This was originally published on Monday, March 09, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
When selling a home you have a lot to consider. Besides the price or condition of your home there are outside forces that come into play that can make selling your home a challenge. One of those forces is the type of market in which you are selling your home. You probably heard of a “buyer’s market” and a “seller’s market.”
A buyer’s market is caused when the homes for sale outnumber those that are looking to buy. In other words, the buyer has the advantage because there are more homes to choose from. Because of this competition to sell, buyers can negotiate prices usually much lower than the seller wants. If you can hold out to find a buyer willing to pay close to the asking price, it would definitely be worth it. But if you need to sell the home to purchase another home or need that money for other reasons, the advantage is definitely on the buyer’s side.
A seller’s market is just the opposite. In a seller’s market, there are more buyers than there are homes for sale. The advantage goes to the seller because the completion is lower and the demand is greater. The seller can usually get their asking price and sometimes more if the competition to purchase the home is great.
These markets can fluctuate from one minute to another. A geographic region can have several different markets. For example, a newly built housing development may entice more buyers than there are homes for sale compared to an established neighborhood just down the street. It is best to take a look in your neighborhood and study how long a house stays on the market. Look at homes that are comparable to yours in size, condition and location.
Another factor that comes into play is how you sell your home. Do you want to hire a real estate professional to assist you or do you want to sell your home yourself? As with any major decision there are pros and cons for both.
There are several different real estate professionals that can assist you. Each can help you sell your home, but experience and education can make a difference.
Real estate agents are anyone who has taken a number of classes and pass a test earning a license to sell real estate. Real estate agents cannot work independently and are employed by a broker.
Real estate brokers have been a real estate agent for a period of time and who have continued and completed their education past the real estate agent level. They must also pass the broker’s license exam. A broker can work independently or they can run their own firm and hire agents to work for them. Brokers can conduct appraisals and ensure that transactions are properly completed.
A REALTOR® is a real estate agent or broker that is a member of the National Association of REALTORS®, NAR, and has completed ethics training. REALTOR®s maintain the strictly enforced code of ethics and standards of practice set by the NAR.
As the seller, when you enter a contract with a real estate professional he/she becomes your representative and is legally obligated to represent you and your financial interests. Usually the buyer will have a real estate professional who will represent their financial interests. If these two real estate professionals are from different brokerage firms, the process is pretty straight forward. But, it is possible that the seller’s and buyer’s agents work for the same brokerage firm. The brokerage firm is called the designated agency. The agency must abide with strict confidentiality to both parties and represent both parties fairly. On rare occasions one real estate professional may represent both the buyer and the seller. This situation can be quite complex since the real estate professional must remain confidential and perform in a manner that is not detrimental to either party’s financial interest.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.