Things Real Estate Agents Won't Tell You

(A small excerpt from "Make More Money Selling Your Home.")

Most real estate agents will feel a little uncomfortable if you run through all the questions above. Many would probably argue some of the points above as well. That's okay. They see things from their own perspective, but be aware that there are also things they won't tell you.

Open Houses Are For The Agent

An open house is a prospecting tool for the agent, not a way to sell your home. In fact, many experienced agents won't even host their own open houses. They get a newer agent to host it. I did this many times as a new agent. The listing agent gives up half of his commission if the hosting agent sells the home. Would they risk that if homes were commonly sold from open houses?

Why let dozens of people who aren't qualified to buy your home track their muddy feet through it then? The listing agent does it so they look like they're doing everything they can to sell your home, and the hosting agent uses it as a prospecting tool. Two dozen couples that want a new home coming right to them - now that's an opportunity (just not for you).

The whole point is to collect a list of buyers to work with. Most of these buyers are looking for homes that are nothing like yours. It isn't really expected that the agent will sell your house in the process. Of the many open houses I hosted when I started selling real estate, I didn't sell one of them that way.

Not that it can't happen. Any additional exposure of your home can increase the odds of it selling. Just consider that this is a more effective prospecting tool for the agent than it is a tool for selling your home. It may or may not be worth the trouble for you. If you do have a open house, hide the valuables - no matter what they say, an agent can't watch the visitors all the time.

There Are Few "Normal" Procedures

Agents often let you assume things. They want to get the sale closed, and will let you believe what you have to in order to do that. They might tell you that the seller usually pays the closing fee, for example, or just let you assume that. They may lead you to believe that you have to pay for title insurance for the buyer.

Very little is set in stone in real estate. I have seen the buyer or the seller pay for the title policy, or the entire closing fee. It may be a good idea to pay for these things, to keep the buyer's cash needs low and get a higher price for your home. On the other hand, if you want to counter a buyers offer with your own, and include the clause, "Buyer to pay the closing fee," that is your right.

The Commission Can Be Changed

They'll tell you that they can't change the commission after it has been set. This isn't true. I have seen real estate brokers knock $4,000 off the commission to get a sale closed at a lower price. They don't like the idea of negotiating the commission after the fact, but it happens.

What is true, is that if your agent brings you a full-price cash offer for your home, you owe the commission as set in the listing contract. What if, on the other hand, your agent brings you an offer for much less than what he said he could sell your home for? You can always say no, or you can say it works for you if the commission is cut by $2,000. The agent can always say no to that.

I am not suggesting cheating the agent out of his commission after all his hard work. In the case above where $4,000 was taken off the commission, though, I was one of the four parties involved (2 agents, 2 brokers) who took $1,000 less, and I was happy to do so. Sometimes you want to get paid something for all that effort, even if it is a bit less than expected. No sale means no commission, so if a discount would make the sale work for you, at least suggest it.

Agents Are Not All Experts

The first time I made an offer on a house, the agent didn't understand what I meant when I told him that I wanted to get a 90% first mortgage and have the seller carry a second for 5%, so I could get in with only 5% down. Years into his career, he still had only dealt with deals that had regular bank mortgages.

Often agents will be very knowledgeable about a certain type of real estate, or a certain neighborhood, but know little else. Like other professionals, they specialize. If you really need help finding a particular type of property, look through listings online until you find an agent that already has several of that type listed. Then ask all the questions listed above.

The questions referred to are an extensive list found in Chapter 4 of my e-book "Make More Money Selling Your Home." For more information, visit:
http://www.99reports.com/selling-your-own-home.html