4 Secrets of Selling
4 Secrets of Selling
Four Secrets of Selling Your Santa Fe Home
Fact: The majority of the properties that are now on the market in Santa Fe will not sell this year. As hard as it may be to believe this statement, this is the situation and it will again be the situation next year. With many segments of the local real estate market having 2-4 years worth of available inventory, there simply won’t be enough sales to chip away at most of the inventory.
So the obvious question is: what can we do to get your property to be one that sells this year? There are four factors (the “secrets”) that can be managed to maximize the chances that your property will sell in the months ahead.
Secret #1: PRICING
The most important factor is the price at which the property frst comes on the market. As much as every property owner does not want to believe that it impacts them personally, property values have decreased as a result of the unprecedented economic decline we have witnessed in the recent past. How a particular property has been impacted is very diffcult to determine by even the most analytical and experienced real estate brokers and appraisers. The supply of available properties changes by the day and demand ebbs and fows as buyers arrive in Santa Fe and then depart. The cost of mortgage fnancing regularly fuctuates, and what buyers want seems to evolve and change before our eyes. The bottom line is this: accurately estimating the value of a particular property is diffcult, complex and more challenging than ever. It will likely remain this way for quite some time.
As you would expect from a highly experienced and top producing team of brokers, we take the task of valuing every potential listing very seriously. We stay on top of market trends, we track listing and sales data and we know the properties involved in transactions. 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 those properties available that will be true competition and we closely evaluate relevant properties that have recently sold. We conduct the necessary research, we contemplate the important subtleties that cause some properties to sell and others to remain on the market……..and we prepare our fndings for presentation to the property owner.
Closely related to accurately estimating the future sale price of a property is the owner’s willingness to be moved by their broker’s research and pricing recommendation. If their broker conducts honest, thorough and accurate research and recommends a specifc asking price (or asking price range), does an owner go with the recommendation or add “a cushion for negotiations”? This single decision, assuming the broker’s recommendation is valid and accurate, will likely determine if the property sells this year. And for what price. If the initial pricing decision is wrong, the result will likely be one or more price reductions, leading to an eventual sale price that will be far less than what could have been. The initial pricing decision will also impact whether the property is sold in 3 months or 3 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 totally transparent and complete manner.
We go over all the relevant data that is available. We compare and contrast recent sales, evaluating and understanding the important relationships between them to help us arrive at the best possible listing price recommendation. We consider other listed properties and determine which ones represent the stiffest competition and which ones will drive buyers to other properties.
As mentioned, the process of accurately evaluating a particular property and recommending the most effective asking price is very challenging and there is some “art” involved, as the answer is usually not totally clear with even the most complete research.
Secret #2: HOW YOUR PROPERTY PRESENTS ITSELF AND IS SHOWN
The next key factor that can be managed is how the property shows to prospective buyers. Is the property furnished in a way to make it as attractive as possible? Is the house clean and presentable for all showings? Is the property well maintained? Maintenance is critical, as it strongly impacts a potential buyer’s reaction. As an example, is there evidence of water leaks (past or present) that subtly causes a buyer to question the maintenance of the property in past years? If this dynamic creeps into the picture, it makes it very diffcult for that property to compete against others that have been beautifully maintained.
Every seller wants to believe that an interested party will look past a few items that “aren’t perfect”, but experience proves otherwise. Serious buyers react to a property on several levels, the emotional level as well as the logical level. If the buyer senses that the property hasn’t been well maintained, the logical attraction to the property takes a backseat to the negative emotional response. If all looks and feels good, the property gets one reaction. Alternatively, if there is concern about the roof, or the stucco, or (fll in the blank), it robs that property of the best possible impression. When a buyer has many choices, as they do now and will in the months ahead, this point is central to how a property is perceived during and after a showing. Making sure the details are tended to, big and small, can mean the difference between being on a buyer’s short list or off.
To assist our sellers in this area, we have a reliable stable of maintenance professionals who we can recommend to help get all the details in order. Whether it’s having exterior wood stained, leaky toilets fxed or getting a roof repaired after a rough winter, we can put a seller together with reliable professionals. We also have time-tested “home stagers”, “home tenders” and decorating consultants for those situations when much more than paint and stain are needed.
Also, how a broker handles a showing opportunity is critical. Many available properties have lockboxes placed by their listing brokers, so that other brokers working with potential buyers can show these properties without the listing brokers being present. This approach is certainly easier for the listing brokers, but at the expense of the opportunity to effectively handle the showings. We don’t underestimate the importance of effectively dispensing 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 quick 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 if 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 diffcult 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 rare circumstances, we attend every one of our showings. Seven days a week.
Secret #3: ADVERTISING AND MARKETING
This critical factor is about how your broker and his/her company plan and execute an advertising and marketing campaign for your property.
This is an important topic as the rules of the advertising and marketing game have been turned completely upside down in the past few years. Much of how brokers promoted properties in the past decade is now fundamentally obsolete. A primary example, print advertising, which was so important in past years, is no longer very important or productive for a property seller or their broker.
In contrast to even a few years ago, virtually all calls go directly to a broker’s cell phone or to their direct offce number. It is even more common for a broker to receive a potential buyer’s email, which almost always indicates from what source the buyer made the connection with the broker. In addition to providing a very effcient and effective means of connecting buyers with property information, we also see exactly what venues of advertising and marketing generate in-quiries. It is just as clear what venues are not generating responses. As you would expect, most prospective buyers use in-ternet sites to get information that was previously not easily obtainable just a few years ago. It has revolutionized how we communicate with potential buyers and it also tells us exactly where we should be directing our advertising and marketing resources. By carefully monitoring what venues generate the most potential buyer inquiries, we continue to redesign our promotional approach to reach this important group most effectively.
Putting rich and detailed information about our listed properties where it will be seen by the most interested consumers, we have developed a very comprehensive web strategy. This is true for both Sotheby’s International Realty and for the Neil Lyon Group. We use excellent professional photography, interesting and accurate copy, comprehensive online brochures and many other tools to get buyers to fnd our sites and to keep them looking as long as possible. We also create websites specifc to each of our listed homes to provide maximum information to those who might be interested.
Our web strategy is just one of the many ways we promote our available properties to those who need to be reached. There are many other approaches we employ, knowing where it is we need to be visible.
Secret #4: NEGOTIATION SKILLS AND TRANSACTION MANAGEMENT
The fnal important consideration that always comes into play is one that is diffcult to demonstrate directly (at this point in time), so there is some “take our word for it” yet plenty of circumstantial evidence to support our strength in this area. These are the skills of negotiation and shepherding a transaction to closing. As a team that handles many transactions (257 since the beginning of 2005), we have seen it all, in terms of transaction “potholes” and dealing with brokers who bring varying levels of skill and competency to each transaction. In a surprisingly large percentage of transactions, the most challenging party to deal with isn’t the other principal in the sale. It is the other broker. This is often times due to inexperienced brokers who are new to the real estate business or others who simply aren’t very skilled or knowledgeable. Other times, it is clear that the relationship between the broker and the principal isn’t very strong. That’s not to say that the other principal in every transaction is easy to deal with. They aren’t. But one thing is clear. If you don’t have a strong negotiator/transaction manager on your side, the odds of getting what you want (or close to it) will depend more on luck than a predictable outcome. Once a contract is struck, staying on top of the many steps and deadlines is critical and will make the difference between smooth sailing and a transaction flled with suspense and stress.
It stands to reason that a team that closes 40+ transactions a year is going to have a different skill level than a broker who closes less than 3 transactions a year…which was the average number of closed transactions the average broker completed in Santa Fe in 2012.
In this market, selling a home is very challenging in spite of our collective best efforts. With some market segments of Santa Fe having 3-5 years’ worth of available inventory, it is simply too competitive and complex to know exactly what it takes to get one particular property sold. The best approach we can employ is to be attentive to the “secrets” that lead to success and manage them as effectively as possible.
Simple on paper….very challenging in practice.