How Can Illinois Homeowners Make More Money Selling Their Homes?
Want to make more money when you sell your home? Nah, you’ll pass
right?!...er wait YES of course you do! Who doesn’t want to make more? Maybe a few moneyless communities (https://tinyurl.com/y3rhpqvo), but those eccentrics aside, we all want to make more money to survive and thrive in this world of ever increasing health insurance premiums, taxes, student debt, and since we are in Illinois it’s worth mentioning again, TAXES. As selling a person’s home is often selling the largest asset one
owns, it makes sense logically to make more on the sale of this large asset.
Here’s some tips to make sure you maximize your time, money, and effort
when deciding to sell.
The first step is to leave it to the professionals and list your home with a
qualified agent or broker. There is a ton of stats out there detailing just why
FSBO (for sale by owner) sales are at their lowest percentage of total sales - ever (for more details check here - https://tinyurl.com/y2o88kp2).
That being said you need to be informed when selecting the right agent and
brokerage and understand that there is no set, standard, or normal listing
commission fee - that would be a violation of the Sherman Anti-trust act
which prevents price fixing.
This is pivotal to the informed seller realizing that commissions before
signing a listing agreement are negotiable and this step will determine often
the difference with making money on selling your home and breaking even
or worse. The national average in 2018 for a listing commission was 5.1%,
but with houses priced more modestly it is still common to see 6%. This is
the fee the listing broker charges the seller once the home is sold.
Typically the listing broker then offers a co-op commission to the
cooperating agent who brings the buyer. Typically this is 2-3%. This
model has worked for a long time and our real estate market is the most
fluid and dynamic and open in the world. However, it is time for change.
Technology has changed so much the last 10 years shifting the power
tilting the balance into the consumer’s side of the equation away from the
real estate brokerages and agents as it was for decades. And rightfully so,
30 years ago agents had printed books of listings that were updated
monthly and you NEEDED a realtor to sell or buy. They had to do all the
showings in person. They were required to work in an office that was
expensive to operate with high rents because visibility of the office
mattered. They had to pound the pavement and physically cold call to
reach prospective buyers and sellers. No internet, no cell phones, paper
written contracts needed to be driven back and forth between buyers and
sellers and faxed to attorneys and lenders. Also home prices were
significantly less 30 years ago. Today agents can run their business from
the palm of their hand. They use facebook and social media to foster
relationships with potential clients for free and can advertise with the click
of a button.
With the rise of Zillow and other similar home searching sites, consumers
can enjoy access to 98% of the information on their neighborhood of
choice, it’s housing stock, individual homes property features, tax records,
etc.. Serious buyers are looking at homes while sipping their morning
grande blonde with room for cream (that never gets room and I have to
poor out into the trash). They are looking at homes on their lunch break/all
day in their cubicles on the second chrome window that is minimized when
the boss walks by and it is the last thing they do before putting their phone
down for the night as they close their eyes dreaming of finding the perfect
place in the perfect neighborhood. These buyers are the kind that call their
agent when a new home comes on the market before the agent even
knows. These are the buyers who will find your home regardless of the
card stock thickness of the shiny marketing materials or the historical sales
volume of an agent, or the shiny personal agent IDX websites with all the
bells and whistles.. that their client’s won’t really use because they prefer
the superior user interface of the big sites, Zillow, Trulia, Realtor, etc..
If information is power, and it is, then consumers hold more and more of
the power. Listing commissions haven’t fallen much in the last 50 years.
Actually the last decade, born out of the financial crisis and the great
recession of 2008, has seen a rise in discount brokerages, who are
essentially glorified fsbo companies who will list your home and not do
much beside that for a smaller % or a flat fee. And now there are instant
offers from Zillow and iBuyers who will offer to buy your home without any
agents and with cash in a matter of days. This is not good for the 1.3
million Realtors whom are particularly sensitive to the idea of home selling
process not having any agents involved in the near future.
The national average listing commission has ticked down more in the last
decade than in the previous 50 years, but not at the pace it should given
the market dynamics, information availability, and technological
advancements described above. The trendline is there though, and it is
only going to decrease commissions at a faster rate as more and more
consumers become enlightened to these facts.
This is why we opened 2% Realty Inc. for business. We believe that
consumers have been overpaying - both buyers and sellers - for years and
rather than ride the wave until it collapses we want to lead the charge of
making buying and selling more affordable for consumers. We have
determined that we can operate our business which has low overhead, no
legacy costs of expensive offices filled with underperforming agents and
franchise fees; utilizes free SEO, blog, and social media; along with paid
advertising through FB, Google, Instagram, and Zillow; and the traditional
methods of mailers around the home being listed, open houses, and
knocking on the doors of the neighbors; and earn a decent profit while our
home seller’s pay 40-60% less in commissions. Also note our buyer
client’s receive a 50% rebate on other companies listings! We believe our
concept is win win win and when combined with these suggestions, give
seller’s the best possible chance currently available to maximize their
Have a pre-sale home inspection. This will cost you 300-400, but will
identify a laundry list of hopefully small imperfections that the homeowner
can address before they go to contract after already negotiating a price and
then having to negotiate again on price after the buyer gets a home
inspection. This will minimize any potential for this double dipping that
many buyers try and take part in and who many home inspectors play to
ensure happy buyer clients. This will save you headaches and money in
the long run.
If the home inspection does uncover larger defects at least you will be able
to have time and space to figure out a plan to deal with, and not under the
pressure of being in the middle of a sale. This may also give you a better
idea of where to potentially make some upgrades to help sell the home
faster. When making improvements it is important to do it right the first
time or don’t do it at all. Everything depends on local market
characteristics, but I’ve seen over and over again homes that were
remodeled in DIY amateur style where I could tell they spent some real
money but didn’t spend it wisely. Whether it was buying the cheapest tile
possible in a new green/yellow tone you haven’t seen since staring into the
toilet bowl freshman year of college, or hiring a handyman who does
everything ok for a great price- details matter, so pick a cheaper tile but a
neutral color if its on sale, and make sure to get multiple bids with
references for contractors who specialize in what they do, ie HVAC
company to replace the furnace, electrician to put in a new panel, etc.. If
you aren’t going to do anything to prep the home, this should be reflected in
the price. I would nearly always recommend deep cleaning, painting
neutrals over bold loud colors, and offering a home warranty at a minimum.
Beyond that, dressing up the house from the outside, enhancing curb
appeal’s importance, cannot be overstated. If you can’t get people in the
home because of the appearance on the outside it doesn’t matter what you
do on the inside. Painting a lighter color that compliments the
neighborhood, trimming shrubs and trees, planting in season perennials,
and a nice colorful rich door will all be expenses that will pay off multiples.
If you can make energy efficient upgrades all the better. If you do this,
make sure your agent knows about it and can update the marketing
materials to inform buyers of how the home will save them more money
compared to homes without energy saving features
As the conventional wisdom goes, buying and selling a home, for most
people involves the largest investment they will have to contend with in
their lifetimes. It can be challenging, stressful, and full of charged emotions
threatening at every stage to blow your deal up. The good news is as long
as you understand this ahead of time, you can make preparations to
manage the process in order to best minimize issues and conflicts and
make more money! In addition to making smart upgrades, a pre-sale home
inspection, please do yourself a favor by not paying the commissions of the
past! Make more money by listing your home with an experienced broker
who will negotiate on commission or better yet work with our brokers who
charge only 2% listing fee. Not 2% for us and sneaking 2% for the buyer’s
broker. Just 2% Period. It’s your home, the serious buyers of today and
the future will find your home, make more, list for less!