Home Seller Strategies: Making the most of a competitive market
If you are a homeowner, recent changes in the real estate market make now the perfect time to assess your opportunities and ownership goals.
Low interest rates are bringing out buyers who previously couldn’t afford to buy. Inventory is at all-time lows, making competition tougher. More people are bidding on fewer properties, and increasingly, with bids over asking price. In some neighborhoods, over 30 percent of the properties sold are bid-ups.
Not surprisingly, this dynamic has put pressure on prices, which are starting to increase, creating great opportunities for sellers.
“Buyers are having a tough time finding their dream homes,” says James Chan, Partner and Realtor at Prudential Locations. “If you have ever considered selling, now is the perfect time.”
Many sellers have been waiting to see if prices climb, but that’s not always the best solution, “especially if you’re selling in order to move up into a larger home or a better neighborhood,” Chan says.
“Say you want to sell a $500,000 home and move up to a $700,000 home – not an uncommon move. If prices move just 10 percent per year, the home you sell will increase $50,000 in a year’s time. However, the home you buy will increase by $70,000. In waiting a year to sell, you end up losing $20,000.”
If you are ready to sell, Chan recommends some strategies for a competitive market.
SET A PRICE TO ATTRACT MULTIPLE OFFERS. While it may seem counter-intuitive, a lower listing price can actually bring in a higher sales price.
“The right price will draw in the greatest number of buyers to create an environment for multiple offers and bids over asking. Reasonable listing prices have proven to get more people in the door and create more buzz, resulting in stronger offers and people willing to bid up,” says Chan.
SHOW THE HOUSE AT ITS BEST. An experienced agent who is up on the current sales in your neighborhood will know what pre-listing work on the property is worth doing and what can be left alone, to create the best offers and maximize your value. “This is where an expert can really help you,” says Chan.
He suggests the agent evaluate whether “there are certain times of day when a property might show better, and whether it is optimal to have the agent present for all showings to highlight unique features and address buyer questions.”
Curb appeal and staging are also important.
“Depending on your price point and neighborhood, (staging) doesn’t have to be elaborate. The goal is to make your property stand out and help potential buyers see its potential. Make sure hedges and trees are trimmed. Consider potted plants, door-mats, updating the address numbers – small things that can make the house pop.”
MAKE THE MOST OF THE INTERNET. According to an independent 2012 study by Ward Research, 50 percent of buyers find their home through the Internet. Thirty-two percent find their home through a real estate agent, for whom the Internet is a key source of leads. If you don’t impress an agent or buyer online, you may never get them in the front door.
“Good, professional photos are extremely important,” Chan emphasizes. “iPhone photos or photos taken by a Realtor with a point-and-shoot camera will do you a disservice.”
More people are also choosing to create video tours. “For off-island buyers and investors, this can be very effective. In this market in which time is of the essence, a buyer is able to tour your property within a minute of seeing the listing. They won’t miss out if they can’t make the open house,” says Chan.
MARKET TO THE BEST BUYERS. “You want to get your home in front of the most buyers, but also the right buyers,” Chan says. He explains how Prudential Locations agents market directly to the agents who represented 100 percent of the buyers in the neighborhood.
“By targeting these agents, we tap into the network of buyers looking for homes just like yours. These are proactive agents who have proven that they bring successful bids from qualified buyers. They know the product and the neighborhood, and they will bring better offers and the right buyers to the table.”
KNOW HOW TO MANAGE MULTIPLE OFFERS. In a competitive market, sellers benefit from an agent who not only creates an environment for multiple offers, but helps clients navigate the offers to decipher which buyers are the best and why.
Chan explains that Prudential Locations has specialized training for their agents in how to create and manage multiple offer situations, to get the best for their clients. “Just because a buyer offers the highest price does-n’t mean that they will successfully close the transaction. An experienced, trained agent understands the ins and outs of financing, knows the individual brokers who are representing the buyers, and watches out for the implications of all the details in a purchase contract.”