Inspire a Bidding War

Every homeowner dreams of having a bidding war on their property, but few are willing to actually do all the things necessary to create a bidding war.  Bidding wars are easy to create in markets that are on the rise and when there is low inventory in price ranges that have high demand.  But how do you create a bidding war when the market is slow?  There are no guarantees, the market will speak, but we have developed effective strategies to create urgency and garner at top selling price for our seller clients.

Superb Seller Strategies

Let’s start with seller strategies.  Sellers need to be shameless.  The home that attracts a lot of attention on the internet is the one that looks “perfect” and today’s idea of perfect is, well, boring, but formulaic.  Sellers ignore this at their peril, because homeowners like what they have done to the house and their eclectic and personal taste is always hard to sell.  

Here is a good example of how we propose optimizing the sale of a home in our market.  The following is what we wrote to one seller, who had been on the market for 6 months with a relative agent for a price of $649,900.  

After speaking to this very nice woman at the first appointment, I knew she was not ready to hear our recommendations for price or condition. Therefore, I opened by letting her know that I was going to disappoint her so much that I suspected we’d be a good match as her third agent.  It was my nice way of signaling to her that I knew she wasn’t ready to deal in real estate reality.  I’ll tell you that she did decide to work with another agent who must have said all the right things.  The house went on the market and none of the obvious recommendations a good agent should make were implemented.  The second agent was a perfect match for this seller because she wouldn’t make her do any work to the house and was willing to price it at $599,900.  Almost a year later the house remained unsold.  I would like to be the third agent.  She did want to sell the property, and I know she needed our guidance.  This is what we wrote in our summary when we visited with her on our second appointment.

“Looking at other homes that sold during the last six months, we have determined that your property will fetch between $485,000 (super conservative) and if the stars align, just over $500,000 in its current condition.  We suspect you just fell on the floor.  We do believe your home could sell as high as $550-$575,000, but that would require making the home picture perfect for today's boring buyer who wants their home to look exactly like what they see in today's magazines and show rooms.  Your home is bold.  Your home is a statement.  Your home has dramatic personality.  Your home is an outlier and today's buyers will perceive it to need a lot of work and updating to get it in the condition they seek, except your new second floor bathroom.

Pricing Your Property to be Attractive

“Our recommended asking price would depend on the final condition of the home at the time of the listing.  Should you choose to do all of the work necessary to make the home more valuable we know we can get well into the $500's because of the yard and amenities your home offers.  We cannot ignore the fact that the home is on (BUSY STREET NAME HERE) - a busy location, which always dings price.  If you do not take the mindset of today's buyer into consideration and decide to price your home over a half a million dollars without doing the work we recommend, we promise you, that despite all of the hard work and money you have put into this place in the past that today’s buyers will take a steep and serious discount for the work they perceive needs to be done.  

“To maximize the sale of the house you would need to paint the exterior in warm and inviting tones that work with the gorgeous mahogany deck.  The purple and pink stripe in the shingles around the brown house does not appeal to most buyers.   The colors I would suggest are not the bold pastel colors you have used in the past.  You suggested a taupe.  We know that brown houses take longer to sell, and sell for less money.  I would suggest a sage, olive or gold/yellow combination accented with red to create a more authentic painted lady. You should consult an expert.  We understand that you have done extensive de-cluttering, but would encourage you to be even more ruthless.  Sponge painting is no longer in vogue and it would benefit your sales time and price to repaint the kitchen and living room in solid colors.   

“Would you consider a sunny yellow in the kitchen?  Wallpaper is also passé and we always suggest fresh paint to update those rooms and replace wallpaper.  Fresh paint is the best return on investment for today's sellers.  You indicated that you do not want to get rid of the above-ground pool because of the hole it would leave in the yard.  May I suggest that the hole in the yard may be preferable to an older, above-ground pool?  Surely we can find a way to landscape that area to make it more attractive.  The first-floor bathroom is convenient, but could be refreshed with paint.  Using an epoxy on the tile and making it white would be a huge new look for that older bathroom with yellow tile and replacing the vanity would go far.”

Good Business Decisions Mean you Don't work with Every Client

Our recommendations totally stressed the seller and we didn’t get the listing.  But did we want a listing we knew for certain we couldn’t sell?  Absolutely not.  The homeowner is delightful and acknowledged that her house did not have the “today” look that buyers want.  We saw a twinkle of recognition that what we were saying is true, but she isn’t ready to embrace this yet.  Some folks have to learn the hard way.  I should add that her husband is convinced that the home is a gold mine because it has a barn that can house equipment and is excellent storage, which is the reason he bought the house, but I suspect he didn’t overpay for it when he bought it so he can’t expect someone else to either despite its bonus feature.  

We need to make good business decisions.  Sometimes, sellers jump at our recommendations and that is the beginning of a very good relationship, others take longer to come to reality.  Building good skills and having good strategies for sellers will put you in demand as a listing agent.  When an agent has a reputation of being excellent, that agent can choose to work with only motivated and cooperative clients.  The homeowner who needs to “try” their price and condition can always find another less experienced agent who doesn’t have the strength to tell the client what they need to hear.  

Tune in Next week for Part 2