The Five Secrets of Selling Your Property
The real estate experience of the Neil Lyon Group spans over four decades and during that time there have been many ups and downs in the market. With Sotheby’s International Realty’s luxury orientation and vast marketing resources, you can be assured that you will get the best services and exposure that is available for your property. Additionally, my group’s record of market-leading productivity and leadership provides the confidence to you that we fully understand the complex process of getting a property effectively marketed and sold. With these “5 Secrets”you are getting an exclusive look at what we have learned over many years and what we know matters most when designing our approach to marketing and selling your property well. Please read this important information and have it be the basis for important conversations and for a sound and effective strategy for getting your property sold.
Fact: Many of the properties that are now on the market will not sell this year.
As hard as it may be for you to believe this statement, this is really the situation. Even with much of the local real estate market performing strongly, there simply won’t be enough buyers to buy all or most of the homes and/or building sites that are for sale. Making the obvious question: what can we collaboratively do to get your property to be one that sells this year? There are key 5 factors (the “secrets”) that must be managed to maximize the probability that your property will sell in a reasonable period of time.
Secret #1: Pricing
The most important factor is the price at which the property first comes on the market. Despite an improved market, property values have still only modestly recovered from the lows of the Great Recession. And the recovery of values is not consistent across the various segments of the market. Stated a bit differently, the Santa Fe version of the recovery has been a restrained recovery. The number of homes selling has recovered well (about 15% more in 2017, over 2016), but the values of many homes are still below their pre-recession peaks.
Of all the skilled tasks a local broker must master, determining the best and most effective asking price is at the top of the list. Buyer preferences constantly shift, and these changing preferences impact the attractiveness of a particular property, and therefore the value. Predictable factors such as views, functionality of the floor plan, quality of construction, the absence of road noise, smart bedroom and bathroom relationships and a host of other less obvious factors impact appeal, therefore value.
As you should expect from a highly experienced and top producing team of brokers, we take the task of evaluating every potential listing very seriously. We stay on top of market trends, we track listing and sales data closely and we look carefully at that data to extract what is most relevant. We look well beyond “price per foot”, which we view as a shortcut to estimating value. We look at a subject property and carefully compare it to properties that are currently for sale, representing the competition to the subject property. We also closely evaluate relevant properties that have recently sold. We conduct the necessary research, we contemplate the important subtleties of each property and we then prepare our findings for discussion with each property owner.
Closely related to recommending an asking price is the owner’s willingness to accept the broker’s pricing recommendation. If a broker conducts thorough and accurate research and recommends a specific asking price, or asking price range, will the owner accept the listing price recommendation or add a “further cushion for negotiations”? This single decision will likely impact when the property will sell and how close to the recommended asking price. If the initial pricing decision is wrong, the result will likely be one or more listing price reductions,leading to an eventual sale price that will be less than what could have been. The initial pricing decision will also impact whether the property is sold in 30 days or 6 months, or even 2 years. It really is that important.
With an appreciation for how important the owner’s pricing decision is, we spend whatever time is necessary to present the results of our valuation research in a complete and totally transparent manner. We go over all the relevant data that is available. It is the single most important decision a property owner will have, other than choosing the best broker to represent them and their property. Therefore, we treat it accordingly.
Secret #2: How Your Property Presents Itself and Is Shown
The next critical factor that can be managed is how your property will show to prospective buyers. Will your property be in “prime showing shape” for each showing appointment? Will your property be furnished in a way to make it as attractive and approachable as possible? Is the property well maintained and does it show that attention? Maintenance is critical, as it strongly impacts a potential buyer’s reaction. As a common example, is there evidence of water leaks (past or present) that causes a buyer concern? If a buyer observes deferred maintenance, it makes it very difficult for that property to compete against others that have been beautifully maintained. We see this reaction frequently. It is an overused cliche, but you only get one chance to make a first impression. This is completely relevant to the successful showing of a home.
It’s natural for a homeowner to believe that a potentially interested buyer will look past an item, or two or three, that are less than perfect, but experience proves this is usually not the case. Serious buyers react to a property on at least two levels, the emotional as well as the logical. If the buyer senses that the property hasn’t been well maintained, the emotional attraction takes a back seat to the logical concerns. If the house and grounds look immaculate and beautifully presented, the property gets one reaction. Alternatively, if there is reason for a possible buyer to have concerns about the roof, or the stucco, or (fill in the blank), it robs that property of the best possible impression. Spending the time and money to get a property ready for the market before the property hits the market can mean the difference between being on a buyer’s short list or off.
To assist our sellers in this area, we often recommend a “pre-marketing inspection”, to get a professional’s assessment of the condition of the property. With the inspection report in hand, it can serve as the punch list of needed repairs. We can also provide a list of maintenance professionals and service providers, to make the process of getting desired work done a bit easier. Whether it’s having exterior wood stained, leaky toilets fixed or getting a roof repaired after a rough winter, we can help put a seller together with reliable and trustworthy professionals. We also have time-tested “home stagers”, “home tenders” and decorating consultants who can help maximize the appeal of your home.
Lastly, how your broker handles a showing is critical. Many homes for sale have lockboxes placed by their listing brokers, so that other brokers working with potential buyers can show these properties without the listing broker being present. This approach is certainly easier for the listing broker, and ironically preferred by some buyer’s brokers, but they are placed at the expense of maximizing the opportunity at each showing. We don’t underestimate the importance of providing descriptive and accurate property information and attempting to impact how the property is perceived by the potential buyer…nor should you. We get to each property before a showing and conduct a walk-through to make sure all is ready. Window coverings are opened, lights are turned on, dead bugs are removed, and front walks are swept when necessary. You get the point. We do what needs to be done to maximize the opportunity that is just ahead. Also, if the listing broker is not at the showing, it makes it difficult for that broker to give the seller complete feedback afterwards. Lastly, to assume the buyer’s broker has complete and accurate information about the property and the surrounding area is more of a risk than we are willing to take. Other than in very rare circumstances, we attend every one of our showings, seven days a week. This is one of the many benefits of working with a team of experienced and dedicated professionals. Showing opportunities are never missed.
Secret #3: Advertising and Marketing
This critical factor is about how your brokers and their company plan and execute an advertising and marketing campaign for your property.
This is vitally important, as the norms and expectations of advertising and marketing continue to evolve dramatically. So much of how brokers promoted properties even in recent years is now fundamentally obsolete. An obvious example is print advertising, which was so important in past years, is no longer relevant or important as an effective campaign is designed and executed. Another example is photography. When good photography and 20 images may have been state-of-the-art 3 or 4 years ago, anything less than A+ photography and high definition 3 dimensional virtual tours is “old school” and simply too amateurish to contemplate.
Putting rich and detailed information about our listed properties where it has the most potential to be seen by the most interested and qualified consumers is where the focus needs to be. The web presence that has been created by the many relationships (sometimes exclusive) Sotheby’s International Realty has established is truly market-leading. Not only does the Neil Lyon Group benefit from these many prestigious relationships and websites, we provide to our clients excellent professional photography, interesting and accurate descriptive copy and comprehensive online brochures, as well as a Matterport virtual tour for each home we market. Also, we’ll use drone photography in those cases when such a video is critical in fully showing a property’s special location. The Neil Lyon Group is the only Santa Fe broker or brokerage team that owns and operates their own Matterport camera and exclusively engages a trained Matterport photographer. We don’t subcontract this key marketing tool out to a vendor.
To increase exposure for your home and ultimately uncover the right buyer, Sotheby’s International Realty (SIR) has partnered with and distributes properties to the most significant media companies and real estate-focused websites in the world. These include the New York Times, International New York Times, Luxury Estates, The Wall Street Journal, Financial Times, REAL-BUZZ.com, HOUSE, Homes.com, Yahoo, Trulia, HomeFinder.com, Zillow.com, Shangliu Tatler, Hong Kong Tatler, House24, HomeAdverts.com, Mansion Global, DWELL, FT.com, JamesEdition and PROPGOLUXURY. Your property may also be found on our network of interconnected, locally focused and globally aware SIR network members’ websites that number over 100 worldwide.
Secret #4: Negotiation Skills and Transaction Management
The 4th and probably the least obvious consideration is the supreme importance of having a strong negotiating team on your side and having a tireless and obsessive transaction manager overseeing the many details from start to closing. As a team that handles many transactions, we have experienced almost every possible scenario and we have seen just about every imaginable surprise. This is not to say that we can’t be surprised or caught off guard.
It’s possible, but not likely. It stands to reason that a team that closes approximately 3 transactions each month in a typical year (in a market where the average broker closes 3 in a year) is going to have a different skill level than most. We want that edge to be a significant benefit to each of our clients.
Secret #5: Seizing the opportunity… And not looking back
Many articles have been written over the years about the importance of the first offer, and the likely lost opportunity when a contract is not struck with the first potential buyer.
Below is an article written by an experienced broker that effectively conveys some key issues every property seller should carefully consider in anticipation of when the first offer is received. A topic better thought about early, for the obvious reasons.
Why Your First Offer is Usually Your Best Offer By Shawn Buryska
There’s an old real estate rule of thumb that the first offer you receive is usually the best one. I’ve run into this with several listings where the seller received an offer early on, made a stiff counteroffer back to the buyer and the buyer headed for the hills. In some cases, as much as 24 months and several price reductions later, another offer finally came in only to be significantly lower than the first buyers’ offer.
While your first offer may not be what you were hoping for, it is a good idea to consider several things when choosing how to respond to that offer. Length of time on the market, time of year, initial asking price compared to the price recommended by your agent, and current competition should all be taken into account when determining whether to accept, reject or counter the first offer you receive.
It may be tempting to hold out for a better price, especially in the first few weeks that your home is on the market when there is a high volume of showing activity. However, that activity typically wanes after about three weeks, at which point the buyers who have been waiting for “just the right house” will have already considered your property. Buyers rush to see new listings, and if it’s the best thing they have seen they will probably make an offer. Most of these buyers have been at it for a long time and know the values very well, in some cases understanding market realities in their price range even better than realtors who have been tracking a broad market. Therefore, an offer received in the first few weeks on the market is probably appropriate to current conditions and worth serious consideration. Comparing the offer to your realtor’s initial price recommendations can help you decide what action to take.
After the first several weeks, the activity that remains is buyers just entering the market. Since they are at the beginning of their house hunting, they generally have more time to look and are less motivated to act quickly. They are less educated about the market than those who have been shopping for a long time and will err on the side of caution when making their offers, especially in a buyer’s market.
Consequently, offers will more likely be lower than early on.
Time on the market erodes value as well. The longer a house is listed for sale, the less interested buyers and Realtors are in the property. People will begin to wonder what is wrong with the property, and even if they like it will offer a lower price so they won’t lose money if they end up having to sell.
Be sure to consider the opportunity costs. While your first offer may be lower than you had hoped, every month you keep the property is another month you must pay mortgage, taxes, utilities, and insurance for a home you are hoping to leave. These costs can add up quickly and end up costing you more in the long run. Time of year is another factor that can affect the offer. Your offer in March or April will most likely be much higher than in September or October. Sellers who were optimistic in the spring will be lowering their prices quickly to try and sell.
The bottom line is that you are never in a better position to get the best price for your home than when it is fresh on the market. Even if the offer and subsequent negotiations are less than you are hoping for, don’t kick yourself months or even years later wishing you had taken the offer. That real estate rule of thumb stays true: your first offer is usually your best.
Even in our recovered market, selling a home quickly and will still be a challenge. It takes the property owner and their broker working collaboratively, doing the many tasks that are necessary, to get the property ready, the marketing effort executed, and the sale completed. From start to finish, there are literally hundreds of steps to take. Add to that the reliance on lenders, appraisers, home inspectors, septic and well professionals (in many cases), title and escrow specialists, insurance agents, surveyors, home maintenance professionals, utility providers and others, to make it all work.
As you now see, the 5 Secrets are not secrets at all; they are a summary of the most important steps that we have learned will maximize your chances to make your transaction go in the direction that you desire. Each step along the way, from the day the property first goes on the market until the close of escrow, must be handled promptly and effectively. A process that on Day 1 probably doesn’t sound too difficult. However, by the close of escrow, you’ll see the reason for all of the attention paid to managing the process as closely as we recommend.