how to sell a home

Why do new listings get so much attention?

by John Rice

I have a listing that got lots of showings the first few days on the market. It is now only getting 1-2 showings a week.

I have a new buyer who I have shown everything that is currently on the market. They haven’t liked any of them enough to pull the trigger. We are now just looking at 1-2 houses a week.

Notice a similarity? Both are not getting a lot of activity. Why? The seller has exhausted all the buyers currently in the market. They are waiting for new buyers to enter the market. The buyer has exhausted everything currently on the market. They are waiting for new listings to hit the market. This is how it has always worked, but all the waiting is because there is still a significant shortage of listings.

When there is a new listing that drops on the market, every buyer in that price range will come out to see it. For buyers, it is tough because they are one of those people coming to see the listing as soon as it hits the market. They need to quickly decide if they want the house or not. There is often not a lot of time to sit on the fence when it is a new listing. For sellers, this is your best chance to get multiple offers. It can be easy for a seller to assume they will always get that much traffic. I have had sellers turn down an offer during this period because they think they can get a better one later. They think they will endlessly get 4-5 showings every day. Then it dries up after about day 3 or 4 on the market.

The market is constantly moving. It’s like the sun. You can’t see it move. You just look up in the sky and realize it isn’t in the same place it was the last time you looked. There are new listings and new buyer entering the market every day. (I do realize the sun doesn’t actually move, the earth does. Think of this analogy more as how we refer to the sun setting or rising.)

The single most important thing when selling your house (or anything really)

by John Rice

I did it again.

I bought another car. For people who know me, this is par for the course. I am always falling in and out of love with cars and trading them like crazy.

If you’re wondering how me getting a new car is related to real estate, it is because of pricing.

The car I bought was not expensive. It is just a little Japanese sports car that is fun to drive. A new version came out during COVID and they have been in short supply ever since. You never see one on a lot. Most are sold before they arrive. Dealers are taking deposits on them and telling people they will call when the car arrives.

I went to a Volkswagon car show with my oldest son and his girlfriend last weekend. We had lunch on the way home. They asked about the deposit I had on another one of these cars at a local dealership. I replied that I was told it should arrive later this month. He then went on a mission of finding me one that was immediately available. He found one about 250 miles away in Indiana.

He called to confirm that it was in fact in stock. It was. I remember thinking to myself “Why is this car in stock, collecting dust on a dealer’s lot when every other one is pre-sold???”

Ahhhhhh……the price!

This dealer wanted $9000 over the MSRP price.

I told the salesperson that I was definitely interested in the car but there was no way I was taking it at $9000 over MSRP. He started telling me what a hot car it was and how many calls they get on it. I am totally sure all that is true. I’m a realtor, so I know how markets for things for sale work. This is a super hot car in high demand, but the reason it hasn’t sold is that it was overpriced.

Here are some truths about any market:

  1. You cannot sell something for more than it is worth.
  2. The whole market determines the value, not just the seller.
  3. A buyer is defined as ready, willing and able. (At $9k over list for a very affordable car, that price pushed the total cost well over budget for the target buyers, thus knocking out the “Able” part of those three requirements.)

Like real estate, you cannot sell the most gorgeous $500k house in a highly sought after neighborhood for $750k. If you try, it will sit on the market and you will reduce the price until those ready, willing and able buyers think it is worth it.

But isn’t the market still hot? Yes, it is. Prices are still going up in our area. That means you still, like always, have to price a house for something a buyer will pay. A hot market doesn’t mean you can sell it for more than it is worth. It just means it will sell quickly and many buyers will want it and be eager to pay top dollar….not more than top dollar. If you ever see a house that is sitting on the market and wonder why it hasn’t sold, literally 100% of the time it is due to price. It may have some odd feature or be in bad shape, but it will definitely sell when the asking price is in line with what Buyer’s think it is worth.

So what happened with the car? They came down to $6k over MSRP and I drove up and got it yesterday. I suspect had they priced it at that from the beginning, it would have immediately sold.

Know what I like about this market?

by John Rice

If you just want the answer but don’t care to know why, it is because this market is LOGICAL.

If you want to know what I mean, here we go:

Other than the past few years, the real estate market has always been logical. The best houses sold for the most money and sold the quickest within their price range. The second choice houses sold for less than the more desirable houses. Location mattered. The lot the house was on mattered.

For a few years there, nothing mattered. Any house was selling for more than it should have and it didn’t matter if one house was in a second choice neighborhood or had a terrible lot. It was tough being a realtor back then. You could look at recently sold comparable homes and determine what a house should be worth, but it always sold for more, sometimes waaaaaay more than that. I would tell my sellers “Here is what your house is really worth but here is what it could sell for…..expect anything to happen!” I would tell my buyers “Here is what the house you are bidding on is worth, but here is how much of a convenience fee you may have to pay just to end your misery of losing in multiple offers.”

Today’s market is about logic again and I am glad. If two identical houses come on the market on the same street and on the same day and one of them backs to the interstate and the other doesn’t, the one with the better lot will sell for more. If a house is overpriced, it won’t sell at all.

Why is this? It is because today’s buyer has choices. Yesterday’s buyer had one shot at the only active listing in their price range. Having a little inventory makes a difference. It is still a good market. It is an even better market if you have one of the better houses in your price range. This has always been true. I remember back in 2009. The market sucked yet I was getting multiple offers the first day on the market for some of my listings. Buyers will always pick the very best house that is available and take a pass on those that aren’t. That’s just the way logic works.

How the market works when there is inventory

by John Rice

Now that we are back to having some inventory in our real estate market, I thought it would be a great time for a refresher on how the market works when there are actually houses for sale.

The recent past has shown that any house will sell fast when there are more buyers than sellers. When your choice is between whatever house in your price range hits the market or hoping the next one is better, people usually make an offer on the one for sale that day.

We are back to a normal market where Buyers have choices and this is how they make their decisions.

Simply put, they pick the best house on the market. Usually this is a house that is priced realistically, that is move in ready and is in the most desirable neighborhood within the Buyer’s price range. Then there is their second, third, fourth and so on choice.

Once that #1 pick house sells, then the #2 pick house becomes the top choice. Once the #2 house sells, then the 3rd pick becomes their 2nd choice. Once the…..well, you get how this works I am sure.

Sometimes what happens though is that a brand new listing hits the market and changes the ranking. If you have the #2 house and are excited to be the next house to sell, a house hitting the market that is better than your house means you will stay at #2 on any Buyer’s list. Sometimes winter is a good time to sell a house that has been the #2 or #3 house because we tend to see fewer new listings. Eventually your house rises to become the best choice in its price range.

The goal of you and your realtor is to make your house as competitive as possible so it ranks high on the list of Buyers. Sometimes it is as simple as rearranging furniture, doing a little updating, doing a few repairs that have been noticed during showings, or even a price reduction.

While we are discussing inventory here, I want you to know that in the coming months you will see headlines about the “Average days on Market” rising. Any time you have inventory, this will happen. It doesn’t mean that every house is harder to sell. There are still plenty of houses selling fast and even getting multiple offers. Those are all the #1 choice houses, the ones everybody wants. All the houses that are further down the list will stay on the market longer, waiting for price reductions or some other change to be made which will eventually lead to a sale. In the meanwhile, those houses will dilute the average days on the market statistics.

Thankful that these embarrassing moments don’t happen more often!

by John Rice

I normally do a lighthearted post around Thanksgiving since I know few are thinking about real estate during the holidays.

This time I thought I might share some of my most embarrassing moments.

There have been the countless times I have been out with clients and not realized until I got home that my zipper was down. It has happened so many times that I can’t recall any one specifically.

Probably the funniest time was when I was having an incredibly busy day showing multiple houses to multiple clients. I had arrived about 5 minutes early to a house. Just as I got there, my client texted saying they were running a little late. I was so excited because I had drank many many many cups of coffee that day. I let myself into the house maybe 2 minutes before the scheduled showing time officially began. While I am in one of the upstairs bathrooms, I hear a voice asking if anybody is in the house. I state that I am the realtor here to show the house. The voice was the seller, who hadn’t left yet, in the bathroom on the other side of the wall from the one I was in. The seller and I never talked face to face. He must not have drank as much coffee as I did that day because when I exited, he was gone.

Then there was the time I had another crazy day of showing houses. This one began really early one morning. It was still dark outside. I kept my sandals in the foyer closet. I stuck my left foot in the closet and pulled it out with a left sandal on. Then I stuck my right foot in the closet and pulled it out with a right sandal on. What I had forgotten is that I had two identical pairs of sandals. The only difference was one was leather and the other was suede. I did not realize until I got out of the car that I was wearing one of each of those sandals.

Speaking of shoes, for a while there I had a really nice pair of sandals that would occasionally, if I stepped a certain way, make a noise like somebody was passing gas. Every time that happened, I would subtly try to get the shoe to do it again so people wouldn’t think I had just passed gas, but of course the shoe never cooperated. I then looked like somebody who had just passed gas and was walking funny. After a few times of this embarrassment, they became my lawn mowing sandals.

More than a few occasions I have been worried about running late and passed my client at a rapid pace on the way to a house. I usually say something like “See how motivated I am to find you the perfect place?”

And I won’t even go into all the times my phone’s autocorrect totally changed what I had typed.

One time, I was showing a vacant rural property that had a giant outbuilding. I was there with a husband and wife. I opened the door to this building and the wife walked in right behind me. All of the sudden, we both felt all these insects literally all over us. I am highly allergic to bees, which is what I assumed they were. I turned around to run out of the building and she was in the doorway so I grabbed her like I was saving her life and then both of us jumped off the top step into the yard with our arms wrapped around each other. Turns out they were just flies. When we went back inside, there were probably a thousand flies swarming around.

I guess if these things are the most embarrassing moments of my nearly 18 year career, it hasn’t been too bad.

I hope everybody has a great Thanksgiving!!