Bidding wars erupt frequently, sometimes driving up the selling price beyond the asking price, especially in some hot neighborhoods.
While it varies from neighborhood to neighborhood and the price of the home, overall there is about a three-month supply of unsold homes on the market.
Previously in this column, we addressed how prospective buyers need to strategically, economically and emotionally prepare themselves to compete for a home in today’s market.
But what about the flip-side? Is it all bunnies and rainbows for sellers?
Steps sellers need to take in today’s market is this month’s topic.
John: Lane, we focused on the plight of the buyer in today’s market, but what about the seller?
Lane: It certainly is better to be a seller today than it was a year ago or two years ago or three years ago. But that doesn’t mean you still don’t face challenges, or you don’t have to be smart about how you approach the market.
John: Challenges? So it’s not enough just to plant a “For Sale” sign in the front yard and list the home on MLS?
Lane: I think some of the challenge is that buyers, for the most part, are still looking for houses that are ready to move into – turnkey condition, showroom-condition. However you want to describe it.
I’m not talking about distressed sales. I’m not talking about investors looking to buy and flip homes, where the condition might not matter.
These are buyers who are not necessarily looking for a great financial deal, but for a great home.
John: Do you think given how frothy the market is that sellers can become complacent, or even a bit cocky?
Lane: I think a seller can get a little cocky. For the past several years, the question was can you sell your home?
Today, if you live in a neighborhood where nine out of 10 homes listed are under contract, chances are you will be able to sell your home. The challenge is that you need to present your house in a way to maximize your price and your net.
Your Realtor can help you on this. He or she might be able to advise you on how to spend $1,000 or $2,000 to get $10,000 more when you sell it. I think most people would be very happy to get 5x on their investment.
John: So maybe it is a good idea to spend some money replacing fading carpet or paint walls?
Lane: Even before you think of cosmetic changes, make sure your home is extremely clean and there is no clutter.
A weekend with a bottle of 409 and a sponge might translate into $10,000 more for your home. I think most people would be willing to spend a weekend of heavy-duty cleaning to make $10,000.
John: Other thoughts?
Lane: While it’s true that the market has shifted, and buyers may not have the luxury of running spread sheets that dissect the price per square foot so they can beat up sellers during negotiations.
That said, if you are a seller, you can set your sights higher than simply not getting beat up on price. You can aim for two or three buyers interested in, or even bidding on your home. To make that happen, you have to make the home as visually and emotionally appealing as possible.
It’s like having four guys wanting to dance with the same girl on the high school dance floor. Your goal is to have four people saying, “I not only like this home, I have to have this home.” When that happens, you just don’t sell your home, you maximize your net.
John: Are there any emotional aspects of selling in this market?
Lane: You have to be prepared for your home to sell quickly. As soon as you put your home on the market, think of it as no longer your home. Putting it under contract and the closing are just the process, the mechanics of the transaction.
Emotionally, it is easier to part with your home the moment you list it. If you’re able to let go, you’re also more apt to allow your Realtor to create a showing condition that appeals to prospective buyers.
John: Thanks, Lane.