neighborhood

A bridge not to burn

by John Rice

We are back in a market where buyers want to test sellers and see how far they will bend.

Used to be that the average List-to-Sale percentage was about 97%. That means that the house sold for 97% of the list price. As the market got hot right before COVID, it inched up. During and immediately after COVID, houses were selling for no less than full price, many going for 10% or more over the list price.

Those days are gone. I occasionally see a house that will go for slightly over the list price. That is only for super amazing houses that got multiple offers immediately. Short of that happening, full price is about the best a seller can expect and not a whole lot sell for that.

I have had many sellers this year get super discouraged when we finally got an offer. Most will tell me they don’t even want to reply to it. I tell them that it doesn’t matter what the initial offer is. What matters is how high the buyer will go. Most of the time the buyer will end up paying an amount that the seller is satisfied with.

If a buyer offers 92% of the list price, odds are they will go to 96%.

If a buyer asks for $5k in repairs after a home inspection, odds are they will settle for $2500.

It is crazy how predictable this is. So much so that when I get an offer or a repair list, I am usually correct on where it will end.

So, if you are a seller, be prepared for this. Don’t be offended. Don’t reject the offer or burn the bridge. Keep playing the game until it is over. Odds are you will be glad you did.

Selling a house is like middle school gym class

by John Rice

I was that kid in middle school that was always picked last in gym class. You know the drill. Two team Captains (Buyers) pick their team (Houses) until there is only one left and that person gets picked by default. Don’t feel bad for me though…….I’m sure the past 40 years has been better for me than for most of those picked before me.

The real estate market is very similar to what we’ve all experienced in gym class. Buyers organize the houses in order of preference. Naturally, they are most interested in move-in ready houses that are priced right. Then they move down the list to those that are less desirable.  Sellers want to be picked sooner rather than later. Think “Days on Market.”

Once the Captains are chosen, that is like the beginning of the house hunting season. The Captains pick those they think will be the best. Once those kids are on a team, they are “Sold” and not available anymore. All a Captain can do is pick the most desirable kid from what is left. Once the best one has been picked, the second best one becomes the new best choice. That is until it was just me standing there and the Captain says my name with the enthusiasm as if he had just heard the cafeteria was serving goulash for lunch.

Right now, we are in the time of year where not many new listings are hitting the market. It’s kind of like when there are only about 6 kids left from the whole class. These are the ones that maybe nobody really wants, but the next kid that gets picked is going to be the best of those that are left. There are many sellers right now with average to below average houses that will get contracts simply because there are no better choices for a buyer right now. I always say that fall is the best time to get rid of  house that nobody has wanted all spring and summer, which I guess is my whole point.

 On a side note, the only time I ever got picked any higher than dead last was when it was for volleyball. See, I am left-handed. When I serve, the ball always goes on the opposite side of the court from where it lands when most people serve. Everybody on the other team was always caught off guard. Nobody ever noticed the pattern of where the ball would go when I served. Come to think of it, that is one of the first times I ever realized the benefit of zigging when most people zag and zagging when most people zig.

Virtual Staging-Good or Bad Idea?

by John Rice

Don’t do it. (Virtual Staging is where fake furnishings are digitally placed in a vacant house to make it look appealing in case you didn’t know!)

The purpose of the pictures in a listing are to “Sell” a showing. The goal is to get a buyer interested enough to come see the place in person. Many realtors think it is to sell the house. This isn’t eBay or Amazon. Nobody is buying a house without somebody coming to see it IRL.

Let me back up a bit. The real estate industry has always had gimmicky services provided by people who are not in the real estate industry. These businesses exist to make money off of realtors. They tell us stuff like “You will have something other realtors won’t. You will win more listing appointments. You will make more money.”

When I was a new agent, there was a company that would give a talking tour of a home by calling a phone number. It was sort of like Apple CarPlay reading your texts. It came and went. It did not directly sell any houses. Then we had QR codes. Came and went. Now we have drone photography. I think there is a place for drone photography. Like if you have a lot of land that won’t all fit in one picture. Let’s face it, showing home buyers what their potential house looks like from a landing plane is pointless, especially in a neighborhood where the picture shows every roof top of every house. Who cares?

Virtual staging is the latest gimmick. I’m ready for it to fade into history. The thought is that it makes a house look better online. Yes, it does. But remember, somebody is going to come see that vacant house. It is not going to look or feel at all like what the buyer saw online. And that is where the problem lies. The goal is not to just get showings, the ultimate goal is to sell the house. Having been in real estate for 20 years, I can 100% tell you that people do not buy a home if they are disappointed when seeing it in person. I have had so many buyers get excited about a house due to what they saw online and then be disappointed after seeing it in person. I have also had listings that photographed much better than they looked in real life. I once had a listing that looked amazing in pictures, but was sort of worn out and tired looking in reality. The stream of feedback I received from showings was that it did not look like it did in the pictures. Some realtors even accused me of using older pictures of the house when it looked better.

Virtual Staging does the same thing. It excites a buyer enough to come see a house that will not be anything like what they expected.

If you’ve got a house that is tough to sell due to a variety of reasons, go with real staging. That way the pictures look great online and the house will match the expectations when the buyer comes to see it in real life.

#1 biggest mistake a seller can make

by John Rice

Often, when talking about pricing a house with a seller, they say something like “Couldn’t we price it at this number and won’t people just make an offer if they like the house?” Makes a lot of sense to the seller, but doesn’t when you look at it through the buyer’s eyes.

Why? Let’s say a buyer is shopping for a $400k house. You have a house that is worth $350k, but are asking $400k because somebody will make an offer if they like it, right? The buyers are viewing every house that is priced at $400k, most of which are really worth about $400k. To buyers your house will seem like the worst house they have seen with a $400k list price. Why? They are comparing it in THEIR mind to the better houses they viewed that are worth $400k. The buyer is either going to get a better location, a bigger house, or one in better condition……They are never going to like your house enough to make an offer. On the flip side, the person who is going to spend $350k is never going to see your house because they aren’t looking out of their price range. So, you have a situation where the people looking at your house aren’t going to buy it and the person who would buy it isn’t going to see it!

Here are some tips to keep this from happening:

1) If you must price on the high side, never go more than about 5% over the recent sales of similar homes in your area. Sometimes an over-priced house will get a lot of showing, which makes the seller think they are priced right. You can still get a lot of showing on a slightly over-priced house, but no offers. When you get showings and no negative feedback, it means you have a price issue. I say if you have a $350k house, it needs to priced around that number.

2)  Avoid the temptation to have a high price and have your agent tell people you are motivated. When I see a steep asking price and the agent says the seller is motivated, what comes to my mind is that they are motivated to get their price. A truly motivated seller will price their house at or less than what it is worth. In 2025, the days of testing the market are a thing for history books.

3)  Realize how the market works. You have so many buyers and so many houses. The buyer gets to pick whichever house they want and they always pick the best one. Even in a sloooooow market, I have been in multiple offers. It is human nature to want the best. The buyer is comparing all the houses available. Make your house the best one by pricing it right.

Trust me on this…There is no magic in real estate.

“How long will it take to sell my House?”

by John Rice

I get asked this on every listing appointment. It is hard to believe that a couple of years ago, it was rare for any house in any condition to make it past the first day on the market. I usually don’t reply with an amount of time, but with a sequence of events that need to happen to attract a buyer. The honest to goodness truth is that any house should sell pretty quickly if the seller will do some prep work. Granted, there are exceptions…..Two million dollar house? Will take time since there aren’t many buyers in that price range. A unique house? May need a unique buyer. An overpriced house? Will usually only sell to an idiot with a realtor who thinks we are still in the 2022 market.

I’ve been doing this a long time. This is how it usually goes in this changing market. I see the house. I ask the sellers if they are able to do any work that needs done to attract buyers. Buyers want as move in ready as possible and for the best price right now…..well, I guess they always have but now they have more listings to chose from and sellers can no longer just put their house on the market without a little prep work. Sometimes the seller can’t/won’t do anything. If they can’t/won’t, I tell them the price I think their house will sell for just like it is. Usually though, the seller picks a few items from the list. We put it on the market. They get positive feedback for the things they have done. They get negative feedback for the remaining items on the list.  After awhile, the seller starts to realize that they are going to have to do more items on that list or reduce the price. Often, buyers subtract about 5 times the cost for the remaining items on the list. I’ve been on the buyer side of this. They almost always say something like “If I have to paint this whole house I’m not paying a penny more than $XXX,XXX!!”  or “I would need to replace all the carpet and I like hardwood, so let’s just subtract the cost of hardwood from the asking price and go from there.” Can’t blame them. After all, it is turning into their market these days.

Eventually, the seller plugs away at the list until it sells. See, there is the sequence of events I mentioned at the beginning of this post. Now that the house is ready, it is going to sell because it is competitive and will almost always fall on the short list of a buyer.

But what happens to the people who do everything on the list from the beginning and price it correctly? Their house usually sells very quickly. Why? Because buyers want the best house for their money. Make your house THAT house, and start packing.