NEW & VIEWS
NEWS FOR SELLERS
Most Common Seller Mistakes
By Bernice Ross
With the credit crunch and huge amount of competition from distressed properties, "normal sellers" have had a tough time getting their properties sold. If you must sell in this market, it's absolutely critical that you
price your property right.
Pinpointing the best possible price for your home can be a challenge. If you overprice your property in today's market, it can stay on the market for months. If values in your area are declining, the longer you take to sell,
the less money you will net. If you want to net the most from your real estate sale, avoid these common seller pitfalls:
1. Basing the list price for your home on the list price of other properties
This is probably the most common mistake that sellers make. They look at what other properties are listed for in their neighborhood and base their price on those numbers. This is a huge mistake. To correctly price your property, the only accurate "comparable sales" are those properties that have closed either for all cash or where a lender has funded a loan. While properties may be selling, many are not closing due to the credit crunch. Appraisals are a huge issue. The reason is that a property worth $200,000 today may be worth $196,000 when it closes 60 days later. Appraisers are aware of the issue and often set values more conservatively as a result.
You can obtain comparable sales information online from real estate brokerage sites, Realtor.com and multiple listing service (MLS) Web sites. These online resources are a great starting place. The challenge is that they often lack up-to-date sale and/or price-reduction data. The best source for comparable sales information is a competent local broker who has access to the most up-to-date MLS data.
2. Basing your list price on what you paid for the property
Many sellers believe that what they paid for the property influences their current sales price. "We paid $200,000 for the property three years ago. We have to sell it for at least $218,000 to break even." This reasoning is based upon a very common fallacy. Many people believe that the agents and the sellers determine the price at which a property will sell.
The truth of the matter is that the real estate market is like the stock market. The buyers -- not the sellers or agents -- determine whether a property is saleable in any given market. For example, if you paid $80 a share for IBM stock and today it's selling for $50 a share, if you wanted to sell for $80 per share, you wouldn't be a seller in today's market. The same is true for your real estate. The price you paid for the property has no bearing on what the buyer will pay. (It does make a difference in terms of your tax liability and a host of other issues.)
3. Overestimating the value of your improvements or upgrades
Many sellers have a challenge understanding how the improvements or upgrades that they have made to the property impact value. Some improvements do increase value. Generally these include adding square footage or bringing your property up to the same standards as most other properties in the area. Most improvements, however, make your property more saleable, but they don't necessarily add to the value.
For example, assume that you have white travertine marble countertops throughout your home and distressed walnut floors. These features make your home more attractive to potential buyers, but normally don't add much to your sales price. The reason is that those improvements have no value to a buyer who prefers dark granite and plush carpets. Also, if you overimprove your property by making your home substantially larger than that of your neighbors, you probably won't recoup that money either.
4. Testing the market
Sellers often want to "test" the market. "Let's list it at a higher price for a few weeks and see what happens." This is a huge mistake. Real estate professionals know that all listings have a "honeymoon period" where the listing will have the most showings. This normally takes place during the first 30 days the property is on the market. The reason is that buyers who have not yet found a property attempt to see new listings as soon as they come on the market. This initial rush normally drops off after the first 30 days. After that, showings are normally limited to new buyers coming into the market. If you don't sell during the honeymoon period, there's a high probability that your property will be on the market for an extended period of time. You can generate additional interest with a price reduction, but
it never creates the attention you receive when you first list the property.
To get the most from your real estate sale, avoid these costly mistakes.
Bernice Ross, CEO of RealEstateCoach.com [1], is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books.
VIEWS FROM TOM
Joining Tradewinds Realty Inc.
Tradewinds has global visibility unmatched by any other real estate company in Nova Scotia. That immediately enhances a property owner's potential for a sale, due directly to the fact that more people, in more locations around the world, are viewing the offerings available from Tradewinds. Not only is there the award winning website at www.seanovascotia.com but there is also world class access to European markets through Mayfair in London, and of course this website, CapeBretonEstates.com.
It is a fact that innovative marketing leads inevitably to greater market penetration, which is the single biggest reason for a client's using a real estate company. A sale or purchase, completed with a minimum of complications or surprises, in as short a time as possible, is the reason that successful real estate companies exist. While active and professional marketing is certainly the most obvious value sought after by a client, I believe that an ethical and thorough approach to the specifics of any property being traded is every bit as important. That is to say that whatever problems arise in completing a transaction, an honest and professional ability to work through those sticky points is mandatory.
The geographic coverage of the province by Tradewinds is also second to none in Nova Scotia. It is therefore my pleasure to be able to refer buyers or sellers to my professional colleagues throughout the province, when the occasion arises.
I have joined a company - Tradewinds - that not only has the awards to decorate their success, but also the key management and business history to prove it. I am very pleased to have made this assocation and couldn't be better equipped to assist both buyers and sellers
NEWS FOR BUYERS
A Message for Buyers about Real Estate Terms & Conditions
Every profession appears to have its own language, it's an 'in' thing, as well as being convenient short hand for practitioners. The problem is that frequently the language is not very clear to the public who are trying to deal with the products or services being marketed.
Real Estate is no different. While one person believes 'offering for sale' suggests (from experience in other areas) a property that is for sale - and decides that he wants the property - he is not then putting a "bid" - against that offer - but in real estate he is actually putting in an "Offer". Inconsistent - would be the reaction of anyone used to dealing in investment instruments, or on the floor of an exchange. There, one would put in a "bid" when trying to negotiate a purchase of a stock, bond or other investment instrument. An "offer" to an investment dealer is strictly a proposal to sell something - not to buy it.
So let's take a more important point. Consider the terms "Under Offer" or "Offer Pending" or "Conditional Offer" or "Accepted Offer" - such as are added on to some of our properties listed on this web site. One could easily misconstrue that term to mean that a deal has been struck and no further "offers" would be considered by the vendor of the property. While this may be true if the various criteria of the Agreement for Purchase and Sale are all met, that is - the dates for completion of inspections, the insurance coverage, etc. are all successful - - but it doesn't necessarily mean the property will close as scheduled or - at all. A lot of things could come unstuck. The bank may balk on the level of the mortgage take down, the interest rates could take a jump, or any one of a dozen different variables could derail the completion.
Thus - if a buyer really wants a property, and there is an "Under Offer" designation on the MLS or other web site - it is frequently wise to put in a "Back-Up" offer. Whether one decides to increase the amount to or above the list price; or perhaps increase the deposit to a larger sum than 'normal'; reduce the time frame for completion, or all of the above - if anything shakes the original "Offer", a back-up offer could easily take over, and possibly win the day. Failure to understand the language of Real Estate could cause the loss of an attractive and desirable property that might have been a realistic and sensible purchase.
NEWS FOR SELLERS
New Land Registration Requirements as of March 1, 2005
As of March 1, anyone selling their property (and in some cases, this applies to property transfers as well) in Cape Breton must "migrate" the property first. Conversion (formerly known as "Migration") is an expanded land registration process that provides government guarantee for the validity of a deed.
When you decide to convert your property's title documents - usually a move that is wise the moment you decide that you wish to sell it - keep in mind that attorneys do NOT all charge the same fees.
A recent article in the Oran discusses the pricing practices of legal firms handling the new conversion process. Apparently, some attorneys claim that the "conversion" process HAS to be expensive. Do not be mislead by these claims.
There is no mandate for attorneys to recover their full cost of "education" in the conversion process immediately on the first one or two conversions they perform. We have seen prices that range from under $700 to over $1500 on the island, so there is a great deal of variance.
Keep in mind that legal fees for conversion on the mainland, where conversion requirements were put into place in 2003, have dropped precipitously. A conversion on the mainland can be done for as little as $300. Legal practitioners there have learned that many conversions do not involve a great deal of complexity.
For more information on Conversion (formerly known as "Migration"):
"Migration of Property" Article- Good general article on topic on Trade Winds Real Estate site.
- Migration Issues
- An earlier article written by attorneys on Migration Issues.
- Registry 2000 (migration) System
- Provincial government site explanation of the Registry 2000 (migration) system.
NOTICE
Please feel free to use the toll free number to contact Tom instead of email:
1-866-325-1001
NEW LISTING ALERT
Want to know when we add a new property to the site? SEND US your email address (name optional) and we'll add it to our notification list. Or, periodically check here on this page for new property additions and news about the Cape Breton real estate market.
