It is no secret that we are currently in a buyer’s market. Home inventory is high and it is taking a much longer time to sell than it used to. Buyers are in a better position to negotiate and ask for discounts and usually don’t have to worry about competing with another offer. However, in the last week, we brought two listings on the market in Seattle that blew away our expectations. We had two offers on each house within two days, with multiple parties requesting an opportunity to submit a backup offer. Both homes were also bid up substantially over their list price. For a moment, it felt like a return of the seller’s market from a couple of years ago. Why did it happen? Is the market turning around? Are buyers suddenly re-entering the market? I don’t think so. It was a case of two homes at the right price and in the right location that catered to bargain hunters. Clearly there are buyers out there ready to pounce on a great deal. As a home seller, it is helpful to look at the situation for each of these homes and think about what you can do to drive similar excitement on your own listing.
- Home #1 – We listed a 1920’s home in Wallingford, a popular neighborhood close to downtown Seattle. The seller had started a massive remodeling project, but never finished. All of the expensive work was done, such as a new roof, new plumbing, new foundation and new electrical. However, the seller never finished the flooring and trim work. Cosmetically the home was not attractive at all, and we actively worried about the impression that buyers would have with no flooring. We did our best with professional photos and making sure the house was clean. However, our aggressive sub-$400k price point was the magic that brought buyers in the door. The goal with our pricing was to make sure that even after a buyer spent $20-30k, the home would still be an exceptional value for the neighborhood. It worked! We had 100 agents view the listing online during the first day, and had 24 agents show the home in the first two days! After two days, we had two offers for more than list price and quickly were able to secure a buyer.
- Home #2 – We listed a 1940’s Cape Cod in North Seattle. The home was in reasonably good condition and had clearly been remodeled in the last few years. However, while it was in a convenient location, it was quite close to a major arterial. Our seller acquired the property at a foreclosure auction and had enough equity that he was able to price it for a quick sale. In fact, he wanted it to sell in the first couple of weeks and was willing to price it even lower than we recommended. He spent a few thousand dollars to straighten up the place and make the yard look sharp. We followed up with professional photos and a comprehensive online marketing campaign. We had 54 agents view the property online, 36 of them show it, and then two competing offers that drove up the price after two days.
As a seller, what can you learn from these home sales?
- Price it to sell – Even in a slow real estate market, every home has a price that will bring out buyers, and if it is aggressive enough, it will bring out lots of buyers. Pay particular attention to “psychological price barriers”. The difference in traffic between a home listed at $299,950 and $310,000 can be very substantial.
- Make it look sharp – If the home has rough spots, do everything you can to make it look good. A few thousand dollars spent on paint, landscaping or cleaning will go a long way towards getting you a quick offer. Put away your point-and-shoot camera and make sure that your real estate agent gets a set of professional photos taken for your listing. The only way to secure a buyer is to first attract them to your online photos.
- Buy in locations with intrinsic value – When buying a home, try to remember that you need to sell the home some day. By focusing on great neighborhoods and attractive locations, your job selling the home in the future is much easier.