Did you ever wonder how long it takes for a home to sell once it goes onto the market? If you are a potential home seller, you may be on the sidelines observing whether homes in your neighborhood are selling quickly, perhaps in just a matter of a few days, or whether they are sitting on the market for months. Some of you might be scratching your head trying to figure out what makes one home sell faster than another. And if you never really thought about why this would matter, other than for the convenience of not having your home be ready constantly for showing appointments, read on. This article is a must read for any home seller. We will begin at the beginning, which is prior to listing a home for sale.
Days on Market (DOM) – What You Don’t See
What happens once a home goes on the market is really rooted in the culmination of everything that has occurred during the weeks, or possibly months, leading up to the date the home is listed for sale. Let me give you an analogy.
Think about a theater production and its opening day. The success of the show is closely linked to the number of rehearsals and overall preparation prior to opening day. It’s about all the work that has been done “behind the scenes”, so to speak, that contributes to rave reviews by the theater critics and audience. And of course, getting the right talent and having them shine on stage makes a big difference.
Similarly, when a home is launched onto the real estate market, there is often a series of steps taken prior to the list date that some realtors and would-be buyers may not be aware of. Like the opening day for a musical or play, the open house is “show time” in real estate. So what kind of steps are frequently taken prior to putting a home on the market?
Key Steps Prior to Going Onto the Market
1. Staging. Home staging refers to the process for preparing a house for market in order to attract and maximize buyer attention. Simply stated, how we live in a home is different from how a home gets showcased when it goes onto the market. Home staging is a broad term and includes a combination of addressing deferred home maintenance items, as well as creating design enhancements to both the home’s exterior and interior. Every property is different, and depending on the homeowner’s budget and timing, the scope of staging recommendations will vary. With the advent of HGTV, home staging has been gaining popularity in recent years. Over a decade ago, I was one of the early adopters. I had my own home staging business before I entered real estate full-time in 2011. Below are my top 3 home staging recommendations.
2. Professional Photography & Floor Plan. With over 90% of home buyers beginning their home search on the Internet, the importance of the online photos cannot be overemphasized.
To make the most impact when potential buyers are browsing for homes, the photographer needs to go beyond standing in the corner of each room and documenting what the room looks like. When working with my home sellers, I choose a professional photographer who understands how to frame photos in a way that they “market” the home, highlighting the best features of the home. For example, a photo of a fireplace may include the sun pouring in from a nearby window while showcasing the beauty of the hardwood floors.
In addition, the right photographer will know how to capture the story of the home using “lifestyle” photos. And with many MLS sites (Multiple Listing Service) now allowing in excess of 25 photos, adding the lifestyle photos on the property listing creates a wonderful marketing opportunity.
Letting buyers see the property setting with the use of drone photography can be especially effective. An aerial view of the home and the larger neighborhood offers a unique perspective. And if the home has a special location, such as close to a lake or park, this can be captured by the drone photography in a way that words cannot.
From my perspective, the goal of the photos is to generate excitement among buyers so that they want to schedule an appointment to see the home in-person. When I list a home for sale, I always work closely with the photographer to ensure we get a photo that is what I like to call the “money shot“. It’s the photo that essentially “sells” the house. And every house has a money shot!
In addition to the professional photos, many would-be buyers want to see a floor plan of the home. The floor plan is another marketing tool for buyers, as well as realtors, for evaluating room sizes, layout, and overall flow of the home. The traditional floor plan also can be elevated, and shown in a digital format known as Matterport. With special equipment, a photographer can create a digital footprint of each floor. Buyers can view the Matterport at their own pace and get a 3D tour of the home as if you were actually standing in the house. It can be a little dizzying, but once you get comfortable, it really is quite cool.
Providing buyers with an array of marketing tools will ensure that the best features of the home are given multiple avenues to shine!
3. Video & Social Media. Marketing a home for sale in today’s ultra-competitive real estate market frequently includes the use of video. Depending on the price point of the home, modest to elaborate professional video of the home can be created. For the ultra luxury multi-million dollar homes around the country, a lifestyle video of breathtaking homes for sale can rival the best advertising/public relations campaigns. Aligning the right message with the right format within both budget and timing parameters will be woven into the marketing strategy. The use of short video, often less formal, is routinely included on Instagram and Facebook to generate additional excitement about the home.
4. Pre-Launch “Buzz”. Once all the marketing materials, including photography and video, are prepared, the home is ready for what I like to call the pre-launch “buzz”. This is an opportunity to build excitement among both the realtor community and potential buyers that the home is “Coming Soon” to the market. Think of how a movie trailer is a “teaser” and people can’t wait to see it when it is available in theaters.
Another approach used during the pre-launch listing phase, is to have a “soft launch”. This is when the home is listed as a Private Exclusive by the brokerage company. Realtors can offer their sellers the opportunity to list the home privately, in advance of going onto the MLS. One of the advantages of this approach is that Days on Market (DOM) are not accrued. It gives realtors the flexibility to “test” a listing price. This is especially helpful when the seller wants to “try” an ambitious price.
In some instances, homes may not make it to the MLS because the sellers accept an offer during the pre-launch phase. When this happens, buyers frequently pay a premium, knowing that they did not have to compete with multiple offers.
Going Live on the MLS – Let the DOM Begin!
So let’s turn now to the initial question I raised in the beginning of the article: “What makes one home sell faster than another?” As I discussed above, several steps are often undertaken leading up to when the home goes live on the MLS. This is done to ensure the home has the best possible outcome when it hits the market. But there are two more steps that are crucial in determining the potential real estate fate of the home. Before I explain what they are, let’s review what the objective is when a home goes on the market for sale.
For most home sellers, the objective is to get an offer that represents the highest possible price and the most favorable terms. An example of a “favorable term” is timing. Some sellers may want to close quickly with the opportunity to “rent back” the house for up to two months. This can be especially helpful to sellers who need the proceeds from the sale of their home in order to purchase their next home. Another “favorable term” may be regarding the mortgage appraisal contingency. Getting a transaction to be smooth, without any hiccups, is desirable. And if the house doesn’t appraise at the offer price, the mortgage lender will reduce the amount of the loan, creating a financial shortfall for the buyer. To help ensure that this isn’t a potential concern, some buyers may waive all of a portion of the mortgage appraisal contingency.
So how does a seller achieve their objective? This is where the role of an experienced and skilled realtor is critical. In addition to all the steps taken prior to going live on the MLS, it is price and showing accessibility that will drive success. And it is within the first few days of going live on the MLS, that the seller has the “best window of time” to generate maximum buyer interest. The longer a home stays on the market without an offer, the property runs the risk of becoming stale in the eyes of the buyers. And the longer a home lingers on the market, the probability of getting top dollar for the home goes down. In other words, the seller may lose leverage and negotiate down from the list price, rather than up. Thus the opportunity to get multiple offers (more than one at the same time) is strongest when the home is first listed on the market.
Listing Price – It Matters
The list price of a home needs to be viewed as a marketing tool. Homes do not sell at a fixed price, like the way a widget does when we go to the store. Instead, a home has a range of values. Ultimately, the sale price will reflect what a qualified buyer is willing to offer. It is a negotiated price between seller and buyer.
When a home goes onto the MLS, the list price needs to be so irresistible that buyers are super excited to see it. Buyers, especially those who have been house hunting for a long time, will often move heaven and earth to schedule a showing appointment as fast as possible. The list price needs to convey value in the eyes of the buyer. And this can happen when the list price is positioned “ahead of the market”.
But you can’t rely on the list price alone to yield the best response when a home goes onto the market. The list price will get people in the door. As noted above, the visual appeal and home staging will generate buyer interest. However, the “showing accessibility” of the home is key. It is what can contribute to “buyer frenzy”.
Optimizing Visibility and Accessibility
To help create a “buyer frenzy”, you need maximum exposure of the home. In other words, leave no stone unturned. Provide multiple opportunities in a tight window of time for buyers to see the home in-person. I call this a “marketing blitz”. When working with my sellers, I recommend an initial open house for the realtors (Broker Open House). Here in Northern New Jersey, this is typically held on Thursday, and realtors can bring their clients. I then follow it up with an early evening Public Open House, usually on Friday. And then a public open house on both Saturday and Sunday.
That is four opportunities for potential buyers to see the home in a concentrated period of time. And in the current housing market, there are buyers who are “waiting in the wings”. They are waiting not just for any inventory, but the right inventory for them. One of the advantages of an Open House is that buyers get to see other buyers excited about the house. And buyers want a house that others want. That’s just how it goes in real estate!
Maximizing the Home’s Value
Thus, it is the culmination of all the steps taken prior to when the home goes onto the market and the critical two steps at launch time that will contribute to how fast a home gets an accepted offer. When a home goes onto the market, you know whether the home is going to be a winner – the home that generates all the excitement. If it is not a winner, the home will be “chasing the market” as the Days on Market (DOM) increase. Without a doubt, marketing is a key differentiator in maximizing a home’s value when it goes onto the market for sale. And what home seller doesn’t want that?
Want to Dig for Gold?
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Discover the golden nuggets of wisdom I can offer that can make all the difference! To reserve your individual session, simply click on the link to register: Digging for Gold – Complimentary Home “Strategy” Session with Suzy Minken
Did you miss my previous article? Simply click on the hyperlink: https://www.linkedin.com/pulse/mid-2003-market-report-scoop-what-you-must-know-buying-suzy-minken/
Got questions? Reach out to me at 908-239-9261 or via email: [email protected]. I’ve got you covered from coast to coast, as needed, together with my CØMPASS colleagues in over 300 offices around the country. My mission is to help everyone find their place in the world.
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Attention Sellers! What You Need to Know to Maximize the Value of Your Home