River Realty Selling Guide - On the Market
Once the listing goes to the Multiple Listing Service (MLS) you are officially on the market. The MLS listing sheet will contain all the pertinent data about the house, sales helps for showing agents, photos and financing options. Now begins the nail-biting time, when you discover what buyers actually think about the home you’ve worked so hard to present. You’ve priced for what you hope will be a quick sale, and strong buyer demand these days can sometimes make your list price just the starting point for a bidding war—but try not to think of it as opening weekend for a big blockbuster movie. Your future success may not depend on the first few days’ exposure. But when there's a lot of inventory on the market it sometimes takes a while for buyers to compare your house to all the competition, or to even make their way to your door. It’s best to remain as detached (read: resigned) as possible while you wait for an offer.
In this topic area we’ll consider aspects of life on the market, we’ll jab at a few sacred cows and explore some of the most effective strategies for success. And we’ll show you how to listen when the market speaks.
Showings will be handled through the agent’s office, or through a specialized appointment company hired by the broker. Sellers can choose to require showing notification in advance, up to 24 hours; but most sellers require only short notice, and none on workdays, in order to accommodate buyers as much as possible. You’ll need to leave the house if a showing is scheduled for your at-home hours, so plan to spend about an hour away (the normal window of time allowed for showing, although the actual showing might last only 10 or 20 minutes).
Of course you’ll have to make arrangements for pets to keep them safe, and safely away from your visitors. Your agent will put a lockbox on premises and arrange for keys. You’ll want to turn lights on (especially the basement) when a showing is scheduled during your workday; and you can leave instructions for the showing agent about lights, locks and pets when the party leaves. The showing agent is expected to leave a card so you know who was in your house.
Listing agents occasionally get calls from irate sellers complaining that the showing agent didn’t lock the door; or locked the wrong door; or left the lights on; or failed to leave them on when another party was scheduled to see the property—there are many opportunities for a harried showing agent to screw up. Try to understand if this happens to you; and picture the responsibility involved in ushering 2-4 people through perhaps as many as 8 different properties, many with special requirements for locking, pets, lights, shoes, blinds/drapes, garage keys, and more. One type of call we’ve never had: a call from a seller to say something was missing.
Obviously all sellers know they need to keep their house as spotless as possible during the time on the market, but it’s a dramatic change in lifestyle for many to make the beds, wash every dish, clean the bathroom and kitchen, sweep the entries, shake out the rugs, vacuum the carpeting, clean the litter box, put away the kids’ toys, clear the mess from the dining room table, then set it with brochures and Seller’s Disclosures—all before leaving for work in the morning! This harsh regimen may not be necessary every day; but you’ll want to be ready if a showing is suddenly scheduled when you’re already at work, or if you get a one-hour notice showing request just as you’re sitting down to supper with the family. We’re not trying to pile on here—we won’t even mention snow removal and lawn care (oops!)—but it doesn’t hurt to remind you that time spent on the market can turn you into the housekeepers that your mothers always wanted you to be.
Try to remember the long-ago time when home ownership was but a gleam in your eye: you probably pictured an open house whenever you thought of real estate activity. Indeed, most people are first introduced to the housing market by stepping (timidly) into an open house. Maybe you still remember how you sensed the excitement as clusters of people were drawn to the shiny new kitchen; how you had to wait for a crowd to pass so you could climb the stairs. It was here, perhaps, that you met the agent who sold you your home; or where you first began to practice your now-perfected technique for deflecting a salesperson’s queries. Ah, memories!
Thus the venerable, iconic Open House holds a charm for sellers that far outweighs its actual value as a marketing device. The fact is that a home rarely sells because of an open house. Many people go to open houses randomly (think bicyclists on the River Road who noticed an open house arrow on the corner), or walk into a house they know they can’t afford but want to see just for fun. Some people routinely go to opens to check out decorating, or to keep up with market prices, or to see the inside of their neighbor’s house. These folks greatly dilute the population of actual prospective buyers in the home, effectively reducing the open house to a low-percentage activity, far surpassed by agent showings set up through MLS. The truth is that holding an open house is not a necessary part of marketing, and that many houses sell without ever going through the effort.
So why does the open house continue to be such a popular marketing tool? Actually there are a number of good reasons, but you’ll want to consider them in the light of your own interest and effort. Some important ones:
- It gives buyers who have already seen your house by appointment a chance to bring family and friends back through to get their blessing, without having to set up another formal appointment with their agent. A busy open can increase their sense of urgency. A smart listing agent may introduce them to any recognized neighbors who happen to be there, to help them get comfortable with the block.
- It gives your agent a chance to meet neighbors who might know someone interested in moving close to them.
- It gives your agent a chance to meet potential buyers and sellers who are shopping around. (This rarely helps you, of course, but if you like your agent…)
- In the case of First Opens only, it gives you a deadline and frames your efforts to get the house completely ready for viewing. There is a strong motivation for sellers to make their house look good to the neighborhood as they “debut” on the market.
Not all Realtors will agree with us about the value of open houses to the seller. We willingly concede that every effort made to sell your home, whether high-percentage or low, helps your cause. But since the overwhelming majority of sales come from arranged showings by Realtors who are working with qualified buyers, you may well ask if it’s worth it to welcome the unfiltered public into your home on Sundays.
To the real estate industry, it is clearly worth it. Open houses play an important role in sparking interest in home ownership, turning random lookers into qualified, motivated buyers, and providing a meeting ground for agents and potential sellers. It’s where the great getting-acquainted party happens: beginning the process of fueling real estate demand and production, thereby stimulating economic activity and creating jobs; green-lighting more buyers, thus sustaining values for homeowners. So where do you stand? The choice is yours—we’re just here to tell you the truth about open houses.
If you bought your home more than 10 years ago you may be mildly surprised to discover that newspaper want ads have gone the way of the dinosaur. It happened suddenly, just a few years ago, when one of the Twin Cities’ largest real estate companies announced that it was ending newspaper advertising to focus its resources on the Internet. Within months nearly all brokers had followed suit; and the big metro newspaper’s classified section dwindled to a skeleton. While some brokers still place picture ads, they have mostly institutional value; mainly fishing for buyers by casting a wide net over a huge area, they are of questionable value in selling a specific house.
Nowadays the Internet reigns supreme as the industry’s medium for advertising and communication. Realtor websites (such as ours) can direct buyers to all open houses across the metro; or summon up detailed information about every broker’s listing, complete with photos, videos, maps, aerial views and dancing bears. The net is the Great Equalizer that allows a small company to market your home just as completely as any big company can. The key to this is the regional MLS, which has expanded and consolidated its function as the single repository of listing information for all member brokers—effectively that means all brokers. All Realtor websites get their information from the MLS database and deliver the “consumer” version to the public. And the public is plenty hip these days: buyers are frequently ahead of their agents in ferreting out a new listing.
Since MLS is every broker’s main tool for advertising, it’s important that your listing be as attractive as possible, with carefully staged, well-lit photos and a well-written description of features and amenities. Nearly all buyers first see their eventual home on a Realtor website. With so many houses to pick from, agents and buyers rely on photos to help them select the ones they want to tour: a perfectly good home will suffer on the market if the photos don’t do it justice. With this in mind, we strive to update photos as necessary (clean white snow on your lawn doesn’t look so great in May) and retake photos that haven’t captured your home’s best attributes.
We’ve talked about the power of MLS as an advertising tool, but we don’t want to overlook the considerable value of the listing broker’s website itself. A buyer who has discovered our website by Googling, say, “Longfellow houses” or “homes along the river” will easily find your listing in our Search section. Here your listing gets more personal treatment than it receives on the MLS listing that’s available to all brokers, and it includes your agent’s photo and contact info. We’ve designed our website to make it easy for visitors to quickly access all information about our listings, our agents, our process and philosophy. Except for this wordy tome, we believe that less is more—that your listing shouldn’t be buried deep inside a confusing mash of blinking lights, pitches and irrelevant distractions.
So—if open houses aren’t all that effective, and the newspaper’s impact is minimal, and the MLS is a level playing field where all listings on Realtor websites are treated alike—what can a listing agent do to attract special attention to your house? At this point we need to ask another question: who are we trying to reach? The answer, obviously, is agents. Agents have the qualified buyers who make offers; they take the time to sift through the new listings, to preview them and recommend them to their clients for showing.
So how do we reach out to agents? Some listing agents use spam emails in a wide-net approach. Possibly effective, but they can be a turn-off to most busy agents. Office tours are a useful approach: remember, just before you went on the market your agent brought her office through your home to get price opinions and suggestions for showing. Later, but very soon after listing on MLS, your agent may hold what is called an “agents open,” inviting Realtors from all offices in the area for more price opinions and to get valuable market exposure for your home. Usually there’s a free brunch or lunch involved, which may help to attract the most diligent agents and is certain to attract the hungriest (these affairs are subject to the law of diminishing returns, losing their value as more agents use them). Office tours are sometimes used again by the listing agent after the home has been on the market a while; especially if there is a significant improvement to unveil, or a substantial price reduction.
But the best tool we have to reach agents is the MLS listing itself. Buyers agents are sure to see your listing in the course of doing their jobs: if we’re doing our jobs as listing agents, your listing will make an impression on them. We’ve already touched on this, but it doesn’t hurt to repeat that a well-written presentation and enticing photos in the MLS listing are critical to the chances of your sale. And no seller should discount the power of a well-liked veteran Realtor to create awareness among a wide circle of agent friends and acquaintances. Reputation is everything in this business, and if agents come across a listing by someone whose work they respect, the home is more likely to be shown.
Until you get an actual offer, the only way to see how you’re doing on the market is to get feedback from agents. As we mentioned earlier, you got some early feedback just before listing with MLS when your agent brought her office through your home to get price opinions.
But the agent showing feedback you’re going to get while actually on the market is much more important, since it comes from agents after they have shown your home to their clients. An agent who has shown your home will get an automatic email from the appointment services company requesting feedback, asking for opinions about the price and condition of the property and if there is any buyer interest; additional space is provided for the agent to make comments. This feedback is forwarded on to the listing agent and the seller without identifying the showing agent (although of course we know exactly who showed your house and when). The comments often tell you the unvarnished truth about how your house shows. Comments such as, “the basement smells like cat litter” or, “the house seems crowded” can be very helpful, no matter how much they sting. But to hear “your street is too busy” simply stings. We’ve had a few clients who opted not to get feedback just because it was too upsetting; but we urge all sellers to swallow their pride and pay close attention, because feedback is the best guide to help us correct our course.
After you’ve had a number of showings you may start to see a pattern that can help you make decisions. If lack of a shower is mentioned repeatedly, for instance, you probably should consider adding one. If more than half the feedbacks say your house is overpriced it may be time to take a hard look at your position in the inventory.
It’s no secret that the marketplace can be fickle. Some odd houses sell quickly while others, seemingly better, languish for months. But that’s no reason to turn a deaf ear when feedback is negative, or showings fall away. Yet many sellers do just that. Pride of ownership becomes prideful ownership as they cling to their price and defend their condition. If the feedback is overwhelming that their price is too high, some sellers will say that they need more exposure: more ads, more opens, more signs and balloons. But the market is telling them that the price is too high—and if their poor agent throws a party every day and gets all that exposure, the sellers will just have more people to tell them that their price is too high.
The market speaks through agent feedback and measurable buyer interest: when a house sells, the market has spoken. When a house sits for six months, the market has spoken. Perhaps the market is fickle, but when it speaks you need to listen. Agents and sellers who do listen understand that being on the market is most often a humbling experience, requiring patience and flexibility. You can’t outsmart the market, but you can listen; and you can react with intelligent purpose. A well-timed price drop or a new kitchen floor can make the phone ring with good news.
We’re going to make you work for it in the following example. Let’s say you need to find a larger home even though you have very little equity in your house. At the time of final pricing you elect to go on the market higher than your agent recommended. In these cases, listing agents often propose a strategy that calls for a price adjustment within a given time frame: usually two weeks, if feedback establishes that you are overpriced. You agree; and when the reduction proves necessary, you lower your price without much hesitation. Two months go by; feedback indicates you are still overpriced, and showings slow down to one or two a week. The market is telling you that you need to adjust something: either you need to make your house worth the price you are asking, or you need to reduce the price. Listen carefully to the feedback: if a condition or lack of a feature is repeatedly mentioned, you may be able to repair or remodel your way to a sale. If no fix is called for, or is impractical, then your agent needs to help you re-think your plan.
Remember the question: Can we do it? The answer was based on how much you could get from the sale of your home; but it also rested upon how much you’d have to pay for the next house, what kind of financing was available to you, and what other sources of cash might be available for down payment. You may need to look at all these components again (and some we haven’t thought of) to see if adjustments in any or all of them can allow you to sell at a reduced price and still get on to the next home. Maybe the new home will have to be more of a project than you’d hoped for (your new remodeling skills could pay off here), or maybe you could cash in that whole-life policy and switch to term insurance, or raid the IRA for ten grand. The idea here is to be proactive and keep your wheels moving toward your goal. We’ve seen too many sellers paralyze themselves when the going gets rough. When the market speaks to them, they hear: “Nobody wants your house, just give up,” or “Nothing is selling now, the economy is terrible.”
When the market speaks to you, listen carefully and you might hear the truth: “Other houses similar to yours are selling for $10,000 less. If you lower your price we will buy yours, too.” No judgment, just opportunity. You lower your price. A week later, the phone rings.