Would you go to a Toyota dealer advertising a Corolla for $85,000? How about a pizza joint with a $62 pie? Of course not! Which is why, as a real estate professional, it infuriates me to see homes priced well above their eventual sales price.
Many in the media would lead you to believe Miami is a hot market. And, in certain neighborhoods, this is true. But in the vast majority of Miami-Dade County there is an over-supply of homes and unrealistic expectations. In short, if you are a seller in this market it’s time to put on your big-boy pants.
If you travel through Pinecrest and Palmetto Bay, you’ll see loads of FOR SALE signs, even on the shortest drive. And yes, most of them have been there long enough to start serving as landmarks. I consider those signs as badges of dishonor.
I am amazed by the conversations I have with people who (a) believe they magically know the market better than anyone else, (b) think their house is perfect and (c) feel they can outsmart the market and make a disproportionate amount of money. In short, many people are living in Fantasyland.
Homes sell with four important things in place: the right list price, strong marketing, proper showings and measured negotiation. If a yard sign is up longer than 60 days, one or more of the four were not satisfied. Further, each of the four rely on the former being done correctly. Thus, the best marketing in the world will not overcome an overpriced home. And showings can’t occur unless the marketing draws buyers to the property.
So, it stands to reason that it all starts (or stops) with the proper list price.
Sometimes the seller insists on an inflated list price. Other times, the agent exaggerates the price so just to capture the listing. Either way, the homeowner is in for a world of hurt (and price reductions) before the sale is complete, if at all.
Much like every other industry these days, the Internet has put the power of information into everyone’s hands. Home shoppers are far more savvy than before, and if by chance they aren’t, the appraiser will eventually bring the Buyer and Seller back to reality.
So, what if you must sell and need to yield the highest sales price possible? Some race to try a For Sale by Owner (FSBO) thinking they can do the same job as a full-time Realtor and save the cost of commission. Using the four magic items from above, this means the homeowner must first properly price the home. Unfortunately, 38% of FSBOs end up doing at least one downward price adjustment. Further, the buyers see the FSBO sign and can easily negotiate a lower price because their argument is that the owner is already saving 6%. Still further, once you start off with the wrong price, you are attracting the wrong buyers.
Pricing is a special talent. There is zero room for emotion. This takes most sellers out of the game even before it starts. Further, an agent has different perspective than an appraiser who only deals with the value of a home, not the art of finding the right list price for a home.
The second item is strong marketing. To draw showings, each home must be marketed to a particular audience. Everything from photos to descriptive language to how, where and when to advertise makes up strong marketing. Despite what you may have heard, there is low likelihood a home in Pinecrest is going to be sold to a foreign investor, so the marketing focus should be elsewhere.
Did you know that different camera lenses can change the appearance of room size in a real estate photo? A good agent does. Also, 88% of the homes sold in 2016 were the result of the buyer seeing the initial information in the MLS (or on a website fed from the MLS data). So, we know that placing the listing in the MLS is predominant way to find buyers, but it is far from the only way. Yard signs, social media, video, professional networking and direct buyer engagements are all important add-ons. You never know where the buyer will come from, so a measured amount of the right marketing is key to success.
Proper showings are the next step to selling your home. And, the first step is to be able to accommodate a showing request. Turning down even one request can be turning away your clandestine buyer. Then, when they arrive at your doorstep, the home must be show-ready. Even more important is that the agent (or homeowner) needs to flawlessly perform their script. Yes, a showing should be much like putting on a Broadway performance. An intelligent monologue creates a story as you move through the home. Never say ‘this is the dining room’. Instead, try ‘The last Thanksgiving meal here was such a success because they were able to seat 24 people and easily serve from the kitchen through this wide doorway’.
The last step is measured negotiation. Remember, once you get an offer its time to put on your business hat. Emotions must get checked at the door! No house is perfect and buyers are going to try to leverage found issues to their financial advantage. The key is for the seller to anticipate and be ready to compromise on the issues that go beyond esthetics. Rarely can a seller be impartial enough for this task. Thus, an agent on your side is best. We’ve seen it all before and can almost write the script in each negotiation.
If you’re curious about the market, want to get some advice or just want to chew the fat as we contemplate the 2018 future, please get it touch with me. I’d be happy to provide a 15-minute consultation with no obligation.