IRS's Top 10 Tax Tips for Home Sellers

Real Estate Tax Talk

By Stephen Fishman, Monday, August 15, 2011.

Inman News™

From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful.

Last week the agency released "Ten Tax Tips for Individuals Selling Their Home," (IRS Summertime Tax Tip 2011-15).

As a real estate agent or broker, it is not your job to give home sellers tax advice. Indeed, it is advisable not to, since you could end up getting sued if you give wrong advice.
Instead, refer sellers to this list of IRS tips. It's a good starting place for them to begin to understand this often complex area of tax law. You could even print it out and hand it to anyone who asks you about these issues.

Here are the IRS's top 10 tax tips for home sellers:

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.


2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).


3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.


4. If you can exclude all of the gain, you do not need to report the sale on your tax return.


5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.


6. You cannot deduct a loss from the sale of your main home.


7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.


8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.


9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.


10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

The #1 Reason Homes Don’t Sell

August 7, 2011|Sellers5 Comments

It’s easy to come up with a short list of classic seller mistakes that hamper sales: poor property preparation, no pictures, overpricing, sellers that insist on giving guided tours, distinct odors, ill mannered dogs … and so on.

There is, however, one mistake that stands head and shoulders above the rest. And ironically, I’m seeing this issue actually grow in frequency to the point where it’s seriously hampering our ability to sell homes to our buyers.
It’s access. If we can’t get in, we can’t show the house. If we can’t show the house, we can’t sell it. We frequently end up showing less than 6 because we can’t get access to homes on the list. There are two primary reasons:

1. Appointment Only

I understand that in some parts of the country, “Appointment Only” is the only way to access properties. In those locales, sellers and buyer agents are well trained and make it work. In contrast, here in the San Francisco Bay the majority of homes have always had lockboxes and showing instructions have been some variation of, “Call, leave a message, GO, leave a card.”
Once in a while a seller really needs to limit access to their home to specific times. Valid reasons include illness, latch-key kids home by themselves, swing-shift workers sleeping during the day and so on. I do not include dogs, renters or new plasma TVs in this list.
Of all of the listings we’ve done, we’ve only had one “By Appointment Only” – and it was an uncooperative tenant. We work hard to help our sellers understand that buyers need access when it works for THEM, not the seller. With proper instruction, sellers can be educated to understand that access is critical and will subsequently cooperate.

2. No Lockbox

Just a few short years ago, we seldom, if ever, encountered homes without a lockbox. Recently, however, that has changed. We’ve seen a marked increase in properties without lockboxes. And, making a bad situation even worse, no contact information for the sellers. And to add injury to insult: Realtors who don’t answer their phones or respond to emails or texts.

No contact = no showing. No showing = no sale.

As an example, as of this article, Hayward, CA has 281 single family homes on the market. 97 of these do not have a lockbox – a whopping 34.52%. One third of the homes actively on the market. Of the 281 homes, 57 are REOs (20.28%), 109 are “normal” sales (38.79%) and 115 are short sales (40.93%).

100% of the REOs have a lockbox. Of the normal sales, 77% have lockboxes. Out of 115 short sales, however, an astonishing 60.87% DO NOT have a lockbox. And the majority of these also have no contact information for the seller, making it exceedingly difficult to get access.

The very sellers that, by necessity, need to make access the easiest are, in fact, making it almost impossible.

Since short sales represent such a high percentage of the market and typically have the lowest prices, these are the homes buyers are clamoring to see, and can’t, in so many cases. Not only does this hamper sales, it also frustrates buyers (who cannot comprehend the lack of access) and, quite frankly, makes Realtors look like idiots.

In contrast, even though a significant percentage of our listings are short sales, we’ve only had one with no lockbox – ever – it had a Section 8 renter who absolutely refused to cooperate. This was a very specific case, and we now know what to do next time.

Without question the growing lack of access to homes is changing the very fabric of this market.

5 Ways to Improve Home Accessibility

1. Overcome Seller Objections
Over the years, many of our sellers have told us they don’t want a lockbox. While we understand they may have any number of reasons for this, we carefully explain why lockboxes are critical to obtaining top dollar, great terms and a successful sale. Once we explain the reasons why an electronic lockbox is necessary and the protections it provides (ie: electronic monitoring) they’ve ALL agreed to have one.

2. Allow Buyers Access When Buyers Are Available
I frequently call to make an appointment and, if I can actually get hold of the seller, I hear things such as, “We have an open house tomorrow,” or “I’m won’t be home when you are asking to come by,” or “Gee, 1:00 is not good for me – can you make it at 6:30?”
I graciously explain that my buyers are available from 1:00 to 3:00 that day only, and, quite frankly, if we can’t get in then, we won’t be getting in at all. Time is at a premium and buyers have precious little of it. If we can’t get into any specific home, buyers normally won’t come back. They often feel that if a seller is too unreasonable to let them in when they’re available, they’ll probably be unreasonable in other areas as well.

3. Make Them Feel Safe
Some sellers don’t like the idea that anyone can open the lockbox at anytime and access their home. In reality, if you are using a system such as SUPRA lockboxes, then only licensed Realtors with an electronic key can access the home. Our MLS monitors reports of stolen items and, from the information I’ve seen, chances are greater for robbery when OFF the MLS than on it. Electronic key boxes provide an audit trail of who entered the home and when. We provide our sellers with clear written instructions for allowing access to their home and tell them who NOT to let in and why. In reality, sellers are at the greatest risk during Open Houses, and we provide written instructions for our sellers to train them to prepare for these as well.
Renters often object to showing their home when the owner decides to sell – after all, if they cooperate, they’ll be out of their digs. They often express “fear of theft” as their reason for not providing complete, unfettered access. First of all, if your listing is a short sale, then, quite frankly, renters should be gone. If it’s a normal sale, I suggest you cut a deal with the renters by lowering their rent in exchange for their cooperation. Also offer to pay for their renter’s insurance policy if they don’t have one.

4. Map out Showing Hours if necessary
Occasionally a seller can allow access only during limited hours. Those working swing shifts are a prime example. We understand this and, once we’ve carefully mapped out hours that work, we ensure that the stated hours for showing are clearly written in the confidential comments section on the MLS. Since we also know that many agents DO NOT carefully read the confidential comments, we also program the electronic lock box to allow access only during the agreed upon hours AND we put a sign on the front door. During the available hours, buyers and their agents have full access.

5. Handle the Pets
Pets don’t have to be a problem. I’ve sold homes with dogs, cats, iguanas, snakes and a host of other animals. Critters can be in crates, a specific bedroom with a “Do Not Open Door” sign … with a padlock on it if you feel it’s necessary. The garage and back yard also work. Buyers get it and they appreciate the access.

At the end of the day, it’s all about training.
Trained properly, sellers can provide full access and … get the best possible price and terms. In fact, the more access a seller provides, the more likely their home is to sell in a shorter period of time. And once their house is in escrow, they can settle down to a normal schedule with as few interruptions as possible.

About the author

Carl Medford

With the motto, "Helping You Write The Next Chapter In Your Life™", Carl Medford, Trulia Mayor, is a Prudential California Realty Realtor based in the San Francisco East Bay. In addition to his Trulia presence, Carl writes for various venues including the weekly Real Estate Reality column in the San Leandro Times and Castro Valley Forum

The magic of mobile in real estate

Technology is putting more power in consumers' hands

By Glenn Roberts Jr., Friday, July 29, 2011.

Inman News™

 

SAN FRANCISCO -- Matt Dollinger, vice president of strategic development for Chicago brokerage @properties, demonstrated the power of mobile and social technology with a simple audience poll.

Speaking during a Thursday session, "Blending Social, Local and Mobile," during the Real Estate Connect conference, Dollinger asked for a show of hands on how many people had used services like Yelp, Foursquare and Facebook to find a restaurant for dinner the night before -- and indeed, most everyone in the room acknowledged using one of those services.

"That's really the power this has given us," he said.

Dollinger said that before traveling to Washington, D.C., he queried Yelp users for their views on things to do in a particular neighborhood. "I had (about) 100 responses. There were all these people waiting to share this information." An online argument even broke out over which eatery had the best empanadas, he noted.

Neighborhood amenities can speak volumes about homes for sale, Dollinger also said. He related that his wife, who works as an agent, has a favorite homework assignment for clients who are selling their homes: Tell me why you love your home and your neighborhood.

 

And in the end, "It's not just about the house," he said.

While there are many mobile and online tools to help consumers key in on particular neighborhoods, Matthew Shadbolt, director of interactive product and marketing for The Corcoran Group, a Manhattan-based brokerage, said, "There is no algorithm to show you what it's truly like to live there. True neighborhood insight is sold offline. It isn't actually something that's sold by technology."
Dollinger noted that his wife often instructs clients to do their own neighborhood research by visiting coffee shops -- during the day and at night -- in a particular neighborhood to get a better sense of the area.

Beverly Thorne, chief marketing officer for global franchisor Century 21 Real Estate LLC, said that mobile and social technologies represent a major shift for the real estate industry.

"The ability for consumers to have access to mobile websites, to listings, to offices, is clearly transforming the way that ... homebuyers buy homes," Thorne said.

"With the advent of mobile they're using their mobile device far more frequently, and it's just such a natural for this application. Nobody wants to go home to look (at a for-sale property) on the Web -- they want to go immediately and get information on that."

Ryan Charles, mobile guru and CEO for product comparison site Cnsmr, who participated with Thorne in a session titled, "Using Mobile Technology to Increase Customer Loyalty," agreed that the immediacy of the mobile experience is a powerful force. "The faster that you can get that information to them, the higher the satisfaction rate."

Thorne noted that Century 21 has rolled out a series of consumer-facing mobile apps across multiple platforms to assist in home searches, and has also launched an app for agents that allows them to personally brand the app.

She shared a conversation she had with a broker in Oklahoma who appeared resistant to mobile apps because he didn't feel there was widespread interest in apps among consumers in his market.
A bit of research showed Thorne that millions of apps had been downloaded in a period of several days across the state.

"One of the most important things to (know) about mobile is that it is moving mainstream. We clearly see the growth. We see more apps coming out, we see the adoption," Thorne said.
And with that growth, some traditional marketing channels are withering, she noted.
"We're clearly finding email not to be an effective (marketing) vehicle for us. We see very strong links between social and mobile," and "we're finding that the social alert is received far more favorably" than an email alert, she noted.

Century 21, she said, has found better engagement in messages to its network by making them more video-based, and it also helps that the communications are coupled with direct phone calls.
Charles said that consumers are still responding to some emails, citing the example of Groupon and Living Social email messages that offer daily deals. "When it's relevant and when it's a compelling offer people are still opening up and clicking through," he said.

In the mobile realm, Charles said he sees opportunities for the real estate industry to take advantage of "geofencing" technology, which could use a smartphone GPS to alert smartphone users that they are close to a for-sale home, for example.
During a separate session focusing on augmented reality -- which blends a smartphone's camera view with digital overlays of multimedia information -- Tish Shute, co-founder of Notifide and Augmented Reality Event, said that mobile technologies have created a "magical" interface that transcends the office-focused paradigm of desktop PCs.

"Everything on our PC is office metaphors," Shute said, such as the use of "folders" and "files" to organize information.

"We're moving to this new era where the metaphor of interaction is not the office -- it's actually kind of magical."

And as more information and services go mobile, "The big challenge for you is not to drive people crazy with data. You need to make data a pleasant, easy, pop culture experience," she said.
The simplified representation of immense pools of data is key in the mobile space, she noted.
"What oil did for the industrial revolution -- basically, it's all about data now," Shute said.
Taylor McDonald, co-founder and president of Second Site LLC, an augmented reality tech firm, said he sees the potential for augmented reality to gain traction with real estate consumers.

"The more information I have, the more informed I am, the easier deal it's going to be for the horse-traders of the world. (Consumers can) make better, informed decisions, and (there's) less handholding," McDonald said.

Is the ‘Move Up’ Buyer Starting to Feel Stuck?

Daily Real Estate News | Wednesday, August 03, 2011

More home owners who want to trade in their current home to buy a larger one are holding off, feeling trapped by a sluggish housing market and the loss of equity in their current home, The Los Angeles Times reports.

“Potential move-up buyers ... are largely sitting on the sidelines these days, leaving a key part of the housing market stuck in neutral,” The Los Angeles Times' article notes. “The promise of rising prices and upward mobility, once a powerful force in the American housing narrative, has been all but shattered by the downturn.”

Move-up buyers are often classified as home shoppers looking in the $300,000 to $800,000 price range, according to the research firm DataQuick. Home sales dropped the most in that category in June, dropping 25.5 percent from June 2010, according to DataQuick. On the other hand, sales of homes priced below $200,000 dropped 11.4 percent from June 2010 and home sales priced at more than $800,000 fell 17.6 percent.
The “move-up” category creates a chain of buyers and sellers that is important for a healthy real estate market, since trading up “fuels price gains and helps home owners to build equity,” The Los Angeles Times' article notes.
"The way to think about [it] is a chain of trades that normally occurs, and if that chain is broken at any point, or it doesn't begin because you don't have enough entry-level buyers, then the whole dynamic of the marketplace is affected and the level of resales is going to be very small," says Ed Leamer, director of the UCLA Anderson Forecast.

Source: “Home Owners Who Want to Trade Up Are Stuck Waiting,” The Los Angeles Times (Aug. 1, 2011)

5 Good Reasons to Use an Agent When Selling Your Home

© 2011, Brandon Cornett. All rights reserved.

I recently sold a home in Round Rock, Texas, with the help of a real estate agent. I’ve also sold a home by owner before (FSBO), which allows me to compare the two processes. Out of those two experiences comes the following list.

Top 5 Reasons to Use an Agent When Selling Your Home

1. Objectivity – You are too close to your home to see it objectively. This can prevent you from pricing it realistically, and it can also make you blind to any improvements that are needed. My selling agent pointed out several things that I never would have noticed otherwise. He helped us see the big picture and understand the current real estate market. We had the home under contract in less than two weeks.

2. Pricing — We touched on this in the previous paragraph, but it needs more attention. Overpricing is one of top three reasons why homes don’t sell. (Weak marketing and a lack of preparation are the other two.) In fact, I would argue that pricing is the most common problem for homes that stay on the market for a long time. In many cases, homeowners are simply unable to price their own homes. They attach a lot of emotional value that doesn’t translate into real value. Your agent will help you determine a price based on actual market data, including recent sales and current listings.

3. Marketing — As a homeowner, you can only do so much to promote your house. A selling agent can do much more. Your agent will put your home on the Multiple Listing Service (MLS) and other high-visibility websites. If your agent is a Realtor, he or she will also add the listing to Realtor.com. Most real estate agents have large networks to work with as well. This means you’ll attract more buyers, than if you had sold it on your own.

4. Negotiations — When I was selling my house, I was CC’d on a few emails between my agent and various buyers’ agents. This showed me how much price haggling can take place during the process. Over and over again! It sure was nice having someone else do this on my behalf.

5. Stress Factor — When you’re selling a home, there are usually 50 other things you’re doing at the same time. Packing and cleaning. Having garage sales. Making trips to the Goodwill. Working on the details of your next house or apartment. And so on. It’s a lot to have on your plate at one time. By relying on a real estate agent for the selling side of things, you’ll reduce your stress considerably. It’s hard to put a price on this.
These are certainly not the only reasons to use a real estate when selling your home. But they are some of the biggest reasons, and they’re enough to give you a “nudge” if you’re sitting on the fence. Make things easier for yourself. Sell the home faster. Use a listing agent!

Published on: June 24th, 2010 | Category: Home Buying Tips

What Sells a Home and Why Most Agents Won't Like This Article

What Sells a Home and Why Most Agents Won't Like This Article

Chances are you're not going to like this article.
What I am about to write flies in the face of the vast majority of real estate agents in North America today.
That is, the number one thing that contributes to the sale of a home, in any market, is the price of the property.  That's it.
Location, features, benefits...all of those have a price tag.  What that means is, if I had a dump of a house in a dump of a location, it would sell if the price was low enough.
That being said, what's low enough for a buyer to want to buy may not, in fact, be low enough for a seller to want to, or be able to sell.  Yes, that was simple economics at it's best and it lends to explaining much of what has gone on the last few years...the price a seller would/could sell a house for far exceeded the price a buyer would (and sometimes could) pay for the house.
Now, let's get back to the reason you, and most agents, might not like this article.
Both when practicing real estate (May 1998-Dec 2006, top ten percent in my market 2001-2006), and more recently as a coach, I've heard the arguments against price being the number one reason homes sell.  Most of those reasons center around an agent's ego and/or the huge misconception as to what their job actually entails, as well as some sort of misplaced loyalty to the seller and the price they say they want.  (Before I go any further, I'm not in any way advocating that you shouldn't be loyal to your sellers.  I'm saying defending a random price a seller tells you they want, ignoring comps and any sense of reality, is misplaced loyalty.)
Some of the arguments from agents:
"If price is the only thing that matters, then we real estate agents aren't needed." - Guess what?  That's actually kind of true.  If you've ever heard of a FSBO selling on their own, then you automatically realize selling a house can be done without a real estate agent.  The good news is that the vast majority of FSBO's do not sell without the help of an agent (even if only on the buyer side - but most end up listing).  And, unfortunately for the FSBO seller, they get a very low list to sale price ratio as compared with when listed by an agent (both stats are published by NAR).  So, on some level, my fine fellow agent, you are definitely needed...so breathe a little easier.
"All you want to do is lower the price as far as you can, darn the seller, and take your quick commissions!" - A buyer will not buy something they don't feel is priced correctly; plain and simple.  I'll explain more about that later in this article.  In the meantime, I can only go on statistics/facts.  My personal statistics in my former real estate practice showed my listings selling for an average of 4-9% more and up to twice as fast my market's average, depending on the year.  Simply put, I was getting my sellers more money, and selling their homes much faster than the market average.  So how was I harming the seller?  I don't know many sellers that want their home to sit on the market for a long time, do you?  Do you know of any seller's who want LESS money for their home?  I sure don't.
And where does this false sense of loyalty to the seller's price come from?  I'm sorry, but it's so misplaced.  I always wanted to get as much money as possible for my sellers, and did my absolute best to make that happen.  But just because a seller WANTS a certain price doesn't mean they'll get it, or, in most cases, that it's even realistic.  I'm sorry if the seller paid $400,000 and owes $350,000.  If the comps say it's worth $275,000 then that's what it's worth.  Listing it at $400,000 so the seller can feel like they broke even does NOT mean the home is WORTH $400,000.  Nor does it mean they will get anywhere near that.  In fact, in my example, with it being so far overpriced, if there isn't a significant price reduction, the house likely won't sell at all.  How is that protecting the seller?
I don't want to digress too much, however in a previous article I wrote on negotiating, I discussed the issue of many listing agents being egotistical about the price they set on their listings.  If a buyer comes in low, the listing agent scoffs and postures to the buyers agent about how the home is worth every penny of what it was listed for, etc.  Please.  The only true test of what a home is worth is what a ready, willing, and ABLE buyer is willing to pay...not what the listing agent or the seller thinks its worth.
"It's not price, it's marketing.  Staging, open houses, broker opens and advertising are all where it's at." - This is the reason for the big chasm between the average agent (selling between 2-5 houses a year, on average, according to NAR) and the higher producers (over 25 homes a year).  Agents who sell a lot of homes know how to SELL, and know that their job is to SELL the home for the most money possible.  Agents who don't sell a lot of homes typically aren't good salespeople, don't actively prospect for buyers and sellers and think their job is not as a real estate SALESperson, but rather a real estate MARKETINGperson.
Simply put, you can market a house to the hilt, but it will NOT sell if the buying public thinks it's overpriced.  In fact, today's shrewd buyer who combs the internet and does their homework, won't even look at home that they feel is overpriced; unless they think they can get a tremendous low-ball deal.  And, if you want to take a notorious low-ball buyer around so he/she can throw offers up on a wall and see what sticks, have at it.  You'll end up doing a lot more work and probably be very frustrated.
So, let's investigate some of these marketing ideas:
Staging - I'm always amazed at how someone comes up with something for agents that doesn't sell homes, yet agents buy into it in droves.  Text "MOVE" to 12345 and receive no obligation information on this listing.  That worked for about a minute until buyers realized they would get called back from agents they didn't want to talk to.  Now, it's no better than a regular sign with a regular phone number or website.  Or, how about the private radio station that drive-by buyers can tune into and hear all about the house?  Way to go!  You just bought something that assures you of never hearing from your buyer leads!  They won't need to call you to find out information because you gave it to them on their car stereo.
Staging is one of those tools that doesn't sell a house.  Yes, the house should always look its best.  And, yes, if you stage a house, it will look better than the competition.  BUT...staging only works better to sell your house versus the competition if the home is priced competitively.  Let's say you're in a development, and two identical houses on the same street are for sale.  One is for $350,000 and NOT staged.  The other is for $425,000 and is staged.  The seller or agent who paid for staging of the $425,000 house doesn't know anything about sales or economics and wasted their money.  No amount of staging in the world can trick a buyer into grossly overpaying for a house.
Open houses - This is the biggest real estate scam ever perpetuated on sellers.  And the funny thing is, many sellers will fight tooth and nail for the right to leave their house for multiple weekends in a row so that you can park yourself there for 4-6 hours at a time and put balloons out front.
NAR itself puts out a report every year that shows a very small percentage of buyers buy the home they saw open.  It's usually around 1%.  That is an astonishingly low rate of return on your marketing efforts.
Open houses do provide buyer leads for the AGENT, not the seller.  All listing agreements should come with a disclaimer showing the past year's NAR percentage of homes actually bought due to the open house.
Low producing agents love open houses because they haven't been taught, or are too afraid, to prospect for business.  So, the idea of sitting in a home and having potential buyers come to them seems good.  Never mind that most people are just looking, and the percentage of leads converted to actual buyers (and the time it takes to convert them) is no better than a call in on a sign or website.  And let's not mention the fact that you may sit all day at a house and have NO traffic.  God forbid if it's a rainy weekend.
Broker opens -   These have a small chance of helping you sell the home because it can get you exposure to agents who missed it in the myriad of listings on the MLS.  However, it's usually not worth doing a broker open until well into the listing term, and is most effective to get a price reduction for the seller by having the agents write their pricing opinions on a survey card (darn, there's that pricing thing again).  And here's the fundamental flaw - top agents, you know the one's doing 90% of the business, are typically too busy to stop at broker opens.  So you're exposing the property to a handful of agents who have nothing better to do than to eat your free lunch.  Look, I know I'm sounding harsh, but my big concern is that many agents think their job duties entail hosting and going to things like broker open houses and working on making a pretty brochure...things that DON'T help sell a home.
Advertising - Here's another scam on the seller.  NAR reports a very small percentage of homes are sold as a result of being advertised.  I will admit they also report a slightly higher percentage of homes are sold as a result of the buyer calling in on a different home, so advertising can help (but the home still has to be priced right).  For the sake of this article however, I want to stick to the specific house you have listed, and I'm talking about advertising over and above the norm.  I mean the type of advertising where the agent thinks it's the solution to why the home hasn't sold in the last 90 days.  We all know that every agent does some form of advertising, whether it's the MLS itself, the various websites that agents/companies have, the websites that pick up listings from the MLS, or the newspaper ads your company provides.
Here's the flaw:  If your local grocery store paid for circular ads in your town's Sunday paper, and advertised premium, no-filler, turkey lunchmeat at $50 a pound, how many people would buy it?  The answer is nobody.  Two things would happen.  People might still visit that store, but they would buy another brand of turkey lunchmeat (congratulations, you're overpriced turkey ad sold the competition), or people will go to another store all together to buy that brand at its normal price.  In any case, the store could have spent millions of dollars on ads all over the place and it wouldn't matter a lick in regards to the sale of that brand of turkey.
Yet sellers and agents all think that more advertising will equal a sold home.
The bottom line is that your job as agent is to educate the seller and list the house at a price that will cause the home to sell.  Stop kowtowing to the seller who wants to overprice the home.  Stop with the false sense of loyalty to a pie-in-the-sky price, against all reasonable economic sense as evidenced by the comps.  Stick to your guns, be professional and price it right.  Or, horrors, be willing to say “no” to the seller, and walk away from listing the home if they insist on overpricing it.
You’ll be doing yourself a huge favor, I promise you.  Even if another agent lists the property, don’t worry.  It’s not going to sell.  Look at your market.  Look at any market.  Overpriced listings don’t sell.  Why do you think there are so many expireds?  Oh, right, I forgot.  The agents all must not have staged those homes.  Yeah, that’s it.

Scott Friedman is a former top producing agent from New Jersey.  He is a speaker, coach and co-founder of You're The Difference Sales Coaching.  He is also co-author of the highly acclaimed objection handler book Now What Do I Say?  If you're interested in learning what to say and how to say it so that you can sell more homes, visit www.yourethedifference.com for more information on the book and other products, as well as training and coaching.  To ask Scott a question about your business, or hire him to speak or coach, email scott@yourethedifference.com, or call 609-601-1296

Buyers Should Push to Cut Junk Fees

Buyers Should Push to Cut Junk Fees

Now is a good time for home buyers to push for lower closing costs.

Closing costs include lending charges, local tax and transfer fees, and expenses for such things as title insurance, appraisal costs, and other third-party services. The rule of thumb used to be about 3 percent of the cost of the property.

Today, most buyers should be able to do better than that, said Guy Cecala, publisher of industry newsletter Inside Mortgage Finance. Fees that buyers shouldn’t have much trouble negotiating away include wire-transfer fees, loan application-processing fees, and high FedEx charges.

"It all boils down to what a lender will work for," says Cary Pearce, production manager at Provident Bank Mortgage in Riverside, Calif.

Source: Investor’s Business Daily, Kathleen Doler (04/22/2010)