How every Buyer picks their house

I often get a Buyer who gives me a very long detailed list of all the features they want in a house. It’s usually things like how many bedrooms, bathrooms, what type of floor plan, what type of kitchen cabinets or flooring they must have.

Then they buy something totally different from what they described?

Why is that?

It is because people pick the home they ultimately purchase based on how they feel while inside a house. It’s the vibe the house gives them. It is an emotional decision.

When I work with a Buyer, I try to notice how they respond to a house. Did they tell me it was too dark inside? Did they think the yard was too bare and needed more trees? Was the backyard not private enough? Did they not like the floor plan and why? Or did they even care about any of this?

These are the type of things people use when making their decision. If a Buyer feels groovy inside the house, they can overlook items such as not having a pantry, not having the flooring they prefer, or if it is missing one of those specific features they said they could not live without. In houses they feel good about, they say things like “We could always change the counter tops later.”

All of which is why I try to create that vibe when I list a house. Buyers also respond to colors, decor, cleanliness and clutter. You can have the most amazing house but if you have wild paint choices, it is going to be harder to sell. Why is that? Truth be told, few of us have vision. We ALL think we do but trust me, there have been so many times where I have told a Buyer that all a house needs is a fresh coat of their choice of paint and they don’t see it. Or I’ll say imagine this house with the flooring you want and they can’t see it. Or maybe I’ll say “Those cabinets could be painted and that mauve counter top could easily be replaced.” And even worse is a cluttered or dirty house. Nobody can imagine what it would look like in better shape.

So the lesson here for Sellers is that you need to make your house feel a certain way for a Buyer to fall in love with it. Another important thing to keep in mind is that people who totally fall in love with your house will pay the most since it is an emotional response and not a logical one.

How can a Seller do this?

The most crucial and obvious ones are to declutter and clean. Not to your standards but to the Buyer’s standards. Then think about how your house looks. Think about how Buyers will tour your house. Ever been in a Builder’s model home? Next time you go in one, notice that there is just enough furniture to make the space feel good. You want your furnishings to compliment the space, not fill it. You will notice that the furniture often has narrow legs and you can see more of the floor. Seeing more of the floor always makes a space feel larger. There is thought about how people will walk around a space. You don’t want to block parts of the room off with furniture nor do you want to make pathways seem narrow. Those things create the vibe that the house is small. Buyers get that same vibe from this as you do when you’re stuck in a traffic jam.

Something else you do NOT want to do is have Buyers leaving the showing with a To-Do list of repairs. If you have unfinished projects, finish them. If you have a stain on your ceiling from a repaired leak, paint it. Buyers will respond to those things logically instead of emotionally. They begin to think about what it would cost to repair it, and they usually estimate high. You want your buyer to leave your house thinking only about how wonderful their lives will be in your house and how they need to rush home and sign an offer.

My response to this always disappoints people

As a realtor, you wouldn’t be surprised that people are always asking me the best way to add value to their homes.

What might surprise you is my response.

There are no improvements or upgrades that get you more than a 100% return. All give pennies on the dollar. I know, you are thinking “Then how do people who flip houses make money?” They make money from buying the house below market value. You already own your house so spending money to sell it and getting back less than you spent is just wasting time. Usually you want to do the least you can do, and the best thing is to address the worst aspects of your home before selling it. If you have worn out carpet, replace it. If you have a rusting light fixture in a bathroom, replace it…..but what is the best bang for the buck in getting top dollar for your house when you are selling it?

The absolute best bang for your buck has always been and will always be a fresh coat of paint.

Fresh paint makes any room automatically feel better and cleaner. Fresh paint can be done in whatever the trendy color is at the moment, which gives your home an updated vibe. Fresh paint can be used to unify all the rooms in your house. Buyers will walk around every room in your home within their 30 minute viewing. Having the same color in all the rooms is soothing and calming. Buyers love that. In a vacant house, all you see in most rooms are 4 walls, a ceiling, a light fixture and the floor. Having 80% of all there is to see be new makes a huge impact.

So there you go! If you are getting ready to sell your home and want to know the wisest way to spend your money in preparation, hit the paint isle at the hardware store.

How a Seller can protect themselves in a Seller’s Market

What?

It’s their market. Why would they need to do anything? Aren’t they the ones holding all the cards?

Yes, they are. However just because it is their time right now doesn’t mean they don’t need to do things to ensure they got the best terms possible and had a smooth transaction.

So here we go!

DO NOT SELL YOUR HOUSE OFF MARKET-I know this is very popular right now and us realtors love it because it is easier. It has become sort of a status symbol. Sellers feel like their house was more exclusive that it was. Buyers feel like they got an invitation to the after party. It isn’t a good idea though. The market is crazy right now. Buyers are tired of making offers that don’t get accepted. They want a house. I have seen numerous times where I will get multiple offers on a house and one buyer will go way over the list price to get it. Let’s say you get five offers. Four of them are pretty much the same and then there’s one that is waaaaay better. Come to find out, they had lost several houses and were just tired of it. Their attitude was that they were not going to lose another one again. Long story short, you never know what your house is going to sell for until you expose it to the market.

DON’T TAKE THE FIRST GOOD OFFER-There is no question that if you have a decent house and don’t overshoot the value with the list price, you are going to get multiple offers. Too often I see sellers in a rush to accept one. They know it is a sellers market but since they don’t buy or sell houses all that often, they are afraid of losing a buyer. It is up to their realtor to let them know that the buyer is not going to suddenly rescind their offer if it is not accepted within a few hours of receiving it. The only time you want to be in a hurry to accept an offer these days is when it is the ONLY offer you got. I think it is best to give the market at least 24 hours to see the house and let everybody know the cutoff for sending offers. That deadline implies you have multiple offers even if you don’t and makes buyers in a rush to decide if they want the house.

DON’T SELL THE HOUSE “BY OWNER’-I know this one sounds self serving. The temptation to save paying real estate commissions is appealing for sure. I see more for sale by owner sellers having deals fall apart or selling for less than they could have gotten for their house. This could be an entire blog series so I will just skim the top. To begin with, few sellers take good pictures of their houses. That makes people less interested in seeing it. Then they can usually only show the house when they are available. That means fewer showings. Then they don’t leave for showings. Buyers ALWAYS feel awkward when a seller doesn’t leave. They think they need to be in a hurry or can’t open closet doors. They feel like they are invading the sellers personal space. Even worse are the sellers who want to lead you around and tell you unimportant details about their home like telling you what the kitchen looked like before remodeling it. Newsflash, painting a picture in the buyer’s head of the old ugly kitchen does not help to sell your house. Then they go with the highest offer, which on the surface sounds good, but the buyer has to sell their old house first and they were preapproved by “By-Pass Mortgage and Bait Shop” which is located somewhere in Arkansas. Then they feel like they shouldn’t do any home inspection repairs since they have been living there and that leaking roof has never bothered them. In the end, few for sale by owner sellers know if the offer they have is the best one and if it is likely to close. They often kill their own sales since they don’t know what they are doing.

ALWAYS ASK FOR THE TERMS YOU WANT, EVEN IF IT WASN’T IN THE OFFER-If you have several offers, try to combine the terms you like from all of them. Sometimes it works. Let’s say you like the price of one offer, the closing date of another, the possession date of another, and the inspection type of another. What you do is pick the one that you think has the best chance of closing (cash or preapproved with a lender your realtor knows is good, bigger down payment, etc.) Then you see if that buyer can match the other terms you like. You might say to the buyer’s agent that you really want to work with their buyer but you also would like to close on such and such date like one of the other offers you got, and that you’d like the buyer to not do a home inspection like one of the other offers you got. It is a friendly way of letting them know that while you like them the best, you might just go with another buyer who has already agreed to those terms. My experience is that most of the time a buyer is more than willing to alter a closing date, possession date and possibly change their inspection type to get the house.

What is being a realtor really about?

You’d think it would be about houses, but it is not.

You’d think it would be about the market, but it is not.

You’d think it would be about knowing what a house is worth, but it is not.

You would think it would be about marketing a property for sale, but it is not.

You would think it would be about showing houses to buyers, but it’s not that either.

All of these things are important, but they are not what being a realtor is really about.

It is about guiding people to make a good decision using all of the things above. I often describe my job, when asked, as “Talking people into making a good decision and talking them out of making a bad one.”

In the future, realtors might not even be needed for a buyer to view a house. People may end buying real estate like they do anything else online, or there will be an app to open the lockbox on the front door without a realtor. In the future one of two things will happen: Technology will make tools like Zillow’s Zestimate more accurate, or people will broadly accept them as being accurate. Either way, realtors won’t be needed to determine market value.

It all comes down to helping people make a good decision. There are tons of tiny decisions in buying or selling a house that can have huge consequences. Money can be lost. Time can be wasted. Stress can be compounded. Since most people only buy or sell a house a few times in their lives, often they don’t know the difference between a good decision and a better one. It is easy to make a good verses bad decision. Good verses better requires some knowledge and experience.

A realtor friend and I often chat about what we having going on. It makes us both better realtors I think. He had a situation where he had two offers on a listing. One was slightly better than the other, but the people with the slightly worse offer really wanted to live in that specific neighborhood. Do you go with more money and risk losing those buyers if the home inspection didn’t go well? Do you go with the slightly less offer where you know the buyer is less likely to walk away because they have to have that specific neighborhood? I told my friend to go with the higher offer. My thinking was that if the higher offer people walked away after the inspection, which is usually within 10 days, the other buyers who wanted that specific neighborhood will still be around. Best of both worlds.

Since the market is so hot right now, I am seeing lots of sellers saying a neighbor or a somebody they know is interested in buying their house before it gets listed. My advice to anybody today is to put the house on the market and try to get at least two offers. Today’s buyers are used to fighting to get a house. Get two or more buyers competing for a house and YOU as the seller will always come out the winner. Also, a buyer wanting your house because their parents or grown children live on the street will ALWAYS be there too. That buyer is not just looking for any house in your price range. Being close to mom, dad, grandma, grandpa or grandkids is what makes them want your house. They may or may not pay the most for it, but they are not out actively looking for any house in your price range all over town.

Another thing I am seeing more of is the opposite end of this where a buyer thanks me for my time and tells me they have bought a house from a friend. I had somebody this year with a friend who was selling their house by owner. My client bought it. The house had been on the market for quite a while. In today’s hot market, not selling fast is a sure sign that something is wrong. When buyers decide to wait for the next new listing and pass on your house, can you imagine how difficult it will be to sell the house in a cooler market? This is where the whole good verses better decision starts to have big consequences. People who make poor choices as a buyer typically don’t realize they made a poor choice until they go to sell the house. I saw plenty of that from Great Recession sellers who told me they went over the asking price in multiple offers when they bought the house that they were now selling for less that they owed on it.

So, being a realtor is really about using your experience and knowledge to help people make the best decisions possible. There is nothing that feels better than knowing your seller got the best deal possible, or that your buyer landed a house that will always be easy to sell when that time comes.

How many days on the market are best?

One.

One day on the market is best.

A lot of sellers feel like if their house sells immediately that their realtor under priced the house.  Some of them feel like realtors shouldn’t make that much money when a house sells fast.

Here is the truth from 14 years experience:  1)  A house will always sell for market value.  If it was under priced, buyers will bid over the list price.  2)  The effort between selling a house the first day on the market or it taking 6 months is not that different.  Being the listing realtor is a lot like fishing.  You bait a hook with your marketing and cast it in the pool of buyers.  Then you wait for one to bite.

Enough about the realtor perspective, how about why this is somehow great for the seller?

Statistics tell the story.

A seller is much much much more likely to get their full asking price when it is a new listing.

When a house hits the market, every buyer in that price range comes out to see it.   They often see other buyers leaving the house before they see it and/or have other buyers waiting to see it when they leave.  Buyers know that they need to act fast if they want the house.  They know that other buyers may want it too so they better put out their best offer first.  There is a sense of urgency.

If it sells, it will most likely sell for the full list price.

Once all the buyers currently in the market have seen it, a seller will only get showings as new buyers emerge into the market.   There is no frenzy.  No buyer is afraid of losing the house so they want to see how low they can get the seller to go.

A phenomenon that has been happening since buyers have been able to set up their own saved searches on Zillow is that buyers seem to look at a house online only once when it is a new listing.  Few buyers these days will comb through rejected listings.  They opt to just wait for new listings to come on the market…..which means a house that did not sell quickly is unlikely to ever have a buyer reconsider viewing the house.  It is like it doesn’t even exist to them.

So, how many days on the market are best for the seller?

One.

One day on the market is best.