Selling in a Hot Market | How to Set a Record High
When the real estate market heats up in Silicon Valley, it’s really crazy to see. Open Houses have so many pairs of shoes upon entry it's tough to walk in without stepping on some. Listing agents are scrambling to answer questions or get people to “sign-in”. Buyers essentially line up to see homes. After walking through that crowded open house once, they then bid well over any recent sales just to have a shot at being considered. This is Silicon Valley’s “splurge” mentality at its finest.
For a buyer, this is beyond frustrating. For sellers, it seems as though every sale should be a record-smashing number because it's a “hot market”, even if this isn’t always true. Even identical floor plans on the same floor in the same building will yield different results. Some units get more exposure and viewings, which turns into more offers and higher prices. Conversely, other properties don’t get packed open houses, showings are lower, offers don’t come in droves, and no records are broken. So what’s the difference? What makes on home stand out over another if, on paper, they’re nearly identical?
Essentially, your home needs the best exposure it can get. That is, the more people that see your home, the better chance you have at attracting a bidding war. Once you have exposure, enticing and making it easy for buyers to submit offers is key. Then, once you have offers, negotiating them to get the best offer will make your home sell at the highest price possible. To understand how to get the most eyes on your listing, let’s look at how buyers find homes.
The first thing that serious buyers do when looking for homes is set their price range. Thus, your pricing strategy should be one that causes buyers to look at the attributes (size/bedrooms/bathrooms) and price and see value. Severely underpricing a home is one way to get people to come see it. However, if the price is too low, your listing may not come up in people’s search results because it’s not within their selected price range. You may then be missing a well qualified buyer who’s looking for a home just like yours because your agent convinced you to price it 20% below value.
On the other hand, overpricing a home to “leave room for negotiation” is also unattractive to buyers. Buyers here are savvy and know what they want. They understand when something is priced higher than it’s worth and they will rule it out. If you can’t get an offer because of the high price, you’re forced to drop to a more reasonable price - causing people to think there’s something wrong with your home or that they can get a deal. Pricing comfortably under market value will help your home fall within the preset price ranges of the most qualified buyers for your home.
With the internet dictating how people find homes, there is a baseline amount of exposure the home will get simply by being on the market and the listing being published on the big sites buyers use to search for homes. But is it turning heads? Is it getting people to click on the listing to see more pictures? How your home is presented online is typically your first shot at getting people to save it, send it to their spouse, and plan to come to the open house. Looking through the eyes of a buyer, they will decide within seconds based on the first image they see of your home whether or not they’d like to live there.
As such, your home needs to get the buyer’s attention and then keep it. This means that your pictures have to be outstanding. As such, professional staging and photography is always worth the investment. Since you have decided to sell, your home should not really look like yours anymore. You want your home to look like a model. Current design trends coupled with simple styles that appeal to the masses is what you’re going for. The goal is to get as many qualified buyer’s attention as possible and have your open house have a consistent flow of people, but not so crowded people are turned off by it.
Once you can capture interest at the open house, buyers are going to want to know more. Your disclosure package should be more than the documents required by the state for a sale. Paying for inspections upfront will help avoid hurdles down the road by helping buyers to fully understand what they will be buying before they write an offer. If you have the funds to address any issues on the inspections, by all means, take care of those items. It shows you took care of the home and gives the buyer less reason to offer lower or keep the option to back out later. If you don’t have the funds to address anything on the reports, that’s ok too. By telling buyers everything you can about the home, it will encourage them to remove contingencies so you have offers you know will close rather than ones that will ask you for credits or back out when they find issues they weren’t planning for. You want to make the decision as easy as possible for buyers and give them no reasons to consider backing out.
Negotiation of offers is where your agent earns their money. Assuming everything else was done right, and you have received multiple offers, if your agent tells you to just take the highest one, you may be leaving money on the table. Yes, you read that correctly. The highest offer may not be the best when it comes to terms or timeline. They may leave ways to back out or renegotiate the price after the offer is accepted. So having an agent who knows how to evaluate offers, buyers, lenders, and the buyer’s agent will help you to counter the strongest offers properly. In turn, you’ll have the top offers competing against one another aggressively and that’s when records are broken. Having a skilled negotiator on your side can be worth tens of thousands of dollars in your pocket at the end of the day.
Every agent (especially the discount ones) will say they will get you maximum value for your home in a hot market but there is technique to doing so. After witnessing 7+ years of a soaring market, these are some of the proven keys to giving your home a shot at a record breaking sale.