For Home Sellers

A reminder that commissions are and have always been negotiable

Posted on by Teresa Boardman

coinsYes, it is true real estate commissions are negotiable. They always have been.

Agents are independent contractors who set their own rates. Some agents will not negotiate. Agents are not required to negotiate.

There is no “going rate” but I’ll admit I have benefited from the myth. For many years I have charged less than what people believe to be the “going” rate.

Real estate agents are selling experience yet new agents often charge the same rate an experienced agent charges. Personally I wouldn’t pay it but people do.

There are many real estate agents to choose from. In fact, there are more agents than there are houses to sell. If one agent charges too much and won’t come down in price find an agent who will.

Real estate agents are salespeople taught how to sell themselves and negotiate fees and commissions. Real estate agents do not get paid until after a sale closes and most work on a 100% commission basis. There are no paid vacations and there is no group health insurance.

Some agents show this chart that shows how much of the commission they get to keep after fees and splits with their broker. To that I say who cares. That is the agents problem.

The good news is that people can buy and sell houses without the help of a real estate agent. It can work out very well especially considering that home buyers and sellers often do not know what it is they do not know and won’t know if they ended up spending more or getting less because they did all on their own.

Real estate commissions and fees are spelled out in the contracts home buyers and sellers sign.  It is a good idea to read the contract before signing it. We can not list a house or work with a buyer without having a signed contract.

It is true that real estate agents can make a lot of money but most do not but don’t feel sorry for those who don’t make a lot of money.

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What you don’t know about your real estate agent

Posted on by Teresa Boardman

Small Blue House with flower boxesPeople choose their real estate agents for all sorts of reasons. Often because the agent is “nice”.  Sometimes that “nice” agent is inexperienced and sometimes they can cost you money or even the home you want to purchase.

Last year a well-meaning but very inexperienced agent encouraged her client to ask for all sorts of minor repairs. She waited until almost the end of the inspection period. The seller was blindsided and somewhat angry. He did not make all of the repairs but he did make some of them. Later when I talked to the buyer I found out that none of the repairs were his idea but his agent felt he should ask for something.

Sometimes we get purchase agreements from new agents that we have to talk them through re-writing so that they are written correctly. Once I got an offer from a person with an expired real estate license. I had a hard time finding his broker who had no idea that the agent was out representing buyers without a license.

Another agent gave her client a bunch of documents that he thought were all of the condo documents required by the state. Most of the required documents were missing. I sent the agent a link with a bunch of information and made sure that the buyer got all of the documents.

There was this agent in a Facebook group for appraisers asking for some specific information regarding St. Paul Truth in Housing inspections and requirements. An appraiser isn’t an expert on such things and the agent was referred to the city of St. Paul website and told to ask her broker if she needs help.

Recently a new agent carefully explained to me how I should handle offers on one of our listings. Why? Was that necessary?

Most of us learn early on that no matter how we would like things to go they don’t always work out that way. We can never predict what our clients will do or what other agents will do. We learn to adapt and we learn flexibility.

There are more real estate agents than ever before and fewer home sales. It is more likely than ever before that the agent you choose has never sold a house.

At the very least agents should be asked if they have ever sold a house. There is a surplus of experienced agents who are looking for work to choose from.

It is easy to get a real estate license. All agents have them and learn on the job. New agents don’t have a clue what it is that they don’t know. Home buyers are in the same boat and don’t mind working with new agents as long as the agents are “nice”.

Smaller home improvements pay off

Posted on by Teresa Boardman

I am often asked to recommend home improvements that will result in a higher sales price or a faster sale. Let’s not get carried away. People who are planning on moving soon usually don’t need to make a lot of expensive home improvements.

It is possible to spend too much time and money selling a house. Sometimes sellers get carried away and spend money they won’t get back.

A complete remodel of the kitchen is a great example of spending too much money to sell a house. Homeowners who lower their asking price because the kitchen is dated end up with more money in their pockets because the immediate return on investment for a new kitchen isn’t 100% it is more like 75% depending upon the price range of the house and its location.

If the kitchen is damaged or unusable then it should be repaired or upgraded. Go ahead and replace twenty-year-old appliances with new appliances that are comparable.  It is important to keep it in character and the price range of the house.

Fresh paint, a new backsplash, and some new lighting cost a lot less than a new kitchen and the return can be more than 100%.  Landscaping is also a great but often overlooked investment.

Even during the current seller’s market pricing is important. A lower price list price can mean a higher sale price as the home sells faster with more offers.

If the goal is to live in the house for the next several years then remodeling the kitchen makes sense but if the goal is to sell the house now for top dollar make smaller less expensive improvements.

When getting a house ready to sell start with cleaning and decluttering. Removing excess furniture and stuff is what good staging is all about.

After that consider repainting rooms in lighter more neutral colors that will make rooms appear larger and cleaner. Replace bold and dark colors with shades of white, beige, and grey. Touch-up painted trim. The purple or dark green bathroom that the seller loves can be a minus in the eye of the buyer.

Make repairs where needed. In the eyes of a home buyer, needed repairs may look huge and expensive.

It is important to look at selling your house as a business transaction.  It can be hard to be detached which is one of the reasons why people hire real estate agents.

2024 has arrived

Posted on by Teresa Boardman
Happy New Year
Happy New Year

Happy New Year to all. No, I didn’t stay awake and ring the new year in. Sleep is too precious, and I fight for every Z I can get.

With that said I’ll make a few predictions for 2024.

  1. Mortgage interest rates will go down.
  2. Mortgage interest rates will be too high.
  3. Home prices will continue to rise.
  4. There will be fewer home sales than there were in 2023. (This prediction is for the Twin Cities Metro area only)
  5. There will be more lawsuits against the National Association of Realtors and they will lose most if not all of them.
  6. We will see a new organization emerge from the ashes that the National Association of Realtors will be by November 2024.
  7. The new organization that replaces NAR will be run by men but they will be younger and more diverse.

If you have a house to sell in 2024 you can sell it. If you would like to buy a house in 2024 there will be fewer to choose from and they will be expensive. Please take advantage of downpayment assistance programs. 

If you have not purchased a home in the last three years ask your lender about first-time home buyer programs. If the lender can not help you with that choose another.

Also, home buyers should get their paperwork in order and file a tax return for 2023 early in the year.

Cash buyers do not wait until spring to buy

Posted on by Teresa Boardman

January can be the perfect time to put a home on the market. We have sold more homes to cash buyers in January than in any other month. Home buyers who plan on getting a home loan often wait until after they get an income tax refund before they buy a house. That is why March 15th is considered an ideal time to put a house on the market.

Quick sales happen all year long and so do cash sales. Putting your home on the market in January can lead to a higher sale price, a shorter time on the market, and a cash offer.

Money is money but with a cash offer, there is no appraisal. There are fewer steps that the buyer and sellers have to go through. There is no waiting for underwriting approval.

loft style condo - kitchen
Loft style condo

 

Holiday house hunting

Posted on by Teresa Boardman
Lights

It isn’t at all uncommon for people to do a little house hunting during the holidays. People come to town to visit relatives and decide that they want to work with a Realtor. Sometimes they reach out a couple of days before they are due to arrive.

I usually can not accommodate last-minute clients during the holidays. I can work with clients who are already under contract. I have shown houses on New Year’s and the day after Christmas. Christmas is a holiday and in my household, we often celebrate on Christmas Eve. I don’t work either day.

People who are planning on buying a house during the holidays in 2024 should contact a Realtor by November 1st, 2024.

Home buyers who are currently working with a Realtor should be able to show or buy a house during the holidays. Most of us work during December.

Houses are sold during the holidays too. Homeowners who have a plan in place by mid-October will be able to sell their house quickly during the holidays and for top dollar.

Buying or selling a house is like many other things in life in that it is best to plan ahead.