WRITTEN BY MIKE KALIS
POSTED ON WEDNESDAY, 28 FEBRUARY 2018
No matter who you are or where you live, selling a house can be a huge pain. Besides usually paying a hefty 6 percent commission in the process, there are constant open-house showings that require you to clean up, deal with the kids and the dog, and make sure the goldfish is on lockdown.
Even in a white-hot market, average sales times are about three months. That means some homes sit for as long as six months. If the market is moving more slowly, the process only gets dragged out longer.
A big problem in the home-selling process is that so many realtors are inexperienced. They start by telling you they can get more for your home than it’s worth. Then, only after you enter into an exclusive listing arrangement that lasts six months, they will back off and say the price needs to be lowered to drum up interest. Ultimately, the woes in the current real estate climate are primarily the result of misaligned interests. Realtors might be using your listing as a marketing tool to acquire new leads instead of truly working toward selling your home.
Fortunately, trade-in programs have emerged to solve many of the headaches associated with the home-selling process.
From a Need to an Advantage
We started our trade-in program at Marketplace Homes back in 2003 because we believed there was a huge niche — especially in the new construction industry. This belief came from my experience working for a builder when I saw plenty of homeowners have a catch-22 experience.
They’d need to sell their home to remove some of the financial strain of building a new one, but the construction process took months to a year to complete. Once their home was sold, they would have 30 days to move out, leaving them without a place to stay. Other clients started construction only to have their current home sit on the market for ages, forcing them to double down on payments.
Through these scenarios, the trade-in program model has a big advantage over traditional home sales. We make homeowners an offer first, and if they accept, the home is sold and closes back to back on the same day as the new home, relieving the stress of unpredictable timing conflicts.
Get the Most Out of Trade-In Programs
Aside from Marketplace Homes, there are at least three other viable trade-in programs already in the market. We’re all going to say why we’re great, but at the end of the day, it’s about the check in your pocket. Money is a commodity, and if one offer stands above the rest, it makes sense to take it. With that in mind, here are four ways you can get the most money out of whatever trade-in program you choose:
Know your qualifiers. To avoid wasting time and adding frustration to the home-selling process, make sure you understand how your home must qualify for your desired trade-in program. For starters, you might need to secure a mortgage on a new home, and because a trade-in program isn’t a mortgage company, seeking out and being approved by a lender is a must. Your home also has to qualify for the specific program. At Marketplace Homes, for example, we’re looking for homes between $70,000 and $500,000. If you’re outside this range, we’re not interested in buying. Finally, there needs to be a neighborhood at the right price point and in the right area that works for you in order for the program to work.
Take photos seriously. Think about it: No one has ever bought a home without looking at it. It's important to submit interior shots, but don’t walk around your dim, dirty home and take blurry cell phone photos. This seems like a no-brainer, but you'd be amazed by what homeowners send our way. Remember, there are actual people valuing your home based on the material you send them. In fact, The Wall Street Journal reports that buyers allocate 60 percent of their time for examining photos, compared to 20 percent for the listing description and 20 percent for the agent description. Your sink full of dishes could literally cost you thousands of dollars. Clean up, open some windows, turn on the lights, and take high-quality pictures. It’s well worth the effort.
Utilize automated valuation metrics. All trade-in programs calculate your home’s value — at least in part — with automated valuation metrics. To stay up-to-date, go on Zillow and make sure the information logged there is correct, such as square footage and extra features, including hardwood floors, remodels, garage space, bedrooms, and bathrooms. Zillow feeds information to many other AVMs, so a mistake can undercut your valuation before the process even begins. Again, this is an easy step to complete but can quickly turn into a money suck if not taken seriously. So don't delay. Keep track of your home's assets, and don't hesitate to let them be known.
Ask for more. Most trade-in systems don’t come with a lot of wiggle room, so asking for an extra $5,000 will likely get shut down. On the other hand, $1,000 might get accepted if it's a great home because nobody can tag a price on a property down to the dollar. While talking with your trade-in program rep, flex those negotiation muscles to bump up the selling price. As long as your counter offer is within a couple of percentage points, you might not be rocking the boat too much, and you could be singlehandedly beefing up your wallet. The worst-case scenario is that they'll just say no.
Trade-in programs represent a new way to sell a home, and without a doubt, they have great potential. The current real estate climate is ripe for change, and buyers and sellers are eager to see what non-traditional options are available. When it comes time for you to move, be sure to check out the possibilities offered by various trade-in programs. Taking the plunge to ask more questions, being vigilant in taking high-quality photos, making sure your AVMs are accurate, among other steps, could save you tons of hassle and help get you into the home of your dreams sooner than later.