Strategies to Sell a Home, As Buyers currently can Afford less house than a year ago.
If you’re considering selling your home now, you might be thinking, Why didn’t I do this a year ago? The 13-year residential real estate bull market came to an abrupt end in 2022 as quickly escalating mortgage rates undermined would-be buyers’ purchasing power. A buyer who can afford a $2,500 monthly mortgage payment could have borrowed around $600,000 when mortgage rates were at 3%…but can borrow only about $370,000 with today’s rates at 7.25%.
Many buyers have retreated to the sidelines, leaving sellers with fewer offers than they would have fielded not long ago. And some homeowners have put their home-selling plans on hold, but not everyone has that luxury.
In the current market it’s better to ‘Set the market - not chase it” Over decades of experience has shown market patterns and an experienced agent can help you get ahead of market changes and position your home sale to maximize your net profits.
The key to landing the highest sales price for a home isn’t setting a high asking price. It’s getting the largest possible number of buyers to bid on the property. The best way to accomplish that at times like these is to set the asking price slightly on the low side to attract attention. Most experienced agents know this, but many still try for above-market asking prices because it increases their odds of landing the listing.
Caution: Sellers often assume that they can set their asking price high at first, then lower it if necessary. But that’s not how the real estate market works. The most appealing buyers pay attention only to homes that are brand new to the market—once a home has been for sale for more than two weeks or so, most buyers assume there’s something wrong with it. Then the only interest will come from bargain hunters who offer well below even the lowered asking price.
Quality over Quantity: Personal Attention to details is Demanded in this Market.
Find the Right Agent that puts Personal Attention into your Home sale process, not one that passes on the details to ‘team’ to process your home sale like a factory widget.
Any agent can sell a home when the market is hot, but significant skill and experience are needed when it’s not. An agent that has been through several real estate markets cycles, not just the easy ones. How to find the best agent for your home sale…
High Level of Personal Service and Attention Concierge Level is required for your biggest investments like your Real Estate. Not a time for discount ‘turn em and burn em’ approach. Trying to save a few thousand can cost tens of thousand in net proceeds. Penny wise, pound foolish.
Look for an agent that understands Marketing and focuses on selling your house, not selling their agency for more clients. Don’t fall for the Hyped up sale volume number. (A trick to show hundreds of sales transactions is by putting less experienced agents' sales on a ‘team’ into one agent's name. That’s kind of misleading. There’s not enough hours in a month to put the time and attention that a complex home sales transaction needs and be able to close multiples of transactions in a week.) Also- Did you know, ‘for sale signs’ main purpose is to sell the agency to your neighbors for more business but ‘marketed’ solely to sell your house. Let’s have a direct conversation about what works and how it works directly for marketing a house for sale.
Your Home sale needs an agent that puts personal time into each listing like a partner to your transaction. Not the factory approach where a team of less experienced agents process the selling transaction like putting out widgets in a factory
This is not negative to the real estate agency business model; it’s systemic in industry on how to increase volume. You have to decide if you want to be another cog be processed or partner with a highly experienced, educated professional to give you a higher level of personal service.
This is a home sale and requires a knowledge of the complex process of market analysis, financing, negotiations and marketing. Experience and personal attention is required as in any serious procedure.
Does the agent know how to do detailed market analysis?
Do they follow economic reporting and understand complex data that can help you stay ahead of changes in market trends and real estate prices?
Financial Professionals Read, Analyze and Understand Economic Reports- So you don’t have to. That’s why you hire them. Yes, making social media posts are a part of advertising a home but you would want your CPA spending most of their time staying up to date on market economics and law changes not Tic Tok videos.
Economics are boring to most people but understanding market data reports are vital to your financial prosperity. Make sure you work with a financial professional not only educated in financial markets but monitors and understands how those indicators affect your real estate and portfolio!
Understand Marketing!!!! It is more than sales and advertising. It’s a science of analytical process understanding: customer, market segments, niches, products placement, pricing.
Don’t just look for claims of ‘ professional photos, videos and broadcasting listings on 100’s websites’ when these are also selling the agency more than the house.
Marketing is more than hiring professional photography and making videos.
It’s knowing the product: house, condo, townhome, single story, large lots, etc.
Who is the target market for that property, demographics and what they want?
Find the niche in the target market that needs your house and will pay above market price for that home.
Messaging that connects to that niche market through specific targeting. Empty Nesters mostly likely will not be looking for a 4000 square foot house with a lot of landscaping upkeep.
In addition to Analyzing and Marketing, you need an agent with a lot of experience NEGOTIATING. This could be the most important quality when looking for an agent and always gets overlooked. This is Most important in tough markets in getting buyer’s offers accepted! Negotiating not just the best price but best terms for sellers. Another reason why you need an agent to give your sale personal attention is because they can’t pass this off to a team member.
I have negotiated commercial real estate deals that are much more complex but residential transactions still take dedicating a good amount of time and focus to each transaction. It’s just not to your benefit if an agent is juggling dozens of transactions that week or month.
The highest price is not the best price if the deal falls through and the seller has to start all over after their house has been off the market for over a month. Complications happen and deals fall through, it’s part of the business but you need to know that probability is minimized.
The agent should know how to tell the differences of mortgage qualification, conditions to docs and how to verify those when you can.
Most agents have all of these skills, so find one you trust and have good communications.
What will you do to sell my home that other agents won’t? An agent might respond by pointing to top rank status of hundreds of sales in a year. Again, there are not enough hours in a day, week, year to close a transaction every other day and still provide a high level of personal professional attention your home sale needs without passing on most of the details to less experienced agents or non-licensed assistants.
Be concerned if an agent instead promises lots of open houses or print advertisements—research by the National Association of Realtors has found that these tactics are not effective in this era of online listings. *sells the agency not the house*
Also be wary if an agent says he already has a potential buyer lined up. As tempting as it can be to choose an agent who promises a quick sale, this answer likely means he intends to sell your home to a buyer he also represents so he doesn’t have to split the commission—an unethical conflict of interests. Such an agent might not aggressively market your home to other potential buyers. At least agents have rules against this. I-buyers and investors don’t have any obligation towards your financial interest, so always go with a licensed agent over an investor offer.
What are my home’s top selling points and challenges? Follow this question up with, “How will you prevent those challenges from standing in the way of sales?” You need to hear from the agent honest observations. What buyers will see and how it compares to other houses on the market and should be able to provide a well-thought-out plan of action. This is where an agent's personal experience investing and flipping real estate is invaluable.
Selling Strategies after a rapid rise in interest rates increased buyer’s payment shock mortgage qualification.
Three ways sellers and agents can improve the odds of sales today…
Offer to pay down the buyer’s interest rate. Higher mortgage rates are a big reason buyers aren’t buying these days. But there’s something sellers can do about this—offer cash to secure your buyer a significantly lower rate for either part or all of the loan’s term. Example: The buyer is approved for a 30-year loan at 7% for a $600,000 purchase with 20% down. The seller could pay $11,000 from the home-sale price to the buyer’s lender to reduce the buyer’s rate to 5% for the first two years. Doing this can reduce the buyer’s monthly payments from $3,200 to $2,600...increasing the market share of buyers qualifying to purchase your house.
Buyers want Turn-Key. Get your home into ready-to-move-in condition. There was a shortage of supply during the pandemic real estate rally and the people that had to move were willing to over bid to move. The supply/demand balance now is leveled out and the buyers who remain are shunning homes that require repairs. Also there are a lot of flipped houses that are completely remodeled, setting buyer’s expectations. Buyers are comparing your house to houses that are completely painted, new flooring, cabinets and fixtures. You don’t have to completely remodel your house but your agent needs to show you where your home accurately fits in pricing level with the other homes competing for buyers, not just past sale comps.
Another reason to find an agent with experience personally flipping houses to understand where to put money into remodeling that will return an increase in sales prices over the investment.
Confirm that your home’s completely prepared before the listing hits the market. If you have any doubts, raise them with your real estate agent. Your first showing is online—you have only one chance to make a first impression with buyers.
The meaning of Fiduciary Responsibility = To get you the maximum return by treating your money as if it was my own.
I first got into real estate as an investor and I learned how to find "value" when buying a property - how to maximize it's value and Market it for the highest price when selling.
I will work with you as a partner to get you the best outcome as if I was buying or selling my own home. Not treating your home as a tool to get my agency more business.