Hi, I’m Phil Pustejovsky with FreedomMentor.com I’m a full time real estate investor. I’m a real estate coach and mentor to some of the most productive and successful real estate investors in North America. In this blog, I want to share with you a very important part of the process of selling a live, something that so many people make a mistake on. It’s extremely costly. On one deal alone, it could cost tens of thousands of dollars. If you’re a real estate investor and you do various slews, it could cost you, perhaps millions of dollars over the course of a career.

You’re also going to discover in this specific blog, I’m particularly biased, opinionated, and passionate because it’s decisions like this that have cleared my fiscal future but it also could have broken it. My support is based on the relevant recommendations that I am going to make money on my real estate business as well as now that I mentor and coach. My apprentices, when I split the profits with them, those slews have to close, so I’ve literally had to, in the real world, event this lesson to be able to share it with you. I hope that this is going to save you coin, shorten headaches and heartaches when you sell a live, whether you’re just a dwelling proprietor or you’re a real estate investor.

What is This Kiss of Death?

What is this mistake that costs people tens of thousands of dollars? It’s this.

When a House Sits on the Market For a Long Period of Time

That’s it.  Now in the lexicon of a real estate MLS listing, it would be called Days on Market or the short version of that is DOM. Okay, so I’m going to take you inside this a little bit rather than just telling you what time it is, I’m going to show you how to build a watch here. I think it’s critical because it’s such an important exercise. I would argue that many of you would get done reading this blog you are able to think it’s terrifically helpful, you are able even share it with acquaintances and family, but then in the real world, you forget and still do this. I want to drive this home because it’s so, so important.

Days on Market

I want to start off by suggesting you watch the following videos of mine:

Simple Tip to Sell Your House Quick

The Biggest House Flipping Mistake

If you’re house is listed on the MLS or on the market, the longer the period of time it has been listed, the less desirable I becomes to potential buyers.

The Psychology of Persuasion

Now here’s the psychological reasoning behind this.  Human beings are hardwired for certain, it’s very interesting, Robert Cialdini, he wrote the book The Psychology of Persuasion. He related a few of these. One of them being social proof.

Social Proof

Have you ever looked at an essay and witnessed fourteen hundred comments and hundreds of thousands of Facebook likes and all sorts of other social shares, and you thought to yourself,” Hmm … This must be an interesting essay. Look how many people have read it. Look how many people are provide comments on this article .” That’s called Social Proof.

A Simpler Example

If you’re walking through a city and someone travels “look there!” and looks up at the sky and some other people look up. You can’t help but look up and see what’s going on, right?

Pertaining to Real Estate

• Social proof:
  • We are hardwired to follow the crowd.
  • Social proof can work in reverse as it pertains to selling a live.
  • That is as the working day on marketplace goes up, what happens is, the issues to becomes to a prospective buyer, they’re going to ask their buyer’s real estate agent,” How long was this put one over world markets ?”
  • If the agent says,” It’s been on the market for a hundred and twenty dates .” What’s that buyer going to think to themselves?
  • What’s going on? Social proof in reverse, isn’t it? Why has nobody else bought this property? What’s going on? This is another part of it too.

It causes kind of a domino effect because not only does it look inadequately upon the house, that there’s been a higher dates on marketplace, but also people are pre-dispositioned to do more to avoid paying than to gain please. We can thank Tony Robbins for discovering that.

What That Means

In the casing nature when you’re trying to sell one, that they might be concerned that they’re walking into a coin cavity, or they’re going to get clamped, or in some they’re going to miss something. They’re more just scared making a bad decision than moving the good decision to move into that home which could be a wonderful dwelling, great backyard, two car garage. It may have everything they require, but the working day on marketplace is up there and that’s lingering in the back of their psyches. Does that make sense? If it doesn’t make a lot of logical feel, it makes feel in the real world. Look, I’ve dealt with this trash. I’ve been a part of over hundreds of thousands of business. In knowledge, I’ve been using that statistic for awhile so maybe it’s up to two thousand at this place. I haven’t recalculated it in awhile.

CDOM

You might be wondering how you can avoid this trap. If you are thinking you can just take the home off the market and put it back on in order for it to appear more desirable, the MLS has already put an end to that.

CDOM:

Combined Days on Market. A heap of MLS’s are cracking down on what we are applied to do if it didn’t sell for awhile. We’d take it off and put it back on. There stopping us from doing that, so there you go.

How is This Happening?

Why are houses staying on the market too long?

• Priced Too High

If you identify a belonging on the MLS for six months, for even a hundred and twenty dates, I can assure you, I can guarantee you the reason why it hasn’t sold maybe it’s because of the colour shade. Perhaps it’s because the garage. Perhaps it’s because the driveway’s too steep. You know what the answer is? The cost is too great. Because if the cost is ceased low-pitched enough, people will overlook those blemishes.

If you don’t believe, you can even see it in places like Detroit. They sell rooms for a dollar. If you tried to sell your dwelling tomorrow for a dollar, would it sell? Yes it would. It’s likely a priced too high topic if it doesn’t sell.

What Not To Do

What often day people, and I’m going to beg that you don’t do this so listen carefully, they think to themselves the following logic :

I’ll start high, see if anybody makes an offer, and then I’ll drop the cost.

I’m here to tell you that this right here is a ghastly idea. If you gotten away with it before, that’s even worse, because now you think that you can do it again. Do not do that. Horrific idea.

Here’s Why :

When “youre starting” high, what that intends is you eventually run the risk of no one making an offer. If no one makes an offer, the working day on marketplace, the DOM goes up. The longer it goes up, the more difficult it is for you to alter the problem. Even if you remove the cost, the problem is that’s still there, dates on marketplace, it was better 90 days ago. Why hasn’t anybody bought it?

More Problems

This doesn’t go away. Here’s the other problem, and I want you to be very critical of this.

The first week or two is the most powerful part of the process.

That’s when you’re trying to sell a home , whether it’s flip-flop it to other investors, whether it’s a retail dwelling that you’ve lived in for twenty years, when you’re trying to sell the first 2 weeks, that’s the big zone right there. The house is the new kid on the block, so there’s no reason to think that there’s anything wrong with it because it hasn’t been on market for very long. This first two weeks is critical. This is where the houses get sold. The majority of owneds that I sell or my apprentices sell that I’m a part of transactionally, we sell in the first 2 week. Why? Because “were starting” low.

Starting Low

You start the house where you want to sell it at

If “youre starting” high, you run this risk. If “youre starting” low-pitched, you know, what if you started too low? Well guess what? You’ll get a multiple offer situation and world markets will bring it back up in most cases.

Often you can’t start too low but you can definitely start too high. Some interesting thing, when you put a belonging in the MLS, it’s going to propagate to homes like Trulia, Zillow, Hot Pads, and all those other homes on the web. Parties look at those homes, but there it’s going to get distributed at what you priced it in the beginning. What did you begin the present at? If “youre starting” it high, even if you remove the cost, it doesn’t mean that the MLS is going to update Zillow or Trulia. It may not. You start at the cost you need to start at so you can sell.

Figuring Out How To Price

Like I said earlier, I will expend a lot of meter ruminating over this subject right here. I’ll expend a lot of meter trying to chassis what this thing should be listed at because it makes such a significant difference. That’s not something that I can share in this blog because it’s too complicated.

• You can take into account the judgments.
• You can take into the account the closed comps.
• Take into account the active.
• There’s so many different variables. You’ve got to study this stuff. I’ve wasted a lot of meter with my apprentices and coaches only working with this particular section because it’s so important. What does it need to be priced at? Where does it need to start at?

Example

I’ve got a ton of narrations on this. I’ll do a quick one on its consideration of the sub-item. Person I know put their belonging up for sale and they had it priced a bit too high. The person actually had contacted me to ask me what I belief. Not one of my students, acquaintance of quarry. I told them,” Look, you need to plunges the cost and only get this thing sold .” He travels,” Yeah, but I don’t want to give it away. You know Phil, I don’t want to take a bath on this .” I said,” You’re not. This is how real estate occupations. You have to build in a bit of part of margin for the fact that you have to give the buyer what the buyer feels is a cope .”

That’s part of this. I’m not changing an entire marketplace here. I’m not asking you to sell seven thousand homes below marketplace. For your one live or your one live per month kind of numbers, you sell only a little bit below everybody else, you’ll sell it faster. I was telling him this, and he was like,” Yeah, I genuinely want to do this .” Long story short, this was right at the top of world markets. The marketplace collapsed, as we are aware, this was a few years ago. He realized empty live fees on that house for five years, on a four hundred thousand dollar lend. Five years of empty live fees on a four hundred thousand dollar lend. The marketplace eventually is coming and he sold it.

You Have to Price it Right

Do you know how much coin he lost? He actually had to sell it for less five years later. That is so common. I can’t tell you how often people start high and then they remove the cost and they still don’t sell. Meanwhile, they have the holding cost, the utilities, the monthly fees. Could be the headaches and heartaches because you have to move or something. You’ve got to price it right right out of the door. If you have a real estate agent let me tell you something,” You’ve got plenty of meter. Let’s start high. We’ll get low-pitched .” That is kiss of death. Sitting that situation on world markets is frightful theme. That person did eventually sell their live but unfortunately it was likely calculated, I don’t know, maybe they misplaced $50,000. It was massive quantity. They didn’t want to do a short sell, that’s why they just didn’t move it loose and give the keys back to the bank. They wanted to keep their ascribe good.

You start low or at least at the cost you wish to get rid of the property at.

Your First Offerer,( offerer is the person who makes the present) is Often Your Best

Your first offerer is typically the very best. I don’t know wholly why this is true, but I can prove to you over years and years and years of doing this, they’re almost always, almost without exception is the rule, the only big-hearted exception to this rule is going to be what I share with you in that video Biggest House Flipping Mistake, which is where I talk about if you don’t get non-refundable, earnest money, if you don’t verify the person or persons can get a lend. Again, premising the offerer has the ability to buy the belonging, they financially can do it, they’re generally your best one to work with.

Notice I Didn’t Say Offer

I didn’t say the first offer they give you. I said the first person that makes an offer. You may have to do a bit of countering backward and forward. Perhaps the cost has to up a little bit because generally the first offer they stimulate is typically a bit less than that of what they’re willing to go with. Perhaps you need to adjust the word, such as get non-refundable earnest money. If you’re doing a turn, maybe you want them to close with your designation company. There’s certain things you may wish to massage with the present that you want to work with first offerer.

Example

I have so many narrations on this one. An acquaintance of quarry again, they bought this property when world markets was actually booming. What they did was, they bought it from a builder who only needed to get it off his inventory because he had goes like an $80,000 sediment to build a custom-made dwelling. The custom-made dwelling went built and then the purchaser backed out and lost their $80,000. The builder was eager to various kinds of get rid of it on a dime. Sell it a lot cheaper. Sold it to my acquaintance for $205,000 plus closing costs, call it $210,000. Now when they looked at the comparable marketings and they did all their statistics and they got an appraisal, they thought it could clearly sell for $280,000. They get it on world markets. Their first offerer comes by with an present, all cash, $250,000. What do you do? This came in within one day. I’ll tell you what it did.

They thought to themselves,” Geeze, we’ve got an all cash present of $250,000 on the first day. Boy, if we leave this out here quite awhile, wait it out, we’ll maybe get a lot more .” Some of “youve had” cleared that decision in your brain before, haven’t you? Long story short, they shifted this offer down because he would not go above $250,000. He was a legitimate, bonafide buyer, he was paying all cash. They shifted him away. They sold the dwelling for $180,000 in the end. True story, and I know these people. They’re very good people. They made a big, big mistake. Don’t stimulate that mistake.

A Second Example

I have another example where someone that I know had made a belonging on world markets for $200,000 because he belief the comps supported that. He didn’t do his comps experiment as well as he maybe should have, but either way he gave it on world markets for $200,000 and he descent it to $180,000 pretty quickly and he got an present at $154,000. He thought that’s way too low. He’s got it registered at $150,000 right now and doesn’t have an give again.

Why It is Frequently Best

Your first offerer is typically the very best. Why? Well, I see, again I don’t know all the reasons, but here are a few :

• Some Parties are Waiting For a Certain Property to Come on the Market
  • They have like a little mechanism set up with their real estate agent that when something smacked their parameters, they get an e-mail of it.

So often, like the members of this house I just sold about a few a few weeks ago, they were waiting for a home in that subdivision and as soon as it came up, boom, they made an offer. What did I do? I said yes. I didn’t wait. I said yes. Some people are just sitting there waiting for a belonging to hit the market that first the parameters of the one you’re trying to sell. That’s one of the reasons why your first offer is your best one.

• As the Time on Market Go Up, it Grows Less Desirable

That’s that kiss of death we’re talking about. Your first offer is typically the very best one. If you stick to this rule, you will be so much wealthier as a real estate investor and as a dwelling proprietor, you will be able to move.

• Walking Away

Does it mean you may walk away from some revenues? It sure does. That is absolutely possible, but your big threat is a higher dates on marketplace. That it is that somehow your first offer was such a low-pitched pellet present. Again, that could be the case too. Proceeding back to that video Your Biggest House Flipping Mistake, you have to verify that this offer is for real. I symbolize, some people will make an all cash give because it’s all the money they went. Then you can end, do you want to do like a first mortgage, seller harboured, you know, section of the riddle? Perhaps they return $250,000 cash and then you carry back $30,000. No, you know. Buyer might not agree to that.

The point is work with your first offerer Treat them like they are royalty. This maybe the only give you get. So many times I’ve seen this happen. It is so common.

Don’t Be Stingy

Like I said earlier in the blog, it is entirely possible that it is able to discover what I’m saying, shake your heading and say,” You know Phil, this is fantastic. I’m so glad you shared this with me .” Then you go out in the real world and then you fall prey to this. It means that you can’t be greedy. You’ve got to remove greed from the equation, okay? When you get that first offerer, work with them, premising they’re bonafide.

What if they make a low-ball offer first?

Ask them to support it. Expect them to tell you why the quantity is what it was. They may learn you something. You may have not assessed a belonging as well as “youve had”. You may not know the rest of world markets as well as they do, because they’ve been looking. They identify all that is goes on world markets. You may have missed some things.

Do Your Homework

It also means that you need to spend a lot of meter ruminating over what your opening cost needs to be. If you’re not a licensed real estate agent or you don’t have access to the MLS through a licensed real estate agent, that employs you at a huge drawback. If you’re a homeowner watching this, I do have a great video called MLS Access for Investors. You may want to check that out to figure out how you can get access to the real cope comps, so you can do your own analysis.

Real Estate Agents

Look, I’m not going to say anything negative about all the real estate agents that are out there working hard to help their clients, but I will say this, they have a different motive rather than you do. A listing agent is going to get 3 percent. If it sells in the first week or not, they’re going to be okay. If it takes 3 month and the working day on marketplace come near and you were supposed to plummet the cost considerably lower than you should have to create the desirability, than they don’t lost all that much. Three percentage of a hundred thousand is three thousand. Three percentage of ninety thousand, well it’s a bit less but not a whole lot less. Again, I’m not saying anything about real estate agents, I’m just telling you human psychology, you as the real estate proprietor, you have to help make a exceedingly informed choice here.

That also symbolize, and I’m going to side with the agents here, many agents understand this rule. Sometimes they try to convince their clients,” Say yes. Say yes ,” and their purchaser travels,” Well, you don’t care. You’re just an agent. You know, it’s me that’s losing the $30,000, as opposed to selling it for $280,000, I’m trying to sell this thing for $250,000.” The agent might be telling your absolute profundity. Your first offerer is typically the very best. If it’s a bit low-pitched, try to counteroffer with them, you can also ask them to substantiate. These exercises right here, I genuinely hope this is going to make a huge impact in your bottom line.

Resolution

If you want to learn more about what we are and what we do, You can check out my YouTube channel. You could actually grab my volume How to be a Real Estate Investor. You may want to apply for my apprentice platform. For those of you who liked this blog share with some acquaintances and family. This is the various kinds of profundity we all need to have. This benefits everybody because the buyer gets a good deal everyone is wins here. Nothing goes this dreaded kiss of death of too many dates on marketplace.