12 ways to get ripped off when you sell your home

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    10-Feb-2017

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  • 12 Ways to Get Ripped Off

    When You Sell Your Home

  • You worked hard for

    the equity in your home

  • Why give it away so thoughtlessly?

  • When you sell your home, your objective is...

  • ...to keep as much of your equity as possible

    ...to keep as much of your equity as possible

  • But you probably wont

    You will get ripped off

  • And the worst part is...

  • ...it will be invisible

  • You will get

    ripped off AND

    you will never

    know it

  • You will pocket less money from the sale

    of your home than you should, BUT...

  • ...you will think you did just fine

  • The first step to avoiding these rip-offs...

  • ...is to know about them

  • There are (at least) a dozen ways to get

    ripped off when you sell your home

  • And it is doubtful you know about ALL of them

  • Make sure you understand them all

  • Or your hard-earned equity...

  • ...is going

    into

    someone

    elses bank

    account

  • 1 You Will Choose a Lousy Real Estate AgentStudies* show two thirds of home sellers only speak

    with one agent before selecting one. The reason?

    Most home sellers have no idea how to tell a good one

    from a bad one so why bother interviewing them.

    You are going to hire a temp employee and pay them

    $10K or $20K or $30K to sell your home. You should

    know how to tell a good one from a lousy one.

    *Citation

    http://www.realtor.org/sites/default/files/Highlights-NAR-HBS-2013.pdf

  • 2 You Think Paying a Real Estate Agent 6% Commission is the Only Choice You Have

    Paying a 6% commission to sell your home is THE most

    expensive way to sell your home. Other options, such

    as flat fee and fee-for-service, will save you a lot of

    money. You should not be afraid to consider them.

    If you do insist on using a percentage-based

    commission, at the very least you should negotiate a

    substantially lower rate.

  • 3 You Will Pay Too Much Commission Because You Have No Idea How to Negotiate

    If you are like most home sellers, you will invite an agent

    into your home to give you a listing presentation.

    Towards the end you will feebly attempt to get them to

    come down on their commission, but at that point it is too

    late. Your window for negotiating has already closed.

    Nothing will preserve your home equity better than

    understanding how to effectively negotiate a lower

    commission with your agent.

  • 4 You Will Pay Too Much Commission Because You Believe the Big Lie

    What is the Big Lie? You get what you pay for. Not true.

    Research* conducted by Consumer Reports found...

    Sellers who paid 3% were just as satisfied as those

    who paid 6%.

    Paying less did not hurt the quality of service.

    Those who paid 6% were more likely to have regrets

    about the selling process.

    *Citation

    http://pressroom.consumerreports.org/pressroom/2008/08/consumer-reports-survey-home-sellers-can-haggle-on-broker-commissions-paying-less-may-not-hurt-service-or-sale-price.html

  • 5 You Will Unwittingly Give a Big Chunk of Your Equity to the BuyerToday, it is not uncommon* for buyers agents to give a

    portion of their commission (which you pay for) to their

    buyer. This helps them attract buyers, but does not do

    a thing to sell your home.

    This is wasted money, and effectively lowers the

    selling price of your home. You need to have a

    strategy for how to keep that money for yourself. After

    all, its yours.

    *Citation

    http://money.cnn.com/2006/04/10/real_estate/buyers_target_commissions/

  • 6 You Do Not Understand the Conflicts of Interest Between You and Your Agent

    It is called the Principal-Agent Problem and it causes

    good agents to give sellers bad advice. Research*

    conducted by two Stanford professors found that agents

    distort information to mislead clients. It explains why

    agents sell their own homes for 3.7% more than the

    sellers they represent.

    Smart home sellers know how to eliminate, or at least

    reduce, the Principal-Agent Problem.

    *Citation

    http://www.nber.org/papers/w11053

  • 7 You Have No Idea What a Pocket Listing isA Pocket Listing is when your agent keeps your listing

    off the local MLS (Multiple Listing Service). They do

    this so they can keep the buyers agents commission.

    Research* by San Francisco real estate agents found

    that pocket listings, by severely limiting the homes

    exposure, can cost home sellers as much as

    $200,000.

    *Citation

    http://www.jacksonfuller.com/off-mls-sales-in-san-francisco-foul-ball-or-home-run/

  • 8 You Will Allow Your Agent to Function as a Dual AgentDual Agency is when your agent also represents the

    buyer. You may not think it is a problem, but the consumer

    advocate group CAARE calls dual agency The Biggest

    Consumer Scam in Real Estate*.

    Research** conducted at Cornell University found that

    dual agency homes sold for 8% less. That equates to

    $24K on a $300,000 home.

    *Citation

    **Citation

    http://www.caare.org/DualAgencySchemeshttp://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1277&context=articles

  • 9 You Will Pay for a Pre-listing Home InspectionSome real estate agents will try to convince you to pay

    for a pre-listing home inspection in the hope that you

    will fix any problems that it uncovers. Fixing all the

    problems certainly makes the agents job of selling your

    home easier.

    Unfortunately, a pre-listing home inspection can never

    save you moneyit can only cost you money. Save

    your money and let the buyer pay for it. After all, it

    benefits them to find hidden problems, not you.

  • 10 You Will Pay for the Buyers Home WarrantyBuyers benefit from a home warranty. Why should the

    seller pay for it? Because they provide secret

    incentives for real estate agents. Many Realtor

    Associations now include a check box for buyers to

    select on the purchase agreement requiring the seller

    to pay for a home warranty as part of the transaction.

    You do not have to agree to this.

    Visit RipOffReport.com to see all the problems with

    home warranties.

  • 11 You Have No Idea How to Combat Buyer SteeringIn the event you negotiate a less-than-customary

    commission (i.e., 6%), some agents representing

    buyers will actually try to steer their buyers away from

    seeing your home in an effort to punish you for offering

    such a commission. And less traffic generally means a

    lower sale price.

    Even though this behavior is a violation of the Realtor

    code of ethics, research* conducted at the University of

    Chicago confirms that buyer steering does exist.

    *Citation

    http://home.uchicago.edu/~syverson/discountagentsantitrust.pdf

  • 12 You Will Use Service Providers Affiliated With Your AgentBy using title and escrow services owned or affiliated

    with your agent, not only do you forfeit the opportunity

    to shop for a better price, but you destroy the integrity

    of these vital checks and balances.

    Research* indicates that these affiliated service

    providers lead to market manipulation and artificial

    price increases that cost consumers in one state an

    estimated $100 million.

    *Citation

    http://www.caare.org/MinnesotaPriceFixing

  • So, now

    that you

    know

    about

    these

    rip offs

  • What will you do to combat them?

  • How about some education?

  • I will teach you

    how easy it is to

    preserve your equity

  • At a FREE mini course called

  • Introduction to

    The Intelligent Home Seller

  • To register...

  • Go to End Of Six Percent

    Im Carl Weisman and

    I help home sellers preserve their hard-earned equity

    Why do I do that?

    Im sick and tired of home sellers being intimidated into

    squandering away their equity due to an abundance of fear and a

    lack of education

    http://endofsixpercent.info/