Thinking of Selling? First Get Analysis

SPECIAL TO THE TIMES

You own a snug bungalow. For better than a year you've thought about moving to a larger house with a bedroom for every kid. But you're not sure. All the talk about soft housing prices has you worried what your bungalow would fetch.

Then you get an idea. Why not test the market by putting the bungalow up for sale before actually committing to let it go? After all, don't politicians test their presidential chances by tromping through the snows of New Hampshire?

But what seems like a bright idea is not so bright, realty experts say. Sure, you'll get a notion what your house might bring if prospective buyers start to nibble. But the market will soon realize you're playing games. And when you're finally committed to sell, the excitement will have drained from your listing.

"When you're false fishing, all you do is wear yourself out, exhaust the agent and aggravate buyers who come down the line," said Norman D. Flynn, a realty executive and former president of the National Assn. of Realtors.

A far better way to gather information for a selling decision is to ask at least three reputable agents to give you a free "market analysis." By comparing your home to similar properties in your neighborhood, a good agent will come up with a realistic estimate of your home's value.

False fishing is one of the five most common mistakes people make when they're trying to decide whether to sell. Here are the others:

--Mistake No. 2: Waiting until you actually sell before getting a market analysis.

Only 5% to 10% of U.S. home sellers seek such information before selling, according to Monte Helme, vice president of Century 21 International. It's understandable some homeowners must hurry--perhaps because of an unexpected job loss or transfer. But many sellers have time to decide and could benefit from an early market analysis.

You needn't feel guilty or intimidated about calling realty agents before deciding whether to liquidate your home, Helme said. "All you have to do is call and say you don't want to sell right now--that you just want to know what the property is worth."

Doing the market analysis early gives you a base line to decide whether selling the home will accomplish your goals, said Karl Breckenridge, author of "Staying on Top in Real Estate," a book published by Dearborn Financial Press.

"In most parts of this country, you can get an agent faster than a cab. Plus, a market analysis is a free service of the real estate industry. So why not take advantage of it?" he said.

--Mistake No. 3: Failing to ask an agent doing a market analysis for a net figure on what your home could bring.

"The net and gross are two totally different figures," Helme said. Sellers typically face several transaction costs to unload a property. If they hire a full-service agent, as most sellers do, they're likely to pay a hefty commission as well. All these deductions can significantly reduce your bottom line.

Some agents, especially the inexperienced, may be sheepish about writing down a commission figure, Helme said. They fear you'll cringe at seeing the size of the number and will seek another agent. Or they worry you'll try to sell the property on your own.

But unless you demand all the numbers, you won't have a realistic picture of what a selling decision would mean financially and whether you can afford to make the move you contemplate.

--Mistake No. 4: Failing to tell an agent doing a market analysis about defects in your home or the surrounding area.

"It's like a mental computer process. You put garbage in and you'll get garbage out," Helme observed.

"It can be painful for consumers to tell anything negative that could hurt the value of their home. But if you're sitting on some radon gas or a dump site, or if a freeway will be cutting across your back yard, you'll want to tell the agent to get an accurate figure on what the property will bring," Helme said.

--Mistake No. 5: Failing to make sure your market analysis is professionally done.

A minority of agents take a less-than-professional approach to preparing a pricing estimate, Helme said. Some are casual in their selection of comparables--similar properties used to judge a home's worth. Others deliberately estimate high--believing you'll be flattered into selecting them as the listing agent for your property.

To develop a serious market analysis, you can expect an agent to spend at least an hour doing a preliminary interview at your home, another hour back at the office and a final half-hour explaining the results. You can also expect that comparables will be truly similar properties.

"Anything less than that is a 'kiss and run' analysis and will do you very little good," Helme said.

Distributed by Universal Press Syndicate

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
70°