Monday, November 23, 2020 / by Vanessa Saunders
By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
Because the Hudson Valley real estate market today sees so much demand and so little inventory, it heavily favors sellers in negotiating a sale. According to a recent report from the National Association of Realtors, the inventory of homes for sale is down 21% from last year, and sellers are receiving an average of three competing offers.
So how does a seller know which offer is “best” (no, it’s not just one with the highest price), and how do sellers set themselves up for success?
Play your cards right first, (and deal yourself a good hand).
High perceived value drives higher priced offers. That’s why it’s important to amplify the “WOW” factor of your house before you even think about listing. Declutter and fix up the cosmetics of your home to make sure it’s light, bright and color-neutral. Better yet, hire a professional to make your home magazine ready. If they’re like the designers on the Global Property team, you won’t recognize your house, and it will impress buyers and their agents.
Once you’ve dressed up your home, showcase it with professional marketing. It’s likely that every buyer who walks through your front door will have already seen it online, so be sure your visual tour is done well, and uses professional photography. The Global Property Systems team of marketing professionals present our listings with a narrated virtual tour on every home’s dedicated website. Our marketing campaigns appear everywhere. On and offline including industry trades, mainstream media, real estate portals, multiple listings systems, broker networks, social media, search engine optimization, and much more. This ensures maximum exposure for the property.
Pricing: Start with a tempting offer.
A home is new to the market only once, and you have this opportunity to make a first impression. So price it a little below market value to start with. Nothing shakes buyers out of the trees like a shiny new property at an attractive price.
What we’ve seen over and over in 2020 is how homes that start out a little below market attract far more offers than homes starting at or above market. Multiple offers are the fertile soil in which bidding wars grow, with higher prices and stronger offers.
Negotiating a contract.
Price isn’t always the factor that decides which offer is best. What’s negotiable besides price? Very often, in order to seal a deal, they may offer a flexible closing date, pay for a home warranty, cover title fees, or buy furniture or other items physically in the home.
With so many homes selling above asking price to begin with, other factors come into play for buyers wanting to “win” the bidding war. In today’s market, all cash offers are common. The advantage of cash is it precludes the complication of lender approvals such as a property not appraising above market price. Buyers can also agree to waive inspection (something we never recommend), or they may agree to take possession at a date convenient to the seller.
When to accept an offer.
The time to accept an offer is when the seller is reasonably sure the best offers are on the table. We say “reasonably’” because a contract doesn’t necessarily end negotiations. In New York state, when a seller accepts an offer before contracts are drawn up or even signed, the property can still be shown to prospective buyers unless no more showings are requested in writing by the seller. Having agreed to and signed a contract does even not preclude a seller from accepting a better offer if one appears. It doesn't happen often but it has been known to.
My last word of advice to sellers: Don’t be greedy.
I’ve seen it before - an agent does all the right things: prices a home fairly, markets it beautifully, sells it quickly and gets the best possible offer, even one well above asking price. Yet when it all comes together, the seller accuses the agent of pricing the property too low. As we said above, market value is merely a perception. A closed sale is money in the bank.