real estate listings

How to price your house in a Seller’s Market

by John Rice

I have always said a house is gonna sell for what it is worth. I said it when it was a Buyer’s Market. I’m saying it now. Overpricing your house is the surest way to make the process take longer and likely sell for less than it could have. Price it right and buyer’s all rush to see it when it is a new listing, regardless of the market conditions. They are afraid of losing the house if they like it. You want that sense of urgency.

Back in a Buyer’s Market, the goal was to drop the listing on the market at the right price and hope to get multiple offers. It is the same today, only with a few tweaks.

Today the list price is more like when an auctioneer begins the auction with a number low enough that they know they will get that first person to raise their hand. Then the price keeps going up until nobody else raises their hand. The list price is more like a suggestion these days. You still do not want to start off with too high of a list price. I often suggest a list price to sellers. They will tell me how strong the market is and want it to be higher. Then when a house sells for more than the list price, they feel like they left money on the table and undersold it. That is not the case. If you had several buyer’s bidding up your house, that means you got every penny out of it.

What I like to do is examine the most recent comparable sales in the neighborhood. I figure out what the house is worth compared to what other buyer’s have recently paid for houses around my listing. Then I put it on for that price since we know 100% that number will work. The worst thing that could happen is you sell it for full price. Then I drop it on the market late on a Friday. That way everybody sees the listing and starts scheduling showings for the weekend. It is good when buyers see other buyers coming and going. It shows them it is a hot listing and they better decide fast. Once I get one offer, I let all other realtors who have shown it know. You don’t tell them before they show it. You wait until after they have shown it so they don’t assume they won’t get it and cancel the showing. Even if the offer sucks and is not one I can suggest my seller accept, just having one enables me to leverage any other offers up as high as any buyer can go.

I recently put on a listing for $360k. We got 6 offers on it. Five had escalation clauses and we ended up selling it for $384k……and that must be the market value since that is what a ready, willing and able buyer agreed to pay. My seller is a good friend who was very happy with the results. If I had put the house on the market for $384k, do you know what would have happened? Since there was only one buyer willing to pay that much, I probably would have only gotten one offer. It would have been full price or less. I wouldn’t have been able to leverage the terms towards the interest of my sellers without the presence of more than one offer any more than an auctioneer could drive up the price with only one bidder in the room.

My superpower is……

by John Rice

I really wish it was something like mind reading, predicting the future or the ability to move slow drivers out of the left lane, but it isn’t any of those.

Yesterday, I showed a massive house in Beaumont to a family. Well over 6200 square feet with the unfinished basement. As they asked me questions about the house, part of my answer was explaining what room was above, under, or beside where we were. After a few of these, their oldest son asked if it was part of a realtors job to know the floor plan of every house.

Before that, I had never thought about my ability to walk through a house and build a 3-D floor plan in my head, or visualize what a house will look like from just the floor plan. I just thought everybody could do that?

I used to draw floor plans of houses when I was a kid. Then I took a lot of architectural classes in college. Then I worked as an estimator with a construction company where I would have to build the plan in my head to figure out how much material was needed.

I don’t know what to call this superpower? Any ideas?

When it seems like it was meant to be

by John Rice

I sold a house this week that I wanted to tell you about.

The buyer is a first time buyer who was sent to me from two separate past clients. She works with a client who has become a friend of mine…..Thanks David! Her mother works with another friend who has used me before too……Thanks Doug! I don’t have this happen often when somebody is asking for realtor references and I get mentioned twice. It always makes me feel twice as good that somebody would take their time to connect two people they care about. Close to 100% of my work is getting referred to new people or people coming back to use me again. That is why I don’t ask for reviews and don’t advertise. I just don’t need to do either to attract new work!

The buyer was going to be in the super tight $150ish market. There is almost nothing ever for sale and when something hits the market, you are competing with cash buying investors who sometimes don’t even look at the house before making an offer. This was going to be a tough one.

Right after I started working with this buyer, I get a text from another client who was wanting to sell their house.

The sellers are past clients who I have thoroughly enjoyed working with several times. They bought a house to rent many years ago and it was time to part with it. The sellers did a lot of work to it themselves and it looked really good. The price point was going to be around $150k, which is very hard to find in the current market.

I just knew this was the house for my buyer. I mean, I had recommended it to the sellers when they bought it so I could certainly recommend it again to my buyer!

I told the sellers what I thought it was worth. I told them that I had somebody that was interested in it. I also told them that they could put the house on the market and possibly get a little more than the price range I thought it would sell within since you never know what a desperate buyer will do in this market. They liked the idea of me managing the entire transaction and keeping it simple, so I showed it to my buyer. Of course she wanted it. It was a gorgeous home in one of the most desirable neighborhoods in her price range.

The buyer is happy she didn’t have to frantically make an immediate decision and that she got a great house. The sellers are happy because they know I am managing the whole transaction and made it so easy for them. A win for everybody.

I seem to be having this happen several times a year now. A seller will tell me they are wanting to sell soon and then shortly afterwards I have a buyer tell me what they want and they describe exactly the house my seller has. Happens the other way too. I will have a buyer tell me what they want and then I will have somebody tell me they are ready to sell the exact house the buyer described. It’s sort of cool when this happens. It makes me feel like I am a small part of a bigger story.

The hardest house to sell is….

by John Rice

I showed a house to a family last night. It was in a desirable neighborhood. Had a nice lot. Had lots of square footage and a nice floor plan.

What was the problem?

There wasn’t any one feature of the house that was amazing and there wasn’t anything to hate either. It was all just okay.

Most houses have a combination of things you love and things you dislike but you can live with. The normal thought process for deciding if you want the house is weighing back and forth between what you like and dislike. When the house has nothing you like and nothing you dislike, it is hard. People want to fall in love with their house. Often it is easier to sell a house with an amazing kitchen and a bad lot. Or an outdated house with an incredible lot.

You would think such an inoffensive house would be ideal, but it is not. Showings for these type of houses usually take a little longer. Buyers typically walk through the house several times hoping they have missed that one feature that they can get excited about. But it isn’t there. And there isn’t anything to walk away from the house hating. So most of them just walk away.

Never thought I would see this

by John Rice

I woke up Monday morning with not really much to do. That is how a lot of days go in real estate with so little on the market for buyers to view.

Also like a lot of days, things can suddenly change. As I was standing in an isle at Lowe’s, two new listing had hit the market and I was suddenly trying to schedule showings from my phone.

One was a $620k house near Albany Road/Shady Lane. The lot was fantastic. That area was outside the city limits when new and probably felt like a semi-rural area when built. The house had a bonus garage which would have been great for my car loving client. The house was, how can I say this…..STRANGE! It was sort of like somebody decided to throw every trendy 1980s design at the house and see what stuck. Well, ALL of it stuck. It was an old house that had been added on to on 3 sides. The kid I was in the 80s would have loved this place.

The other one was a $900k house off of Chinoe. Really nicely done. Fabulous patio and backyard. Nothing really odd about it other than it only had 3 bedrooms and there were cabinets above the kitchen island that made the kitchen feel small.

It wasn’t too long ago that a seller at these price points expected to wait an average of several months before selling. Like that famous video of a news clip where a lady was being interviewed about a fire in her apartment and said “NOT TODAAAAAAAAAY”, the same can be said about the current market.

The $620k house sold that evening. The $900k house that hit the market about 3:PM got an offer by 9:PM that the seller accepted the next morning. Neither were a good fit for my clients so we are anxiously awaiting the next batch of new listings.