How to position your home as the one the buyer wants!
In most real estate markets, the days of instant offers, multiple offers and “over-asking-price offers” are gone – for a while. But buyers, fueled by visions of great value, are still out there. And though their expectations have changed and their options are plentiful, most will ultimately identify a house they want to make their home.
How can you, as a seller, make them pick yours?
As an Accredited Buyer’s Agent, I work with buyers every day and receive some truly valuable insight from them. One key to getting a buyer to pick your home is to understand typical buyers so that you know what they’re looking for.
“No more than 3% over…”
Price it right – In the Calgary market that means no more than 2 – 3% over the target sales price (which should be fair-market value) or below. When I search from homes to show my clients, I go only about 3% over the upper end of their price range, so anything that causes the price to be artificially higher will automatically rule out showing the home. Things that I have seen a lot of recently that truly work against the sellers are:
- Raising the asking price above fair market value and offering a bonus to the buyer’s agent (an increase in the cooperative commission offered);
- Raising the asking price above fair market value and offering allowances to the buyer;
- Raising the asking price above fair market value to allow a lot of negotiating room for when the offer comes in; and,
- Raising the asking price above fair market value price “just to see if someone is out there that will pay it.”
Again, artificially raising the asking price to encourage more agents to bring buyers actually works against the seller since their listing is automatically and efficiently excluded from the search by the buyer’s agents’ "agent-only" MLS® System search computers.
So how do you determine your price? It’s from the recent, comparable SALES in your immediate neighbourhood. As a seller, you can’t rely on comparable stats from six months to a year ago. The market is changing quickly, and buyers are much more knowledgeable than in the past. So to price your home, your agent must be providing you with comparables that are no more than three to four months old. Buyer’s agents use exactly the same statistics to assist the buyer in setting their offer price. If you are overpriced, you likely won’t even receive an offer, they’ll make it on the home that is “priced right.”
Another thing to consider, with all the press the real estate market has received, buyers won’t even look at a house that is overpriced. They’ve heard what’s been said on the news and they believe it – whether or not if it’s not true. If it’s said in the media “it must be true…” As a seller, your just can’t afford to overprice your home.
“Make it beautiful…”
With so many homes on the market in the Calgary area, the homes in better condition go much, much faster than homes that need work. The old approach of offering a decorating or landscaping allowance no longer works. If the home needs work, today’s buyers expect the sellers to do the work before it’s offered for sale. In terms of paint or the carpeting, my advice as a buyer’s agent is to choose carefully and stay with a version of builder’s beige.
Another issue may be that the funds necessary to do the work have to come from the proceeds of the sale. Frankly, the buyers don’t care, so the seller needs to get creative and should not just add it to the asking price if that means making above “fair market value.” With that being said, a seller shouldn’t be a “do it yourselfer” unless the result is going to look professional. Doing nothing and pricing the home appropriately is far, far better than doing something poorly. Buyers don’t like wasting your time (or their money) and likely won’t even place a “lowball” offer to purchase.
I also tell sellers and listing agents that they need to be more patient. Sellers are dealing with more showings, and some of them become impatient with having to keep their house spotless for what seems like a wasted effort. They also need to go above and beyond what has been done in the past to interest buyers. Price, condition and accessibility of the home information are key to getting the home sold. Consider anything that is going to make your home stand out from an almost identical one down the street that may be priced at the same price.
“Present the home well…”
Presentation is often overlooked, but it makes a huge difference. If the home is occupied, it should be spotless. If it’s vacant, it should look warm. And just as important, the first impression for buyers – and their agent’s – is almost always made from the MLS® System photographs. This is all too often and unbelievably overlooked. The photographs should be as near to professional quality as possible. Again, this is no time for your agent to be a “do it yourselfer” unless the results are going to look professional. Review each and every one of the cropped and enhanced photos that the agent is going to use in their marketing. You're looking for great marketing materials. Review: all 20 photos, all room measurements filled in, a carefully crafted description in the MLS® System, beautiful photos on their mail out postcards, in-home feature sheets, neighbourhood flyers and on their websites and their web virtual tours. Have the agents linked their brochures and web tours for your home to the MLS® System listing or have they only marketed their own personal website links? Or worse still, linked nothing at all.
If your real estate agent promises “Full MLS® System Service,” you should expect no more than a generic listing and maybe a half dozen mediocre photos. Today, that is full service! Does this “present your home well?” Are they offering a "market-normal" cooperative commission for the buyer's agent, or are they using something less? Find out how much of their portion of the commission is being used as for marketing, and are they being spent to exclusively market your home, or are they being spent to market themselves to get more listings while claiming that it's your home they're marketing. Do you really want them spending your marketing dollars to find more clients? If they’re marketing your home, then your home’s address and price must be on every marketing piece. If they're not there, then they’re trying to attract business to themselves by using your home's photo and description.
“Inspections carry weight…”
I’ve found that if sellers have their home inspected just prior to having their agent market their home, the inspection carries some weight. Buyers know what they’re getting up front, and for sellers, it makes the asking price stand up stronger. Sellers have been reluctant to complete the home pre-inspection only because they are afraid of what may be found, and the cost of these repairs. As noted above, if repairs are required, complete them and provide the receipts, before and after photos, and a copy of the actual home inspection for every potential buyer to review. The home pre-inspection is a truly worthwhile investment to justify your asking price, “getting top dollar,” and reducing the time consumed by that buyer’s conditions in the agreement to purchase.
In the same light are the condominium documents and their review. Not only should the condominium corporation’s financial statements, annual insurance certificate, minutes to the board of director meetings, and annual general meeting minutes be provided to the listing agent during the home listing process, but having a professional condominium document review completed prior to marketing, again, helps you to appropriately price your home. These documents provided by your condominium management firm, (along with the documents the listing agent has quick and inexpensive access to (the condo by-laws, condo plans, easements, restrictions, etc.), should be reviewed by a professional, unbiased firm that should provide a complete picture of the state of health of the condominium corporation for you and the potential buyer. Buyers need this information to justify the asking price for your home and to mitigate the inherent risk factors of buying into the condominium corporation. For the cost of a few hundred dollars, this pre-inspection is a truly worthwhile expenditure to justify your asking price, “getting top dollar,” getting offers quicker, and reducing the time consumed by this important buyer’s condition in the agreement to purchase.
“Doing everything necessary…”
Condition dictates salability. Smart agents are schooling their sellers to do everything necessary to detail a house – even before they write up the listing contract. A house MUST be in move-in condition. After that, it’s price. To attract interest in this market, sellers must either have a house in perfect condition OR must price the house below the comparables in their market. After all, the buyers and buyer’s agents will price it that way in their minds and in their offers.