As we journey through life we are reminded time and time again of the adage, “Jack of All Trades, Master of None” and throughout our lives we have learned the importance of surrounding ourselves with our village. As professionals we find those who can guide us in the areas they know best; the thorough and competent home inspectors, the trustworthy lenders, our proficient title and escrow officers, financial advisors, insurance agents and the list goes on. In our personal lives, we lean on medical professionals, care providers and those who excel in their profession of choice.
Through the several hundreds of real estate transactions we have participated in over the years, we have seen countless examples of the importance of having a real estate professional on your list of “advisors.” A short conversation can not only save you money, but also time and undoubtedly a great deal of stress. It is amazing what you can gain through a loyal, professional relationship. Often times people think that real estate agents are only there to guide you when it is time to sell, but there are many other important aspects to the housing market and having a professional agent in your corner at all times. This can make a huge difference.
Whether you’re strategizing about future property investments, or even considering a remodel, you should be consulting with your realtor, and especially if you are considering selling within the next five years. We can guide you on the current trends of the market, whether the choices you’re making will appeal to largest pool of buyers and if that specific investment will likely have any sort of return. There have been more than a few occasions when we have been called “after the fact” and we could see the devastation on the face of the Seller when we told them their $60K remodeled kitchen resulted in a mere $10K price increase. Rarely is an investment into your property going to result in a dollar for dollar return (i.e. spending $15K will not get you $15K more) but on occasion there have been opportunities when spending $10K and a couple weeks time, could elevate you into being able to ask an additional 10% for your property and around here, that’s often an additional $40K-$50K which is no small potatoes. We recently guided clients, recommending a relatively easy remodel of the bathrooms in their home because we knew this small change would support a higher listing price. Less than 30 days after listing the house we had our offer in hand and it was $30K higher than we could justify without the remodel.
Before listing your home your realtor should walk through the house, pointing out areas that can be improved and also areas that won’t really make much difference. Money well spent can have a great reward.
Every commodity is driven by supply and demand and real estate is no different. Receiving guidance on timing is one of the most critical components of our business. Sometimes, holding off for a few months and waiting to sell your home can increase your value, even if it means your property goes active in the fall vs. the summer. Waiting for the other properties in your neighborhood to sell or listing your four bedroom home when all the others have gone pending can have a huge impact on the sales price. Even if you aren’t quite ready to list your home but would be willing to sell if an opportunity presented itself, connect with a realtor. You can start preparing your home for marketing but also let the agent know you would consider selling. We can count numerous occasions over the last year when we were able to align one of our clients with the perfect home before it even hit the market and all because that particular seller gave us a heads up they were ready if an opportunity presented itself.
Establishing a relationship with a realtor will pay off. Take our word for it. And once you have that trusted professional in your life, don’t be afraid to listen to them. They see things that you don’t and know what the market supports. After all, it’s what they do, day in and day out. We find it ironic how many discussions we have with clients about our opinion of value, our marketing strategy, how to best position a property to sell with regard to not only price but condition. I can’t think of the last time we questioned our CPA’s advice on how to prepare our taxes nor would I ever consider disagreeing with an attorney on how to best litigate a case. Realtors with proven track records and years of experience are versed in not only what works but also what doesn’t. If they were one of the lucky ones who have weathered the storm when the market was hot and also when it was not, they have learned by trial and error and they know what it takes to sell properties. Be willing to listen to them, learn from them and let them “do what they do.” Most agents are open to pricing homes “with their clients” as well as different marketing ideas, and working as a team is essential in any professional relationship. But we feel it is equally important to be honest and fair in what today’s market supports. Inflating a value in a home leads to frustration, disappointment and in the end a lower sales price.
With the lower supply these days and the illusion that we are in a seller’s market once again, we are starting to see one of the most costly mistakes being repeated…. Overpricing. It doesn’t mean that lower levels of inventory don’t warrant slightly higher prices but we can’t get crazy and place things 10% over what can be justified. Pent-up buyer demand is driving our market right now and 50% of new John L. Scott listings are selling within the first 30 days. Our market has shifted in the last year and there are buyers out there just waiting for the right house to hit the market. These same buyers are very familiar with market values and what homes in the area are selling for and they recognize a fair value when they see one. They also know when a property is overpriced and if they aren’t excited about it, they will “keep an eye on it” anticipating a price reduction in the near future. Unfortunately for the sellers, once that price correction takes place, new inventory has come on that has diverted the attention of the pool of buyers and that particular listing is now stale and goes unnoticed. If you price the house accurately, statistically we know the house will sell for around 98% of the list price. If you push our value too high and it takes longer than 60 days, statistically the home will sell for 92% of the list price and often times, that list price has already been reduced once. Overpricing a home is a costly mistake so definitely give it some good, hard thought and follow your realtor’s advice. We are all guilty of, “Let’s give it a try and see what happens.” because after all, we don’t want to take money out of anyone’s pockets; but if three different realtors have given you their opinion on price and none of them are near what you think your home is worth, they are telling you something. Remind yourself that you asked for their opinion for a reason and while you may not like what they are saying, it’s sound advice that you can rely on to make the important decisions for your family.
We would much rather give someone candid feedback on pricing or condition, even when it’s not a fun conversation to have than to give them an inflated sense of value, list their home at a price that nobody but them believes in, only to have them make decisions based on this inflated sense of value that they will never realize. It’s a lose-lose for all involved. We want to be part of the team and work with you to sell your home. After all, we all have the same goal.