6 things real estate agents wish you knew

Do you really want a prospective homebuyer to see your underwear on the floor?

By MSN Real Estate partner Dec 4, 2013 11:18AM

Getty ImagesBy Dana Dratch, Bankrate.com

 

Real estate agents see it all -- from the unmade beds to the "What were they thinking?" decor.

 

Over the years, they learn a thing or two: why some houses sell while others linger on the market. Why some promising buyers never make it to the closing table. How to get a better deal on the mortgage. Even just how much the other agents stand to make on your home.

And the good news is, they want to share.

 

Whether you're a buyer, seller or both, here are six things real estate agents wish you already knew.

 

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1. Want to sell quickly? Price it just under the market

In today's market, sellers are again optimistic on the value and price of their homes -- "But buyers aren't," says Ron Phipps, principal with Warwick, R.I.-based Phipps Realty and past president of the National Association of Realtors.

 

"Your challenge as a seller is to price the house so that it is compelling," he says.

 

What that means in dollar signs: "Set a price slightly below market value," he says, just "a fraction."

For example: If similar homes in your neighborhood are clustered around $210,000, you might price yours at $200,000 or $198,000, he says.

 

What the agent wishes you knew: "The longer a house is on the market, the less likely you are to get fair value," Phipps says. "So you really want to position yourself to be the one that sells, not the one that languishes."

 

And that adage of not wanting to leave any money on the table? Still valid.

If you're turning around and buying a home, and you already have cash in hand, thanks to a fast sale, "that puts you in a very powerful position," Phipps says.


2. The preapproval letter is just the beginning

For many potential buyers, frugality ends the minute they get preapproved for a mortgage, Phipps says. That's when they start running up the cards and opening new lines of credit to buy things for their home-to-be.

But that preapproval letter is just one of the first refreshment stations of the homebuying marathon, not the finish line.

 

Just before closing, a lender will re-examine a prospective buyer's financial situation -- complete with a recent copy of the credit history and other updated information.

 

If those numbers have changed for the worse (salary decrease, higher card balances, new lines of credit), then the applicant could get clocked with a higher interest rate or even lose the loan. "The number of buyers who get denied is significant," Phipps says.

 

What the agent wishes you knew: Never get new loans or start using credit cards more heavily until after you've actually closed on the home.

Even better, retain your frugality until you've been in the home for a few months and have a good sense of how homeownership affects your finances, Phipps says.

 

3. Selling a house probably takes longer than you think

If you're selling a home, it's important to understand the timeline, says Jeffry Wiren, principal broker with Re/Max Equity Group and past president of the Portland, Ore., Metropolitan Association of Realtors.

 

"And that's something most people don't understand," he says.

 

Underestimating the time it takes -- and building a schedule around those unrealistic expectations -- adds stress, Wiren says.

Instead, realize how long the process takes in the real world (not just your head) and plan accordingly. Another important factor: Different markets (and prices) move at different speeds, he says.

 

Wiren's sales schedule breakdown:

  • Getting your home in shape: two weeks
  • Average time on the market (varies widely with location and price): 2.5 to three months
  • Negotiating after an offer: one week
  • Preparing to close (assuming a traditional transaction): 30 to 45 days

What the agent wishes you knew: A smart seller allows a minimum of four to six months to sell, Wiren says. And that's if you have a home that's priced right in a good market with one solid offer that makes it to the closing table.

 

4. Not all 'buyers' are able to buy

To prove their worthiness, sometimes prospective buyers will show a prequalification letter, Wiren says. "And that means nothing."

That's because in a prequalification, lenders usually don't verify buyers' information. A preapproval, on the other hand, involves third-party verification.

 

"'Prequalified,' that means they've talked with a lender and said, 'I have good credit and I make X number of dollars a year,'" Wiren says. Based on that, the lender responds that the buyer can reasonably expect to borrow a certain amount -- if those self-supplied facts are accurate and there aren't any negatives, he says. Most lenders don't research those details until the buyer applies for a loan, he says.

 

What the agent wishes you knew: Serious and smart buyers are "preapproved." That means they've already applied for the loan, the bank has verified their financial information and (if the numbers remain the same until closing) it promises to loan a specific amount at a specific interest rate.

 

Still, after an offer, smart agents will call the lender and verify that the prospective buyer is preapproved for the necessary amount, Wiren says. At the same time, that agent will verify that the lender would have no problem closing in the expected time period -- usually 30 to 45 days.

 

5. Yes, it really does have to smell good
Sellers sometimes drag their feet on little details that make a big difference, Wiren says.

He can't count the number of clients who asked, "Does it really matter if we have the carpets cleaned or take the family photos off the wall?"

"The answer is yes," Wiren says. "A buyer needs to walk in and have it look good, feel good and smell good."

 

Sellers should put themselves in the shoes of prospective buyers -- and try to see the house for the first time, he says. The home should be kept showroom-ready.

 

"It's a regular occurrence that I walk into a home with a buyer" and find "beds unmade and underwear on the floor," Wiren says. In spite of an appointment, "I don't see a home that's ready."

 

What the agent wishes you knew: A mess leaves an impression that's "hard for a buyer to overcome," Wiren says.

 

His checklist for a showing:

  • Home: Clean and smelling good
  • Temperature: Heated (or cooled) for comfort.
  • Lights: Left on to welcome guests.
  • Snacks or soft drinks: A nice touch.

The impression you want: "Warm, inviting and comfortable," Wiren says.


6. We don't make as much as you think

Chances are the agent you hire to sell your house -- or find a new one -- isn't getting as big a cut of the deal as you might think, says Graham Stiles, senior vice president with Alexander Chandler Realty and HighRises.com.

"Six percent isn't anywhere near what we're taking home," he says. In fact, it's more like "1 percent to 1.5 percent," on average, he says.

 

While the two sides will split that commission, those agents split their shares with their broker, Stiles says.

 

What the agent wishes you knew: Unless your agent is handling both sides of the transaction, the agent is getting roughly one-quarter of the commission, Stiles says.

And that 6 percent commission is by no means a given in this day and age, Phipps says. "There's always a range of fees in the marketplace. Each broker sets his or her own fees independently."

 

"I spend a lot of time on the topic of commissions," Stiles says. And still, the idea that agents are getting all or even half the commission, he says, "is still one of the biggest misconceptions."


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5Comments
Jan 1, 2014 6:17PM
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 have two friends who priced their homes way above what they should have been. both homes were lost to their lenders and one is still for sale at $150,000 below the asking price and it is not sold as yet. The other one has gone to the bank and is trying to be bought by two, neighbors. this is a lesson to all who think their home is wroth more than their neighbors- wrong wrong.
Jan 1, 2014 7:13AM
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Have just placed our home under contract after being listed for only 10 days.  It was shown furnished allowing the perspectives to see a lived in appeal. Very important to have the home tidy, clean, and smelling good.  Refrain from deodorizers.  Clean up the closets and rearrange the pantry.  Be ready to add items to sweeten the deal.  We had to include two wall mounted 3D LED flat screens, dining room rug, and washer and drier.  The buyers requested them specifically.  Sometimes you have to bend a little and let some things go to snag a sale.  Very important to cater to the buyer and make them excited about moving in.  In my experience a little attention to detail will pay off later in a favorable sales price.  Advisable to sit back and think what is most important aspects of showing and marketing the house just as if you were the buyer.  Very important to realize your castle has to be appealing to the buyer.  This is the fourth home I have sold over 33 yrs using this basic formula with all being on the market less than 3 wks!  
Choose your realtor wisely noting how many homes they have sold in the past year in your neighborhood.  Make sure you are comfortable with your agent who listens, is available, and is a good moderator.  Keep away from agents "who know it all" and make promises too good to be true.  
Dec 4, 2013 4:41PM
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Yes,  after building and selling close to 2000 homes in my career,  I can say for sure certain things count:
Clean,  shiny, new home odor, a few additional goodies to throw in to close the deal are all key.

Dec 4, 2013 2:49PM
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We actually looked at a home that was cluttered with unmade beds and, yes, underwear on the floor.  In the livingroom no less.  Our realtor said that someone in the home didn't want it to sell.  We walked out.
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