There are a lot of decisions a seller has to make during the pre-listing and negotiations processes.
During the pre-listing process the decisions mostly have to do with the Realtor they are going to list with, when to list, what listing price to start with and so on.
During the negotiations process the decisions will be more related to whether to accept the price and terms of specific offers, what to counter offer if not accepting offers as they are, what changes to make if acceptable offers aren’t coming in, etc.
Sellers who are the most successful are the ones who can confidently make decisions and who work with professionals who know what they are doing. Those who make bad decisions in either phase can find themselves in a situation where their homes stays on the market too long which then requires price reductions to sell at all and they ultimately net less because they made the wrong decisions earlier on. Inability to make decisions in a reasonable period of time or hesistancy in making decisions can also lead to a less successful outcome.
This is even true in the current seller’s market where you may think that all you have to do is put a sign in your front yard and people showing up throwing basketfuls of cash at you.
The 2 things that you as a seller can do that will help make the tough decisions easier for you are very similar to the 2 that buyers can implement if they want to be successful, only in a different way.
Information and Analysis
The first of the main 2 factors that are vital in making correct decisions is information….accurate and current information. This may sound like it is too obvious for me to even bring up but this is where mistakes can be made when making decisions about how the home is listed and promoted as well as how negotiations are addressed.
Success in selling a home depends on 1) how the house shows, or its presentation, 2) how it is promoted and marketed and to whom, and 3) the price (especially the initial price it is listed for).
Most agents will discuss how to make the house show better, how they are going to promote it and the price – but the really good ones know that establishing the type of buyer who will buy your home and marketing to those buyers will get your home sold faster, for a better price and with less hassle to you. So when chosing an agent to work with look for the ones who know to do this vital step.
Next in importance is determining the correct initial price and this requires a thorough, current analysis of the market for your type of home in your area. A good agent will do thorough research and present you with the information so that you can determine what price range your home will most likely sell in and will work with you to determine the price you initially want to list for.
Why is this so important when you can always lower the price at a later date?
I did an analysis of every home sold in a specific city in our area during 2016 and found that the average sale price for homes sold within 30 days of being listed was at or above the listed price. Those which sold in the 31st to 60th day sold for 2% less. If it took more than 60 days but less than 90 days then the average dropped another 2%. Over 90 days the average sale price was about 6% below the list price.
So getting the initial price right can make a difference in what you ultimately get from 2-6%. That may not seem like a lot but that works out to a minimum of $5,000 for every $250,000 of the price, and that is only at the 2% stage.
Having the right information about your current market in order to get the right pricing strategy at the very beginning is vital.
When you get into negotiations over an offer or mulitple offer, you are definitely going to want as much information as you can get about the buyers and their financial condition. That is why almost every offer now is submitted with proof that the buyer has the cash to make the purchase or that they have been deemed creditworthy by a lender.
But there is more that a good agent can find out about the buyer and their agent – because the buyer’s agent can have a lot of effect on their client and on the ultimate outcome of the deal and you do not want to neglect this. Your agent needs to factor this in and present any information, observations and evaluations regarding both the buyer and their agent.
When you are having difficulty making a decision in either of these areas, start asking questions until you find out all the information you need to be able to make that decision. You will find that a key factor in your success will be an agent who is able to listen to you and who has good communication skills as well as an ability to properly analyze situations and come up with applicable solutions to present to you. Ultimately you are the one making the decisions but you do need enough information to make those decisions and this will be difficult enough without someone on your side to help get you that info and help you analyze it properly.
There is also something vital to your success that is more personal and won’t be something your Realtor can do for you.
Naming What You Want
All of the information in the world and all of the expert analysis will be no good to your decision-making process if you aren’t already clear on the outcome you want.
When you have no clear description of what you want, and what you don’t want, you have nothing to use as guidelines when making pre-listing and negotiations decisions.
By what date would you like to (or do you need to) sell your home?
How much would you like to (or do you need to) sell your home for?
What do you need to (or would you like to) net from the sale?
What price won’t you go below?
Are you willing to spend some money to get the home ready to show? How much are you willing to spend, what are you willing to do or have done and what aren’t you willing to do or have done?
Are you willing to sell to an investor who may want to flip your home, rent it out, and who may never live in it or do you only want people to buy it who will be great neighbors to the other people in your community?
It will be good to think about them before you get into the process so that you know the answers to these questions. This way, when your agent makes recommendations regarding the initial list price and regarding improving the presentation you will have an easier time making the needed decisions.
The answers to the above questions will also help when entering into negotiations.
Even though a market like this one may seem like it is the easiest one for a seller that there could possibly be – sometimes sellers have a much harder time of it than in what is considered a balanced market. Wanting to make the right decisions regarding the listing of your home so that it doesn’t end up being one of those that ‘linger’ on the market too long which buyers then wonder ‘what is wrong with it’….and having the excitement of getting 3 good offers within 3 days of listing the house but then realizing you have to make the right decision or you could lose all 3 potential buyers – well, let’s say that it can be an adventure in this market.
So determining the answers to the above questions will be vital in your success in this market in addition to getting all the needed info and a good analysis of it, as described above.
When you are ready to sell don’t forget to call me to get my input and to find out about the tools I use to target and market to specific buyers for your home.