Selling your Kansas City house through an agent? Make sure you read this blog post that reveals 4 mistakes you should avoid when listing when an agent in Kansas City…
If you’re looking to sell your Kansas City house, or if you’re an agent who is selling houses in Kansas City then here are 4 mistakes you should avoid when listing when an agent in Kansas City…
First, Don’t Assume That You Can Sell Right Away
The market varies and can even shift from one day to the next, depending on a number of factors. So make sure you set realistic timelines about how long it will take to sell.
If you are a seller, assume it will take months for the sales process to be completed – from fixing up the house to showing buyers to negotiating to setting a closing date to moving out. If you are an agent, be careful not to over-promise a timeline to your sellers – set their expectations.
Historically in Kansas City we see the sales of homes peak March through June with Home Buyers wanting to find a house and be all moved in before school starts in August. So the best time to target getting your house on the market is mid March. The slowest time to sell a house in the Kansas City Market is November, December and January as everyone is busy with the holidays and recovering from the holidays.
Strangely enough we also see sales slow down in the 3 to 4 months leading up to a presidential election as everyone is afraid to spend money because of what might happen. And then right after the election, we see a lot of contracts written in the next week.
Second, Don’t Assume That The Asking Price Will Be The Selling Price
The asking price is the starting point in the sales process – it establishes what a seller wants to sell for.
If you are a seller, realize that the actual selling price might be different than the asking price. If you’re an agent, make sure you explain this to your sellers.
It is always a good idea to review your listing price as you market. So let’s assume you listed your house today with a Realtor. You would want an update to find out how many showings happened in that week and what the buyers’ agents and buyers though of the property. If you have no showings in your first 2 weeks and it is a peak time to be selling a house (not November, December or January), the it may be that you need to adjust your price. If you are getting a lot of showings but no offers, be sure to see what the feedback from the buyers and their agents might be. They will tell you if you are over priced.
Third, Don’t Assume All The Money Goes Right Into Your Pocket
Some people make the mistake of assuming that the selling price (minus anything they owe on their mortgage) is pure profit. But this is not true.
If you are a seller, make sure you know that there will be agent commissions, closing costs, and other fees you’ll have to pay. If you’re a real estate agent, make sure you explain to your customers.
On a typical $150,000 sale of a home there are some typical fees you might see:
- Six to Eight Percent commission or $9,000 right off the top.
- Title Policy is usually paid for by the seller and will cost $500
- Closing Fee to go sign papers is about $225
- Cost to record paperwork $32
- If you have a mortgage you will have to pay the amount owed plus interest accumulated till closing
- Your taxes will be prorated, so you will credit to the buyer the taxes for the part of the year that you owned the property.
The above are just the typical costs. Often times the buyer will also perform an inspection and determine that this or that needs fixed. When we sell a house that has not been 100% renovated, and even then, we almost always end up spending about $1500 on repairs the buyer wanted completed before they closed.
So if you look at listing and selling a typical $150,000 house, you can usually figure you are going to spend about $10000 to $12,000 either out of pocket in the case of the repairs or out of proceeds in the case of commissions and prorations.
Also keep in mind that if you list a house today and got an offer on today, that the soonest you will be closed with the average buyer, average inspections, average appraisals and average lender time frames, will be about 45 to 60 days. If you get an all cash buyer, they can close sooner, but when you get all cash, you usually have to trade off the speed of all cash with a lower sales price.
Fourth, Don’t Assume That The First Offer Will Go Through
Buyers often make offers and then discover that they can’t get financing for some reason.
If you are a seller, be prepared to have one or two buyers fall through before a buyer can be found. If you’re a real estate agent, prepare your sellers ahead of time by explaining this so they can be ready in case it happens.
Note that if you are selling with a Realtor and the buyer is represented by a Realtor, that most of these transactions will go through eventually. However, not always. If the buyer is not -pre-approved, don’t accept an offer from them until they are pre-approved, read their letter and talk to their lender. On our typical sales here at kcmoHomeBuyer, I would say that 9 out of 10 of our sales to home buyers getting a loan go through no problem, its that 1 out of 10 that cause issues.
If your buyer is a cash buyer, ask them where the cash is coming from. Why? Because many Cash Investor Buyers out there just graduated from real estate investor training class last week and they want to get your house under contract so they can then shop your house with their buyer list and find someone who will pay more. Here at kcmoHomeBuyer we do have some cash set aside in a bank account for purchases and we also have 3 or 4 other individuals with about $100,000 each set aside in a bank account to lend to us so we can make an offer on a house today and close on it and pay for it in about 7 to 10 days. Many of our competitor cash buyers want 30, 45 to 60 days to close, that is a good sign that they don’t have the cash or easy access to the cash.
Whether you’re a property owner looking to sell, or you’re a real estate agent who is representing sellers, these are 4 common mistakes that can happen during the sales process – so make sure you’re aware of them.