In 2010, when the world was running away from real estate at full speed, I boughtmy first multifamily property. Since then I’ve walked through several thousand properties, managed several multifamily properties, and held over a dozen mortgages. I live and breathe real estate and I’m always looking for the next good deal.

As a routine I contact around 30 buyers and sellers every day and this allows me to make connections and keep my finger on the pulse of the market. As your real estate advisor, my primary goal is to get you the highest amount of money that the market will bear, and make the often complex, stressful, and time consuming process of selling, as smooth and painless as possible.

As the majority of those who read this will have gone through the process of buying already, I will give a brief review of the process. Once you’ve selected an agent it’s time to come up with a list price for your property and fill out a sellers disclosure. Most of the leg work for this will be done by your agent as they see transactions on a regular basis and have access to the Multiple Listing Database. They should also advise you of trends in your local market, and get an idea of how soon you want to or need to, sell your home. Through collaboration you and your agent will settle on a pricing strategy.

The next step is to get your property looking and functioning as good as possible. Potential buyers will make an initial opinion of your home within the first 10-15 seconds of pulling up to it. Curb appeal is critical to making that first impression a good one! You definitely don’t want your house to have to “grow on” potential buyers. Clean, fresh, and organized are good concepts to abide by, from the driveway to the landscaping to the house itself.

Once the house is looking great your agent will (should) have a professional photographer come in and take pictures. Aerial drone footage should also be taken as this helps potential buyers get an idea of the property lines, layout, and
the surrounding area. Once your agent has the photos they will create your listing by placing your photos in a logical order and describing all of your properties features making special note of what sets your property apart from the rest. After that all you have to do is keep your property looking good while you wait for showings.

Your agent will schedule open houses and showings, get valuable feedback from buyers agents, suggest any adjustments as necessary, and present any offers. Your agent will then negotiate based on your instructions. Once an offer is accepted by you, your agent will coordinate inspections and appraisals, as well as helping to keep all parties aware of contractual time frames.

As closing draws near, your agent will go over the closing disclosure which shows the sale price and itemizes expenses. At closing your agent will be there to guide you through the process and help to answer any questions that you may have. After that, congratulations are in order for the successful sale of your home! 

 Choosing to list with an agent…….or not?

To some, that’s the big question. I am a big proponent of freedom and the free marketplace and with that said, if you want to save a portion of the expenses related to selling your property, I say, go for it. Before I became an agent I sold a
property myself, so it can be done. With great freedom, comes great responsibility however, and my goal with this section is to help you make a better informed decision. Usually folks like to start with money so let’s look at a typical transaction. 

You have a home worth say, $400,000 that you want to sell and with average seller and buyers agent commissions, you’re going to have around $20,000 in fees. This would come out of the proceeds of the sale. Now, as a result of the recent bought of inflation, that number probably isn’t going to pay for your child’s college, but it isn’t small change either so let’s take a deeper dive into this.

With the internet you have a few options for advertising your property, Facebook, Craigslist, etc. This will definitely get your property more exposure than just putting a sign out in your front yard. A drawback to this however, is, your number is now out there for anyone to call, be it a scammer, a car warranty salesperson or an unqualified “buyer” who wants to “tour” your home and your belongings.

Answering the phone, replying to emails, and vetting potential buyers is all part of the process. So after you vet those potential buyers by having them send you their loan pre-approvals, after you’ve explained to them how and where to get one, you can then schedule a showing for them. But wait, the loan pre-approval shows the maximum amount that they can borrow, which of course would put them in a bad bargaining position, so you’re probably going to get quite a bit of resistance to that request, if you get any compliance at all. Potential buyers don’t have a problem giving that kind of information to an agent who belongs to a reputable brokerage, because they know the brokerage will protect that sensitive information. When a buyers agent contacts a sellers agent and says their buyer is pre-approved, there is professional trust between those two agents because neither wants to waste anyone’s time.

So you’re now showing your home to potential buyers, Tuesday at 4pm, Thursday at 11am, Friday at 7pm, Sunday at 12:30pm, 3pm, and 6pm. Remember, if your trying to sell your home in a reasonable amount of time, you’re going to have to rearrange your schedule to accommodate your potential buyers. Keep in mind also, that because your advertising reach is limited, so too is your pool of potential buyers. As a side note, from industry surveys, most potential buyers feel awkward touring a home with home owner right there with them.

Typically this causes potential buyers to rush through the viewing. When this happens they tend to not have a good memory of the home which makes it difficult for them to later envision themselves living in it. Typically they will not tour the home again to refresh their memory because they know they will get the same experience. That said, you may want to step outside and allow the potential buyers to tour your house, alone. This of course comes with potential problems if something were to get broken or worse, go missing.

Last but not least, be absolutely sure to familiarize yourself with the rules of the Fair Housing Act and all of its amendments, as even the most innocent comment made about a local church, school, or neighborhood could be misconstrued as you looking for a certain type of buyer, which could result in a lawsuit.

You’ve been careful with vetting your potential buyers and making sure that you don’t violate any federal or state laws. You’ve thoughtfully photographed your home, described it beautifully being sure not to be misleading, and have uploaded it to the internet. You’ve kept your property clean and organized, showed it multiple times, and now have been blessed with an offer, congratulations!

But wait, the offer is super low!! You may have a rush of emotions that come along with that lowball offer, but you compose yourself and then ask why? Is there something wrong with my home? The area? Did I say something wrong? Maybe, maybe not. You see, the buyer knows that you’re selling the property on your own without an agent(s), which is going to save you a decent amount of money, and of course, they want part of that deal.

So after much back and forth, you end up splitting the difference with the buyer. They may accept this or they may not. They may be savvy and say, I know that you have a limited pool of buyers, it hasn’t sold yet, so I’m just going to wait.” Now, you may get highly annoyed by that and say, “Forget them! I’ll let this house crumble to the ground before I sell it to them! On the other hand, you may understand that this is part of normal negotiations.

When you work with a professional who is involved in the market every day and they have a very good idea of your homes’ value and more importantly, what people are willing to pay for it, you can avoid this. Given your permission to do so, your agent will simply say, “No” to that offer and tell that person to come back with a reasonable offer, no emotions involved.

Let’s say that they decide to accept your counteroffer and you both sign a contract. I’m assuming that you’ll want an earnest money deposit and the buyer will probably want a reputable professional to hand it over to, to protect it during the process, and release it to the proper recipient as the contract states, so you’ll need to find and retain the services of this professional.

Your buyer now has to procure financing, schedule an inspection and appraisal, and have a title search performed. Like you, if they’ve purchased a home before, they may have an idea of how and when to get all of this done. If they haven’t, you’ll most likely have to hold their hand through the entire process to ensure contractual time frames are met and you have a successful sale.

So with some cooperation and effort on your part to assist the buyer who lowballed you…….(comedic pause), you’ve managed to get through the inspection, contact any vendors to make any necessary repairs, get the property appraised and approved by the buyers lender, the title agency has given your property clean title, and your buyers financing has been secured. You and your buyer complete the transaction and you hand over the keys. Congratulations! You’ve just navigated through a fairly complex, large transaction.

When you go to work every day, you’re trading your time and effort for money, so let’s see if it was worth it to do the transaction on your own. We’ll stick with our original example of your house having a market value of $400,000. Typical buyers and sellers agent commissions in Florida range from 2-3% each. So let’s say that you negotiate the commission split down to 2.5% each, for a total of 5%. At the market rate of $400,000, $20,000 would end up coming out of the proceeds of your sale.

Remember however, that you weren’t able to sell your house for market value, at best you were able to split the difference of the commission. So you ended up selling your home for say, $390,000. You can’t get away with not paying for title searches, doc stamps, and the other required services, and those closing costs usually come in around 1-2% (although in certain circumstances they can be significantly higher). So let’s go low and say that your closing costs are only 1% of the transaction.

So, $390,000 minus 1% in closing costs equals $386,100. Let’s assume that you own your home outright and have no mortgage. You would get a check for $386,100. If you had a balance that you owed on your mortgage you would subtract that from the $386,100. Let’s see how you’d fair using a real estate agent to list your home.

So, using a real estate agent and selling your home for the market value of $400,000, your proceeds would look like this; $400,000 minus 6% (2.5% + 2.5% + 1%) equals $376,000. So, in essence, you paid yourself $10,000 for your time and effort as acting as yours and your buyers real estate agent. That’s not too bad depending on how long it took to sell and how many hours you have in the preparation, marketing, vetting potential buyers, showings, and final contract process.

In my 14 years in real estate, depending on market conditions (2020-2022), meeting the buyer half way is usually the best deal that you’re going to get. So, if the price starts to dip below that threshold you may want to recalculate the money saved vs. the time, effort, and risk spent.

In summary, if you don’t have a strict timeline in which you need to sell your property and you don’t mind putting in the time and effort to learn the local and federal laws involved with a real estate transaction, market the property, vet buyers, show your property, organize and secure the required professionals and
possibly assist your buyer, it could save you several thousand dollars.