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I read a great article this morning by Donna Harris, a Realtor with ReMax Austin Skyline, entitled "Real Estate Opinions - Is it the Pricing or the Marketing?". In the article, Donna does an excellent job highlighting two scenarios of properties that have yet to be sold. The first being a situation where there has been a lot of showing activity but no offers. The second being a multiple price reduction scenario that has yielded little or no activity. The question that comes up quite a bit with sellers is which is more important, price or advertising? I say that it is a balance of both for all properties and all market conditions.
The formula that I have found to work best when listing a property is:
Priced Right + Marketing & Advertising To The Widest Possible Buyer Audience + Great Presentation = Showings => Offers => SOLD
Through this type of strategy, you always have a component to revisit that may need to be tweaked or revised to get to the result of SOLD. The most important part of being able to make any decisions in any part of this is to get feedback. Feedback from buyer showings is crucial and the most common. I look for trends such as "Priced a bit too high" which tells us the obvious . . . revisit price. Price is great feedback though because it's the perfect opportunity to ask for an offer which gets the negotiation process in motion. Other feedback may be "Too small" which may be a staging and presentation issue that can be revisited and tweaked to give a more open feel. So forth and so on. No showings is a time to ask for some by partnering with other people in your office or other Realtors in the area and schedule a preview of the property to get feedback.
To give you a real world scenario, a family within my neighborhood had their house for sale on their own for about a year with no reaction. When I first heard the price they were asking, I thought that might be the issue. They asked my opinion. I did an analysis, and found that the price really wasn't "out of line". The house was gorgeous and offered a lot of great features to highlight. So we put things in motion at the same price point. The result, multiple showings in the first week and an offer within 4 days. Sold in less than 30 days at more than they expected to get. Here, advertising and follow-up to showings was the issue.
So let's look at the role each of these play within the selling strategy:
- Priced Right - Pricing is one of the most difficult things to do. Data has to support the price and is commonly known as a Comparable Market Analysis. "Shooting from the hip" or simply pricing at the same price as the same number of bedrooms house down the street is not the best strategy. Pricing can be a real challenge in today's market because of the volatility over the last few years, but still important to make every effort to "get it right the first time". Some common myths I find with price:
- "I'll start higher and if nothing happens, I'll just reduce the price and advertise that." - Price reductions are a reality of the selling process and have to be done at times, but pricing right the first time has better benefits. That 'Price Reduced' can get a reaction but can also put you in a less optimal position during negotiation. Buyers can perceive the owner to be 'desperate'.
- "Price it low to get multiple offers and hope for a 'bidding war'" - This is a gamble and can backfire with obvious repercussions. Reducing a price is usually understood. Increasing a price later on rarely (or never) makes sense to anyone.
- "It's all about price and that's why I'm not getting showings" - You can have the best house, priced perfectly, and if no one knows about it . . . price isn't the problem.
- Marketing & Advertising With Great Presentation - There are obviously three components here (Marketing - the story, Advertising - the mechanism to get that story out, & Great Presentation - enticing to buyers to want to come and see). Each compliments the other.
- Marketing is about telling "the story" of the home. The features that stand-out and their benefits. Who the home would appeal to.
- Advertising is the mechanism to get the "word out" to the widest possible buyer audience. This is both online and offline. And it encompasses both buyers directly and other Realtors within the area.
- Great Presentation is achieved by looking through a buyer's eyes. "Can I picture myself living there?" is the question I always ask and this is where those staging things come in. Reduce clutter, take down personal photos and things, etc. This should also be done BEFORE taking any photographs. Buyers don't want to see something drastically different than what they saw in an advertisement.
- Showings is the goal. Showings are what gets a property sold. Pricing and advertising play a significant role in this. Online shoppers usually put a price range in or are getting properties emailed to them within a particular price range. If it's within their price range but has less features than others or is presented poorly, it will get passed over. Here's some key components about showings:
- Be available any time. We all try our best to make showings convenient for sellers, but potential buyer schedules are different and can come out of nowhere at times. It is best to accommodate "out of the blue" showings as best you can.
- Feedback is key. Not all showings will yield an offer, but they are all valuable in terms of feedback. That feedback can offer great insight to something to tweak (i.e. staging, pricing, etc.) that if reacted to in a timely manner can greatly reduce 'days on the market'.
- Offers are always a great thing even if they aren't what we expected. This puts the negotiation process in motion. Offers are usually a sign that the other components are working well. Some key things to keep in mind with offers:
- Be open-minded. Yes, buyers tend to "low ball" initial offers and it can become a back-and-forth scenario for a short period of time. Keep in mind, just as you (the seller) wants to get the best financial benefit out of the deal . . . so does the buyer (which you will most likely be next).
- This DOES NOT mean that all offers should be accepted. Every situation is unique and some negotiations just do not work out. Offers should be reasonable and knowing the market data is key to keeping the offers reasonable.
- Either way, offers show real interest and that is always positive.
There is obviously a ton which could be written on all of these components. The key to successful selling is having a strategic plan and working the plan. 'The Plan' is the formula I gave above and quickly identifying 'weak areas' and taking the necessary steps to correct them quickly leads to more success in selling your property. Feedback is always welcome.
Thanks and have a great day. And a big thank you to Donna Harris for her article.
Kathleen West, Realtor
Trademark Realty Group of Palm Coast
"Excellence Is Our Trademark"
Call me at (386) 446-5930
Email me at Kathleen@PalmCoastHomeShow.com
www.PalmCoastHomeShow.com
