“A Picture is Worth a Thousand Words”

By Mason Eldridge

You’ve heard the phrase before but did you ever think it would apply to selling your home? With the age of the internet, listing photos are more important than ever in getting the right marketing exposure for your listing.

In a time when there are thousands of homes on the market and buyers have unlimited access to listings via the internet, having professional quality photos and virtual tour scenes is of the utmost importance. Think about it, for a buyer, moving on to the next property is as easy as clicking the mouse on the next home in their search. If your listing does not catch their eye online, they won’t be visiting it in person.

For this reason, I use a high resolution digital SLR camera to capture the best quality images, photo stitching software to capture more of a room in the photograph, and Photoshop to ensure that the photos look their best before going online.

WHY HIGH RESOLUTION? Many people don’t shoot in high resolution since most web sites have a maximum resolution that only allows relatively small files. At the Sotheby’s Realty web site that receives buyer traffic from all over the United States and the rest of the world, only high resolution property photos are allowed. Check out this new property listing I recently submitted to our web site. Due to the high resolution of the photos, buyers can zoom in on all parts of a property photo. Additionally, our property flyers use a 8.5 x 11 property photo on the front side so having high resolution photographs is important.

WHY ARE VIRTUAL SCENES IMPORTANT? A standard landscape photograph with a point-and-click camera can only capture part of the story.

When you can stitch multiple photos together and create the whole picture…you’ll catch the buyer’s attention! Notice how the panoramic photo allows the buyer to see the entire size of the kitchen, the built-in wine cooler, the view to the keeping room, and the desk area & additional cabinets on the right.

The last bit of advice I give as it relates to photography and selling a home is make sure you get it taken care of prior to putting your home on the market. The moment your listing hits the multiple listing services, it needs to have the maximum number of photos and a virtual tour to accompany it. The most serious buyers or agents with buyers ready to make a decision will closely watch the MLS for new listings to pop up and most times you only have one chance to make a first impression…if you have no photos or poor quality photos, they may not take another look at your listing.

Please let me know if you have any questions or comments about listing photography and please check out the yellow Virtual Tour links on my listings to the right to see a nice combination of still photos and panoramic scenes.

“Mistakes to Avoid When Buying a Home – Part 2″

By Mason Eldridge

The following is a continuation of “Mistakes to Avoid When Buying a Home.”

OVEREXTENDING YOURSELF FINANCIALLY – With the recent mortgage crisis, this one’s gotten the most attention recently. It used to be that you had to have 680 or higher median credit score, 20% down payment, and be able to document your income and all of your assets. In recent years, mortgage companies relaxed their standards for each of these criteria offering “no doc” loans to people with less-than-perfect credit or people seeking 100% financing. Many borrowers overstated their income and assets which resulting in them being able to purchase the house they wanted, but a house they never could realistically afford. This is a large reason for why areas of the mortgage industry have been in trouble recently and as a result they have had to tighten down on underwriting guidelines.

If you are looking for financial stability with your cash flow, the 30 year fixed mortgage is the only way to go since you know what your principal and interest payment is next month, 5 years down the road, or 29 years in the future. If you are bad about saving money, it is not a bad idea to escrow for taxes and insurance. This is where the lender will collect 1/12th of your annual tax and insurance payment each month and set it aside in an escrow account to pay those bills when they come due (many lenders will require this anyway).

If you or your spouse has an employment situation that might adversely change in the next 6-12 months, you might not want to count that income when determining a payment you can comfortably qualify for. If it means you need to wait until you have more certainty in your employment situation before purchasing a home, then that should be the path you follow to avoid ending up in foreclosure.

BUYING THE MOST EXPENSIVE HOUSE IN THE NEIGHBORHOOD – Real estate values seem to also follow the “lowest common denominator” principal and buying the most expensive home in the neighborhood will result in your home’s value being dragged down by the less expensive homes around it. Buying the most expensive home will help out the values of the other homes around you but there will be no other more expensive homes to pull your value up. Neighborhoods appreciate as a whole and not as individual properties. Along this same principal, it is never a good idea to purchase a home and sink a ton of money into it improving it beyond the value of all of the other homes in the neighborhood (a few exceptions to this rule can be found in my previous post “Should I spend the money to renovate/upgrade my ______?”).

FAILING TO SHOP AND COMPARE – Some people make the mistake of falling in love with the first home they see and buying it on impulse without knowing what else is available or having any frame of reference for what the home is worth. A good rule of thumb is to have looked at at least 10 homes before deciding on one. With today’s high levels of inventory, there should be a number of options available meeting your criteria.

Once you find a home you like, have your agent prepare a Competitive Market Analysis (CMA) of the other homes for sale and which have sold in that neighborhood. Given today’s rapidly changing real estate market, I would go back no more than 6 months for sold properties and a year at most if you are having a hard time finding comparable sales. If you are buying in a community that was built in the last 10 years by a single builder and the interior finish and construction quality is pretty consistent throughout the neighborhood, it is helpful to have your agent go into the tax records and pull out estimated square footage information and factor that into their analysis. I do this for all my Smyrna Vinings buyers and can come up with an average price per square foot for the type of home they are looking at (basement homes should be averaged separately than slab or crawl space homes and you can even segregate finished basement home from unfinished basement homes). Doing so will give you a clear idea if a seller’s asking price is within reason, at market value, or a real bargain.

FAILING TO BUY OWNER’S TITLE INSURANCE – After 17 years as a Fulton County Superior Court Judge and almost 9 years on the Georgia Court of Appeals, my father had witnessed some real horror stories by the time he retired from the bench where title insurance came in (or would have come in) really handy. He’s always stressed to me the importance of purchasing title insurance and I’ve never passed it up when buying a property.

While the closing attorney will check the chain of title to be sure the seller is the proper owner of a property and there are no existing liens against the property, most title searches only go back 50 years and there are other problems that can’t be discovered at the courthouse. A good example is when a previous seller misrepresents themselves as the property owner and sells the property to an unsuspecting buyer. A few years later, you come along and purchase the home from that unsuspecting buyer. A week later, the real homeowner shows up at your door and asks you what you are doing in his home…that is the point in which you are glad you bought title insurance.

Owners title insurance is a one-time piece-of-mind policy that generally runs about $2 per $1000 of the purchase price and will cover you and your heirs for as long as you own the property.

TRYING TO TIME THE MARKET – This is probably one of my favorite mistakes and it is especially applicable as it relates to today’s market. There simply is no way of knowing what is going to happen tomorrow. If you are considering purchasing a home, don’t buy real estate until you are ready. Once you are ready, don’t hesitate…waiting for prices to drop or interest rates to improve is speculative at best and will likely result in missed opportunities.

In Atlanta, we had seen modest appreciation until Atlanta won the bid for the 1996 Olympics which resulted in a more brisk run-up of prices. Most people expected the appreciation to subside or for prices to go down after the closing ceremonies ended and the national spotlight was no longer on our city. To most everyone’s surprise, the exact opposite ended up happening.

With regard to mortgage rates, I know of one buyer in particular that I was working with earlier this year to find a home. Their credit was not perfect but they qualified for a rate just over 7% on a 100% financing product which would put them in a home that was right for them. They were complacent and never acted and as we all know, major changes took place in lenders’ qualification criteria. Just a few months later and most lenders won’t loan this person money without at least 5% down. One lender is willing to do the loan but the same product he was considering before is now over 10.5%.

If you have any questions about any of this information and want to know how it might translate to your specific situation, feel free to give me a call and I will be happy to discuss it with you.

“Atlanta Fine Homes Sotheby’s International Realty”

First off, I would like to apologize to everyone for the recent lull in my posting to the site. As you have noticed, the site has taken on a new appearance and I am now proud to be an agent for Atlanta Fine Homes Sotheby’s International Realty.

Earlier this year, Jenny Pruitt left Jenny Pruitt & Associates after running the company for nearly 20 years. Five years ago, she sold Jenny Pruitt & Associates to Warren Buffet’s Home Services company and earlier this year she completed her employment agreement with them. When starting her new company, Jenny knew that there would be no better brand to affiliate with than Sotheby’s International Realty due to their stature in the luxury home marketplace, their experienced leadership, and their network of offices in the United States and around the world.

I recently made a commitment to get back to basics and focus solely on my resale and buyer business since this is what I know best. I wanted to work for a company that had deep leadership experience, had a widely recognized and respected brand, yet was locally owned and operated. When I was selected to join Atlanta Fine Homes Sotheby’s International Realty, I became the 30th agent in the rapidly growing company that now has over 120 listings with a listed value over $180 Million.

While that translates to an average list price over $1.5 Million, my business plan still focuses on working with buyers and sellers in all price ranges. Atlanta Fine Homes Sotheby’s International Realty’s marketing offering is far superior to anything I have ever seen and the office’s support staff is second to none. I am thrilled to be a Founding Partner in this exceptional organization and to be able to offer Million Dollar service and marketing to the Smyrna Vinings market! To learn more about our company, visit www.AtlantaFineHomes.com and www.SothebysRealty.com for information on Sotheby’s International Realty.

“Price Your Home Right – Don’t Let This Happen to You!”

By Mason Eldridge

A number of factors can contribute to the length of time it takes for a home to sell: not preparing the home for showing traffic, not making it easily accessible for agents to show, not adequately marketing the property, etc, but the biggest contributing factor is overpricing a home when it first comes on the market. A home might not have the best lot, need cosmetic updates, or have an obsolete floor plan, all of which can be made up by pricing the home accordingly.

When your home hits the market it is crucial to price it as close to market value as possible in order to attract an offer. During the first several weeks on the market, sellers should experience higher levels of traffic and a larger percentage of ready, willing, and able buyers. Those buyers are the ones that have already seen everything on the market and are waiting for the right thing to come along…if they feel the new listing is overpriced, they will dismiss it and wait for something else to come along. Homes priced right are more likely to see offers in the first weeks. Homes that receive offers within the first few weeks give the seller more leverage over the buyer in the negotiation of the contract and have a better chance of seeing competing offers.

“Testing the market” by pricing the home high and adjusting it later will miss out on the quality buyers in the marketplace. After your home has been on the market several weeks or months, most of the buyers looking at your home will be in the early stages of the house hunting process and still defining what it is they are looking for. Additionally, the buyers looking at your home are more likely to have a home they need to sell or other obstacle to overcome prior to being able to make a purchase decision.

Another significant disadvantage to pricing the home high when debuting on the market is that it will discourage the agents who do show it in the beginning from showing it to other buyers they might be working with at a later time. If an agent that is active with buyers in your area shows your home and feels it is priced appropriately, they are likely to show it again to another one of their buyers or suggest it to other agents they work with. When they walk through a home that they feel is overpriced, they will dismiss it and probably won’t come back to it later, even at a lower price.

Additionally, dramatic price reductions or significant time on market send a distress signal to buyers that the seller is desperate. Buyers might think the property is stigmatized and stay away from it all together or if they submit an offer, it is likely to be a lowball offer.

From looking at the Market Activity Reports, you will see that inventory levels are at recent higs. In such a market, it is essential that you price your home correctly from the day it goes on the market in order to net top dollar and limit your time on the market. When you meet with agents, be cautious of the agent that suggests a list price significantly higher than what RECENT market sales suggest is feasible…while it might be what you want to hear, it is probably not what will lead you to your desired outcome.

“Beware of Builders in a Depressed Market”

By Mason Eldridge

In a market like today’s, you are likely to find builders offering all kinds of incentives to attract buyer’s to purchase in their community. I’ve seen gimmicks including a free lease on a Mercedes or no mortgage payments for 6 months. While these incentives might seem attractive, you should also view them as a potential red flag. Given the large new home inventory, many builders are feeling the pinch.

Carrying multiple construction notes on fully drawn out construction loans significantly adds to the financial burden already imposed by their typical monthly operating expenses. Plain and simple, the more building lots and homes sitting in inventory, the quicker the builder’s operating capital will disappear. Once a builder depletes their operating capital, they can look for outside investors, sink more of their personal wealth into the business, or let the bank take back their property. In today’s market, we are seeing more of the latter.

A large amount of inventory can more easily cripple a small builder if they are not careful. Smaller builders typically have less money in reserves and less brand recognition to attract outside investment…therefore they fall victim to slow absorption of new construction inventory. Large builders are not immune to the same fate. There is plenty of rumor circulating about several prominent names who might be in financial trouble.

Laurel River, a medium-sized builder in the Atlanta market, recently went belly up leaving homes half finished and sites partially developed. If you’ve driven down South Cobb recently, you have certainly noticed their desolate townhome development with tumbleweeds blowing through the site. They never completed all the horizontal work and it now poses a threat to careless motorists since there is a foot drop-off between the traffic lanes and the deceleration lanes for the community entrances. They are an example of a builder who got too ambitious at the wrong time and ended up with too many homes in inventory when the market had pulled back.

As a buyer, you want to avoid being in a situation where your builder runs out of money and can’t complete your home or closes on your house but then leaves you in a neighborhood of partially built homes that have gone into foreclosure. Most builders use their own sales contracts providing that the earnest money is held in their general operating account. This allows them to use your earnest money for anything including paying their monthly operating expenses. If the builder files for bankruptcy, your earnest money is as good as gone.

WHAT TO LOOK FOR: Many of the large national builders are publicly held and their financial information is open for everyone to see. It is unlikely that a smaller builder would be willing to share financial or bank statements with you in order to secure one sale. As I mentioned before, when a builder is offering an obscene amount of incentives, it can be construed as a sign of desperation. If construction of a community has been progressing slowly, it is often a good indication that a builder is financially unstable. If the builder has several proposed neighborhood amenities (pool, cabana, gated entrance, etc.) that they have not constructed, proceed with caution. When a builder is feeling a financial pinch, they are likely to cut back on their marketing budget and items like landscaping. If you want to dig really deep on a particular builder, you can always check with the county they are building in and find out if there are any outstanding leins attached to their properties. When a contractor or supplier provides a builder goods or services and the builder does not pay for them, often the contractor will attach a lien on the property which must be repaid before the property can be sold.

Before buying new construction in today’s environment, it is even more important that you or your agent do the necessary homework to be certain that the builder doesn’t leave you in a bad position half way through the transaction or months after your closing. If you need an agent who can guide you around the possible pitfalls, give me a call.

“Mistakes to Avoid When Buying a Home”

By Mason Eldridge

For most people, buying a home can be an intimidating process filled with many potential pitfalls. Unless you are relocated with work often or purchase homes frequently for investment purposes, you probably don’t buy a home too often and the process has likely changed since the last time you did.

Avoid making these mistakes and your next home purchase should be dramatically easier and free of frustration:

PICKING THE WRONG LOCATION – It is not just a cliché, but location is everything in real estate whether you are talking about a retail property or a residential home. Location can have the single biggest influence over a property’s value and time on the market.

Taking the time to familiarize yourself with the area you are considering should be a top priority prior to writing a contract. While you can always change a paint color, kitchen cabinet or countertop, you will never be able to change your home’s location. I recommend visiting a property at different times of the day, especially on weekdays, in order to see what the traffic patterns are like. An area around a neighborhood might seem peaceful and serene on the weekend but could easily turn into a parking lot of cars during rush hour and turn a ten minute drive into an hour commute.

Within the community, some locations are better than others providing more privacy. If you are the type that needs more privacy, don’t sacrifice in this category or else you will always regret your decision.

SIGNING A CONTRACT WITHOUT FULLY UNDERSTANDING IT – Sales contracts for residential real estate transactions have gotten more and more complex with today’s Georgia Association of Realtor’s contract being seven pages plus additional pages for addendums, disclosures, and special stipulations (30 years ago the GAR contract was only two pages). If you purchased or sold a home last year in Georgia, the contract has changed significantly and you had better understand the changes before signing anything.

To help simplify life for my buyers, I provide a synopsis of the Purchase and Sale Agreement that explains everything in plain English. Since real estate professionals are not allowed to give legal or tax advice, it is always recommended that you contact your attorney or accountant for answers to those questions.

SELECTING A MORTGAGE OR LENDER WITHOUT SHOPPING AROUND – Much like how all real estate professionals are created equal in the areas of service, knowledge, and experience, the same is true for lenders and the mortgage products they have available to you. Making the mistake of picking the wrong lender can cost you money on a monthly basis or even worse, leave you at the closing table scrambling for another means of financing.

Given the instability of today’s mortgage market, it is important to start off by working with lenders that come highly recommended but also who have the financial stability to ensure a successful closing. It is a pretty safe bet to work with a lender from a conventional financial institution (large national banks) or one who brokers to them since their company has other streams of revenue and they won’t leave you stranded at the closing table (much like HomeBanc and a number of other mortgage companies did when they recently went out of business).

Since you will have a wide range of choices in mortgage products, it is recommended that you work with a loan officer that can clearly explain the differences to you and help you choose the product that is best for you.

BUYING A HOME WITHOUT A HOME INSPECTION – The Seller’s Property Disclosure Statement only tells you about the problems that the seller is aware of (and unethical sellers might not disclose all the known problems). The best way of knowing what you are getting yourself into is by hiring a private home inspector to inspect the home (after you have a binding agreement). This is equally important when buying new construction or a historic home…new homes have problems too and city/county building inspectors don’t have the time to discover all of the defects during their limited inspections. If you are building a home from the ground up, I recommend getting it inspected at foundation, prior to drywall (so that electrical and plumbing work can be inspected), and at completion.

A private home inspector will prepare a list of defects and code violations discovered in a written report (preferably with photos) within a day of completing the inspection. This report can then be used to get the sellers to agree to make needed repairs prior to the closing. While a thorough home inspection will cost you several hundred dollars, it can potentially save you thousands of dollars down the road.

FAILING TO PICK THE RIGHT TEAM – Picking the wrong real estate professional, mortgage lender, home inspector, and property can all prove to be costly mistakes. Selecting a real estate professional who knows the location and market that you are considering, who has a deep knowledge base with extensive transaction experience, and who has a list of trusted and experienced service providers to work with will save you a tremendous amount of time, money, and frustration throughout the entire process. If you are looking for a real estate professional in Atlanta who meets all of the above qualifications, I would love to hear from you.

Check back in the near future for additional mistakes to avoid during your next home purchase.

“What is a TAD? – Explaining Tax Allocation Districts”

By Mason Eldridge

Many people have asked what a Tax Allocation District is or more commonly referred to as a TAD. You might have heard of them referred to as a Tax Increment Financing area or TIF in states other than Georgia. TIFs are used in 44 states to stimulate development and redevelopment.

In a nutshell, TADs and TIFs are tools used by governments to provide financing for infrastructure and other improvements needed to improve a blighted area in a municipality. The financing for these improvements comes without having to raise millage rates…by increasing the property value of the blighted area, the government will collect enough additional tax revenue from that area to pay back the money issued for the improvements.

TADs are not the same as abatements where the property owner doesn’t pay taxes or pays an incremental amount of property tax for the first 10 years as an incentive to purchase in a blighted area.

I’ve found that the Marietta Redevelopment Corporation has the best overview of TADs at their website which was prepared by McKenna Long & Aldridge LLP.

I’ll take a real elementary approach to illustrate how a tad works:

An abandoned 10 acre parcel of land in a blighted area has an appraised value of $1M and the city/county collects $15K a year in taxes from it. The city offers to provide a developer $10M in TAD funds (bonds issued paying a 5% return and to be repaid in no more than 25 years) to develop the property and build 200 townhomes surrounding a 1 acre city park. The 200 townhomes each have a new average property value of $250K and the city/county will collect $3750 in annual property taxes for each unit for a total of $750K in annual tax revenue. $15K of the $750K collected in taxes would go toward paying for city & county services such as fire, police, parks, libraries, schools, courts etc (same amount of taxes collected from the property prior to the redevelopment). The other $735K in increased tax revenue goes to repay the $10M in TAD bonds issued. Given this scenario (factoring in the 5% return on bonds but not factoring in appreciation or an increase in the amount of tax collected over time), the $10M in TAD bonds would be repaid in the 23rd year.

The largest TAD in the history of Georgia (with an approved bond issuance of up to $200 Million) is the Atlanta BeltLine project that recently met some opposition in the courts. The Fulton County Taxpayers Association contended that the development was a violation of the Georgia Constitution. The FCTA argued that “it [was] unfair and illegal for non-TAD taxpayers to pay for city, county or schools services to support the luxury condominiums and class-A office buildings and shopping centers proposed for the Beltline.” On January 23rd, the Fulton Superior Court upheld the constitutionality and validity of the BeltLine project bringing it one step closer to becoming a reality.

A Smyrna resident filed a similar lawsuit on December 20th, 2006 in attempt to halt the use of $26.2M of TAD funding granted for the Jonquil Village redevelopment. Looking at the Cobb County Superior Court Clerk’s records, City of Smyrna, Cobb County, and Cobb County Board of Education are all named as defendants and the case status is still Open. From talking to a source involved in the project, they expect that the outcome of the BeltLine lawsuit will support a positive outcome in favor of the Jonquil Village project. My source also tells me that we could see demolition of the existing structures as early as this May.

When used properly, TADs are an excellent way to improve neglected areas without placing a financial burden on the surrounding property owners. I fully support the use of TAD funding for the Jonquil Village and I am hopeful that the Cobb County School Board and Cobb County Commissioners will increase the Belmont TAD cap in Smyrna in order to pave the way for the redevelopment of Belmont Hills shopping center as well. It is only logical that properties near redeveloped TAD projects will be improved as well without the assistance of local government funding.

“Avoid Being Scammed!”

In case you missed this article from the Cobb AJC RSS Feed (located on the left sidebar) the other day, you can view it in its entirety at their site. To sum it all up, across the United States and recently in Cobb County by a company called National Deed Services, marketers are sending official looking letters to homeowners stressing the importance of having a certified copy of their warranty deeds. After your closing, you should have received a copy once it was filed with the Cobb County Superior Court. While it is a good idea to have a certified copy of your warranty deed, it is not necessary to pay the $59.50 they are charging to provide you one…you can obtain one from the clerk’s office for just $2.50. If you would like to pull up a non-certified deed for any property in Cobb County, you can it at their web site.

While there is nothing illegal about this marketing offer, consumers can save a lot of money by going straight to the source.

“FSBO & Discount Brokers”

By Mason Eldridge

I recently received a question from a recent visitor to my site and he asked/stated “I currently own a home in ABC Community and am planning to put it up for sale very shortly. I am planning on using XYZ For Sale by Owner Company. Please reply with the reasons why I should use a full service agent” (names were changed to avoid litigation). After spending much time crafting my response, I realized it could actually be a valuable post that I could share with everyone. Below you will find some of the many reasons for hiring a full service Realtor to sell your home:

I’ve never dealt with XYZ For Sale by Owner Company so I don’t really know all the details about their system. What I can share with you is some cold hard facts collected from the National Association of Realtors:

Based on the most recent compiled data, only 13% of residential transactions were completed in a for sale by owner (FSBO) capacity…of the 13% that sold by owner, 5% knew the buyer. Given the fact that you are planning on using XYZ For Sale by Owner Company, I would presume you would be in the 8% category that will not know your buyer.

Here are the results of another study conducted by NAR where For Sale by Owner (FSBO) sellers were polled:

There are two types of FSBO services out there:

Type A that advertises your property only in their publications and their business model is built around a direct sale between an unrepresented buyer and seller. The seller pays a significant fee up front and they provide the seller with sales contract forms and a “How to” guide on selling a home.

Type B (Discount Brokerage): In this scenario, the seller typically pays a fee up front to get their home in the listing service and yard sign then the sellers have to pay additional money for a la carte features such as a lockbox, flyer box, directional sign, marketing, etc. By having the property in the listing service, the seller has to guarantee the buyer’s agents a commission (commonly 3% or more in order to be equal to the other properties for sale). The Discount Brokerage company provides instructions on how to handle a contract in the event that one is presented.

The least effective method of the two is the Type A scenario. These companies charge the sellers a pretty significant fee up front and their business model is designed on an unrepresented buyer purchasing your property. As a seller, your exposure is limited to the people who visit that company’s web site, watch their cable TV real estate show at an obscure time, or happen to stumble across your yard sign. An overwhelming majority of buyers use a buyer’s agent to buy a home since it doesn’t cost the buyer anything to be represented (the buyer’s agent shares in the commission offered by the listing agent). With almost 90,000 homes for sale in Metro Atlanta, the buyer’s agents have a lot of other good homes to show their buyer’s where they are guaranteed 3% or more of the sales price. They will receive nothing for selling a home through XYZ Company so they will not show or sell one of their properties. You are left with the small segment of buyers who are not working with an agent and you need to hope that your home is a better fit for them than all the other homes on the market.

Using a Type B Discount Brokerage company has similar drawbacks to the Type A scenario. Even though they are offered a standard commission, many buyer’s agents won’t show a Discount Brokerage listing because they end up having to do a lot more work than if they sold a property listed with another agent.
Common complaints from buyer’s agents about Discount Brokers include: communication from the Discount Broker is often very poor, the seller doesn’t have very good advisement and has to be coached by the buyer’s agent when responding to offers, the buyer’s agent ends up doing the listing agent’s job in coordinating the closing with the attorney, etc.

Another reason buyer’s agents don’t like to show a Discount Broker home is they feel like the seller’s are not very motivated or realistic about what their home is worth and arriving at a “fair market” price for their buyer will be difficult. Although it is not my personal policy to avoid showing Discount Broker listings, I can attest that these arguments are valid after having sold several discount broker listings. I even had one FSBO seller who decided he no longer wanted to sell his house a few weeks prior to closing after being under contract for 2.5 months (thankfully my client was an attorney and the threat of a law suit was enough to make sure the seller complied with the terms of the contract). With this scenario, you are effectively paying for a professional to represent your opponent (the Buyer) in negotiating the best price for your home.

Both scenarios require the seller to incur an up-front expense regardless of whether or not their property ends up selling. In the event that an agent sells your home in the Discount Broker scenario, you may have “saved” 1-2% after you pay the buyer’s agent commission, listing fee, a la carte fees, and any additional marketing expenses…but did you really get your home’s full value? Here is another national statistic from the National Association of Realtors: “Homes sold with the help of a real estate professional last year sold on average for 16 percent more than FSBO sales. The median FSBO selling price in 2005 was $198,000, compared with $230,000 for agent-assisted transactions.”

Your best course of action is to hire a well qualified Realtor to sell your home for you. You want to find a Realtor with a good marketing plan that is applicable for your location, that has good transactional experience (Realtors who have worked a lot of transactions are less likely to leave you with any liability in the sales contract), and most importantly – you need to have good chemistry with the Realtor. After all, you and your Realtor will be involved together in a pretty important relationship that will last from 1 month to a year (depending on your marketplace). By finding the right Realtor you will receive all the following benefits and avoid some of the headaches of selling FSBO:

They will evaluate your home and make recommendations that will help with the presentation of your home prior to it going on the market. Following the recommendations will help your home sell faster and for more money.

You won’t waste your weekends and other valuable time showing your home to unqualified prospects.

You’ll have a valuable resource to help guide you successfully through the contract process. On top of that, you’ll have a well written contract that will hold up in the unlikely event that a buyer defaults.

They should provide you with a written guarantee of the marketing tools they will implement to bring agents and buyers to your property. The marketing plan is one area that listing agents can really differentiate themselves from one another.

You will benefit from the Realtor’s expertise in negotiating to get you top dollar for your property.

Selling your home is stressful enough…you shouldn’t have to take on a second profession in an attempt to save a few dollars. Find an expert who you get along with and save yourself a lot of frustration…in the end it could result in more money in your pocket.