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 HomeYou worked hard for the equity in your homeWhy 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 possibleBut you probably wontYou will get ripped offAnd the worst part is......it will be invisibleYou will getripped off ANDyou will never know itYou will pocket less money from the sale of your home than you should, BUT......you will think you did just fineThe first step to avoiding these rip-offs......is to know about themThere are (at least) a dozen ways to get ripped off when you sell your homeAnd it is doubtful you know about ALL of themMake sure you understand them allOr your hard-earned equity......is going into someone elses bank account1 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.*Citationhttp://www.realtor.org/sites/default/files/Highlights-NAR-HBS-2013.pdf2 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 NegotiateIf 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 LieWhat 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.*Citationhttp://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.html5 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.*Citationhttp://money.cnn.com/2006/04/10/real_estate/buyers_target_commissions/6 You Do Not Understand the Conflicts of Interest Between You and Your AgentIt 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.*Citationhttp://www.nber.org/papers/w110537 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. *Citationhttp://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**Citationhttp://www.caare.org/DualAgencySchemeshttp://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1277&context=articles9 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.*Citationhttp://home.uchicago.edu/~syverson/discountagentsantitrust.pdf12 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.*Citationhttp://www.caare.org/MinnesotaPriceFixingSo, now that you know about these rip offsWhat will you do to combat them?How about some education?I will teach you how easy it is to preserve your equityAt a FREE mini course calledIntroduction toThe Intelligent Home SellerTo register...Go to End Of Six PercentIm Carl Weisman and I help home sellers preserve their hard-earned equityWhy 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 educationhttp://endofsixpercent.info/