I’m seeing a handful of real estate trends that are inadvertently exposing sellers and providing a target-rich environment for savvy buyers. If you’re planning on selling this year, you’re going to want to avoid these common mistakes. If you’re planning on buying this year, keep your eyes out for these signs!
Last week I had several discussions with potential sellers, current sellers and listing agents who are now expressing tones of doubt, concern, and uncertainty about selling and/or meeting their sales objectives. I’ll go through these with you today and help you position yourself on the best track.
Quality Price Reductions
Spammy low-quality reductions are back. These are price reductions typically resulting in 2% or less and are performed when either the listing agent has no idea how to sell a property or the seller is not willing to allow a meaningful reduction to take place. What many don’t know is the effect it has on the buyer prospect pool. In a majority of the cases, buyers get the updates and blow them off. Those tiny reductions don’t provoke a buyer to call or ask questions or make appointments to see the property. In other cases, buyers take that as a sign the seller isn’t serious about selling and won’t be amicable to a reasonable offer. I’ve seen token price reductions actually stall interest which results in the exact opposite of a reaction the seller and listing agent were expecting.
32% of the price reductions taken yesterday were less than 2%…sigh. There are times when 2% or less price drop is warranted. If the listing is getting lots of showings and no offers or if the price was set at a dumb number and the distance to capture a different prospect base is within that range then maybe it’s the way to go.
When agents drop the price of their listing one dollar or five hundred dollars…I know it’s pure spam and the intelligence on that side of the deal is lacking.
Buyers: If you see this type of gaming, it can be a clue that you may be able to do some good negotiating. It can also mean you’re not dealing with a full deck and may be more troubling than it’s worth.
Sellers: If your agent is trying to get you to go this route, don’t. It may cost you way more in the long run and there are smarter, faster and more cost-effective ways to accomplish your objective.
Opting To Not Sell Right Now
Some sellers are already deciding to hold off on listing their properties with fears of too much current inventory painting a negative story for their location. These people may have renters in their properties, are just starting the process of considering a move or liquidating out of Naples. These stalls are typically stoked by market concerns and doubts about getting the amount of money they hope for at the closing table.
Because this group of sellers is typically not highly motivated to sell, this can lead to a cleaner selection of listings. In higher-performing markets, these people are on the market and sometimes easy to spot because their list prices are out of whack with current values. They are also typically unreasonably tight with negotiations which make navigating through them a more strenuous process.
Opting to hold back in weaker markets can help current sellers because inventories will appear smaller than they would be if those sellers listed and can even strengthen markets if current inventories burn off.
Some sellers make a terrible decision to hold back in hopes the market returns to better levels In a short period of time only to find the market has softened further later.
Buyers: If you’re working with embedded agents, they may know of more sellers who are interested in selling and may have an option not visible to you that better fits your needs. Don’t be afraid to ask. They may also have additional insight into the market to help you negotiate a better deal with a current listing. It pays to work with a proven, well connected professional.
Sellers: If you’re considering selling, you might consider orchestrating a series of interviews with high-producing agents. Sometimes one opinion from an overconfident agent isn’t enough. Be wary of those who paint extremely rosy pictures without good proof of their statements. Some agents are really good at hyping owners up only to crash on their lack of actual deliverables.
What Is Preventing Sales?
Many owners and agents are asking what they need to do to get their properties sold. MANY believe if a property isn’t moving it’s because of the price and while dropping the price enough is a sure-fire way to sell a property, sellers could easily be leaving a ton of money on the table if they only consider this option.
#TrueStory I had a conversation with a gentleman last week who’s been off and on the market for five years. That’s an enormously long time! While I admire his exceptional loyalty to his agent and realize he hasn’t been highly motivated to sell, the lengthy market time is disturbing.
- I know there is a percentage of the buyer prospect pool who will believe there is something wrong with the property.
- I know there are people who will not want to see it because they assume the seller will be inflexible during negotiations.
- I see something greater than the price or condition of this property preventing this home from selling.
Even more disturbing is the decision his buddy is making to “reduce his price until it sells.” I took a peek at his property too…it’s not the price more than the presentation preventing that property from selling. He’s likely to lose substantially more this way.
3 Reasons Properties Don’t Sell: It could be the price causing the biggest rejection. The cause for sale failure could also be the property condition. Today more than ever, the presentation could be the biggest reason Naples properties aren’t selling.
Every day new listings hit the market with TERRIBLE presentations. You are looking for:
- Exceptional photo quality
- Great photo composition
- Thoughtfully staged photos
- Impeccable attention to detail
Instead, I see, toilet seats up, weird hallway shots (hallways are not selling points team), poor light quality, really weird nature shots that have nothing to do with the property, 10 photos of one room at different angles, terrible photoshopping, half furnished rooms. We can do SO much better. If I can:
- Sneeze from the dust on the 20-year-old drapes and bedspreads I see in a photo, perhaps we don’t use them in the photos?
- Grimace at the dirt on the grout on the tile perhaps we don’t accentuate the tile in the photos.
- Kill a small village from the mold growing on the roof, we don’t take aerial shots of your roof.
- Question if there’s a divorce or foreclosure occurring due to how a property is furnished, maybe I finish staging?
Photos and presentations like these are killing more sales in Naples than current prices. I can assure you.
I’ve been really fortunate to have listing clients who trust my marketing program. Over the past year, they’ve been able to sell their homes in an average market time of 67 days. A few of my clients have broken sales records even in this market. Others have competed and won over competing properties that had several more outstanding factors and finishes. 100% of the clients who accepted my advice have sold.
Sellers: Before you select your next agent, it’s worth your time to give me a call if for no other reason to see if what I have to say about your market is in line with the agent you’re considering using.
Property Condition Issues Are Causing Stalls
I’m hearing disturbing chatter from real buyers who are driving around and shortening their “let’s go see” list. Specifically, there are neighborhoods around Naples who are still battling it out with their insurance companies or perhaps have already battled it out and are now waiting for new roofs or other repairs.
Sellers and Associations: If you live in one of these neighborhoods and are considering selling or perhaps you are on the board, make sure your agent or the real estate community has all current information about where your association is in this process if you are close to a resolution. This can prevent longer stalls and help boost sales!
Buyers are making decisions to bypass properties that may be well underway to completing repairs but there is no documentation to substantiate it. Buyers and a large majority of buyers agents are probably not going to take the extra step to learn more especially if there are other viable locations the buyer will consider.
Buyers: It may be worth your time to check into where associations are in repair or legal processes. Don’t just discount locations because you think the association isn’t doing their job to maintain property conditions. Many assessments have already been paid and many votes have already taken place. If costs have already been voted on and assessed, those charges could likely fall on the shoulders of the seller. Be diligent in uncovering any plans the association may be discussing that could result in special assessments.
Best Negotiation Strategies
In light of the recent news like the coronavirus, stock market wiggle, impeachment proceedings, etc. we’re apt to see some buyers attempt to take advantage of these alarming headlines and use them during negotiations to instill fear on the other side of the deal. Price reductions in Naples were up 36% yesterday compared to the Monday before. Some sellers are already showing signs of uncertainty.
While most buyers have more talking points to sway the seller this year, I would avoid these trending topics at all costs. A large majority of the sellers (and seller’s agents) are more likely to take offense to these tactics and you will find yourself negotiating against an even more rigid seller. If they think you’re trying to take advantage of them, they will shut down.
Buyers: Now is a great time to implement my 5-point negotiating strategy and I can do that for you brilliantly without using these hoky/unsuccessful tactics. Go in with intelligence and proven points, you’re deal has a WAY better chance of coming to fruition.
Sellers: Despite the recent headlines, traffic on Shannon.com did NOT go down this past week compared to the week before. In fact, more people visited my site this past week even though my rankings did not change very much. If you are thinking about selling you owe it to yourself to list with a level headed agent who knows the difference between attention-getting headlines and sound market trends.