Ever wonder what would happen if you were under contract to sell your home, but you changed your mind and wanted to stay put? Unfortunately, it does occasionally happen that sellers will be under contract with a buyer and have a change of heart. Does a seller have any outs in the Residential Sales Contract used in Northern Virginia? That’s a question every seller should ask of every listing agent they interview.
The contract used in our area, written by the Northern Virginia Association of REALTORS®, primarily focuses on the rights buyers have to void (get out without penalty) the deal. Unless a seller has a contract with the “Contingent on the Seller Purchasing Another Home” clause, sellers have no avenue to unilaterally void a contract. And even in the case of the home purchase contingency, if a seller is working with a listing agent that isn’t watching the calendar, the contingency dissolves at the deadline, obligating the seller to sell. A seller definitely wants to know when that home purchase deadline is up.
If a seller does NOT have a home purchase contingency in place and finds their desire to sell has changed, there is little more they can outside of pushing back on any requested home inspection repairs or price reductions due to low appraisal that their buyer requests. The ultimate hope here is that the buyer, in the absence of the seller’s willingness to do anything in the buyer’s favor, would void the contract. Obviously, that is a poor strategy and reliant on the buyer having significant repair requests that would trouble them immensely if not done, or the property having a significantly low appraisal that the buyer can not cover.
In my business, I have never had a seller-client that wanted to halt the sale of their home while under contract. Of course, my sellers are counseled on exactly what they are getting themselves into when accepting an offer on their home. My seller-clients also have in me, someone who can read non-verbal communication very well and will address it out right. If I get the vibe a seller is having second thoughts, I am going to ask about it.
In representing my buyer-clients I have come across situations where sellers are wanting out of their home sale. In particular was a buyer-client of mine who happened to be the seller-client of another agent. Every time we went house hunting, there was remorse that they should not be selling their home. It started before the home was even listed. Naturally, not being my clients on the home sale, all I could do was encourage them to talk to their listing agent.
As time went on and they were under contract, the seller’s remorse became stronger. By that point in time, their buyer was past all of their contingencies and ready to close. What does a seller do then? They either a) ask the buyer kindly to release them from the contract, b) hire an attorney and discuss their options, or c) suck it up and sell their home as much as they hate doing it. Again, all I could do was tell them to talk to their listing agent. They ended up sucking it up and selling their home, which made me very sad for them.
The most recent buyer-client I had that encountered a suddenly reluctant seller happened about ten days before closing. The seller, through their agent, begged to be released them from the contract. In mulling it over, my buyer decided (with other factors at play that had not been discovered) to let the sellers out. The sellers were so relieved that we were able to work out reimbursements for my buyer-client from them to cover out of pocket expeneses incurred for inspections, appraisal and survey.
The bottom line message to sellers here is that if you are listing your home, you should be ready and willing to sell under the terms agreed upon in the sales contract. You can not rely on buyer’s being empathetic and kind enough to let you out of the deal, especially in a low inventory market. Have a back up plan if you can’t find a home you want to purchase next. Start by hiring a listing agent that isn’t invested solely in getting you to closing, but whose business is relational. Agents like that…like me, are going to care more about what is in your best interest and not the pay day at the end of the deal.
Why Are So Many Sellers Lowering Their List Prices?
Summer 2022 saw a shift in buyer behavior, brought on by sharply increasing mortgage interest rates. We had started the year about 3.5% and by late summer, rates had more than doubled. The frenzy to jump into a multiple offer scrum and make above list price bids with no contingencies all but came to a halt. Multiple offers were still seen on homes that took the time to create buyer enthusiasm, but of the entire summer’s worth of multiple offers I encountered with sellers, no buyer was willing to give up home inspection contingencies or finance and appraisal contingencies. Most buyers felt a strong offer was list price. And seller subsidy was becoming a normal request.
As a full-time real estate agent, the shift in buyer behavior has been palpable. Obviously, I can’t speak to the advice sellers I don’t represent are getting, but my sellers are given an in depth look at what has sold, what they are competing with, any shift in the tides of the market and are given advice about where to price. They are also tracking competing listings and overall market activity to judge whether or not what they are experiencing is on par with competing listings.
Just because buyer behavior has changed with rising mortgage interest rates doesn’t mean buyers suddenly have gobs of homes to choose from. They are able to visit multiple homes and not have to make an immediate decision. Inventory to this point is still not meeting demand, hence we remain in a seller’s market. Unfortunately, to some sellers that had watched their friends, family or neighbors sell during the feeding frenzy that was 2020, 2021 and even early 2022, they equated a seller favored market to that level of frenzy. That leads to three main factors for list price reductions.
PRICING TOO HIGH FROM THE START
From what I can observe in the market, and feather in with what I watched some of my sellers struggle with, sellers were caught off guard and didn’t want to hear that their home wasn’t instantly worth more than the last home in their neighborhood that sold. Therefore, they listed even higher than that most recent sold price. When the market didn’t gobble them up right away, they were stunned. And when some even got list price offers, but included seller subsidy, they rejected them thinking the seller’s market must have more to offer.
Overshooting on list price is a problem a lot of sellers seemed to have faced in the summer and even into the fall. Changing buyer behavior does not mean you still price high and give yourself negotiating room. Price right and get the job done. As days on the market tick by, buyer offers get less and less impressive, assuming that the seller has been over priced. Sellers were forced with lowering list prices to what were more reasonable list prices and would have been appropriate prices at the outset. Some even ended up listing lower than offers they received at the outset. Those were the sellers trapped in the thinking that it was their turn for over list price offers and seller favored terms. Any offer outside of that was insulting.
UNDER IMPROVING A HOME AND RELYING ON MARKET DEMAND
To say a home is under improved for what the sellers are asking is another way of stating it is over priced. In the 2020 and 2021 buyer frenzy, many sellers relied solely on market conditions rather than primping their home for market. The insane level of buyer demand gobbled those homes up with multiple offers, reinforcing to those sellers that they didn’t need to do any preparation, their home would sell regardless. True. Those homes sold. However, there were plenty of examples of sellers who left money on the table with this mindset. Multiple offers always level at market value. Improved homes that peak buyer enthusiasm always see the highest sale prices, even in that buyer frenzy from which we are still experiencing a hangover.
Now that we are in a more typical seller favored market, listing preparation is even more important than it had been. Skipping it and relying on the too few homes for too many buyers to bring top dollar is a lost cause that is resulting in some price reductions were are seeing.
REACTING TO TOO MANY DAYS ON THE MARKET
Days on market has been freaking out a lot of sellers, not to mention their agents. When homes that used to sell in a matter of four or five days were still on the market two and three weeks later, panic set in. Many listing agents working in the market were licensed in years where they have only experienced extreme seller market conditions. Two weeks on the market to them meant it was a buyer’s market. If they represented buyers, they wrote offers reflecting that. If they represented sellers, they were ill prepared to handle negotiating on a seller’s behalf.
Having lived through the housing crash post 2008, I can assure you that two weeks on the market is not a long time. Neither is a month. Try being on the market for six months with no offers. That, my friends is a buyer’s market.
Sellers should be informed of what average days on market for homes like theirs is at the outset of their listing and kept abreast of what is selling before them, or if homes are coming on the market priced below them with more to offer. Many listings in the current seller favored market are going to measured in weeks, not days. When is it time to lower to the price? When other homes like yours at a lower price are being chosen or with more to offer. If nothing is moving, it is the market and you could do yourself a disservice by lowering the price too soon. On the contrary, you don’t want to sit around with a bad price for too many days on market because at some point, buyers and their agents wonder what is wrong with the home. That’s why it is important to know expected marketing times going in after a look at current comps.
Our real estate market is a living, breathing thing that changes. The most important thing a seller can do for themselves is hire a full-time, professional, local agent that can help them through the process.
The fall real estate market in Northern Virginia is changing, just like leaves on our deciduous trees are undergoing a transformation. Many had become used to the frenzied pace of extreme buyer demand that stormed in during 2020 and lasted through 2021, that had sellers setting record high sales prices and collecting multiple offers. Those for whom that was a baseline for the real estate market are left feeling the market is a buyer’s market now that the frenzy has quieted down. That is not at all the case.
While buyers are enjoying the fact that they no longer have to make rushed decisions and waive every contingency, they are left feeling pinched by rising mortgage interest rates that have doubled since the start of 2022. Combined with housing prices that are still trending up, though not on as steep a trajectory, buyers are acting more deliberately. In a lot of cases, they are requesting seller subsidy to help buy down their mortgage interest rate. These factors that have slowed buyers down, has not changed the lack of housing supply to meet buyer demand. We are NOT in a buyer’s market. Believe it or not, the market still favors sellers.
Being in a seller’s market, however, does not mean multiple offers or always selling above list price. Real estate markets are defined by the absorption rate of available homes on the market. We could still have four months of inventory to sell and be considered in seller favored conditions. Our inventory in Northern Virginia, and particularly my primary service area of Bristow/Gainesville/Haymarket has not seen available inventory measured in months for a long time.
The current seller’s market is one where those looking to sell their homes will be advised to consider more than the most recent SOLD listings to figure out a suitable list price. Yes, sold listings are comparables. However, as we begin to build a bit of inventory, home sellers need to also look to a number of other types of listings.
COMING SOON AND ACTIVE
Looking at the available inventory there is to purchase will help a seller to figure out how to price competitively. Just because there are four comparable sold listings at $450,000 doesn’t mean that is the place you should price, or higher, as you would have in 2020 or 2021. Looking at active listings and those coming soon with similar features to your home is critical. If you have three similar competitors on the market priced at $450,000 that have been on the market for a few weeks and aren’t getting chosen, that suggests $450,000 is no longer a reasonable list price. If it were, those home would be under contract. So what competitors have been chosen?
Competing listings that have gone under contract were chosen by the marketplace. Those list prices are much more valid, if all things are equal from a value proposition, than solds. Maybe the solds are at $450,000 and the three actives are at $450,000, just sitting there, but there are two under contract that were listed at $430,000. Do you think pricing at $450,000 or $430,000 is a better play? Clearly $450,000 isn’t working for the three sitting on the market.
WITHDRAWN, EXPIRED & CANCELED
As we build inventory, there are also clues in the listings that have been pulled from the market. If there is a withdrawn listing at $460,000 that was on the market for sixty days, that is a big hint that if you were just looking at sold listings, going higher is a no-no. The listings not chosen are as full of valuable information to choose your placement in the market as those active and under contract.
Suddenly we are seeing price reductions in the market, where they were unheard of in the previous two years, with the exception of sellers who were really taking the frenzied buyer demand for granted and placing exorbitant list prices on their homes. There are sellers in every market that expect their inflated feelings of values to pan out on the market. It can be crushing when they don’t. Buying into an unfounded value as a list price can also be costly in a market undergoing a shift. Wasted time when a market is building inventory means wasted buyer opportunities and inviting more attractively priced competitors. Looking at who is lowering their prices and still lingering on the market is informational as well.
The real estate market is still favoring sellers, but that doesn’t mean sellers are seeing ten percent lift above their list prices or are getting buyers willing to waive contingencies. As the insane pace of the previous two years is slowing to a more measured pace, sellers are still likely to get under contract quickly and with reasonable terms when their homes are priced right, properly prepared and professionally marketed. Buyer demand is still high and inventory is still not enough to meet it.
Tread carefully when deciding how to present your home to the market of interested buyers. Overpricing is a real pitfall that will lock up sellers unable to grasp that the market dynamics are changing. Partnering with a full-time professional agent with experience beyond a seller’s market where the highest and best offer is chosen from a pile of offers is highly recommended. Skills that encompass all kinds of market conditions are not a given just because someone hold a real estate license. The soft skills to start the conversation that leads to getting an offer are absent in those that thought being a listing agent was putting a sign in the yard and collecting offers. Hire your listing agent wisely.
I have been at this since 2005. Making deals that put my sellers ahead of market conditions is what I do, no matter the current dynamics of the market. My listing process starts with detailed analysis of the market and listing preparation advice that will lift buyer enthusiasm. Combined with professional level marketing, sellers go under contract faster and walk away with more money than their competing listings. It would be a pleasure to help you do the same.
Seems like every time I meet a seller who is hiring me to list a property they have rented, I get very anxious reactions about the suggestion to list after the tenants have moved out, or to financially incentivize them to be part of the process. (The latter usually means offering them a free month’s rent or discount on rent if they comply with showing requests, leave the home neat and the house is under contract quickly.) Landlords are quick to become fixated about the cost of such ideas.
In the case of the Parks at Piedmont South Condo pictured above, the landlord-seller was very smart. When attempting to first list the home with the tenant in place, she cleaned the home herself and put the tenants up in a hotel for the weekend. Nothing was going to stop buyers from hemming and hawing about the condition. The tenants had painted some loud colors, left the carpet a disaster and the walls in the stairway were very marked up. It felt shabby. And because the condo didn’t go under contract during the weekend the tenants were out, we dealt with limited showing availability and deteriorating show condition. It was no surprise when the buyer under contract to purchase got cold feet and bailed, having been in a competitive situation with three other buyers. That’s when the seller went down the track of improving the home once the tenants were out and listing again…$25,000 higher.
Having a conscientious seller that cared about the condition of the home was a blessing. The market had cooled since the initial listing at $325,000. Listing at $350,000 with new carpet, fresh paint, a new refrigerator and punch list items fixed, my next step was to do some light staging and order another set of professional photos. We wanted the fresh face of the improved listing to lead the way.
Even with all that, buyers seemed to want to tire kick more than usual. While this was literally the only property with three bedrooms available to buyers under $400,000 in Gainesville or Haymarket, buyers wanted to will a market crash into existence. Buyer agents chimed in with the verbal lowball offers from their clients. Then, one savy agent stepped up to the plate with his ready, willing and able buyer. While lowballers were circling, the serious buyer made a deal and today, they went to closing. The property sold for $352,400. The additional sales price more than made up for the less than $2,000 the buyer requested in closing cost help. Did I mention one of the lowballers wrote an offer at $280,000? Yikes. Talk about trying to will a market crash into existence.
When the time comes to sell your tenant occupied home, my advice is to get the tenant out, improve the home and then list for the best result. The money saved in attempting to dovetail a sale with the end of the tenants lease is usually not equal to what you would net in a higher sales price even with additional costs. Get in touch and let’s talk.
Getting a property ready for the market is not a task to be taken lightly. In order to generate buyer enthusiasm, a home needs to feel inviting. In the case of an occupied home, personal items need to be minimized. Walking into a home that feels like the owner is still very much there, is not helpful. Whether they realize it or not, buyers are trying to imagine themselves in the space. If they see your family photos, recognition plaques, diplomas or degrees, they are seeing you. They need to see a blank slate.
This topic is top of mind for me again today because I am about to step out and help a seller warm up her home with what I call fluff. The seller has cleaned and de-cluttered, but needs a tad of flair in the now bare surfaces. Of course, none of the flair ever conveys, but it sure does make a difference in how a buyer sees the space they are touring. Staged homes get chosen faster and make more money.
For my occupied listings, I take listing preparation very seriously. It is never a waste of my time to make sure a home is properly primped. And if there is a need to fill with some fluff (plants, paintings and the like) I am happy to provide whatever I have to make a more welcoming statement. Sometimes, a family room mantel just needs a pop of color. Or maybe bookcases need straightening up and items of interest. The more generic, the better.
In the case of a vacant home, it is very hard to visualize how big a room is, or feel any warmth in a bare setting with just four walls. Light staging is a complementary service I offer my vacant listings. A dining area would receive a table and chairs and some place settings and a centerpiece. Bathrooms are fluffed with towels and kitchens are warmed up with cookbooks and the like.
Making the best impression on buyers in the market is essential whether there is limited inventory or you are competing with twenty homes. How enthusiastic buyers are about your home will determine how high your offers go in a seller’s market or how quickly you are chosen in a buyer’s market.
When you are ready to sell, it is never too early to engage my listing services for the absolute best advice on the preparation that will make a difference in the market. The staging is the icing on the cake.
How Many Days Does it Take to Sell in Spring 2022?
With the two percent increase in mortgage interest rates since the beginning of the year, you may have heard whispers of our Bristow and real estate market changing. Certainly, interest rates increasing have pinched buyers even more when rising home prices were already making it tough to afford a home. However, to declare that the market has measurably shifted from a seller’s market would be wrong.
In late April, dealing with the same interest rates, I placed a single family home in Bristow on the market. It was hottly contested and had multiple offers in a matter of four days. This past weekend, after having been on the market for just over one week, 14443 Macon Grove Lane had three offers at the same time. Multiple offers did happen, but not quickly. It was a rolling situation that left one of the four offers pulling out and moving on. What’s different between these two homes?
The single family home at 9477 Cromarty Court was owner occupied and updated to the nines. It also had a sought after water view. The downside of this property was the compact size of the rooms on the main level. However, the sellers had left no detail unnoticed. When it was time to the hit the market, the professional marketing drove up buyer enthusiasm and the coziness of the main level was not an issue.
While the condo at 14443 Macon Grove did hit the market a week later, it was not owner occupied. Tenants in a home never have a vested interest in a successful outcome. They are losing their rental home. In this case, the landlord realized this was an issue. She was by far, the most savvy landlord I have dealt with in my seventeen years of selling homes. She cleaned up the property herself. She decluttered the property before showings herself. She even put the tenants up in a hotel for the weekend while showings were happening. The only problem was, the weekend we really wanted to list the house was unavailable to us as the tenants had plans. That meant a hasty rush to market.
A professional photo shoot with great pictures that truly represented what buyers would see in the straightened and cleaned home, happened the day before it was to go active. I am here to tell, buyers and buyer agents do not make appointments until they see listing photos. Unfortunately, the photos didn’t hit the MLS until Saturday morning of our two day showing free-for-all. Showings picked up after the photos had been in a few hours, but the real activity wanted to happen Sunday through Friday. The tenants were unable to accommodate showing requests except for three hours in the evening, and one evening was taken off the table completely. (sigh) Even with showing restrictions and showing condition dwindling after the return of the tenants, the condo in Gainesville got multiple offers. It just took eight days to get there.
We are still in seller market conditions in Bristow and Gainesville. Of course, what matters most is what has mattered all along–how your home is prepared and marketed. An unprepared home is not going to create buyer enthusiasm. And even if it does, if buyers can’t get in to see it, that is a problem. If buyers are seeing poor listing photos, you are sunk.
Proper listing preparation and professional marketing get sellers to the top of the market no matter what their condition. And when there are issues you can’t work around, having a skilled negotiator representing you as a seller is critical. These two properties are great examples of how the market is influenced by condition and marketing. Stay tuned for their final sold prices. Until then, if you want to investigate the 2022 sale of your Bristow or Gainesville home, get in touch with me for a no obligation market analysis.
Every day is a blessing when you love what you do. There are plenty of agents out there that get wadded up over showing property on a gorgeous weekend day when they know their buyers have zero chance of either liking the homes or have the ability to win in a multiple offer situation. I am an agent that understands that interacting with my buyers at properties helps me to understand better what they like, help them adjust expectations and get to know them better. Bonus for me is that I genuinely have fun just about anywhere I go. And I have found that my good disposition has a way of rubbing off.
Today my buyers and I traveled from Culpeper to Warrenton, to Nokesville and back to Warrenton. We saw some interesting things. The blue pig above was one of the more attractive things we saw today. He was so cute we just had to stop and admire. Didn’t notice he had his left ear reattached until uploading the photo above to this post. Some defects can be easily overlooked if the subject is charming enough.
One room we saw was a virtual time machine. Shag carpeting on the walls as an accent to the wood paneling below. Welcome to 1970. The literal orange laminate counter tops in the kitchen made it easy to picture Mike Brady at this desk drawing up some architecture plans.
The other gorgeous thing we saw was this back yard. It had some truly lovely trees in bloom. The dogwood pictured above was the prettiest. Somehow, it looked better in person. Probably something to do with being in the sunlight, hearing the birds chirp and the rooster next door crow.
Though we ruled out more than we ruled in, my buyers and I made good progress today. We tried on some homes that would have been dismissed out right before. My buyers learned where they have flexibility and that the geographic area of the most interest is not out of reach with a new vision on how to utilize smaller spaces. We are now thinking out of the box.
Selling in a Seller’s Market is Not a Guarantee of Best Terms
As limited housing supply continues to meet unfettered buyer demand, more and more sellers have been overly confident in their place in the market. Believe it or not, not all homes sell in a seller’s market. They will if they are priced right and/or in good condition. Market forces are always at work, which means buyers still compare what is offered to what they have recently seen and what they expect to see in the near future.
It is not uncommon for a buyer to walk away from a perfectly pleasing, over priced home in a seller’s market because they fear it will get bid up above that list price. Preparing market reports regularly for the neighborhoods of Braemar, Dominion Valley and Regency I see sellers getting below list price and selling in weeks, not days. Some even have to give seller subsidy. Why? It’s a seller’s market, right?
When buyer demand is high and inventory is low we are indeed in a seller’s market. That does not mean that sellers can ignore listing preparation, hire low skill listing agents who know nothing of professional marketing and expect to get the top of the market. Consider a top athlete who is a free agent. They will get picked up, but how much money they make depends on the strength of their agent. Agency is all about advocacy. Sellers who hire listing agents are not unlike athletes or actors who have an advocate on their side advising them and helping them negotiate. Talent agents know how to best present their client’s gifts to increase demand to max out the money made.
Bringing it back to real estate and the intense buyer demand our seller’s market is facing, it is fair to say to any seller who asks if they need to complete listing preparation to sell, “No.” If the price is right for the projects left to buyers who are faced with having to pay their own closing costs, down payment and now take on projects in a home, there is no doubt the home will sell. The question is, how much is being left on the table by leaving the preparation undone? More than the cost of the preparation.
Same goes for sight unseen offers. Can a seller get a great offer before anyone has set foot in their home? Sure. If they let showings roll a few days, chances are the offers would get better and better. Why? The pressure to accept sight unseen offers is usually from buyers who know they will not be competitive in a multiple offer situation. And if they will not be competitive in a multiple offer situation, why on earth would a seller who only gets one chance at maximizing their profit not wait to see more than one offer? From my own comps, I recently watched as a seller left approximately $30,000 on the table by not being photographed or going active with their listing agent. Very few sellers I know are willing to walk away from that kind of profit.
Having a strong advocate who knows the current market conditions because they are active in them every day is so important. Let’s go back to our talent agent analogy. Do you think hiring a relative who just became a talent agent is what big name athletes and movie stars do? No. Their paychecks are dependent on outstanding representation. They sign with agents with proven track records of success and outstanding reputations. Why don’t sellers when it comes to listing? Part of the problem is that they conflate the cost of a listing agent with the bottom line they will net. They never consider that a more experienced agent will more than pay for themselves in the preparation advice, professional marketing and skilled negotiation. The other part of the problem is they think anyone with a license will do. This job has very minimal standards. Agents who are exceeding industry standards are the ones breaking records with list prices.
When it is time to list your home, even if it is in a seller’s market, pay attention to the marketing done on behalf of the other listings in this seller’s market. Are they offering staging advice and other preparation? Are they hiring a professional to take listing photos? Are they pushing sight unseen offers? There is never an easy button when it comes to getting the absolute max the market will bear. However, if a seller is okay with leaving tens of thousands on the table, any agent will do. If they want every dollar they can get, are willing to do the work and put up with a few days of showings, they will be over the moon with the results when they hire an experienced broker like me to help them through the process.
A seller’s market can be exceptionally profitable, but should not be treated as a lottery. Choosing the path with the best odds of getting top of the market will make a seller successful. That path starts with hiring the right advocate.
Is Listing Preparation Necessary in a Seller’s Market?
Sitting across from a seller this morning who had started the process of packing, pausing only to sign our listing agreement, there was a lot of discussion over what is necessary to do prior to hitting the market. Very few homes that I walk into are neutral enough, de-cluttered enough and exuding enough mass appeal to be what I, as a real estate professional, would consider market ready, but it does happen.
As a Top Producing Agent in the Bristow/Gainesville area, the sellers I meet want the maximum amount of money they get out of their homes for the minimal amount of effort. Moving is hard enough. Prepping a home for a red hot market seems ridiculous to them. After all, the market is so hot that some sellers are accepting sight unseen offers. They want to know why I am advising them to paint, de-clutter, put in new carpet, etc when a buyer is likely to write a sight unseen offer. The answer is usually in the realm of, “Because you want the same or better that the seller down the street got, and their home was move-in ready.”
Market value is determined by being open to the market. Yes, buyers actually seeing the inside of your home in person. (I know. What a pain, right?) Time and again, sale after sale as sellers and I go over comps, I point out how much more this home made after a few days on the market, being presented move-in ready and professionally presented vs. that home that listed as Coming Soon and took a sight unseen offer from a buyer that didn’t even see photos of the home. A seller that popped up in our comps today sold their home sight unseen. I know the inside of the home because I have been in it. To say the seller left money on the table by taking a sight unseen offer is an understatement. Try thirty-thousand dollars or so is my guess.
Earlier in the week, two of my Coming Soon listings were getting calls from buyer agents begging for a chance to submit an offer sight unseen and have my sellers decide right then and there. Why is that? They know their buyers won’t be competitive when the listing hit the open market. Why on earth would I advise my sellers to take a sight unseen offer that I know can be bested on the open market when they only get one chance to sell the most valuable asset they have? The situations are few and far between where that would make sense. Trying to sell before losing a home to foreclosure would be one of them. Losing out on a home they are under contract to buy because their home sale contingency is about to expire is a situation where it would make sense. Minimizing the exposure of a bedridden relative to an overwhelming amount of buyers would be another. Anything else that would may tempt someone to walk away from thirty-thousand dollars would be worthy of investigating opportunities they may not have considered. Boarding pets. Spending the weekend in a hotel. You only get to liquidate your home once.
The same argument goes for listing preparation. Buyer enthusiasm with those exuberant multiple offers doesn’t come from a home that hasn’t been de-cluttered, neutralized and spiffed up for buyers. Sure, an unprepared home may get multiple offers, but the offers will be substantially higher when a seller has put effort into making the home move-in ready. The market comps show it time and again. Is skipping the work worth the money that would be lost?
A little effort goes a long way in this market. Painting the home a neutral color is a great way to put a fresh clean face on the interior of a home. Sometimes the outside might need some fresh paint on the doors, shutters and trim. And maybe a power washing. First impressions are powerful. Tidying up and depersonalizing allow buyers to see themselves living there, which increases their enthusiasm for a home, which increases the price seen in offers.
So when a seller asks me if preparation is necessary, the answer is always, “No, but are you willing to walk away from five to ten percent more in final sold price?” The home sale we saw today that left thirty thousand on the table may have thought differently if her agent had said, “I think you can sell for thirty thousand more if we hit the market for a weekend. What do you think?” Put a price tag on the dreaded event and suddenly it doesn’t seem so bad.
Bringing my first listing of 2022 to the market on January 24th, I knew things were going to be busy. My seller had received a pre-market offer on 14530 Kylewood from a buyer that was well above list price. That was enticing, but in the end, they wisely elected to see what the market would bear if that was an offer someone made without even seeing the home. Boy did the doors get blown off on this one.
Three full days on the market, plus the pre-market offer, left the seller with a total of fifteen offers. Fifteen offers! All of them were above list price. Some were even higher than what the seller ended up accepting. Why would a seller take a lower offer? Allow me to explain.
This four level Parks at Piedmont condo was listed at $315,000. The highest most recent sales were $320,000 and $330,000. The higher of the two had a floor plan where the main level with the kitchen was the entry level. Ours was one where the main level was the second level. Might not be as attractive. Plus the higher priced recent sale had upgraded flooring on the main level, more so than what my seller’s unit had to offer.
The highest offers we had were at $350,000. However, not one of them gave up the appraisal contingency. The best one offered a low appraisal guarantee of only $3,000. That’s not much considering the most likely appraised value would land between $320,000 and $330,000. Talking it over, we made a call to an agent with a listing under contract. Their appraisal had been lower than $330,000. Hmm. The path to which offer to choose became very clear. The seller chose the offer at $335,000 with no appraisal contingency and no inspection contingencies. They knew they would get the sales price. There would be no low appraisal consequence.
This sale now becomes a comparable for Parks at Piedmont South, rising values a tad higher. Maybe the next well prepared, professionally marketed condo will sell even higher. In this frenzied market with very little for buyers to choose from, it is nearly a given. Ready to sell yours? Get in touch for a no obligation market analysis.