In today’s hot real estate market any reasonably competent agent can sell your home. However, it takes an agent with knowledge, skills and negotiating savvy to get you the best possible price for your home. Knowing how to prepare and price a home is critical in a hot market since a home that “lingers” for several weeks without selling can give the impression that something is wrong with it and scare off buyers.
With this in mind, here are some sales strategies that I’ve found to be valuable in an up market:
Don’t Price Too Low
Some agents employ a strategy of “auction pricing,” in which the property is priced below market value with the expectation is that multiple bidders will drive the price up. This is definitely a gamble. Sometimes it works, and sometimes it fails terribly. It’s possible that the low price creates a lot of interest, but many, if not all potential buyers will offer lower than the sellers’ target price. In other instances, buyers may decide not to write if they feel that the property is “too hot” (ie too many bids coming in for a particular property). In instances such as this, the seller may end up with fewer offers than originally anticipated, and receive a sale price much lower than their goal.
Don’t Price Too High
The market is hot and there’s little inventory, so why not shoot for the moon? Just as pricing too low can adversely affect your final sale price, pricing too high can backfire because even a hot market has its limits. While there have certainly been properties that have sold for prices that are considerably higher than the norm, they are not as common as you think, and when they happen it’s usually because of an exceptional location, home or lot size. Many sellers (and agents) often buy into property prices that are unrealistic, even in an up market. When this happens, the property will typically languish on the market while neighboring properties sell.
Determine the Unique Characteristics of the Home and Potential Buyers
Figure out what is special about the property and which buyers those features will appeal to. Is it within walking distance to an elementary school? Is it close to a downtown area with restaurants and shops? Is the lot especially private or large? Is the home new or a modern design? Once you have determined the distinctive features of the property, you can develop a profile of the most likely buyer. Determining who you believe to be your final buyer is key; would you spend your marketing dollars and energy marketing a one-bedroom condo to family of eight, or a bachelor/young couple without children? Targeting your buyer works.
Prepare and Stage the Home with the Targeted Buyer in Mind
In a hot market, it’s tempting to just put up a sign and sell the house as-is. After all, everything’s selling. However, smart, cost-effective preparation and staging can significantly increase your sales price—even in a competitive market. Buyers form their impression of a home within six seconds. It’s important to make those seconds count and to encourage buyers to imagine themselves in the home.
Pricing a home is both and art and a science. In a hot market, you must be up-to-the-minute aware of comparable sales and even pending sales. In the recent market, we have seen prices rise significantly in a matter of weeks or days. Once you have a good feel for the current market then you can confidently determine how important the unique features of the home are and what a buyer will be willing to pay.
Set Expectations with Buyers and their Agents
In a hot market, buyers can be anxious. The seller’s agent has an opportunity to set expectations about the number of offers expected and their prices and conditions. A savvy agent can heighten expectations and maximize the offers.
If you are thinking of selling in this hot market, I’d love to talk to you about your home and share my strategies for getting the highest sales price possible for you.