|Marketing a house
|Getting from the offer to closing
I have always encouraged people
to learn from success. Other than during a short difficult time
period in my life years ago, I have not had my listings not sell and be
relisted by other agents. In the past several years, I have
only had one listing not sell and those sellers plan to relist
soon. That compares to an industry average of 1 of 6 houses not
selling while listed.
What can a good agent do for you and how important is it? I have attributed a score to each of the parts of the importance of your agents work in selling a house with the total being 100. First, lets take a quick look at the real estate industry:
It is unusual in a vocation for the highly trained professional and the untrained newcomer to receive the same pay from their clients. The real estate fees are similar throughout the industry. Agents need to be qualified, experienced and have integrity to give the best service. I believe I meet that criteria and look forward to sharing my experience with you. CONTACT RICK.
What do those agents do and how important is it?
|Pricing a house
This is by far the most important aspect of a real estate agents work. If the house is priced more than a few percentage points above market, the house won't sell, can become stagnant and price reductions will be necessary. Properties with over 5% in price reductions normally sell for significantly less than properties that were priced properly to begin with. Pricing the property slightly above sold comparables and just below the competition is the key. If the house is vacant, it will mean unnecessary costs from excessive marketing time. The more unique the house, the more the house can be priced above market without being priced out of the market.
Pricing a house too low obviously costs the seller money. It takes expertise and an understanding of appraising that few agents possess to do a proper job at this. The common error is comparing "apples and oranges." To get a house priced right, it is important to use an experienced agent. That agent needs to do a comprehensive analysis and make adjustments for differences in square footage, location, condition, number of bedrooms, baths, garages, etc. If prices have been changing over time, then an adjustment for time of sale is also necessary. A quick analysis that doesn't adjust for the differences between the houses is just not accurate.
On the other side, to get a listing, many agents will "buy" the listing. In other words, they will tell the owner that the property will sell for a price that is well above market value to cause the owner to like and use that agent. No matter what any agent tells you, your house will still sell for it's value (or less if the agent under prices it), not an inflated value. Whereas starting off a little higher than what other houses have sold for is wise, starting off above what the competition is selling for will in most cases net the seller less money and substantially increase the amount of time it takes for the house to sell.
|Preparing a house
It takes a trained eye to determine what needs to be done to help a house sell for the most amount of money possible. It also helps to have someone who is not used to living in the home look through it. Most owners, without professional advice, perform work that is unneeded and don't complete tasks that facilitate getting the home sold. Just so you have an idea of what I do when I inspect a home, here are some basic principles that can be used in determining what to do and what not to do.
1. What NEEDS to be done? Most, if not all items that would be required by a lender (work order items) are best to do prior to putting the house on the market.
2. What LOOKS worse than the rest of the house?
There is only one chance to make a first impression. Here is my experience. When a buyer approaches a house that doesn't feel cared for or seems run down, the husband may think, "I don't want a project." and the wife may think, "He'll never get it done!" They start off looking for a reason not to buy. Here may be their thinking or feeling, "Obviously this house needs so much upkeep that the owner hasn't been able to. We may not be able to either." Some buyers will be able to look past the original impressions, but if a seller loses 25% of good buyers, they will end up most of the time with a lower sales price. In general, people will judge the overall condition of the house by its worst attribute. Each of us gets used to our own homes and we know the facts about it and view it as it is. A buyer looking at it for many times less than an hour won't necessarily have the same conclusions we have. It is so important to have a professional take a fresh look and make recommendations. For those who choose to, here is a do it yourself guide.
Once the needs are out of the way, cosmetics are the next and really the most important in staging the house. Start at the sidewalk. Looking for negative things, what is the first thing you notice? Walk through the house and note what items stand out to you as worse than the average condition of the rest of the house. If possible everything up to and including the front door ought to look a step above the average condition of the rest of the house. Here are some examples of important issues to attend to.
To green up a lawn quickly use Sulfate of Ammonia/ Ammonium Nitrate 20-0-0. It is available in a 20 pound bag at Home Depot for about $4. Make sure to water well right after applying.
Paint can be color matched at most paint stores by bringing in a 2 square inch sample. Moss killers are available in spray form at most hardware stores. It takes about a week for the moss to die. There are cement cleaners on the market if you don't have access to a pressure washer.
|Marketing a house
You may wonder why the score I gave above
was only 20%. Most of the value of marketing is putting the
listing in the multiple listing service which is fairly simple. I
could train the average person to do so in just a few hours.
Marketing includes several possible tasks. This was my major at the UW. When marketing anything one needs to determine where the buyers are. In the case of real estate, I have found that the vast preponderance of buyers are already working with agents. Those agents have friends, family, past business and referrals. I estimate that over 80% of buyers are already working with agents. For that reason, marketing to agents is the most important part of getting a home sold. They have access to most of the buyers. I attributed a score from one to 100 as to how effective each of these tools are in obtaining a buyer.
Prudential NW We command a the largest portion of the South King County market. A great portion of buyers will come from Prudential NW agents through the below methods..
Advertising (5) (Local paper, metropolitan paper, homes magazines) These types of advertising help give exposure to the property. Both buyers who aren't working with agents or buyers whose agents aren't working for them may notice these ads and find out about the house through those ads. The big full page ads one may notice are purchased by the real estate firms predominantly to impress sellers. Those particular ads aren't as easy to read through as the column ads which are sorted by location and keywords. Whereas advertising plays an important role in obtaining buyers, very few buyers actually buy the house they call on in the ad. The exception to this is when the house is unique or very expensive.
Brochures (2) - the more positive features a home may have that are not easily noticed, the more important it is to have a brochure available to buyers and agents that point out those features.
Brokers Open House (1) - This is a good tool to use when the house doesn't have easy access with a key-box or is substantially better in appearance on the inside compared to the outside. The better agents don't have time for Brokers Open's and would already learn of the property through NWMLS searches.
Multiple listing (80) - This is crucial as this is where both agents and buyers are able to find properties. The property must be listed properly. In other words, the NWMLS area, bedrooms, square footage, style, view, etc. must be market properly or agents or buyers searching for property won't access yours. The remarks must identify the main selling features of the property.
Open House (3) - Open houses seem to be the most effective at mid plus priced homes that are not unique. It is not usual to sell a house from an open house. Most agents hold open houses to have a source of buyers. Many times agents will offer to hold my listings open for that reason. For open houses to be effective, (in this area anyway) I've found that it helps to avoid weather extremes. People just don't seem to show up on hot days, very rainy days or on very nice days in the winter. It seems that someone in the family finds something more important for them to do.
Sign (7) - a visible sign will attract neighbors and those driving by. The busier the street the more important the sign will be. Buyers who are working with agents many times call their agents when they see a new sign.
Web site (2) - As time goes on, a website becomes more and more important. Buyers have an opportunity to view the features of the house and interior pictures from their homes.
|Getting from the offer to closing
|Reviewing the offer
There are many issues to consider when
protecting a seller's rights. The offer supercedes the listing
agreement so each part of it must be carefully looked at. It takes
experience and attention to details to make sure this part is done
properly. Many time agents who are gifted at "selling"
struggle with the details. Failure to have the knowledge and
attention to detail can cost the seller thousands of dollars and
potentially end up in litigation. An area that most agents fail to
protect a seller is when an offer is written that either requires the
house to be sold or requires a house that is already sold to close prior
to the seller's house being able to close. The first one is called
a contingency; the latter is called "subject to." In
both these cases, the entire sale of the house that isn't closed yet
needs to be scrutinized. It can end up being like dominoes.
If one house doesn't close, then those seller's won't be able to close
on the one they bought and it can go on and on. I have been
involved in a sale that had 3 other houses tied to it. If house
one doesn't close, house four won't either. Closing is when
the paperwork is all done and the seller receives their money.
Think of all the people involved!
BUYER 1 $175,000 SELLER 2--BUYER 2 $250,000 SELLER 3--BUYER 3 $400,000 SELLER 4-- BUYER 4 $600,000 SELLER 5
Here you have 4 houses, 5 people. If buyer 1 fails to be able to close the sale with Seller 2, all the rest of the sales won't close. All the houses go back on the market! What a mess! So what do I do? When I have seller 5's house listed and I get an offer from Buyer 4 and am satisfied with buyer 4's financial capabilities and the wording of the offer, I write a clause in the offer before accepting it making the offer subject to my approval of the wording and financing capabilities of buyer 1, 2 and 3. I actually call all the agents, review documents and when needed, talk to loan representatives to verify progress. Although many agents may consider this time consuming procedure above and beyond, a seller who had to unpack and start over may wonder why it wasn't done.
|Negotiating the sale
|This requires again some experience and wisdom to know how far to push a buyer when making a counteroffer. There are many issues to negotiate such as price, terms, closing date, included items, and dates to have financing and inspection contingencies removed.
|Taking the sale through to closing
There is much to do between the time of sale
and the time of closing. It is sad to say that the quality of work done by
escrow, title and loan companies isn't what it used to be.
Due to lack of knowledge or care on the part of the other agent or other associated companies involved, the experienced agents become baby-sitters of a sort. About one time out of five I meet up with one of those other top agents in the industry. What a delight. There are few if any changes to make on the earnest money agreement, and I have much less work to do between the time of sale and the time of closing.
|Experience, intelligence, diligence and integrity are all important qualities in the agent that you choose. It is also helpful to have an agent that works for a company with enough agents to give support. The qualities of the agent you choose are crucial in pricing and preparing your property for sale, and in reviewing the offer and getting your property closed. The professional gets you the most amount of money in the least amount of time and you receive a check at closing very close to what you were told you would when you listed the house. That is the job of a real estate agent!
The actual market time is different than what many may perceive. Market time is many times (for example in the Seattle Times) determined by taking the average of the time it took for houses to sell. That tells the market time of only the houses that sold. If for example only 25% of houses sold during a particular time frame, the market time for the other 75% of sellers is not considered. Actual average market time can be determined by dividing the number of sales in a given time period by the number of available listings. If 100 houses are sold in a given month and there are 900 listings available for sale then 900/100 equals 9 months. That is the actual average marketing time for those who are trying to sell. I have seen this number as low as 7 weeks and as high as 2 years. The average marketing time that you will normally see computed in other publications usually ranges from 30 to 100 days.
The more unique the house, the more acceptable it is for marketing time to be longer. It takes longer to find just the right buyer. A "normal" house that is priced at market should sell quickly.
My primary goal is to sell an owner's house for the most amount of money net to them. That many times means not having a long market time as at times long marketing times mean increased costs to the owner.
Statistics are available to agents on the Northwest Multiple Listing web site. Since those statistics have been input to the recent site (which is about 4 years), my listings sell 2-3 times faster than multiple averages.
Including unsold properties
Days Rick's listings Multiple average Rick's listings Multiple average
0-30 64% 32% 60% 21%
31-60 27% 22% 25% 14%
61-90 9% 17% 8% 11%
90 plus 0% 29% 6% 53%