How a Seller lost over $62,000 trying to save $6,000- A true story in San Diego
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It sounded so simple. Save 1% on the sale of your home the ad read. It was the beginning of May 2004 at the height of the San Diego real estate market. A house with the exact floorplan from theirs and almost identical upgrades just sold in the neighborhood for 600K. They thought their house was a little nicer and wanted to get 610K. So they called listing agents and went with a popular pitch from an agent who promised them a savings of 1% off the sale of their home- Approximately $6000. They were going to save 6K on the sale of their home and move up to a larger home. Unfortunately, they didn't really compare their net income from the sale.
The problem was they lost money instead of saved it. Their house was listed for 9 months and go tons of showings but no offers. Another house in the neighborhood across the street sold for over $600,000 while listed at the same time as theirs. That other house sold in only two weeks. They counted the business cards after the first month, they had over 40 agents and clients view their home.
After the first month, they almost never heard from their agent. There were a couple of phone calls about offers coming in, but they never received them. After the first six months, their home expired but the agent convinced them to relist it again with them, it would sell this time around. Three months later there were still no offers.
In the meantime, interest rates went up. The number of listings competing with theirs increased and they got fewer and fewer showings for their home. They decided to take the home off the market for awhile.
When all the costs were added up, their monthly payments for mortgage, insurance and taxes totalled approximately $2600/month. In addition they had all that time of keeping the house clean, and strangers walking thru their home.
In the end, because of the changing interest rates, their house was worth less.
They listed it with me using my sales system and we sold it in 10 days for a price of $575,000. Had I listed it originally, I strongly believe it would have sold for the original $610,000 they had asked for.
Here is the math, skip it and see the summary below if you wish:
In reality, here is what the sale cost them.
Original List price and net with listing if I had listed it and sold it the first time around: $610,000- commission = $573,400 net
Actual Original list price and net with listing with discount broker who didn't sell it: $610,000- commission = $579,500 net.
Had the house sold with the discount broker they would have saved $6100
But in reality:
9 months of carrying costs while listed originally (mortgage, taxes, etc.) $2600 x 9 months = $23,400
Actual sales price with higher interest rates (14 months after original listing) $575,000- commission = $540,500.
True net to sellers = 540,500 - 23,400 = $517,100
So the actual difference to the sellers was $62,400 less because they tried to save $6000.
They didn't save any money and lost 62 thousand dollars and also had 13 months of hassle.
Don't let this happen to you, please talk to me about how I can maximize the net profit for the sale of your home and sell it quickly. My record speaks for itself.
Click here to go to my website and contact me