As we start the year, we’ll also be heading closer to the prime selling season of the year in Lamorinda real estate, and working with our seller clients in preparing their homes for sale. Most of our clients are wonderful, reasonable people who make the psychological shift from “living” in their home to “merchandising” it for sale. There is a distinct difference. Very few of us “live” in our homes in a manner consistent with optimizing its opportunity to be sold for the highest price available in the market. That requires presenting it as a product that appeals to the broadest possible segment of buyers.
I attended graduate school in business more years ago than I’d care to admit, but the person synonymous with marketing back then still lives on as the present day authority… Dr. Phillip Kotler of the Kellogg School of Management. Considered to be the “guru” of modern marketing, Dr. Kotler is famous for his “4 P’s of Marketing” — the only four variables that can be controlled when bringing a product to market:
1) Product – What is presented to the market.
2) Price – It’s price point.
3) Promotion – How it is promoted in the marketplace.
4) Place – Where it is brought to market.
Ultimately, the seller of a property has the final control over 2 or 3 of the 4P’s… product, price, and place. This leaves promotion in the hands of their selected real estate agent. A quality agent will also be highly involved in helping to “shape” the home (product) prior to it going on-market, but only to the extent that the seller cooperates in the process.
The following are the most common mistakes we see sellers make when putting their home on the market:
1. “The Stalker”: This is seller that believes that he/she is the best spokesperson for their home, and therefore follows other agents and their buyers around the home when it is being shown — trying to “sell” them on it throughout their visit. Yes, believe it or not, this happens here in Lamorinda! Nothing turns a prospective buyer off more than this behavior, and it inevitably leads to the buyer and their agent becoming very uncomfortable — leaving the home as quickly as possible. The best advice is to take a walk, go shopping or visit a neighbor… and, give the buyers space to mentally “move into” your home.
2. “I just want to ‘test’ the market”: This is akin to being partially pregnant. Either you are on the market with the intention of selling or you should be waiting until you are truly ready to engage in the process. ”Testing” the market at an unrealistic price point serves no real purpose. Today’s buyers are highly informed, and no one in this market will over-pay for a home.
3. ”I’m waiting for the one ‘right’ buyer” : Most agents have heard this comment at least once per selling season, and its usually emanates from the seller who thinks that their home is worth more than the market suggests, or doesn’t adequately prepare the home for market because they believe that the “one right buyer” will overlook its flaws, cluttered rooms, etc. Rarely is there the “one right buyer” who will make an offer on a significantly over-priced home, or want a home that the majority of the market chooses not to purchase. The best advice is to prepare your home for market in a manner that will have it appeal to the broadest possible base of potential buyers.
4. “If I price my house closer to market, I’m afraid I’ll get ‘low-balled’”: If the feedback from showings of your home is that its “over-priced”, then the above concern seems a bit illogical. As a seller, you WANT an offer. You can always counter it, say “no” to it, or even ignore it. Assuming that there aren’t other corrective actions you can take to make your home more appealing, addressing a clear over-pricing issue is the most logical move. Studies have clearly demonstrated that a home that is properly priced from the beginning will sell faster and for more money than one that is initially over-priced.
5. “My home doesn’t need to be staged. It wasn’t staged 30 years ago when I bought it!” Times have changed, and it’s important to make the psychological break from “living” in your home to “selling” your home. Once it’s on the market, it becomes a product, so why not make it as appealing to buyers as possible?! The incremental investment for staging will yield a positive return in the increased appeal of your home to potential buyers and the shorter market time. Remember, the longer a home is on the market, the more the market discounts it. At a certain point, buyers and agents begin to wonder “what’s wrong” with the home, and showings dramatically drop off.
