Seven Pro Secrets of Selling for More

 

 

1. Try to Please Most of the People Most of the Time

You’ve heard the expression “different strokes for different folks” and “to each his own,” right? When it comes to selling your home, you’re better off trying to please most of the people most of the time by keeping the décor neutral. Why? Selling is a numbers game. The more people see your house, the better the chances one of them is your buyer. The more people who like your house, the more offers you’ll get. The more offers you get, the higher the price you’ll command, Therefore, you want to appeal to as many people as possible, not just the ones who like Southwestern décor or a country kitchen.

It turns out there are some things everyone will like—fresh paint in neutral, contemporary colors, an uncluttered furniture arrangement and modern bedding and window treatments. Those things are also relatively inexpensive to do—we’re not talking about remodeling the kitchen or adding a bedroom—but they add a lot of emotional appeal.

Painting the house will require some effort and inconvenience, but you can look at it as an opportunity to start packing. You’re moving anyway, so put what you can in boxes so it’s ready to go and not distracting buyers from the great features of your home. Move the extra dresser in the bedroom to the garage or a storage space and pack up the off-season clothes so the bedroom looks more spacious. If the family room is set up around the big screen, consider rearranging to highlight the fireplace as the focal point of the room.

2. Don’t Just Spruce—Add Style

Since you’ll be taking the bedding with you anyway, it’s a good idea to splurge on something new that looks up-to-date. The more modern your home looks, the more modern the price buyers will offer you for it. So you wouldn’t want to use a comforter that’s in good shape because it’s been in a plastic bag since the eighties, for instance.

Since you’re going to the trouble to paint, make sure that you’re using colors that are warm and welcoming. If you use all white you’ll miss an opportunity to create a mood and show off architectural features like baseboards and molding, which disappear against a white wall. Unless you really know what you’re doing, get an expert’s advice about the color choice. Your Realtor may be able to give you some suggestions on color, but if you really want to make your house a must-have, then you’ll want to take it to the next level by staging your home.

3. Make Your House a Must-Have

Staging a house to sell is the difference between buyers seeing your house as an “also ran” and the one they absolutely positively must have. Why? Buying a house is an emotional decision. When a house has been staged, it looks like a model home. Staging plays to the emotions by portraying a lifestyle that buyers really want. The teapot and book on a tray on the bed portray a sense of comfort. The modern lamp in the living room says the house is up-to-date. The throw on the chaise lounge says this house is cozy and inviting. The princess bedroom says this is a safe neighborhood for kids. Even the savviest buyers get excited by a well-staged house. I’ve had a hard time talking buyers down from a house that is staged to perfection because they feel so good inside the home. That rarely happens with a house that’s vacant and it certainly doesn’t happen when you offer a buyer credit for new carpet. Buyer credits appeal to logic, whereas beautiful new floors appeal to emotions. Emotion gets you more money every time.

A good stager can help you enhance a home you’re living in while you’re selling, or if you have a vacant property a stager can come in with just the right furniture and accessories to make your home look like a model. Some companies even offer free staging for vacant homes by matching a qualified house-sitter with the home. The live-in stager brings in beautiful furniture, keeps the house in perfect condition for showing anytime, and can also be an asset in terms of alerting the sellers of a plumbing leak or grass that’s getting brown because of an errant sprinkler.

4. Promote Your Fixer Upper as a Find

Not everybody wants to stage or even paint to make their house appeal to more buyers. Selling and moving can be stressful enough. You may not have the time, energy or money to spend on sprucing the old house. If that’s your situation, you can turn that into a positive. Advertise your home as a fixer or handyman special where the buyer can save money with sweat equity and then price it about 10% below what you expect it to sell it for.

That’s right, I’m suggesting that you price it for less than you expect to get for it, not more. Crazy, huh?

But look what happens when you price a home below the market: every buyer and their agent will be anxious to come see your house, even if they don’t have time to check out the other new houses that are listed at market value. Everyone gets excited about the prospect of a bargain, so it’s your house they’re going to want to see. Since selling is a numbers game, you are going to get closer to finding your buyer very quickly.

Some sellers worry about using this method, thinking that buyers will offer full price and nothing more, particularly in a buyer’s market. However, that’s not how the invisible hand of the market works. Instead, buyers come in with their agents, who advise their buyers that if they want to be the winning bid, they better offer more than full price, and not ask for closing costs or repairs. They realize the bidding will be competitive. This is true even in a very slow selling market. If a house is priced below it’s market value, the market will always respond with the true value of the house, and it will happen quickly—usually within a week or two if your property is well-marketed. One caveat is that this strategy will only work if you have it listed in the MLS, which is the number one place that people look for houses for sale. You must have plenty of exposure in the market to get the bidding frenzy you want.

Just as with the staged house, a low-priced house will create an emotional appeal that is hard to ignore. The buyers will start to picture themselves in your home, think about what color they would paint it and where they would put the bed. The more they do that, the more committed they become even when the bidding becomes competitive and they have to increase their already above-asking offer to get the house.

Interestingly, every time I’ve underpriced a house to sell, it not only sells quickly but I get more than one offer for the top price. In other words, the market confirms the value regardless of how the house is priced. Sometimes it goes for even more than the recent comparable sales in the neighborhood just because buyers have gotten so excited about finding a good deal. This strategy is a much more effective approach then overpricing the property and lowering the price over a period of months when the house doesn’t sell. When that happens, you can actually end up getting less than the market value no matter how many people see your property.

5. Cash in by Carrying Financing

With the current credit crunch, savvy sellers are getting top-dollar for their properties by offering financing that doesn’t involve a bank. Sometimes seller financing is called a wrap-around loan or an All Inclusive Trust Deed (AITD). No matter what you call it this is a terrific way to make your house stand out in the market place. For one thing, when credit is tight, even some people with good credit and income can’t qualify for a loan because they are self-employed or they own other properties and banks with tight lending restrictions are turning their backs on them. Those buyers have no choice but to buy from sellers who already have financing on their homes, or are willing to become the bank themselves. Suddenly your house may be one of only a handful that the buyer can consider, which means you’ve knocked off a lot of the competition.

Providing seller financing also means you are saving the buyer money on financing, and perhaps giving him a better rate than he could have gotten otherwise. That means you are entitled to get more money for your house.

Yet another benefit to offering financing for your property is that in certain situations you can defer the income taxes on the proceeds from the house.

This is a pretty sophisticated strategy, and I’ve run into lots of Realtors who have no idea what I’m talking about when I ask about seller financing. You may think it sounds too complicated, or that you’re not in a position to offer seller financing, but you might be surprised just how well this could work for you. During easy credit periods, no one needs this so they don’t know about it. But whenever money gets tight, the tough get going on seller financing and they get richer for it.

6. Get the Heads Up from a Home Inspector

Once you get a buyer excited about your home and you get into escrow, the last thing you want is for them to get spooked because the home inspection comes back showing a problem with the roof, or moisture under the hardwood floors or a plumbing problem. It may sound counter-intuitive, but when you disclose a problem before it shows up in the home inspection, you’re actually making the buyers feel safe because the problem is a known quantity. They are less likely to worry that there’s more to the problem than meets the eye if you tell them about it upfront.

That’s why it makes sense to get your own home inspection before you even go on the market. Some of the items that the inspector finds will make sense for you to fix before you list your property but some you may just decide to disclose rather than repairing. The point is to know about everything so you can price accordingly and prepare to make disclosures. You’ll have a much better chance of making the first escrow successful, which has everything to do with getting the best possible price.

7. Cash-in with Cooperation

In every real estate transaction there are dozens of negotiations. At the beginning of the process, it’s not unusual for buyers and sellers to feel some mistrust toward one another. Some agents even take an adversarial posture thinking this is the best way to help their clients.

However, taking a combative approach to negotiations can sometimes spark a battle over the smallest points in a contract. Most of the contract is standard and it doesn’t need to be micro-negotiated. To avoid unnecessary work and make the best deal, do what professional negotiators do and approach the deal with a sense of cooperation. Doing so helps to maintain trust, which in turn can help prevent a buyer from making unreasonable demands or growing fearful and suspicious. The more relaxed everyone feels, the more they will be willing to go along with small bumps that arise during the transaction.

A true spirit of cooperation also means really understanding the buyer’s needs and wants. It means finding out if the buyer needs to move before the school year starts, or wishes the seller would leave the washer and dryer behind or plans to replace the floors immediately. The more you understand about the buyer’s needs and wants, the more opportunities you have to negotiate in a way that works for everyone while putting as much money in your pocket as possible.

 

For more ways to maximize your profits and minimize the work of selling, contact Laura Doyle of CDM Realty at laura@cdmrealty.com or by calling 949-729-9843.