cracks and nail holes, tighten up cabinet hardware and lubricate sticking or squeaking doors.

Kitchen & Baths:  These rooms should sparkle!  Clear off counters and clean all appliances and fixtures, floors and walls.  Store seldom used appliances to show that there is plenty of counter space.  Re-caulk tubs and showers.  Clean these rooms thoroughly and be sure they smell fresh. 

Foundations:  Many homes in the neighborhoods of North Dallas have had or are in need of foundation repair due to the soil composition throughout North Dallas.  This can be a costly, but necessary, expense if you want to maximize your net proceeds as it eliminates the “negative” and it provides the new buyer with a transferable warranty.  Plus, there are a number of firms who will actually do the work and defer payment until closing, minimizing your out-of-pocket expenses.

Remember, most buyers are looking for a home that is “move-in ready”.  The ones that are not, are looking for a “steal”.  Why limit yourself to that one small segment of the market.

As a business owner keen on beating down cost, I wouldn’t begrudge anyone trying to save a buck by selling their home themselves! But, it’s not as easy as it looks (we really do have more to do than just go to lunch and ride around in our fancy cars ). But, in all seriousness, there are several business disciplines that need to be implemented in the sale of real property and decisions need to be made as to which ones can be handled “in-house” and which ones need to be “out-sourced”. These disciplines include: market knowledge, contract negotiation, security, risk management and marketing.

Of the group, the value of this discipline is probably discounted the most. After all, people talk, so finding out what properties sold for in the neighborhood shouldn’t be that hard to find out, right? Plus, there are a number of websites providing sales data with just a few keystrokes. The problem is the data on these websites is, at best, incomplete. These websites pull their data from county records and, since Texas is a non-disclosure state, they can only estimate the value based on the recorded lien amount…not the actual sales price. Plus, how do you adjust for differences in value between comparable sales? What about proposed zoning changes or improvements in area rapid transit? How would these market changes affect a property’s value? These are issues Realtors deal with everyday…and homeowners….once every 3 to 5 years. So, who do you think should be more proficient at determining a property’s value?

Like the old expression goes, “everything is negotiable”. And most business people have negotiated their fair share of contracts. The advantage Realtors have is that we are required to utilize standardized contract forms provided by the Texas Real Estate Commission that are fairly well balanced in protecting the rights of both buyer and seller so we know where the “pressure points” are and how to exploit them to the benefit of our clients.  If, between market knowledge and contract negotiating skills your Realtor can’t save you 1% or more then you SHOULD sell the home yourself (and that Realtor should punch up his or her resume)!

Another element that closely parallels negotiating skills is risk management. As a fiduciary, a Realtor is charged with keeping the seller abreast of all statutory and contractual obligations arising from the sale of their home. In other words, minimizing the risk of being sued. A few examples of potential exposure might be missed contract deadlines, failure to disclose KNOWN materials facts related to the property’s condition or violation of equal housing laws.  This is an area where what you don’t know CAN hurt you!

A MEASURE of security would actually be more accurate. Most Realtors utilize two services to control access to listed homes. They are a showing service and an electronic keybox, or SUPRA. Both provide access logs that can be tracked electronically which is a healthy deterrent to bad behavior. Another thing Realtors do regarding security is communicate. If it is known someone is targeting listed properties for theft or other illegal activity that information is distributed IMMEDIATELY to all Realtors in the DFW area through their local realtor board.   As a seller, the only way to limit your risk in this area is by being present at each and every showing which, you will see, can be quite costly.

There is an old adage in the Internet space that says, “Distribution Trumps Destination”…meaning that the more places a product can be found, the greater the odds of running across someone who will want to buy it. Since more than 80% of potential homebuyers start their search online, this is especially true in selling real estate.

Whether it’s listing a property in the MLS, syndicating property profiles to all the major real estate websites (other than just realtor.com), optimizing property profiles for high search engine returns, placing ads on Craig’s List and social media sites, fielding sign calls (and steering them to optimized web pages) or conducting open houses, it is the Realtor’s job to get the property in front of as many “targeted” potential buyers as possible.  As a seller, this is an area I would drill down on…HARD.  What EXACTLY is the marketing plan for selling my home and who is the target audience?

One of the biggest expenses most homeowners fail to account for in selling their own home is the value of their time. And like they say, “time is money”. Let’s examine the time it would take the average homeowner to sell their home in North Dallas under current market conditions.

First, we need to make a few assumptions. The median sales price in area 10 (North Dallas) over the last twelve months is $272,000 and the average days on market over the past 3 months is 104 days, or about 14 weeks. We will assume the homeowner’s income to be $80,000, or $40/hour, since that is what it would need to be to qualify for this home. We will also assume the homeowner will purchase a marketing package like forsalebyowner.com’s platinum package which includes a web presence (a webpage for Google to find), a listing in Realtor.Com and in the local MLS, a yard sign, a “how-to” guide and flyer template for printing flyers of the home. And, lastly, we will assume the homeowner is prepared to pay a 3% commission to any Realtor that brings a buyer since there is a better than 90% chance that is exactly what is going to happen. Oh yes, I almost forgot. The estimates below are also assuming the homeowner to be pretty “tech savvy” in utilizing the tools outlined below. Otherwise, the time estimates might be a little on the low side.

As you can see, it would take the seller almost two full work weeks to achieve the same level of market coverage provided by your average Realtor…AND at a cost of almost $4000, which doesn’t take into consideration the other incidental expenses like directional signs, printed flyers, custom web addresses or sign riders.

Now, let’s assume you DID hire a Realtor and compensated them with a 3% commission for seller representation.  This would amount to $8160. If you subtract the cost of their expertise, which we discussed earlier,  (1% or $2720) and the marketing expenses outlined above ($3919), what’s left is $1521.  Essentially, this is what you would be paying for risk management, home security and a savvy Realtor’s marketing acumen.

What are these items worth to you?

P.S. The purpose for posting this exercise is to create dialogue. If you have a different perspective on this argument and would like to share your comments, I’d love to hear from you!

All The Best!

There are a number of different ways real estate brokerages can be structured.  There are some that represent only buyers and some that represent only sellers.  These are called single agency brokerages meaning they will only be representing one side of a real estate transaction.

Most brokerages represent both buyers and sellers.  But, what happens when one agent in a real estate office lists a property for sale and another agent in the same office represents a buyer who wants to buy that property?  Now the broker represents both sides of the transaction, which is legal in the state of Texas under specific conditions.  But it does make you wonder where the broker’s loyalty lies.

One of the reasons I got my real estate license a number of years ago was so that I utilize my real estate knowledge and skills as an advocate for the betterment of my client’s interests.  Now that I am a broker I’ve applied that same tenet to the business model of my brokerage firm.  Renaissance Realty Group will represent buyers AND sellers…but not in the same transaction.

Am I leaving money on the table by conducting business this way?  You bet.  But it allows me to do one of the things that I love to do and that is to be an advocate and protect my client’s interests…be they buyers OR sellers.

Please find attached a link to the Code of Ethics of the National Association of Realtors.  Should you ever decide to hire me as your Realtor, I would expect you to hold me accountable to these tenets.

All the Best!

George Scott Stevens