I say hype.
I think it is more about winning listings than getting top dollar for the house. It’s something you tell a seller in a listing presentation to make them pick you over another realtor, who isn’t going to sort of put your house on the market but not let anybody see it for up to a week.
The thought is that during the time between posting that the listing is coming soon and when it is available to show, you will be building a frenzy of buyers who will all see it the first day on the market and it will sell in multiple offers for top dollar.
Sounds good, right?
Well, that is already happening with just about every house that is appropriately priced.
In a hot market where there are more buyers than sellers, the “Coming Soon” approach is sort of like telling a bunch of piranhas that you are going to throw raw meet at them next week……whether you throw it now or later, the results are the same.
I think the “Coming soon” thing would work best in a slow market when you need to create a buzz around a listing to make it stand out.
I’ve been at this for nearly 15 years. Never had an issue with either of the things below. Until recently. Both were so bad that I am just not going to ever do them again.
1. A Post Closing Occupancy Agreement. I don’t like these at all. Never have, but in some situations they can help you get the house in multiple offers. There is always risk though. I’ve had dozens go okay. They usually do. But not this time.
I had a buyer for a townhouse. We had agreed to possession with deed, meaning the seller is out by the closing. About a week before closing, the listing agent tells me that the seller doesn’t have the cash to move. This seller has equity and will be able to pay movers after the closing. As much as I didn’t liked being boxed into a situation, if the seller didn’t have the money, they don’t have the money. We agreed to let the seller stay for 2 days.
The seller was supposed to have been out. They moved out on time. That wasn’t the problem. The problem was that they left about 20% of their stuff at the house. NEVER AGAIN!
2. A contingency to sell contract. I have never liked these either, but sometimes, especially in a slow market or with a house that is tough to sell, you’ve gotta entertain them. The problem is that most are written in a way that assumes once the buyer’s house sells, it will remain sold.
I just had a situation where we had a buyer who wanted one of my listings but needed to sell their old house in order to buy. The buyer’s house sold. We thought we were in good shape. Then it fell apart. Even after involving a really good real estate attorney, it was unclear what needed to happen next. Did we still have a contract? Did we not? Nobody knew. What made it worse was that the buyer still reaaaaaaally wanted the house and was trying to hold it hostage as they grasped at straws to find a way to get it.
If I ever have to take one of these again, I think I will add some verbiage that says something like if the buyer’s sale falls apart prior to closing, the seller has the option of voiding the contract immediately.
This time of year is always tough for comps…..which is the term we use for recent comparable sales used to determine the value of a house. Realtors use comps to determine a list price. Appraisers use them to justify a contract price. The thought is that the recent past will tell you what the market is doing now, but it really doesn’t work that way in a really good or really bad market when prices are either going up or down.
This reminds me of my old dog Julie. She was a beagle. She loved to go out in the yard and sniff around for critters. I remember one time she was on the trail of a rabbit. She had her nose to the ground and was on the trail of where that rabbit had been. What she didn’t know was that the rabbit was right behind her. That is how appraisals work. They always know where the market used to be and never where it currently is.
Part of what makes this time of year tough is that the market for the new year is kicking off and we are looking back at late fall and all of the winter to determine value. Sales are usually down in the winter and most of what sells are the leftovers from last summer.
So, we are looking at the worst times to sell to determine a value during the best time of the market.
I personally have a house that I sold for $200k. It only appraised for $185k. The best comps for my house were from 6-12 months ago. So we have a big gap between what a real buyer with money will pay for a specific house and what an appraiser, whose job is to determine market value, says it is worth.
My current dog Sherpa is a dachshund-Jack Russell mix. She has no problem keeping up with critters in the backyard.
I wish we had a system of determining value more like Sherpa than Julie.
A buyer of mine just bought a house that was for sale by owner. Nice sellers. Nice house. They have been very easy to work with so far.
Being unfamiliar with the contract that all the realtors in this area use, they did not like one part about the termite inspection. It was the part that says the seller has to pay up to 1% of the sale price to repair termite damage if any is found.
They said they didn’t want to be on the hook for that much. I get it.
However, this clause benefited the seller just as much as it did the buyer.
I’ve sold hundreds of houses and been involved in the inspections for all of them. I have only seen 3 houses that had extensive termite damage. All were in houses where the sellers had lived there for decades and never done a termite inspection. It is pretty rare to find termite damage. Most of the time if there is any damage, it only costs a few hundred dollars to repair.
Let’s say there is some termite damage at this house and my buyers decide they do not want the house any more.
In this case, the seller would have been very happy to say to the buyer “No, you can’t walk away from the sale. The contract says you have to let me fix it and by golly, I am gonna fix it.” The seller would want to use this clause in the contract to keep the sale together.
Sometimes things just work out perfectly.
A friend of mine referred me to one of his friends. This seller needed to sell his house quickly without having to do a lot of prep work.
I’ve always got a long list of people who are looking for something specific. I’ve got a guy wanting a ranch on a golf course. I’ve got investors looking for various houses to fix up or rent. I’ve got people looking for their ideal move up house. I’ve got people looking for rural properties in very specific spots. None of these buyers are actively looking. They are just waiting for me to call them up and say “I’ve found it!” I’ve also got plenty of sellers in my pipeline who may sell sooner than later if the right situation arises.
I also have a buyer who has been looking for a similar house in the exact neighborhood as the one that this new seller has.
So, I arranged a viewing.
Then a deal was made.
The seller got the fast sale they wanted without all the prep work before listing.
The buyer got the property they have been waiting to buy, including the huge dining room she wanted.
I get the satisfaction that I brought two people together whose needs were met perfectly by what the other party had to offer.