While the technology that is used in the real estate industry today is extremely effective in helping buyers find and research homes for sale, the same thing can’t be said about the strategies traditionally employed to help sellers determine the best price at which to sell their home.
Traditionally, agents price homes using the same protocol that’s been used for over a hundred years, a comparative market analysis, also known as a CMA. This establishes the value of your home by comparing it to historical sales. What most agents don’t realize is that historical data alone doesn’t determine how you should position your home in today’s market to attract the highest offer.
In fact, using a CMA is so detrimental to sellers getting top dollar that, historically, the average sale-to-list price of a home across the country is only 89% - a full 11% less than the asking price and worth as much as $27,390* to Home Sellers in higher priced markets.
The inherent problem with a CMA is that it only takes into consideration the sale of a small sampling of homes in your competitive range, without considering the reason why those homes may or may not have sold at a specific price. For example: What if the home that yours is being compared to was a rental property occupied by college kids? What if the home was packed wall to wall with junk? What if the home sold low because it reeked of offensive pet odors? Or worse, what if the seller was motivated because of a divorce or death and had to sell quickly and for less than market value?
All of these homes would be used against your home’s value in a CMA and as you might imagine, they should have absolutely no bearing on how to price and position your home in today’s market. So, if an agent presents you a CMA, be aware that he or she may not be able to position your home in the market to sell for top dollar.
To properly position your home in today’s market, an Expert Advisor™ will consider as many as 27 additional variables when pricing a home.
Understanding all of these economic variables and knowing how to communicate them to you is a crucial part of the pricing strategy an Expert Advisor™ employs when getting your home priced and positioned properly on the market.
Having a specific strategy to make your home stand out from other homes on the market can get you up to 7% more money on the sale of your home. To attract the highest possible offer, a home must be positioned to attract buyers who will perceive its highest value. Expert Advisors™ understand that there is an ideal buyer that would be willing to pay the most money for your home. They attract these ideal buyers by differentiating your home from other homes on the market by employing 4 Key Tactics:
This can easily be avoided by ordering an independent appraisal before receiving any offer on your home. When you as the Seller are ordering an appraisal, you can request that appraiser attempt justify your target sales price if there is market data to support it. This favorable appraisal can be made part of the disclosures and documents provided to the Buyer and their Agent and can positively influence their opinion of your homes value, giving you the best chance to get the highest possible offer. This can positively affect the offer price you receive by as much as 5%. The combined effect of these 4 key tactics makes your home stand out on the market and has been proven to increase the final sales price of the home by as much as 7%.
Exposing your home to the largest number of qualified buyers ensures you get the best possible price for your home. This requires you to be especially careful when selecting a professional to represent your home and bring it to market.
Here’s why. Most agents invest only 10% of their income on marketing and the systems to run their business. With the average local real estate agent is making about $45,000 a year as of 2015, he/she only allocates about $89* per month toward marketing and advertising their listings, which is certainly not sufficient to get your home the necessary exposure to attract the highest offer.
Conversely, an Expert Advisor™ invests a significant portion of his/her commission dollars back into marketing and advertising, spending up to 30 - 50 times what an average agent does on marketing. Not only does an Expert Advisor™ have more resources to invest to get your home maximum exposure, but more importantly, they have the knowledge of where to invest advertising dollars and employ a deep, not wide, marketing strategy to get your home the exposure you need.
The key to a smart marketing plan for your home starts with a clear understanding of where buyers are going to search for homes.
Agent cooperation simply predicts that there is a greater than 70% chance that once your home is exposed to the market, another real estate professional, other than the agent that listed your home, will bring a buyer. Since the largest pool of potential buyers are probably under the guidance of another agent, its critical that your agent has a specific plan to get your home in front of the top agents in the market who represent buyers.
EXPERT ADVISORS™ ENGAGE COOPERATING BROKERS BY:
Marketing directly to homebuyers without focusing on their agents can cost thousands in equity and weeks, even months, on the market, so be sure that your agent you hire has a plan that includes tactics like these to get your home attention from other cooperating buyer agents.
If the market tells us that 7% of the time an outside agent is responsible for brining the buyer the next question is: What proactive strategies is your agent employing to try and source the buyer themselves?
While traditional listing marketing methods including flyers, yard signs, and listing the property on the MLS to expose your home to the market, all of these tactics rely on a buyer coming across your marketing and finding your property. Conversely, an Expert Advisor employs not only these traditional methods but also understands that over 98% of buyers start their search online and has built an established database of hundreds, if not thousands, of active buyers to promote your home to. The very first thing an Expert Advisor does after listing your home is to immediately cross reference your listing against the ALL of the buyers in their database and then proactively market to them via phone, email and text to see if they would have an interest in your specific property.
The second critical variable in buyer acquisition is how the incoming inquiries for your home (Phone and email) are handled. Research conducted by the National Association of Realtors and the Sloan School of Management at MIT, concluded that the average response time by a Realtor responding to an inquiry about a property was 16 hours. By contrast, Expert Advisors™ have Immediate Response Systems that offer a live response in 15 minutes or less. Research has shown that the faster the response to an inquiry the more likely a sales conversation will ensue. Anything more than 15 minutes lowers the chance of your agent making contact and decreases the chances of actually showing your home by up to 105 times.
The combined effort to proactively seek out buyers and also respond to their inquires with an Immediate Response System will ensure your home sells faster and for more money.
Once an offer is received, negotiation is the single most important variable that determines the amount of equity you receive from the sale of your home. Regardless of how well a home is positioned to attract the perfect buyer, buyers will want to order their own inspections, they will want to pay less than full price and will likely make demands you’re not comfortable agreeing to. Therefore, hiring an expert who can negotiate an outcome that serves your best interests is of critical importance.
Expert Advisors™ understand how critical negotiations are to help you maximize your equity and protect your negotiating posture.
As stated in the Executive Summary of this report, the sheer volume of tasks associated with managing the 115 variables that go into the successful sale of every home has left traditional real estate professionals at a severe disadvantage to be able to maximize homeowner equity upon sale. In most cases, many of these variables we mentioned are poorly executed or simply not executed at all.
In the cases we studied that had the highest return on equity the consistent pattern observed was that there was a proactive, systematic approach to managing the 115 variables that affect the final sale price. What makes this possible is a division of labor among a team of qualified specialists allowing for operational execution. A qualified expert will be prepared to explain how they work together to get your home sold.