18 Questions For Every Home Seller (Part 5)

                        When should I sell?

Seasonal peaks and valleys

In most American markets, the best times to sell are late February to mid-June and early September to late November. More buyers will be out looking at properties and more will be making offers. In mid-summer and in winter, expect low offers -- if any at all. Leave these seasons to desperate sellers, and if you’re buying another house yourself, consider looking during these periods.

Ideally, prepare your home for the market well before the peak season to get started when the season begins. This will give you as much time as possible to sell, most likely avoiding the problem of needing to sell before the summer or winter dead period begins.

And if you can, sell during the February-June window when other sellers are less motivated to close a deal. Many sellers are more motivated to complete a sale in the fall season because they may see the need to pay income-reducing expenses before year’s end.

In a strong market

It’s tempting in a strong market to want to realize big gains, but of course if you intend to move to another strong market your gains will be swallowed up in the cost of your new home. And if you move from a strong market to a weaker market, you may end up eliminating mortgage debt in the short term (selling for $450,000 and buying for $350,000 for a comparable space) but future appreciation may likely be weaker in your new location in future, as well.

In a soft market

Selling in a soft market means fewer potential customers, a lower property value, and a potentially disheartening wait for a buyer at a reasonable price. But if your new home will also be in a soft market, a bargain awaits you after the sale while waiting for the market to improve might only lead to worse valuations for the foreseeable future. If moving to a stronger market, you will likely take on more debt or need to trade down to a lesser space, but you may see greater future appreciation of your new home than you would have ever known in your former soft market.

18 Questions For Every Home Seller (Part 3)

1.            What’s happening in real estate?

Just fifteen years ago, the real estate broker was at the center of most home sales. Sellers as well as buyers and agents depended on the broker and the broker’s “multiple listing services” book (MLS) to bring a property to the attention of the marketplace.

Online technology brought about a revolution in this marketplace as in so many others. The main change is the elimination of the middle man, a process known as disintermediation. For example, travel agents have been largely replaced by direct purchases from web sites and antiques are now often auctioned off online by the owner rather than in an auction house by an auctioneer.

In the 1990s, the first wave of Internet-driven change overtook the real estate business. For example, it quickly became possible to comparison shop for home loans among many, many lenders. As real estate services moved online, the online MLS became available to agents as well.

More recently, such listing services have become accessible to the consumer. Individual buyers can now search real estate listings almost as easily and thoroughly as a veteran broker or agent, and indeed most home buyers today begin on their own, browsing listings. Finding a compelling listing, these buyers might visit and even bid on a property before they have ever consulted a real estate agent or broker.

To be sure, real estate brokers and agents are still consulted -- particularly by those accustomed to the traditional business model. But the process of disintermediation continues and there is simply too much money involved in the purchase or sale of your home for a seller not to ask: what is my agent doing to earn a percentage of my home? Why can’t I do that job to avoid handing over a piece of my home’s value? Much of this book will address such “value proposition” questions and the corollary, is there an agent or consultant who really is indispensable and worth the expense?

Stopping by Carl’s office

“Carl, how did you sell your home? I heard you sold it online in an auction?

“That’s right. We considered auctions because I had a new job to start and renting for months looked really expensive. But the auction not only sold the house in a couple of weeks. It also fetched us a competitive price and cut our broker fees dramatically.

“I’ve auctioned off skis and a computer online. But a house?

Well, you’re right. A house isn’t the same as a household commodity like skis -- you need a specialized online auction service where serious buyers are following the listings. I used Oresy.com.

“I don’t get it. Who’s going to bid hundreds of thousands of dollars based just on a few pictures online?

“No, that wouldn’t work. Actually, you market the house like crazy and photos of the properties do go up on the site. The point isn’t to sell them on the house via photos but to convince them to see the property in person. Then you ‘Open House’ previews, provide inspection reports, and so on. The bidding happens online in a fixed timeframe.

We’ll look at Oresy.com and the process of selling your property there in the last section of this book.