When the time comes to make good on your exit strategy – whether it be your primary residence or an investment property – the question begs: Do I list on my own or hire a professional realtor? Last week we talked about the pros and cons of this critical decision, so let’s do a quick recap:
Pros of listing on your own:
• You will save on the seller side of the real estate commissions (and sometimes the buyer side as well)
• You have the freedom to ask for the price you want
Cons of listing on your own:
• Marketing costs and efforts are entirely in your hands
• Legal and Liability considerations come into play
• You will have to negotiate with the buyer or buyer’s representative directly
• You may still be required to pay the Buyers’ commissions
A sophisticated real estate investor will consider ALL of the above points before making a decision on how they will list their property. If you are comfortable tackling the marketing and negotiating on your own then self-selling may be the right decision for you.
So how does the sophisticated real estate investor sell their property in a timely fashion at a price they’re happy with? You wouldn’t be the first to inquire on this topic and certainly not the last. If you are comfortable with the considerations listed above, here is a strategy that more and more Canadians are employing to get their deals done and cut back on wasted time and lost profits.
Step #1 is to create the most compelling, attractive “For Sale” sign you’ve ever seen and make sure it is highly visible on your front lawn. You will place a few ads in the newspaper, online or elsewhere that showcase the benefits of the property for potential buyers as opposed to highlighting features, which are not as emotionally appealing to the public. “Cozy up next to your wood-burning fire-place” makes it sound like it could be a home rather than just another house and creates an emotional connection for a potential buyer.
Sometimes a neighbor or someone in your community will be interested in the property and your phone will be ringing right away. By starting down this path, you are finding out if there is any “low-hanging fruit” or easy sales in your close network of contacts.
Step #2 is your next bullet in the figurative gun. If the property doesn’t sell within 30 days (or the timeline that you’ve deemed acceptable for your sales plan): This is the time to list the property on a discount MLS site and keep in mind that you’ll continue to act as the chief marketer and negotiator of the property if interested buyers and offers come your way. If another 30 days goes by and you’re still waiting on a sale, do not pass go and collect $200, but instead fast forward to the next step in this plan.
Step #3 is to get a professional realtor on your side. You’ll want them to provide you with a comparative market analysis so you can be sure that your property value and asking price is up to snuff with the Johnson’s house down the street. This is an absolute must: You will also want them to provide you with a complete marketing plan. If the marketing plan sounds like “I’ll list your property on the MLs and work hard for you…” that is not going to cut it as you’ve just done that! You need more than the basics from your professional realtor. Part of the plan has to include managing the MLS listing so that it stays fresh for new buyers to land their eyes on and to ensure it does not get lost in the hundreds of other listings out there.
If you decide to work with a realtor, choosing the right one is absolutely critical to the success of your sale. A choice made out of convenience (a friend, family member or office location that is nearby) isn’t always the right choice. This is one of the biggest financial transactions you will make and having the best person on your side could make the difference in time and/or money. You want someone who has a proven track record and someone you can hold truly accountable, which can be a more delicate situation when working with friends or family.
How do you find the best person for the job? Ask around. Get referrals and stories on the realtors who are in tune with your neighbourhood. If they’ve had success working with someone in your area, chances are they will be able to deliver for you. A geographic specialist is always your best bet and one with many quality referrals (from people you know) is vital.
In every case, you have to be brutally honest with yourself about your ability to maximize the dollars in your pocket – if you can market the pants off your property and you don’t flinch at the negotiating table, going it alone could be the right call. For those who aren’t as comfortable in the driver’s seat, paying a professional a fee to market your property can put the same ‘net’ in your bank account at the end of the day and save much of the hassle of taking numerous telephone calls, showing the property and negotiating the deal.
When all is said and done, your house is only worth the price that you and a willing buyer can agree upon and is often not the number that gets thrown around in discussions around the water cooler. No matter which path you take to get to the sale, make sure you’re comfortable with the process and the expected results. It truly comes down to what ends up in your pocket when the deal is done.