yourself about your neighborhood's real estate market
Perch yourself on the real estate grapevine by talking
to neighbors and real estate agents about sales in your
Do homes tend to sell for 2 percent over
the listing price, or 5 percent under, or what? Was
a house recently sold for a surprisingly low price?
Maybe the owners sold it to their own kids, a young
family without much money. Or maybe it was a "short
sale" to avoid foreclosure. That's a good piece
of knowledge to have when a buyer tries to use that
low sale price against you in negotiations.
Interview at least two, and preferably
three or four, potential listing agents, and ask them
to prepare competitive market assessments. The agents
will look at comparable homes that have been sold recently
and at homes that are for sale now, and recommend a
listing price and a marketing plan. "Have them
walk through the information they used to come up with
that estimate," Lyons says.
You don't necessarily want to pick the
agent who recommends the highest listing price. You're
making a hiring decision, which is an art and not a
Buyers often make the purchase offer contingent on the
home passing an inspection to their satisfaction. Increasing
numbers of sellers are hiring inspectors before they
put their houses on the market.
An inspector is impartial. "He'll
be able to tell you if the roof needs work, or small
electrical things that need to be done, or plumbing
things," Kerr says. Once you have identified and
fixed the problems, "it makes the house that much
more attractive to a would-be buyer."
An inspector might spot flaws that would
be obvious to a buyer, but that you no longer notice.
A good real estate agent does the same, but an inspector
will look deeper.
paying the buyer's discount points
Paying points is an incentive you can offer to a buyer,
Sam sweetens the deal.
Let's say the buyer wants you to drop
the price by 3 percent. You're firm on the price but
are willing to be flexible by working mojo with the
buyer's interest rate and tax bill.
You offer to pay 3 discount points and
lower the buyer's mortgage rate three-quarters of a
percentage point, give or take a quarter-point. By paying
the discount points instead of selling for less, you
get your price, the real estate agents get bigger commissions,
and the buyer makes lower monthly payments and gets
to deduct the points from income taxes.
That's right. You pay the discount points,
but the buyer gets the tax deduction.
"It's a win-win-win-win deal,"
says Bob Walters, economist for Quicken Loans.
Kerr doubts that the time is right for
offering discount points. "The market hasn't gotten
there yet," he says. When it becomes a pronounced
buyer's market, or when mortgage rates rise a couple
of percentage points, that will be prime time for sellers
to pay discount points.
Whether or not you pay the buyer's discount
points, you put yourself in the right frame of mind
by merely considering the option. It makes you think
like a buyer -- and that gives you a competitive edge.