sell fast

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.

$30k over list and STILL wasn’t the best offer??

by John Rice

Yesterday was sort of a bummer.

It began with a sale falling apart. My buyers had a contingency contract on a house since they needed to sell their old one first. Somebody else came along without a contingency and kicked them out. Time to start all over.

Then late last night, I found out that another buyer did not get a house on which we had submitted an offer. We went $30,000 over the list price, which was close to 10% over list. There were 22 offers on that house. My poor buyers will likely be competing with those other 20 buyers who didn’t get the house on the next new listing in their price range.

I did at least get one of my listings sold for $5000 over the list price.

It’s shaping up to be another crazy year in real estate. It’s a tough market. It’s tough for everybody except the sellers.

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.

My first open house in 13 years

by John Rice

I did my first open house since 2009 recently. None of the people who came to the open house bought it.

Why?

Because open houses do not help a seller get their house sold.

Who comes to an open house?

1) People who are so new in their search for a home that they are not ready to make a decision.

2) Neighbors.

3) People who just like houses and real estate.

Why do realtors seem to love doing them?

Because they get to meet all those people who are not going to buy the house they are standing in but may buy something later.

Why then did I do one?

For my seller. We put her house on the market right before Thanksgiving. That is statistically the absolute worst time to put a house on the market……and Thanksgiving 2022 was pretty much the worst market since 2011. Interest rates had just put all buyers in a state of shock and very few were out actively shopping.

My seller was one of the nicest clients I have ever had. She needed to get this house sold so she could get married, move and start a new life out of state. All that was in the way was selling this house. It was very discouraging to her that it didn’t sell fast. The market did a major shift so quickly last fall. FYI-It is much better now. Buyers are getting used to today’s rates and are not as shocked/mad/afraid to buy a house. Back then all the headlines were how terrible the market would get. Prices would fall. Zillow and Redfin went from predicting things like 14% annual gains to declines of 10% or more in value.

Long story short, she needed a little encouragement and the least I could do was give her part of one Sunday afternoon.

It had been so long since I had done an open house that I didn’t even have any signs. The first step was to buy the bigger open house sign to put in the yard and get it scheduled online. On my way to her house, I placed the brand new directional signs so people could find the place.

Where I hadn’t done one in so long, I had no idea what to expect. My plan was to get my 10,000 steps done for the day by pacing around her house. I had many pleasant surprises that day. The first of which was that the seller had candy in practically every room and had baked fresh cookies. I ate so many of them that I should have walked 1,000,000 steps that day. We had a huge number of people show up. So much so that I didn’t really have time to play solitaire and sudoku on my phone. I also ran into two people I knew that I hadn’t seen in forever. Overall, it was a successful open house in the sense that it gave my seller the encouragement she needed.

Selling a house is very stressful. Most of my job is giving practical advice and taking care of tasks. Sometimes it is about doing something that says “We’re in this together.”

The house sold a few weeks later to a young couple who feel in love with it. The seller was very happy they loved the house as much as she did.

Connection to this house made this new sale extra special

by John Rice

Yesterday started out like most busy days in real estate. I had to drive to Salvisa for a home inspection. I was negotiating home inspection repairs on two listings. Talking about radon, missing tub stoppers and clogged gutters isn’t especially exciting or fun. About the only real satisfaction in working on home inspection lists is knowing you’re working hard to make things as good as possible for your clients.

I also had an offer out with a 7:PM deadline. I wrote the offer for my Buyer’s on Saturday afternoon so it was a long wait to see if they got the house or not. And they did get it. That always feels great. It is especially exciting and fun to be the one to drop that news to your clients.

This sale was a pretty special one.

It was a house I had sold last summer.

This house was where two friends grew up. I have worked with this family several times. It was time for their mother to move out after having lived there since the mid 60s. It was a great house with a great floor plan in a great neighborhood. It was also in great shape. It was just a little dated. We got something like 20 offers on the place when I had it listed. It got bid up about $40k over the list price. Unbeknownst at the time the offer was accepted, the lady who bought it had gone to school with one of the daughters of the owner so they had a little reunion at the closing.

It felt great to have gotten so much over list price for this family. It felt great to see the daughter and buyer catch up after not seeing each other in decades.

Flash forward about six months, I saw the house was coming on the market. It had been totally renovated and an extra full bathroom had been added. I mentioned it to a young couple who had been referred to me. It was pretty much exactly what they were wanting in a house (short of having a garage.) I knew it would be a great house. As soon as it hit the market, we checked it out. Later that day, an offer was made.

When I first saw the house prior to listing it, my friend and her mother were telling me stories about their family’s history in that house. The one that sticks out the most was her mom cooking breakfast on a wood burning stove in the basement during the ice storm of 2003 while the power was out. I always love getting these details…….and I totally love that I got to sell it again, knowing that my Buyers will be making their own history there that one day they will tell me about when it’s time to sell.