Strategy evolves and changes over time, and smart agents make changes in their approach to reflect the market.
For most of 2015, I have used a pretty simple formula to market my listings and get great results:
- Clean, declutter and stage;
- Photograph professionally;
- Price it appropriately at a number that will appraise;
- Aggressively "pre-market" to prospective buyers and agents;
- Encourage sellers to clear out for a long weekend of uninterrupted showings;
- Stream as many buyers and agents as possible through the property in a short period of time;
- Facilitate a bidding war;
- Vet and present offers;
- Determine what the top of the market will bear, write a "reverse offer" reflecting those terms, and present those terms to our hand-selected buyer/agent for ratification.
I don’t want to oversimplify this. Every one of these steps is vitally important, and costly errors can be made if any stage is handled without proper care and precision.
But this formula has allowed me to sell 27 listings this year, 23 of which sold inside of 10 days, with the longest market time being just 19 days. Twenty sold at or above list price.
(I also had the discipline to turn listings away when they were going to be conspicuously overpriced or if the sellers had totally unrealistic expectations. While many agents are programmed to take any listing agreement, fully understanding that they will need to “wait out” the sellers and eventually beat on them for necessary price adjustments, I question the integrity of such strategy. In a hot market, get it ready, price it right, and let the market determine value.)
It’s been interesting to watch how buyers and buyers’ agents have responded to this type of marketing.
Early in the year, if we determined that a property would be on the market for 96 hours, ending at 5 p.m. Sunday night… agents didn’t seem to give it much thought.
If they saw it Thursday, and liked it, they wrote an offer. If they saw it Friday, and liked it, same thing. In fact, early in the year I often ended up with 10 or more competing offers, in large part because agents (especially new ones) were undisciplined about submitting offers and didn’t really think through the strategy.
At the peak of the spring market, one of my listings drew a total of 32 offers, each leveraged on top of the other to generate a final sales price $33,000 above the original list price.
Over the second half of the year, though, it seems more agents have caught on. Now, there are fewer offers, and they arrive later in the game. The best agents wait the process out, staying in communication throughout the process to monitor and gauge what their clients are up against.
Strategically, the worst move you can make is to be the first agent to submit an offer during an open bidding period.
And why is that? Because the truth is, it’s very likely the listing agent (with the seller’s blessing) is going to attempt to use that initial offer to leverage higher and better offers from other agents and buyers.
And if you can manage to generate three… four… five… or more offers… the more likely it is you can leverage the intense competition to not only raise the price, but gain other concessions such as shorter inspection periods, a modified (or waived) appraisal provision or an earlier loan objection deadline.
Here’s the truth: if you’re in one of these bidding wars, the longer you wait to submit your offer, the more likely it is to be chosen. Because if you really want the house, and you can wait out the process, chances are you can figure out what it’s going to take to win.
And then you either write that offer, or you don’t.
That’s always been the game, but with so many new agents flooding the market, especially at the lower-end, a lot of homes have been selling to poorly represented buyers at inflated prices.
Now that the buyer pool is finally starting to thin, if only just a bit, you could argue that buyers are better positioned to find value. You don’t want to compete with people who don’t know what they are doing.