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Selling: Give Yourself a Chance

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If you’ve been in the business long enough, you know how to spot it. A client enters a possible home target and immediately disengages. There are any number of ways to see it, but especially through body language: What are they looking at? Walking slow or fast? Checking their phone? You immediately know the long of it—they’re not buying this house. No matter what you say, you won’t be able to get them to consider it.

Why is this? There was something in that house, or about the way it looked, that just wasn’t going to sit well with your client.

What is a Deal Killer?

When I talk about a deal killer, I’m saying there’s something that the seller could’ve done to fix a situation but didn’t, and now they’ve got a discounted asset on their hands. And if the person who would’ve bought the house in the right condition walks through that front door and then back out, well, you’ve cost yourself some money. And that’s not funny.

We’re not talking about calculus here. If you can fix a “situation” and then get more money for your home than the fix required, you do it. If not, it’s like you’re purposefully trying to kill that deal.

Here’s the thing. Buyers—like everyone in this world—prefer the easy route. If they not only have to imagine a “situation” not being present anymore but actually go through the process of fixing that situation, you are putting an obstacle in their way. If you’re counting on potential buyers to see past the “situation” and recognize what the value could be, you’re going to get less money than you should—and it’s going to take longer to get it.

Here are some of the most common errors that sellers make:

Smells

This one feels like it should be so easy.

Make your home smell good. Or just not bad.

Just take a little time working on your house’s odor. You don’t need it to smell like fresh-baked Krispy Kremes, but…

Some of the things I run into all the time: dog, wet dog, cat, cat litter, old shoes, moldy basement, cigarette smoke, other kinds of smoke. These are deal killers, people.

We’re talking instant reaction which colors a buyer’s opinion so immediately and forcefully that they’re just not going to get over it. Now you’ve reduced your target buyers to cat-loving, cigarette-smoking hoarders. Good luck with that.

If you’re not sure if you have a smell problem, call someone honest who isn’t afraid to tell you the truth. Make them drink in the air.

Another thing: don’t cook any cabbage or other odorous food in the run-up to your open house. That’s not smart.

Pets

deal breakers petsOne of my coworkers once showed a home where the owners kept a crow in a birdcage. The bird was furious and let us know in no uncertain terms.

Whatever it takes, find another place for you pets to hang out, no matter how small.

Snoopy II might be the biggest package of love and affection a human can imagine, but he has no place in a showing. And it’s not enough to put him in the backyard or a crate in the basement. For starters, he might not dig that and bark incessantly to let everyone, including your buyers, know. Second, your buyers are going to want to go out in the backyard, they’re going to want to inspect the basement. At their speed. This becomes an obstacle for your buyers.

People have come to your home to see it unencumbered by distractions. And pets don’t always act the way you’re absolutely certain they’re going to—especially amidst a parade of strangers. Take care of this.

You know who else doesn’t want pets: real estate agents. They’ve got enough to worry about without making sure a cat doesn’t dart out the front door.

The Dirty ‘____’

Remember our little conversation about smell. Same thing goes for dirty stuff. Dirty anything. It’s not enough to have it spotless by closing. You need it spotless for the potential buyers.

Look, houses get dirty. There’s so much that can get dirty: caulking and grout, garages and closets, windows and counters. And everything paints a picture for the buyers about the maintenance, especially if it doesn’t look that good.

A couple of items of note:

  • clean your home before sellingCarpet—if it’s really old and stained, replace it. Shampoo is not going to get the job done.
  • If you’re a pack rat, hire a guy with a van to clean it out and take the crap away.
  • Air filters—when you change them, dust around the grates.
  • Baseboards—first dust, then look for areas that could use a little touch-up of paint.
  • Hand railings—they receive a lot of grime thanks to your hands. Murphy’s Oil Soap will work miracles.
  • Attic—if you can’t cross safely, point that guy with the van up there too.

Then, once you’ve gotten everything to the point that you’re impressed with cleanliness, HIRE SOMEBODY. They’ll clean it even better, and it’s a small cost for a possibly big payoff.

Seller Present

This one seems like a no brainer. It’s one of the cardinal rules.

Sellers, get out. Get out well before anyone gets there because someone is going to come early. Don’t wait for them to get there. Don’t be anywhere on the property, on the block, in the vicinity. You are not needed and you will only cause problems. You can actually become a deal breaker.

I don’t care who you are, how helpful you are, what powers of persuasion you might possess. If you’re there, you’re going to screw it up.

Don’t make a potential buyer uncomfortable.

People aren’t buying a house, they are buying a home. They want to envision it as their home. This is all about feeling. And that feeling will be very hard to come buy if someone else is crowding out the dream.

Which leads to… Personal Items

There is a fine balance between a home that is too personal and one that feels so sterile it belongs in a hospital. Try to find that balance.

It’s time to store photos and special art, political statements, even books can be removed. You never know who’s going to be coming into your house. Once again, you don’t want to erect an obstacle that makes it hard for buyers to imagine themselves in your home, thinking of it as their home. Depersonalize as much as you can.

Hard to Show

If you’re going to sell, be ready to do anything necessary to sell. Don’t make it hard for an agent to see the property. Be flexible. Be prepared to not get enough notice. That less than considerate buyer might just fall in love with your house.

And be responsive. When you see a phone call or text from your agent, hop into action. Don’t take a few hours to respond. Make this easy for buyers, and buyers just might make your day. You have to keep in mind that a buyer’s agent trying to see your home might also want to see 3-4 other homes around that same time. If you’re not flexible, they might just decide to pass on your home altogether.

It’s not always easy to be perfectly flexible. Life happens, kids get sick, whatever. But if there isn’t a good reason for you to bend over backwards to show your home, then do your best to make it happen.

Summary

Believe me, I know. Real estate transactions, for all their excitement and anticipation, wreak havoc with your life. So do the best you can to make it happen quickly by making sure your house, in every respect, is ready to sell.

It’s not easy to do. So if you’re going to do it, then do it right and don’t make mistakes that really only cost one person: YOU. Everything I’ve outlined above is designed to help you sell your house with the least amount of pain and the most return. So give all these ideas some serious thought.

How to Buy When You Know Nothing… Yet

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Every once in a while, I wonder what it would be like to move from Richmond to somewhere else. Maybe Portland. I hear Chicago is fun. And if I made this move but I wasn’t a real estate guy, didn’t have a license or a couple decades of experience, how would I start looking for a home? How would I, as a real estate pro, advise me on buying in an unfamiliar market?

Here is what I would say…

Finding a Realtor

This seems pretty simple: I would talk to a bunch of Realtors and work with the person that I like best. Too often, people feel as if they have to work with the first they meet. Once you’ve found the person who speaks your language, check them out. Determine if they’re more buy side or sell. Do they work with the properties or neighborhoods that interest you? Or are they going to try to sway you to an area they feel comfortable. Because what you want—what you need—is unbiased advice. 

Use the local MLS

Don’t be swayed to think that a Trulia/Zillow/Realtor.com is going to give you the “local” information. Get access to the local MLS immediately. It gives immediate notification if a property falls within your set parameters. You’ll get the most current information and you won’t have to weed through all the noise that comes from Trulia or Zillow.

Explore Every Neighborhood

richmond neighborhoods map

If you’re going somewhere that is truly new, do yourself a favor and go wide in your search. Be flexible. And once you’re signed up on the local MLS portal, include PENDING and SOLD properties. 

Why go broad? Because every neighborhood and asset type is related in some way, and knowing what’s going on at every level will give you important info. Overly narrow searches might lead to you missing a real value.

And the pending and sold thought?  It’s critical that you know how quickly properties are moving. This will tell you a lot about the strength of the market.

Talk to Everybody

I would talk to everyone I could about any area I was interested in. What are the schools like? When did the neighborhood pop? How close to downtown?  What’s the commute like? Everybody has a different story to tell, and each one will have a different perspective on why that’s the place to move. Soak in every bit. Use it to build your local market knowledge, then form your own opinion. 

It’s in the Data

When I got closer to getting serious, I would first take a look at inventory. Sold and pending properties are helpful, but looking at what’s on the market, for how long, and what the pending sales are will really bring it into focus. A good agent will make this happen quickly.

virtual anetnaRaise Your Virtual Antennae

Start reading everything you can from that city to get a perspective on the economy and what’s happening. Local websites have a lot to offer in that regard. It will quickly give you a sense of what this new city is all about.

Leverage Your Realtor’s Relationships

Don’t hesitate to use your Realtor’s connections – particularly when it comes to lending. You want them to have experience working with each other. If something goes wrong, it’ll get fixed more quickly when you know who to call. The way we benefit from using certain people is because they’re good and they make our deals go more smoothly.

I’m not saying that you don’t compare lenders. You have to to keep them honest. But we use people who are skilled because our reputations are on the line. Just beware of mortgage companies promising the moon when it comes to mortgage rates. There’s a good chance they want to get you on the hook and then go from there. Good lenders and attorneys will know how to deal with late-in-the-game problems. I also truly believe that when a lender chooses whose file to work on, they are going to work on the file that came from a great referral source first and all of the others second.  Be a ‘priority’ file.

How to Get the Best Rate

Call three lenders on the same day and ask for a pre-qualification letter on an identical property using an identical loan product. This will give you the best chance to see through fee structures and therefore which lender prices its money best. Because they use it to generate profit. And if you tell them what you’re doing, they’ll know you’re serious and informed. Don’t worry if they don’t like it. And if all there costs are about the same, use the one recommended by the Realtor.

Final bit: stay focused.

Look at the new notifications and try to figure out if the new listing is likely to sell quickly or slowly to test your understanding of the market. Once you start getting a feel for knowing which properties are going to move most quickly, then you’ve learned something about your market.

Cut through it all, find good people, and get high-quality information. Do this and you’re going to be happy about the end result.

Making the Case to Sell

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Go ahead and Google “Is it a good time to buy a house 2017.” I got 62 million hits. 

Now go ahead and Google “Is it a good time to sell a house 2017.” I got 24 million hits. 

Interesting, right? People are 3 times more likely to want to buy a house than they are to sell one. This suggests a little supply and demand problem.

Why are there 3 times more articles and blog posts about buying a home versus selling one?

I know one reason. It’s a heck of a lot easier to buy a home than it is to sell one. Another thing: if you’re trying to give advice on either side of the equation, it’s a lot easier to deliver the right message for the buy side. So whether it’s agents or people writing about this world, like me, buying advice is the easier advice to give.

Here is what the sellers are up against:

  • selling your homeSellers, in many cases, may still be working against all the debt that we collectively racked up in the race to 2007’s bubble.
  • Sellers, in all cases, want to show a profit on their real estate, and many folks might still be short.
  • Sellers, in many cases, are left with no down payment after payment of commissions and other expenses.
  • Sellers, in many cases, are the ones who bear appraisal risk (and this is a significant issue).
  • Sellers, in many cases, have to deal with the wildcard of timing—how can I get this done quickly so my plan falls into place?

Each of the above is a fair concern to have. But they shouldn’t be deterrents to selling, especially today as the house market continues to get its legs back.

If you are toying around with the idea of selling, things are looking good.

For one thing, if there are so many people interested in buying houses—several times more, according to Google—then that could prove to be an advantage in getting people to your open house.

Take a look at inventory, especially if you’re in what we might call a stronger market. It’s down right now, meaning you’ve got quite a bit of leverage.

Basically, a lot of the noise and hype that drove us to the bubble has washed away and the market continues to approach the pre-bubble trend line. The path from 1990-2003 with a couple tweaks here and there for economic factors puts us on a strong value path.

Maybe that’s still a little too much jargon. Put another way, we’re in a pretty normal market.

Here is what’s happening:

neighborhood If you have a good property in a mature neighborhood that perhaps is feeling the effects of a lack of inventory, you’re likely in a very good position. You can be a little aggressive in your pricing. But pay attention to the most recent comparables. Use the higher comps in your market and/or the pending properties as the best pricing guide.

If that same quality property is in a neighborhood where there’s a decent supply in balance with demand, then ask your Realtor to help you understand the absorption rate, or how long on average it’s taking for a property to go into contract. This should help you understand your timing. If you’re in a good school district, you should follow the trends for the number of days on the market and ask/sold ratios. Really important to get a good grip on comparables.

If your property comes with some vulnerabilities or if there’s a lot of supply in the area, be conservative in your pricing. Know that you need to price it attractively for it to stand out.

Above all, make sure you’re working with someone who knows the market well so you get the best possible advice.

Of course, we would be happy to help…

Pre-Qualification & Pre-Approval?

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What are these “letters” and why do I need them?

If you’re eyeing the idea of purchasing a home, then chances are you’re already wondering how much the bank will lend you toward a purchase. And when the time comes to make an offer, rest assured, sellers will be wondering the same – whether or not you’re capable of borrowing enough to follow through on an offer. The best means for tackling these questions is by securing a pre-qualification or pre-approval letter from a qualified lender.

MORTAGE LENDINGPrequalification letters are based on a very basic set of verbally provided information, which a loan officer uses to generate an idea of how much you may be able to borrow. That information includes such things as current income, a list of assets and your monthly financial obligations—all of which are weighed against current lending guidelines. But here’s the thing you should know about pre-qualification: Without providing more complete details, along with official documentation to back them up, a lender’s opinion is only preliminary. In other words, their estimate is only as good as your word. Informed sellers know this and may take your offer “with a grain of salt.”

Pre-approval letters are similar to pre-qualification letters, but the pre-approval process takes things a step further for added assurance. When you’re pre-approved for a loan (not just pre-qualified), a lender has secured all of the documentation necessary to verify and weigh your finances against bank requirements. This process, called “underwriting,” leaves you one quick step away from actually securing a loan. In addition to telling you exactly how much you’re allowed to borrow, it also leaves you with an exact idea of things like how much cash you’ll need and what your monthly payment will be. Don’t get me wrong, there are still plenty of things to do before you can close on a purchase (like appraisals and inspections, for instance), but with a pre-qualification letter in hand, you’re ready to follow through quickly on a purchase.

They both have their place

If you’ve stumbled upon that perfect listing sooner than expected and need to act fast, then a pre-qualification letter is your ticket to attaching some level of assurance to your offer (it takes about 15 minutes). On the other hand, if you’re just getting started, why not begin the process with pre-approval, so you can generate the strongest possible offer?