If you are thinking of buying or selling a property in the Boca Raton area, you probably have some preconceived ideas about the process. Here are a few of the common misconceptions that we agents encounter:
- You should list your house a little bit higher than the market to leave room for negotiating. Anyhow, if it is priced too high you can always lower it.
Listing your home at too high a price might actually result in you getting less than if you had priced it properly from the start. With virtually all buyers doing research online, they are very well-informed about the state of the market and what prices should be. Buyers and their agents will not look at a property that they perceive as overpriced. The more buyers that see your house, the better chance you have of getting your price. Overpricing results in less traffic and therefore fewer potential offers.
- You should start with a low offer when buying. Anyhow, you can always go up but you can’t go down.
Just as a seller should not ask too high a price, offering too low a price usually backfires. You risk alienating the seller and most likely little to no counter-offer. Your agent can do some market research and educate you on the pricing in the community as well as market trends. If the asking price is in range, you should offer enough to engage the Seller in a negotiation. And if it is a hot property, you may want to consider offering full price or even slightly above.
- Buyers can save money by calling the listing agent directly.
This doesn’t work in real life. The listing agent is hired by the seller to get them the best price and terms possible. Don’t you want someone representing your interests? Anyhow, the total commission is built into the listing price. If you don’t have your own agent, then the listing broker will just keep the entire amount.
- It doesn’t matter if the house is staged or prepared for sale.
How a house is presented, both for photos as well as for showings, will directly affect both the number of showings you receive as well as the price you end up with. It is important to wait until your home is ready before putting it on the market. The vast majority of buyers are viewing properties online and will eliminate a home that doesn’t look well online before even seeing it in person. If they come for a showing, and the house is a mess, they will think that the house has been neglected and poorly maintained; if they do make an offer, it will be much lower than if it had been presented in a pristine and attractive condition.
- You will save money if you sell your house by owner.
While it is possible to sell your house by yourself, most sellers do not have the skills required to list, market, negotiate, troubleshoot inspection issues and mortgage issues, qualify the buyers, and get to the closing table. Even if you can do all of those things, most buyers will expect to receive a substantial discount because they know that you don’t have to pay a REALTOR® and will expect you to take that amount off the price. So instead of giving the buyer your saved commission, wouldn’t you rather have an experienced professional managing the process of selling your largest asset? We sell hundreds of homes every year and will put our experience to work for you.
- All real estate agents make a ton of money.
Although successful agents can make a great income, it is important to understand that your agent does not keep the entire commission that you pay. According to Florida law, the commission is earned by the Broker, not the agent. It is generally split between the listing broker and the selling broker. The brokerage then splits their portion with the agent. Your agent generally gets about 30-35% of the total amount of commission that you pay. From this, the agent needs to pay all of the expenses incurred in marketing your house, such as photos, postcards, flyers, advertising, etc. Additionally, agents pay their own employment taxes (agents are self-employed, not salaried), board dues, auto expenses, continuing education, and all of their other expenses of doing business.
- Open Houses Sell Properties.
In our market, homes almost never sell to buyers through an open house. The real reason some agents like to do an open house is so that they can generate some potential customers who are looking to buy or sell. Not holding an open house will not hurt your chances of a successful sale.
- The standard commission is 6%.
There is no “standard” commission. Price fixing is an anti-trust violation. Brokers typically charge a commission based upon sale price, but this amount is not fixed and is negotiable. Generally, the listing broker agrees to a fee with the seller, and then make an offer of compensation to the buyer’s broker from this amount. Every market is different, and every broker charges different fees. There are discount brokers who charge very little and provide very little service, and there are full service, concierge-style brokerages at the other end of the spectrum. Be sure to understand what you are being charged, and what will be provided for that fee.
- All agents are the same.
The general public often views all real estate agents the same, as if they were a commodity, rather than individuals with varying degrees of competence, integrity, and smarts. It is important to do your homework when choosing a REALTOR® to work with. Who you work with matters. Just like some physicians or accountants are better than others, so are real estate agents. Take the time to hire someone with very high standards of excellence and a documented track record of success.
Buying and selling a home rank high on the list of the largest and most important transactions of your life. Become an informed buyer or seller by hiring a professional to guide you from beginning to end. Make this very emotional experience a very positive one.
Gloria Singer is the Broker of Boca Expert Realty, a boutique Boca Raton real estate company with a focus on professional service and an unparalleled customer experience. Our select agents are amongst the top performing professionals in the field. Visit www.BocaExpert.com for information on Boca Raton, Delray Beach and Highland Beach real estate and to connect with an expert in the local market.