For the last several years, we have been in a market with tight inventory and a huge amount of buyer demand. In such a market, you would expect every home coming on the market to have multiple offers and sell within a few days but often that’s not the case. And if you were to ask 100 Realtors why a particular home lingered on the market, you would likely get 100 different responses.
In my experience there are 6 reasons homes don’t sell for top dollar.
Exposure
While there this list isn’t ranked in order of importance, I definitely think exposure is towards the top of the list in why homes don’t sell or don’t sell for top dollar. Exposure simply means getting your home in front of as many qualified potential buyers as possible. Exposure drives demand and demand ultimately determines price. So if your home isn’t getting the proper marketing and exposure then you are likely leaving money on the table.
As a professional, my goal isn’t to get you just one offer. I make every effort to bring multiple offers for your home so that ultimately the price gets bid higher by those not wanting to miss out. Let’s be honest, compared to other industries, the barrier to entry for Real Estate Agents is pretty low. Essentially anyone that passes the test and pays for their licensing can list your home for sale. This doesn’t mean they have the sales, marketing and negotiation expertise required to create demand through a collaborative marketing plan of online, print, social and PR that will ultimately help you achieve your goal of selling quickly and for top dollar.
Price
Pricing your home correctly from the start is critically important. In a day and age where comparable sales data is readily available, every person you talk to seems to have an idea of what their home is worth. While data is an important part of the equation when pricing a home, it’s not the only thing that should be considered. I often encounter sellers who want to take an average of the homes that have sold or the highest sale in their neighborhood and then use that price per sq/ft to come up their value.
Unfortunately, accurately pricing a home is not that simple as there are many factors that should be taken into account before deciding on your list price. Everyone wants top dollar for their home but that doesn’t necessarily mean pricing your home higher than the last sale in your neighborhood. Pricing appropriately from the start will likely bring you better results than listing high and being forced to cut the price when you don’t get the results you had initially hoped you would. In a strong sellers market, homes that are priced according to fair market value end up selling in less time and at higher prices than those that come to market higher than they should. This is due to buyer psychology. When a home has been sitting on the market for “x” amount of days or has seen one or more price cuts, buyers believe the home is not worth the asking price or the sellers are more likely to accept a lower price.
Terms
The terms of your sale, and how they are described in the private agent remarks in the multiple listing service can often make the difference between a home with few showings and one with massive buyer traffic and multiple offers. Impossible or difficult to meet terms can dramatically reduce your buyer pool. You don’t want your agent driving traffic away from your home by disclosing things in a way that can turn off buyers. An example in this market would be contingent offers. Currently, many sellers are listing their home for sale contingent upon finding an acceptable replacement property. When these sellers are making offers on homes, I often hear Agents say that their seller won’t consider a contingent offer. In most cases, a contingent offer is less desirable as there is more potential for a deal to fall apart. But a sale contingency is only one aspect in the strength of a buyer’s offer and a professional Real Estate Agent can help you understand and weigh the relative benefits of each offer. Some contingent offers aren’t a good fit but you may be throwing the baby out with the bath water in a market where contingencies have become commonplace. You could end up having to lower your price to find the right buyer when a contingent offer would have ended up netting you more money.
Accessibility
Access is very important when listing your home for sale. The more accessible your home is, the greater your chances of receiving multiple offers. If a buyer can’t get inside your home, it’s unlikely they will write an offer. As a Realtor who works with many buyers with busy schedules, I can state with certainty that when it’s difficult to show your home buyers get turned off and in many cases will move on to look at other homes. I understand that sometimes there are issues with pets or family members, a home based business or other circumstances which limit showing schedules. Having a Realtor who understands your needs and can help find a solution to maximize exposure with the context of your schedule is critical to a successful outcome.
Desirability
This is one area where some things are within your control while others aren’t. We can’t pick up your house and move it from a busy street, but we can make sure the rest of your home presents as well as it can. Essentially, you need to offset anything that you can’t change by creating a positive emotional response to your home with the issues you can control. Remember, people buy emotionally and justify logically so if they walk into a home that is picture perfect on the inside but on a busy street, it’s not uncommon that their emotional response wins out over their logical concern over living in a high traffic area. It’s all about putting your best foot forward and stacking the deck in your favor.
Commission
As you are likely aware, there is no fixed commission in the Real Estate industry. There are many different business models with varying levels of service. It’s important to remember, you often get what you pay for when it comes to hiring a Professional to help you sell your home. There are discount agents and brokerages cutting commissions and telling sellers that they offer the same level of exposure, marketing, etc….as the top Realtors who aren’t reducing their commissions are able to give their clients. This is simply not true.
An agent taking a reduced commission simply cannot afford to do the necessary paid marketing, professional photos and video, social media advertising, print media or any of the necessary marketing and promotion required to get your home the exposure required to get a top dollar offer.
They also are unable to assist with concessions when a buyer is ready to walk away from an escrow over a repair request when you have already given to your limit to make the transaction work. These are circumstances that are often overlooked but occur on a regular basis.
Most importantly, most discount brokerages offer an un-competitive Buyers agent commission. On principle alone, many agents will be unwilling to show these homes to their buyers. This could be limiting the number of showings on your home, losing the money you had hoped to save.
How Much Is My Home Worth?
Getting top dollar for your home isn’t an easy task and that’s why it’s important to consider each of these 6 items when deciding to put your home on the market. Keep in mind that each of these items has been condensed to make them easy to read. Iif you are considering putting your home on the market and want to know more about how any of these 6 could affect you, I would love the opportunity to speak to you in more detail. Maybe you aren’t considering selling at all but want to know what upgrades in your home will ultimately get your more money? Either way, I’m here to help and would love the opportunity. You can reach me directly anytime by going to my website or reaching out directly to 714.376.2711 or jeb@jebsmith.net.
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