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Zillow CEO Spencer Rascoff explains.

December 11, 2019 19:50 PM UTC
- Updated September 02, 2020 11:46 AM UTC

Zillow CEO Spencer Rascoff explains.

Spencer, so we're in the beginning of the real estate housing season, to buy and to sell. And you have some do's and don'ts. We want to get your advice. First of all, do you need a real estate agent, whether you're a buyer or a seller? Yes, you do. It's an infrequent, emotional, complex transaction. A real estate agent helps with that. And whether you're a buyer or a seller, having a great person by your side can be really valuable. You said that we're in a hot real estate market. Do you need an agent if we're in a hot market? You do. In fact, especially if you're in a hot market for a buyer, you're going to be competing with lots of other offers. And it can be very advantageous to have a great buyer's agent with you, helping to make sure that your offer is properly positioned to the seller and to the listing agent. OK. So let's say you're a seller, and you want to sell your house quickly and for the most money. What's your advice? Research agents online, interview two or three by phone, and select a great agent that's done a lot of deals like yours, and you should be good to go. And what about fixing up the house. When does it make sense to renovate before you sell? Minimal renovation before selling-- fresh coat of paint, maybe a little bit of landscaping, de-clutter, remove family photos. But do not launch into that full kitchen remodel. Our data shows that a small mid-range bathroom remodel-- couple thousand dollars to freshen up a bathroom-- is the best return on investment of any home improvement going into a sale. How do you stand out as a buyer in a very competitive market, where in some markets you're almost in an auction to buy a house? A great real estate agent can help you figure out how to position your offer. There are escalator clauses, there are contingencies that can be waived. A lot of sellers are very interested not just in price, but certainty. So to the extent that a buyer can pay all cash, or more cash, and have less of a financing contingency, that's very attractive to a seller. It can be even more attractive to a seller than paying top dollar. And how about being pre-approved for loans? Absolutely. In fact, most-- in hot markets, most real estate agents wont even start working with you until you're pre-approved for a mortgage. So absolutely get pre-approved online or with a lender before you start shopping for a home. All right. So the biggie Is making that bid. What are some of the do's and don'ts? Be ready for disappointment [CHUCKLES] as a buyer, because a lot of markets have multiple offers-- 5, 10, 20 offers in some cases. Don't get caught up, don't get emotional. You or your co-shopper, or spouse, family friend, loved one, might fall in love with the house. And lean forward if you want, but don't lean forward over your skis. And always be aware, there are a lot of hidden costs of homeownership. So if you're stretching to get into that home, don't forget about the property taxes, don't forget the maintenance costs, don't forget about the homeowner's association dues. All of those things add up. So you don't want to stretch too much on the way in, because then it can be-- you can get in financial distress once you're there. Everybody makes mistakes in this process. What is the most common mistake that buyers make? The most common mistake buyers make is not having a good understanding of what their price range is. It's a very abstract thing to say, oh, I can afford a house but between $200,000 and $220,000. You really have to break that down to your monthly costs. And that depends on mortgage rates, it depends on maintenance costs of the home. So really having a good understanding of their financing is critical. How about sellers' most common mistake? Most common mistakes sellers make is not starting early enough. It takes months to get a home ready for sale, to shoot the photos, to write the online description, to create the open house, and then actually finally close. So be ready for a pretty long process. Is there a good time-- the best time-- for buying or for selling? The best time for selling-- in early to mid May is the best time to list your home. And the best time to buy a home is in late summer, early fall-- September or so. So if you're a buyer, be patient over the summer. More inventory will come online. If you're a seller, it's time to-- time to clean out that closet and put away the family photos, because you want to list now.