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.
