What Realtors Don’t Want You To Know When Selling Investment Property
There are Three Things That Sell A Property–And the Realtor Isn’t One of Them!
When selling investment property you have some choices as to how you go about it. Being Realtors ourselves, we understand the perspective from the real estate professional. Real estate agents are in the business of brokering sales of real property—that’s how they earn their living. Since competition is fierce (especially during the most recent real estate boom where almost everyone on the planet , it seemed, thought it prudent to get a real estate license and become their own agent in “flipping” properties), Realtors must find a way to “fool” the public into thinking that they are the better choice when it comes to selling real estate properties. However, truth in fact, the real estate professional’s job is actually between CONTRACT and CLOSING…this is when the proverbial rubber meets the road, so to speak. The act of bringing the Buyer to the table is actually dependent on the property itself, and, three very important factors regarding that property they are:
- Price
- Condition
- Exposure
Before we expand on our discussion here, let’s first break down those three factors since they are key in your understanding of selling investment property:
- (1) Price
- You get only one chance to price a property correctly – at the very beginning of when you offer it for sale. Property priced too high won’t get the attention it needs to move it swiftly. As time passes, the listing becomes “stale” and buyers will be able to take advantage of the situation by under bidding and ultimately, getting the property for perhaps less than a good starting price might have yielded. We battle this battle with sellers on almost every property we list. Sellers always feel their property is worth more—because it is to them—but, not necessarily to a prospective buyer! A property priced correctly doesn’t mean under market, it simply means at fair market value to a potential buyer. It’s a delicate balance and the help of a real estate professional is certainly warranted at this juncture.
- (2) Condition
- The term condition covers not only the exterior and interior condition of the property but also the condition of the surrounding landscape or, in other words, the “location”. For example, is the property in a nice and well-kept residential neighborhood that is highly sought out due to the school district, etc. Or, is it in a rural area or an industrial area? All of these fall under what buyers view as the “condition” of the property. When selling investment property – or any real estate property for that matter, the property must be in it’s best possible condition. Not only will this greatly affect the price—it also plays into the amount of time the property will remain on the market. Again, it goes back to only getting one chance to make that first impression. Our advice to sellers is ALWAYS to get the property in tip-top shape PRIOR to listing! Too many times we see sellers making the mistake of listing their property for sale while work is in progress. This is the biggest mistake you can make in selling your property-—right up there with pricing it incorrectly. The bottom line is-—spend some time making your property show-ready and you’ll come out better all the way around. We suggest you review our SELLER’S TIPS for making your property ready to go to market!
- (3) Exposure
- The third factor in selling a real estate property is probably the most important of the three. You might have priced the property correctly and it’s condition is superb but, unless you have the optimum exposure for your property, how will prospective buyers even know it’s for sale? This is one of the areas that real estate agents, in their quest to rise to the top of the pack, tend to fool the public into thinking that THEY are what’s needed to sell the property. In truth, ANY real estate professional can assist with the exposure of your property. Exposure is simplistic really – in today’s internet age, besides of course signage at the property, the best place to advertise your property for sale is on the World Wide Web! It’s really as simple as that. The latest statistics from NAR (National Association of Realtors) show that 92% of all buyers begin their search ON-LINE! That’s a staggering number! Therefore, getting your property out there in the eyes of 92% of the buying population at any given time is all you need in the way of exposure for your property.
This is the area where real estate agents try to dazzle potential sellers into doing business with them by showing statistics of the number of properties they’ve sold over the last number of months, how their marketing is superior to that of their competition’s, how they will work harder to drive buyers to your property, how they sell homes faster, for more money, etc., etc., etc…..we’ve seen all of their slick ads and read their letters to expired listings. It’s all a bunch of hype, really. Real estate agents don’t want you to know that you don’t need them to bring a buyer for your real estate property. What you DO need them for is everything that occurs from the point of the potential buyer showing an interest in your property to closing. This goes back to “Contract to Closing” that we discussed earlier. Seasoned Real estate agents have experience in negotiating the contract to best protect you, the seller. And GOOD real estate agents will stay on top of every detail (and there are a lot of them) that needs to occur to make the deal go to closing. For a behind the scenes detailed look at the details handled by the real estate that can potentially occur as well as those that must occur in every real estate transaction refer to “Contract to Closing”
One of the biggest misconceptions that the public has about real estate agents is that the real estate agent who has the sign in the yard or at the property is the one responsible for the sale of that piece of property. That couldn’t be further from the truth! In the world of real estate today, there are buyer’s agents and list agents and, in most states, agents are allowed to be both — even in one transaction. Most often however, the list agent isn’t actually responsible for selling the home – the buyer’s agent is. So, if you see a lot of “FOR SALE” and “SOLD” signs in an area with the same real estate agent’s name on them, it doesn’t mean that this agent is the “best” there is for selling homes in that area – it simply shows that he or she is good at getting sellers to “list” their properties with him/her. Thanks to the MLS (Multiple Listing Service) that just about every city has, any real estate agent can show and sell that property – it’s actually a great thing for you as a seller as it means that you have literally THOUSDANDS of agents working to sell your property!
The list agent comes out looking like the king or queen of that area – however, with a closer look, you’ll see that the “selling agent” is more times than not, someone other than the list agent. List agents don’t want you to know this! If there is anything we would like you to take away from this section, it’s that hiring a real estate professional to assist you with the sale of your real estate property is a prudent choice. However, we want you to understand that “all real estate agents are not created equal”. You many feel this is contrary to what we said earlier when we stated that “any real estate agent can assist with the exposure of your property”. That is true. However, there are good, seasoned agents out there that would serve you better when it comes to dealing with the rest of the transaction that goes beyond the “exposure” and bringing the buyer. For more information on selecting a real estate agent and what specific interview questions to ask when selling investment property.
