Wednesday, March 28, 2012

To Sell a Home in this Market

We recently closed on the sale of our former home in Ballard and it was thrilling.  From when we listed the house to the moment the deal closed and the money transferred, it only took 3 weeks--no kidding.  But it did not come without some level of risk.  Timing and great guidance were with us.

We hung onto this home after we moved into our current house in December 2010 because the economy/market was so bad then.  While not wild about renting it out, we couldn't bring ourselves to sell in such a soft market.  Clearly it was a gamble. While the market in 2012 is now on an upward swing, it is nothing like the pre-2008 real estate pricing insanity.  Truth be told, it still didn't allow us to recoup all of the six years of improvements we'd put into the house.  But we did better than if we had just sold it when we moved.

We were VERY lucky to have had renters come in right after we moved who took excellent care of the home.  As a seasoned landlord, I know renters can be a mixed blessing because if you get the wrong folks in there, they can damage your home/investment which can set you back more than if you had just left it vacant.  But this couple was so great that I remember telling Ken that we'd never find their equal so we'd have to sell as soon as they decided to leave.  Sure enough, they purchased another house toward the end of their lease and we sadly bid them farewell.  So in January 2012, with the home vacant, we began in earnest to ready the home for sale.  There was not much inventory on the market in January and even though it was right after the holidays, we began to hear tales that multiple bid offers were happening for good homes in Ballard.  We were motivated to do everything in our power to have that too.

Based on the stellar experience we had with RedFin (hi-tech real estate agency) when we purchased our current house, we would not have worked with anyone else for this sale.  One thing that really impressed me about this company and it's business model (beyond the 1.5% savings on commission), is the "team" approach.  You have a lead Realtor who is supported by field agents and coordinators.  This means that your lead agent is your main liaison for the transaction and they know the market, pricing, strategy, negotiation but you also have other agents who are working for you too.  In the case of a buyer, field agents open houses for you and provide notes/feedback about properties.  In the case of a seller, they meet you at the home when you sign the papers to list and help write the marketing copy.  Since they are in the field all the time, they know everything about inventory and neighborhoods.  Then when you need meetings, inspections, contractor bids and stuff like that, the coordinators help arrange all of that.  And your whole team communicates among themselves so it's a seamless hand off from one aspect to another.  

As someone who loves logistics and project management, this structure and it's fabulous execution impressed me a lot.  Nothing slipped through the cracks.  Fact is, when we were buying our current home, we may have spoken to Trevor (our main agent) on a daily basis but we never met him face to face.  It was only when we put the other house up for sale that I finally met him in person.  But it didn't matter.  With phone & email, he was always available to us.

The other thing that impressed me as a tech-geek is the company's embrace of technology.  Their website is well thought-out and designed to aid in detailed home searches and to provide resources for buyers and sellers.  They use a digital system to sign documents which meant many trees were saved in our transactions.  But most important, Ken & I could simultaneously sign the same document when he was at work and I was at home via computer, thereby keeping the process efficient and speedy.  It's not a big surprise that RedFin is headquartered in Seattle where technological integration is prized and expected.  I think it might be easy to assume that because of the tech aspect working with these guys would be like shopping at Macy's: hello customer service?  But we found it to be quite the opposite.  I felt that the entire time the team knew their stuff and communicated amazingly.   

Then there is the other inconvenient truth of what "motivates" traditional real estate agents.  Because commission is based on the end sales amount, is there really incentive to negotiate hard and get the very lowest price?  Doubtful.  Also if you are savvy and you have an idea of what and where you're looking for/at, an agent who scouts houses for you and drives you around in their car is probably overkill.  I also dislike the "salesy" feel from some of the realtors I've interacted with in the past.  I just wanted to be in league with people who were motivated to get the best deal and do the best work possible.  Period.  The way RedFin compensates their folks is based on customer satisfaction which is exactly how it ought to be.  Ultimately, we felt they provided better overall service given the tiered agent structure compared to individual real estate agents who have to be all things to all people.  And with a few friends and close relatives who are traditional real estate agents, I don't say that lightly.  

Things that helped us:
  • Make the perspective buyer see that you cared for the house.  Quality repairs, upgrades and products used should be noticed throughout the house.
  • Before listing for sale, fix little items that might be called out in an inspection.  In our case, our living room and dining room outlets were not grounded despite being 3-pronged.  The easy and legal way to do this without ripping out all of the existing electrical wiring was making all of the outlets GCFI (having the test/reset button).
  • Tone down colors/paint that might repel or distract a buyer.
  • Stage the house!  It is worth every penny.  Extract your emotions from how you had things arranged and allow a professional to realize the potential of the interior of the home to it's fullest extent.
  • Make sure every inch of the house is clean including the inside of closets & the inside of the fridge.
  • Spruce up planters and window boxes with new flowers to give a homey feel as have the yard landscaped or at least tidied up.
  • Lights and heat need to be on when people visit.
  • Don't list the house on a holiday weekend or during Superbowl weekend.  
  • Traffic is highest in the first 2 weeks than at any other time.  Make the best impression out of the gate.  The longer a property stays on the market, the more the perception that something is wrong with it sets in.
  • When pricing the house, have a professional (realtor) run a comparable analysis so you know exactly what houses like yours are selling for.   Use this knowledge and be realistic.
We ended up getting 10 offers on the house and sold it for well over listing price.  We attribute those results to a few things that are specific to this home: the house is in a desirable neighborhood near a park.  But the things listed above anyone can do.  It gave us the most solid position to negotiate from and everyone had to come to the table with their best serious offers.  

So good luck to everyone who might be selling or buying homes right now.  I hope this is helpful.

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