The First Key to Max Profit When Selling Your Home
Getting the maximum profit when you sell your home, even in a seller’s market is not as easy as you think. A seller can’t assume that any old agent that is willing to cut their commission because “it is so easy to sell houses in a seller’s market” is going to wring every dollar they deserve out of their home sale. Max profit doesn’t start with hiring the cheapest agent a seller can find, even though it is an absolute fact that the largest closing cost is agent commission. Reducing the largest line item paid in your closing costs may seem like a natural win, but as my father used to constantly remind us, “You get what you pay for.”
No matter the market conditions present when you are selling your home, the first key to success lies in three words:
Creating Buyer Enthusiasm
In one of the hottest seller’s markets on record, I have met two For Sale By Owners (FSBO) who had cut their commission line item in half by going it alone. What were they lacking? Besides buyers willing to write offers despite enough buyer interest to get it done, someone on their side to help them see their home through a buyer’s eyes and present it to the market in a manner to lift buyer enthusiasm. That is what generates higher prices, and in a seller’s market, bidding wars. Despite popular opinion on FSBOs, neither one was priced higher than the market would allow. They just had no clue how to create buyer enthusiasm and get legitimate offers. That’s where a professional marketing agent is worth their weight in gold.
Once I was hired as the professional listing agent, the focus shifted from how much could be saved on commission to how to get buyers to want this listing before they have even seen it in person. In each case, that involved staging, but not to the degree you might think. Simple rearranging of furniture to show a floor plan’s utility or larger amounts of space. Placing punches of color to draw attention to the home’s best features. Getting buyers to see how they would live in the property vs. seeing how a seller is currently living in a property. How someone lives every day in a home is not how they sell.
Once the stage is set, a professional listing agent knows to hire a professional photographer. Just like a seller who wants to cut commission believing it will net them more money, I fought hiring a professional photographer for too many years. Looking back, I can’t believe I ever took my own listing photos. The professionals in any field can not be matched and are a huge component of success. And naturally, the biggest compliment I get from my top notch photographers is that they love taking pictures of my listings because they are always primped for photo day and make great subjects. I like to say they are smiling and saying cheese when the photographer arrives. Still, it is unbelievable to me that a lot of listing agents don’t worry about what they photographers are taking pictures of if they are just professional.
While words used in describing a listing are also very important, they are a second to photos. Listing preparation and staging are vital to making sure your photos leap off the screen of the buyer’s phone, tablet or keyboard and plant that fast growing seed of buyer enthusiasm. Making sure the home presents the same in person to build on that level of enthusiasm is where all the preparation a seller did and maintains throughout showings is important. Making beds, clearing clutter, emptying litter boxes daily…you get the idea.
As I tell all of my sellers, the minute a buyer slumps their shoulders or sighs at clutter, condition, painting projects, old carpet…whatever…you have lost the chance at a full price offer. The cash register in the buyers head is running and they are overestimating the cost to get the home to look the way they want it. And the reality is that getting a home to look they way most buyers want is not as difficult, or costly, as a seller may think. Listing preparation is critical to buyer enthusiasm. Skipping it all together and relying on a hot market to bring you tremendous results is costly mistake.
Both of my FSBOs listed at the same price they had gone it alone and both got multiple offers and ended up selling above list price, which paid for the fee they had tried to avoid when unsuccessfully listing alone. However, it wasn’t just as simple as making sure the home looked great. That’s where we come to the second key to max profit when selling. Click the link to find out more.
Rumors That the 2021 Summer NoVa Real Estate Market is Slowing Down
There has been talk among agents that the real estate market in Prince William, Fairfax and Loudoun Counties is starting to slow down. Oh how I wish those rumors had some basis in reality. The extreme buyer demand that has sellers cashing out at unbelievable prices, has left buyers waiving just about every conceivable contingency and reaching deep into their savings or retirement plans just to have a chance at purchasing. Still, this past Memorial Day weekend I had buyers offer $30,000 above a fairly optimistic list price on a home that had plenty of outdated decor, and waived all contingencies only to lose along with ten other buyers.
The week or so that the gas shortage was causing anxiety in Northern Virginia, presented a great opportunity for buyers to get out and see homes while others were afraid to burn the gas in their tank to see property. That window allowed one of my buyer-clients, a first-time buyer, an opportunity to get under contract without having to waive home inspection. He was even able to negotiate some closing cost help. I had to pinch myself to make sure I wasn’t dreaming. Maybe that was the weekend the rumors of the slowing market started.
Alas, it was only an abbreviated window of opportunity which was created entirely out of panic, not actual shortage of gas. To me, it was like having a snow storm in winter during a seller’s market. Others may sit out the conditions and wait for the snow to melt, but not me. Striking while other buyers are sitting it out is the only way to give some buyers the leg up.
What we may be starting to see in the Northern Virginia marketplace is the typical slow down as we welcome summer and vacations are top of mind. For the first time since I became an agent in 2005, last year (2020) there was no slow down in July and August. Pandemic lock downs made vacations impossible. That makes summer vacations in 2021 even more of a priority for many who missed them last year. I believe the term I heard in some news media was “revenge travel.”
No matter what may ease up the buyer demand, even temporarily, rest assured that if you are a seller in Prince William, Fairfax or Loudoun County, your home will still sell and for a top price if you take time to prepare it and hire a listing agent that will professionally market it. We can shed some buyer demand and still be in a seller’s market.
The tale of 4516 Edsall Drive began in February 2021 when I met with the sellers to discuss what was needed to prepare the home for market and to sign a listing. At my recommendation, the sellers agreed to new carpet, luxury vinyl plank (LVP) in the upper level bathrooms, new electrical sockets, switches and covers and were repainting.
As it turned out, the listing preparation between handyman and flooring went over budget, but not by too much. The sellers trusted the process and the fact that they would get a nice return. Boy did they.
We hit the market priced at $525,000 on April 23rd. The listing preparation was evident in the professional photos. Not surprisingly, with nearly three days on the market, we had thirteen offers to review on the following Tuesday.
It came down to two offers. One had no contingencies and offered $575,000. The other was $585,000 and had only a financing contingency. We called each offer to see if they could come up in price (for the lower offer) and remove financing (for the higher.) Within a matter of minutes, the one with a financing contingency went without and raised their price another $10,000. That made the seller’s choice easy.
On May 26th, this pipe stem home with five upper level bedrooms, sold for $595,000. That’s $70,000 above list price! The sellers were ecstatic and the buyers thrilled to have landed a sought after location in Woodbridge.
Every home will sell in a seller’s market, but for how much is determined by two things: 1) listing preparation and 2) marketing. This listing is a prime example of what happens when a well prepared listing meets professional marketing. Get in touch with me if you want the absolute maximum the market will bear for your home.
On April 23rd (2021,) 4516 Edsall Drive in Woodbridge hit the market priced at $525,000. The plan was to allow showings from Friday morning until Sunday evening and go over all offer Monday afternoon. It was an easy plan and was telegraphed to each and every buyer’s agent through the MLS. There were no surprises.
This listing had been presented as Coming Soon status with limited exterior pictures to give folks an idea of what the sellers had to offer while the final touch ups were being put on inside. There was also a written description of the home that included the features. Many serious agents knew to get their showing booked early. With no overlapping showings, that’s critical.
Of course, once the professional photos hit the day before it went Active in the MLS, that’s when a whole slew of buyers perked up and paid attention. Unfortunately for many, it was too late. The sellers had taken every listing preparation note and the home was saying cheese in every photo.
Thirteen offers arrived to parse through with the sellers. All but one was over list price. Most had seriously limited contingencies like no inspections or low appraisal guarantees, if they had appraisal at all. In the end, it came down to three offers. The sellers looked at the down payments, who the lenders were and when they had responded to my inquiries, earnest money amounts and naturally, their bottom line. It was a hotly contested home and in the end, a deliriously happy couple was notified their offer had been chosen.
Dream Crusher 2021 (me making rejection calls) rolled in after we ratified the deal and gave the bad news. That is the worst part of this job. While I represent the sellers and wholeheartedly have their best interests in mind during the offer review process, that soft human side we all have hurts making the rejection calls. Thankfully, all the buyer agents took their rejections in stride. Unfortunately, like George Clooney’s character in Up in the Air, I have become well practiced in delivering bad news.
For buyers, make sure you aren’t waiting for photos before you schedule an appointment to see a home. When something meets your needs, get a showing on the books as soon as you see the listing hit the MLS, even if it is photo-less. And make sure you are working with an agent takes their job seriously and knows to read agent remarks and use showing schedulers. Better yet, to look for properties on your behalf before you find them. We had three agents attempt to gain access today, and one that actually submitted an offer well after our deadline.
The great news is my sellers got so much more than they expected out of the top offers. Can’t wait to share with you the final sold price, which won’t be until May 26th. Stay tuned.
Appraisals are top of every listing agent’s mind in the frenzied seller’s market that all of Northern Virginia,mm and most of the country, is experiencing in 2021. Homes, even listed for reasonable prices, inevitably get bid up seven to ten percent of list price on average. A lot of times, it is even higher than that.
Most savvy listing agents are advising their sellers about sky high offers with appraisal contingencies. Those offers are only going to be as good as the appraised value. It’s a number meant to make a seller say yes, without thinking of the ramifications of low appraised value.
The way that buyers are getting sky high offers accepted is by waiving appraisal all together, or by offering low appraisal guarantees. Back to the practices of savvy listing agents, those are the ones that understand the importance of appraisal coming in as close to that offer price as possible. A buyer can feel immediate remorse if they are shelling out tens of thousands of dollars just to make up for a short fall in appraised value. So meeting the appraiser is critically important.
Knowing the appraisal process, as taught to me by an actual appraiser when I studied for my broker’s license, I know what they have access to, what paperwork they get and what they are looking for when they are putting together a report. It is astounding how many agents don’t. Some think that if they just raise the list price to the offer price after the contract is ratified, it helps with appraisal. Not in the least. In fact, it may hurt your seller if that deal falls through and the entire MLS service area now knows exactly how much your seller had. They may come in slightly below once you hit the market again. They sure aren’t coming in over.
Appraisers are members of the MLS. They can see what we do to listings. They can see original list prices and the changes we make and when. They get copies of the sales contract itself. They know what the buyers have offered. Finally, they don’t care about your list price. They don’t care about the neighbor’s list price. They care about recent sales in the neighborhood. Sometimes, they care about pending sales. They also care about seeing the multiple offers on the property, as that is a demonstration of what the market thought the value was. Really important, they like seeing a list of major updates by year, going back at least five years, no more seven or eight. Let’s face it, an HVAC isn’t new just because it isn’t original.
Changing list price to reflect the contracted sales price is a poor business practice. It tells the world what the seller accepted before the deal is done. That’s a big no-no in real estate. And since the appraiser has a copy of the contract, it is truly pointless.
What’s the practice of the listing agent you have in mind to sell your home? Might want to make sure you are working with a listing agent that understands the appraisal process and won’t compromise your negotiating position if your first buyer gets sudden remorse. Take a look at my service areas to the right on the chalkboard and let me know if you would like my expertise on your side to get you those multiple offers, keep a buyer in a deal and never compromise your negotiating power.
It isn’t very often that you get a chance to list a true five bedroom home with all bedrooms on the upper level of the home. This pipe stem located home has five upper level bedrooms, with a door between the owner’s suite and the fifth bedroom, making the fifth bedroom a perfect nursery, home office or even work out space.
All the bedrooms on the upper level have brand new carpeting and the smallest of the five measures ten feet by eleven feet. The owner’s suite has soaring ceilings in the bedroom and the attached owner’s bathroom. Shower recently remodeled and LVP (luxury vinyl plank) flooring installed. The same floors are in the second bathroom. And both bathrooms have skylights.
The main level has brand new carpet in the family room while the rest of the main level is hardwood flooring. The wood burning fireplace is the focal point of the family room. Kitchen has plenty of Corian counter space and a breakfast nook with a bay window. My favorite feature of any kitchen is a sink with a view of the back yard. Check! Laundry room is on this level as well.
Step outside onto the deck from the family room and you will see the privacy and space this property has to offer in the fenced back yard.
The basement is freshly carpeted and has an LVP landing from the walk out exit. Enjoy lots of recreation space, a nearly complete additional kitchen (minus stove) and den with attached full bathroom. There is even a connection to the chimney in the basement rec area in the event you want to add a wood stove.
All of this is listing for $525,000 starting April 23rd. Showings will only be permitted from Friday to Sunday with an offer deadline Sunday evening. Get with your agent and book your appointment now. If you don’t have an agent, give me a call and I will happy to connect you with a Long & Foster buyer’s agent.
In general, I like to think the people we come into contact with in our daily lives and give us advice have nothing but the best intentions. In my professional life as a Top Producing Real Estate Agent, I have not found the advice that neighbors give to be particularly useful. In fact, it is not unusual for me to have to fend off bad advice from neighbors, friends and family when helping buyers or sellers. Again, I try to take a deep breath and remember, they probably think they are helping.
Today, a text message popped up from a Coming Soon seller. Her neighbors have told her she is under pricing her home. That alone is not helpful. Add in the other accusation they leveled, which is my seller’s price on her home is going to hurt their appraisals for the contracts they have accepted on their homes. Absolutley not helpful. Let’s unpack the reality.
For starters, my seller has to do what is right for her. Their list price was as much her business as her list price is theirs. My dad would call that noneya. None of your business.
Secondly, my seller hired me to go over comparable sales with her and identify a reasonable list price. When we did, my seller wanted to nudge that number a bit higher than that. Given the improvements she was in process of doing, I happily obliged. Let’s face it, the market isn’t going down. If I felt she was shooting herself in the foot, I would have told her.
Thirdly, a lot of agents are misinformed on how to get homes to appraise at a contracted sales price. That trickles down to their sellers who are now running around giving bad advice to my seller. They somehow have a false belief that list prices have an impact on appraised values. Misinformed listing agents go to the extent of changing their list prices to the contracted sales price when they go under contract. That’s another subject entirely, but I will simply say, why would you tell the whole world your existing contract sales price? You’ll never sell for more if something happens to the first deal. The long and short of it is that list prices have no bearing on appraised value. Market value is determined by looking at SOLD homes in the area that are recent and most similar to the subject property. Since these neighborhood listings are farther along in the process, they will probably be sold and more likely to affect our appraisal than we have a chance of ever affecting theirs.
With all of that out being said, my seller took a deep breath. She felt better. After all that, I was curious and asked, “Just how much were their list prices anyway?” The answer was simple, lower than hers. Yet they are under contract for much more than their list price and somehow think she will only sell for list price. Don’t even get me started. You can’t make this stuff up.
When you are listing your home, hire a full-time professional agent that knows the ins and outs of the entire sales process, including appraisal. Your odds of success from beginning to end are far superior. Secondly, don’t listen to your neighbors. Be polite. Thank them and call your agent if you have concerns.
Another Happy December Buyer, This Time in Woodbridge
Working with repeat clients is always such an honor. Ten years ago I was contacted by a young man relocating to the area to work with Micron in Manassas. He had found me on Realtor.com and decided I was trustworthy based on what he was reading. In the end, we ended up finding him a great townhouse to purchase in Haymarket’s community of Dominion Valley. It was the type of townhouse that many buyers would love to get first time out.
Imagine my surprise when earlier this year, my former buyer called and said he wanted to move closer to his friends. At the time when he had moved to the area, his only considerations were proximity to work and finding a well kept home that was move-in ready. His weekends were spent, however, traveling a little farther than he wanted to his friends in Woodbridge. So the search was on for a property in Woodbridge.
It took some time for my buyer to figure out whether he wanted a single family home or a townhouse. After some exploration in the way of property tours here and there, he narrowed it down to a townhouse in the Lake Ridge area. Once he narrowed it down, it was not long before he found “the one.”
Being the first offer in may not be the preference for many agents or their buyer clients, but in the case of this and another December buyer, their offers were first in and written knowing full well they wouldn’t be the only offers. This buyer went over list price, offered a low appraisal guarantee and was able to get a home inspection with some negotiated repairs.
My buyer was thrilled today to take the keys to his new Lake Ridge townhouse. He got a great home with a unique floor plan, the owner’s suite having a full bathroom in the loft of the room. It’s in exactly the area he wanted to live and he didn’t have to suffer through making a bunch of rejected offers. He knew what he wanted and did everything in his power to get it.
Twice in the last week I have had individuals, who are either not licensed real estate agents or not full-time professional real estate agents, want to educate me and other top real estate agents in the Northern Virginia market that the inventory shortage they hear us complaining about doesn’t exist. There is little more frustrating than someone who doesn’t do what you do, day in and day out, tell YOU what is happening. When the frustration passes, I am left wondering why people on the periphery of performing agents would think we are not experiencing an inventory shortage.
In the case of a licensed agent who works a full time job preparing resale documents for an HOA management company, and who has sold only one home in the last two years, she was exasperated at the talk of an inventory shortage in an online real estate group when in her full-time job, she’s never prepared as many HOA resale package as she has this year. The thought process there being, if she’s doing more resale packages than ever, then clearly, there are more sales closing than she has seen recently, therefore an inventory shortage can not exist.
Believe me, this has been one of the busiest years I have ever had in real estate. To date, I have closed twenty-six homes in 2020. That doesn’t mean that buyer demand is being met. For each home that goes under contract in the Bristow/Gainesville/Haymarket area, there are probably five to ten buyers who are still looking for a home.
Tonight, I met another “expert” in the real estate market. A buyer represented by an agent who is refusing to show him homes that are occupied. (Don’t get me started.) He was clearly upset that I was showing his rental home tonight, which has been listed for sale by the owner and which he must comply with by the terms of his lease. Just because he has been looking to buy and been able to see at least four homes each time he goes out, he thinks there is not an inventory shortage. Meanwhile, he is looking in the same area and same criteria as the buyer I was in Woodbridge with tonight. There are ten houses on the market. TEN! I ran into buyers coming and going from five of the six my buyer wanted to see. One of the properties went under contract before we could have three hours to get an offer together! While there are multiple Woodbridge townhouses for sale in the Lake Ridge area, that doesn’t mean there aren’t more buyers than the number of homes for sale.
My feeling is that buyers who have become frustrated with the multiple offers that have been happening all year long may be stepping back from the market during the holidays. And sellers who are bit uncertain of what our future holds after the election is finally certified and done next month, are holding off until the New Year. As I told my buyer tonight, November and December are going to be a great time to make a decision and get a home. Sellers in Lake Ridge don’t seem to need multiple offers to make them happy. They seem to be okay with getting a good offer and accepting it.
The inventory shortage is likely to continue into 2021. And once the dust settles from our over-wrought political Presidential election, the same thing is going to happen that always happens.–the phone will be ringing off the hook in January. It is unlikely the number of sellers our market needs to satisfy the buyer demand will list.
If you want to know what the market conditions are in your area, ask a full-time, professional real estate agent that is out there beating the street day in and day out. If you live in Bristow, Gainesville, Woodbridge or any of the surrounding areas, I can help you understand what is actually happening in the marketplace. And I’m happy to show you ANY home that is listed.