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How the pros sell their own homes

January 23, 2012

Real estate agents get better deals for themselves than for their clients. To be a smarter seller, look at your home through an agent’s eyes.  Today we will look at what Realtors do when selling their own homes.

Making an impression

If strangers were to walk into your home, what would their first impression be? This is one thing that many people get wrong — even when they use a real estate agent.

For example, in the A&E television series “Sell This House,” potential buyers are videotaped as they tour houses that the homeowners are desperate to sell. As a general rule, homeowners are shocked by strangers’ first impressions of their homes. A home is largely a reflection of its owner, so it’s hard for an owner to accept that other people find the décor, cleanliness or even the smell of the home distasteful.

A real estate agent is often the sounding board for buyers and their complaints about the homes they visit, and she is therefore more likely to address important deficiencies in her own home.

According to the National Association of Realtors, the second-biggest reason a home won’t sell is because the homeowner hasn’t taken care of details like ensuring the house is clean and uncluttered, the décor is neutral and the house has been “staged” to play up its best features. The biggest reason a home won’t sell is, of course, the price. We’ll get to that next.

Evaluating your property

One of the top reasons Realtors seem to get top dollar for their own homes, according to real estate news provider Realty Times, is that real estate agents know how to evaluate a property in terms of what is likely to garner the highest resale price. Therefore, they are likely to analyze the resale values of the properties they buy for themselves in an attempt to ensure a higher resale value.

Setting a price

According to the National Association of Realtors, people selling their homes often choose a price based on one of three factors: need, ego or greed. Particularly in a tough real estate market like the one we’re seeing in the United States now, sellers often want to price their homes according to how much they need to get out of the sale in order to purchase a new property.

Unfortunately, what a seller needs to make on a property has nothing to do with market conditions, which are generally governed by supply and demand, along with other economic factors. The same goes for sale prices that are dictated by ego or greed. Just because a neighbor’s house sold for an attractive price doesn’t mean yours should as well, unless your home truly is more valuable or market conditions have changed.

Accepting an offer

The final piece of the puzzle in selling a house is deciding which offer to take. When an agent is selling a client’s home, that seller is in the driver’s seat. The agent must balance his desire to get a price that will please the seller with the need to ensure that the home actually sells in a timely manner — or at all.

When selling his own house, an agent can afford to gamble on the fact that a better offer might come along — even though this plan will often fall through, particularly if the house stays on the market too long. This is much the same as when your stockbroker makes more money trading for herself than for you: She’s willing to take more risks in her own account than she feels are appropriate in a client’s account.

In addition, a common practice for real estate agents is to relist a home that isn’t selling.  Some real estate agents “test” the market to see if their home will sell at a certain price.  Most sellers do not want to do this, for the outcome could be no sale at all.

The bottom line

Price rules.  If a buyer likes the price, he is more likely to view the property and make an offer.

Parts of article reported by Tara Struyk for Investopedia

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