Selling a Home for the First Time? 5 Things Your Agent May Not Tell You
Real estate agents want your business and they especially want a new listing. While most agents are trained and licensed to put your interests first, it is also important to learn the essentials and advocate for yourself.
We will help you understand the basic costs of selling a home (beyond commissions), the best time of the year to sell a home, what statistically makes a home sell, the basics on Realtor commission, and some basic rules of thumb when negotiating with a home buyer during your home sale. In our opinion, five things to know about home selling that the real estate agent you’re talking with may not tell you.
1. The cost to sell a home (beyond commissions).
The seller and the buyer have their own separate closing cost to pay during a home sale. The buyer might ask the seller to pay their closing costs, but whether the seller agrees to this or not, the seller will still have their own closing costs to pay.
In Oregon the seller pays a portion of the title insurance (insurance that covers the transfer of ownership), they pay half the escrow fee, they pay the title company to close out each lien or mortgage on the home, they pay a small fee to record the sale with their county, and if they are located in Washington County they have an additional special fee to pay. Read our article here for a full breakdown of estimated seller closing costs in Oregon. Keep in mind that none of these costs come out of the seller’s pocket prior to closing the sale, they come out of the proceeds at closing, the title company simply subtracts the costs from what the seller is due. The only exception to this is the Portland, Milwaukie, and Hillsboro mandated energy score program, where the seller is made responsible to purchase an energy score prior to their home going on the market. The cost our preferred energy score service provider currently charges is $129.
2. What is the best time of the year to sell a home?
Some real estate agents are trained to tell you now is the best time to sell a home, regardless of when a potential client asks them. But that simply is not true. There is a strong seasonal aspect to the greater Portland real estate market (also holds true for most of the country). There are a few best and better months to sell a home and there are a few better or best months to buy a home. These seasonal trends remain true year after year even when the overall year might favor a seller or a buyer. Not everyone can pick when they sell a home (job transfer, major life event, etc.), but if a homeowner is free to choose, then there is a better and worse time of the year to pick from. If a real estate agent tells you now is the best time to sell a home, double check their answer.
3. What statistically causes a home sell?
Real estate agents have all sorts of pitches to sell their services promising a quick or quicker sale for more money. But statistically there are only a few factors that actually cause a home to sell. Thankfully, the National Association of Realtors (NAR), puts out a report each year that shows exactly what causes a home to sell and what has little to no effect. Click here to see our latest report in more detail, but here it is in summary of what makes a home sell across the country:
- Less than 1% = Print Ads, Radio, TV, Video (All Misc. Adverting Combined)
- 3% = Already knew the seller, direct sale
- 4% = Yard Signs and all Open Houses Types Combined
- 92% of the time = Internet Home Search (includes friends and family searching for them) + Realtor using an MLS System
It makes sense then that as a top sellers agent (licensed since 2003 with over 2,000 home sales) I’d be focused on what sells a home 92% of the time. We pay extra to the top websites home buyers are using to find a home and we reach more Realtors by being a part of more than one local MLS. Both of these strategies directly enhance our client’s homes where it matters – 92% of sales. Of course, we also are happy to do yard signs and open houses, but we’re clear with the client about how much they help and how much they don’t.
4. What are average commission rates to sell a home?
The average commission rate to sell a home in the U.S. dropped slightly under 5% in 2021. We charge a max. commission of 4% in Portland and SW Washington and 4.5% in Salem and Bend. Often you’ll find the bigger the city the lower the commission rates (higher prices) and the further out you go into rural areas the higher the commission rates (lower prices).
5. How do I negotiate with a home buyer over price and repairs?
At least in Oregon and Washington I’ve found this rule of thumb to be true, when negotiating price or repairs plan for two rounds. Meaning this, let’s say the price is $600,000 and the buyer’s offer $550,000. Don’t counter as a seller with the bottom dollar you’d take, allow for two rounds of negotiations. That means if you’re bottom dollar is say, $570K, then first counter at 585K and give the buyers a chance to take it or bring their offer up. Now of course, if you’re selling during the best time of year (as mentioned above) or just in a generally hot sellers market, or started your price a little low in order to start a bidding war – you might be able to skip any price or repair negotiations. However, if you find yourself negotiating, the two rounds rule is generally true.
When the buyer asks for a list of repairs or money in lieu of repairs, keep in mind you typically never have to say yes to all their demands to keep the buyer, but you also will typically lose the buyer if you simply say no to everything. One final tip, try to not complete any repairs for the buyer as all those repairs you perform will be subject to the buyer’s approval of those repairs. It can become a vicious circle. It is best to offer a credit in lieu of repair if and when needed.
Sell a Home with an Expert Realtor
Of course, there is a lot more to say. We hope you’ll check out our top 1% seller’s agent services. Please give us a call or chat with our bot on this site. We’d love to connect today!August 12, 2022