How many times have you been told “You make a lot of  money”.  We have heard it time and time again, but does a REALTOR really make a lot of money?  Let’s take a look.

We would say that the two most important questions on a home sellers mind is How much is my House worth?  And the second most important question, however it usually takes a while to get to it is; How much do you charge to Sell my house?

These aren’t the only questions you will be asked, but for sure are the most important questions weighing on the minds of the Home seller.  We think it’s important to breakdown the two questions to help better understand the answers to both.

How much is my House worth?

We would like to tell you that it is a simple calculation, however it is not.  It is based on the history of the market and not the future of the market.  Even in a rapidly growing Real Estate Market the value of a home is based on the value of the homes that have recently sold in the past.  That is not to say your house can’t be listed at a higher price because the market is trending up.

What is the definition of recently?  If an appraisal is necessary for the sale of your home an appraiser typically will go back 6 months, however in a rapidly growing market, they may only go back 3 months in order to keep up with the rapid advancement.  What’s important to note here is that it is subjective how far back an appraiser may go.  Here is an example that happens more often than you might think.  A home is in the process of being appraised, however there hasn’t been any “solds” in more than say 6 months or even a year in the neighborhood.  Now in a rapidly advancing market, those comparatives would be more than a year old, and in most cases the evaluation of your home would end in a lower price evaluation because of it.

When it comes to determining the current market value of your home, a professional REALTOR is going to take their time in reviewing previously sold homes in your neighborhood and possibly a mile or two radius from your neighborhood if comparative homes are not readily available.  They will also communicate this information to an appraiser and work with them to ensure the property is properly evaluated.  Relying on a professional REALTOR who has the expertise of the area and knowledge of how an appraiser evaluates a home is a critical component to determining market valuation of your home.  However a homes evaluation doesn’t stop there, it is also based on the REALTORS knowledge of the area, their knowledge of inventory on the market at any given time, and their ability to walk through your home and add up those little details that are not so easy to quantify.

So to answer the question, What is my House worth?, is not an easy answer.  It is a complicated calculation.  When you employ a professional REALTOR to determine your homes value there is significant work and insight that goes into determining a Home’s Value.  All of the technical and intuitive skills of the REALTOR will guide them to determine what is the best possible price your house may sell at.  This will help to position the value of your home with the appraiser when the time comes.

How much do you charge to Sell my house?

We greatly appreciate a home seller who asks us to discount our services, after all it shows that they are looking for the best deal possible and it allows us the opportunity to talk about the process of selling a home.  There is nothing wrong with that.    And when we tell them that we charge 3% of the sale price that may seem like a tremendous amount of money.  But let’s look at how that commission is used.

Of the 3%,  3/4% goes to the Broker and Franchise Fees.  These fees allow us to work as a REALTORS, it allows us to “hang” our licenses.  Not only do  they allow us to work, they also provide us with all the tools necessary to sell our clients home including legal support to verify that all the details of your home sale are correct and legal.  This is so you don’t have to also hire a lawyer to protect yourself, essentially doubling your costs.  As a professional REALTOR we have fiduciary responsibility to our client and we take it serious.

Then we have about 1% that goes to Marketing your home.  What does that mean?  For us Marketing does not end at putting a sign in your yard and putting your house in the local MLS.  No, marketing your home is the most crucial part of ensuring that the highest number of people see your home.  Marketing costs may include Professional Photography, Graphic Design, Promotional Ads in both Digital and Print formats, Print Marketing, Digital Marketing, Website syndication, National and International Syndication, Direct Mail targeting, Local REALTOR Tours, Video Marketing, Virtual Tour Marketing, Digital Magazines, Social Media Marketing and the latest in Mobile Technology Marketing.

That leaves about 1-1/4% for us.  Once we back out the Transportation, Logistics, Continuing Education, Multiple Listing Service and Lock Box fees that leaves us with roughly 1% of the sales price of your home. Then 35-40% of that is paid to State and Federal Taxes.  That is a fairly consistent breakdown of how that 3% your going to pay us to sell your house is utilized.

Now, understanding that if we were to discount our services, we still have Brokerage, Franchise Fees, State & Federal Taxes, Continuing Education and other bills to pay and food to buy just like everyone else, so the discount has to come from somewhere.  And  it will always come from Marketing.  MARKETING YOUR HOME IS THE KEY TO SELLING YOUR HOME.  Discounted services will hurt the ability of your REALTOR to sell your home.

When sitting down with our Client during the listing appointment, instead of asking us to discount our services, ask us how our marketing plan is going to help  to sell your home.  We are very proud of our marketing programs and the value they bring to our sellers and often times there isn’t enough attention paid to that part of the discussion.

So ask yourself, do you want to sell your home or simply list your home?

At Better Homes and Gardens Real Estate Sonoran Desert Lifestyles not only do we have ensure our Clients get the best Marketing plans out there.  We also make sure that our Professional Agents know how to use these tools to succeed.