Working with buyers can be unpredictable. One week they are convinced they want to live in the country and the next week we are in Folsom looking at new track homes. They wouldn’t consider paying more than $400,000 but all the homes they want to preview are priced at more than $450,000. Two-story homes are out one week and the next week they’re a better value. A three-bedroom is not an option until it is.
Buyers are challenging because often they don’t have a good understanding of the real estate market. Perhaps they are new to the area, unfamiliar with schools, shopping and neighborhood amenities. It may take time for them to develop a sense for home values. As they become more knowledgeable their priorities may change.
Sellers on the other hand are pretty predictable. They all have the same priorities. They want the highest price possible for their home. They want to sell the home as quickly as possible, they don’t want their home life to be interrupted and they want a hassle-free escrow with no surprises. The challenge for agents is to make that all happen simultaneously.
With sellers pretty much in agreement in what they want to accomplish, one would assume that the accepted approach to marketing their homes would be predictable as a typical shopping experience with one of our large grocers. All the stores are clean, well-lit and attractive with spacious aisles, courteous clerks and competitive prices. Naturally, that isn’t the case.
Only about one-third of all the active listings are correctly priced, in good condition and easily accessible for showing. These listings sell quickly and for a higher price. As an example, of the 180 homes closing escrow over the last six weeks, one-third sold within 30 days of being listed at 99 percent of their selling price. Another third of the sales during that time were on the market between 45 and 90 days and sold at 96 percent of their listing price and another third were listed more than 90 days and sold for 95 percent of their listed price. All these sellers had the same goal of a fast sale and higher price yet only one-third achieved it. What’s up with that?
The National Association of Realtors recently asked 5,000 agents what they believed were the biggest mistakes that sellers make when selling their home. Although every circumstance is different, here are the top 10.
- According to the survey, overpricing was the biggest mistake sellers made. Local statistics prove that the longer a home is on the market, the lower the offer will be. In our county, homes that sold after being listed 90 days brought in $15,000 less than their listed price than homes that sold within 30 days.
- Difficulty in showing the home was another mistake. It is fascinating that sellers want their home sold quickly yet they put up barriers to its entry. If the showing instructions on the listing read: restricted hours, appointments with an owner/tenant, Saturdays only or beware of the dog, agents may pass on scheduling that property in favor of another more easily accessible.
- Cluttered space makes the home look smaller and prevents buyers from visualizing their own collectables in the home. Get packing before listing the home. A small investment in off-site storage will be rewarded with a faster sale at a higher price.
- Unpleasant orders will distract buyers from everything that’s good about the home. Pets, smoke, chemical and food are the largest distractions.
- Refusing to negotiate can cancel an escrow or prevent one from opening. A low offer shouldn’t be considered an insult but the beginning of a dialog. Often, buyers who make a substantially low offer will accept a counter offer that is only slightly less than the listed price.
- Sellers who fail to make repairs will find buyers making offers on other homes. When a home shows even minor signs of neglect, buyers think the worst. Too many repair items on the home inspector’s list does not leave a buyer with good feelings. Homes that are well-conditioned sell and close escrow faster.
- Bad photos or no photos in the MLS are a nonstarter for buyers. Never let the home go on the market without nice photos accompanying the listing. Buyers want to see pictures when they go online. Poor photos will cause them to disregard the home before they have an opportunity to preview. iPhones are convenient for taking pictures but using a professional pays dividends at closing.
- Messy homes turn off buyers. It isn’t pleasant living in a fish bowl while the house is for sale but the cleaner it looks the faster the process will be over. Buyers have favorable expectations of what their life will be like in their new home. That positive image is shattered when they see dirty dishes piled up, scattered clothes and grease on the stove.
- Shadowing sellers make buyers uncomfortable. Leave the showing to the agent. It’s fine to be available to answer questions but let the buyers discover the property at their own pace.
- Picking the wrong agent can be a big mistake. Sure, the home may sell but at what cost? Hiring a local experienced agent is likely the same cost as the new part-time relative from West Sac. In addition to experience, look for a personality match. The busiest multi-million dollar agent may not be able to provide the individual attention you need.
Ken Calhoon is a local real estate broker and can be reached at [email protected].