Our Home Selling Approach
Our Approach to Selling Your Homes Changes with the Market
At Nationwide Realty Services, the approach we use to assist a home seller is dependent on the type of real estate market that exists in the area of the home for sell. At any given time, a geographical area of homes will pass through one of three types of markets; a Seller's Market, a Buyer’s Market or a Balanced Market. Knowing how best to represent a home seller in the varying markets is key to the successful approach we use.
In a Seller’s Market, where there are more home buyers than home sellers, a successful listing approach is not all that difficult to establish. Here all that is necessary is to establish a selling price that will expose the listing to the most buyers, yet not set too low of a price which would cause the seller to leave any money on the table. The right price will allow for some competition on the home, but only from the most serious and qualified buyers.
After the price is set, then simply exposing the home to the market through some modest advertising will usually bring a good buyer to the table and the negotiating can begin. Any good real estate agent should be able to get the best price possible here, because they can negotiate from a position of power: The seller has many more buyers out there to negotiate with, however, the buyer has few, if any, other homes to negotiate on. In this market, a seller may consider selling the property For Sale by Owner (FSBO) , or by using our Discount Listing Program, to save some of the commissions.
A Buyer’s Market, where there are more homes for sale than available home buyers, can present a much more difficult time for home sellers. Here the buyer is in charge and can pick and choose from many homes in their price range. As we discussed in our Approach to Home Buying Page, simply lowering the asking price of the home does not really help that much.
What is surprising here is that so many real estate agents and home sellers will take this approach even when it is not the most effective approach to take. What they loose sight of is that most home buyers purchase real estate based on two questions; “How much cash do I need up front?”, and “What will my monthly payments be?” With every one thousand dollars that the seller reduces the asking price, the home buyer will only save a few dollars in payments. It takes a very large price reduction to have any real effect on the home buyer’s budget. A very large price reduction means a very large profit reduction to the seller.
Here our approach is very different from the majority of real estate agent. What we do here is lower the effective price of the home without eating up the seller’s profits. By using an effective financing package, which means lowering the cash needed up front and by lowering the monthly payment, we can make the home look much cheaper to a buyer.
This means more buyers will be attracted to your home as their cash and monthly payment requirements may be equivalent to homes priced thousands and thousands of dollars under yours. This dramatically increases the demand for your home, and an increase in demand will yield a higher selling price and a greater profit to the seller.
The good news is that it takes far less money to fund an effective financing package than it takes in price reductions to accomplish the same thing. This is why you see so many new homebuilders advertising their homes based on terms, not price. The other really good news is that it is a win-win situation. The seller will receive greater profits for their home, and the home buyer will get a much nicer home at similar terms other homes of far less value.
A Balanced Market, one in which there are a similar number of home buyers to the number of home sellers, is actually the most rare market of the three. As the pendulum swings from a Seller’s Market to a Buyer’s Market, or from a to a Buyer’s Market to a Seller’s Market, it only passes through a Balanced Market for a short period of time. Most real estate agents don’t even realize that it has happened until after it is over. This is perhaps the most important time to be on the alert. It generally means that the market is changing and what was driving the market will soon reverse.
Knowing which way the market is moving is key. If we are moving into a Seller’s Market, then we can take our time as the prices are soon going to rise and if the seller can be patient, their profits will soon increase as well. On the other hand, if we are moving into a Buyer’s Market, then we have got to move fast. Here a slight price reduction or funding a financing package should be done sooner rather than later as the seller’s profits are about to evaporate and the sooner we can sell the home, the more of the seller’s profits we can save.
After the Sale and Before the Close
Regardless which market you find yourself in, and which approach we use to sell your home, one factor is often neglected; after the offer to purchase is executed, what do we do to make sure that the transaction remains intact until the deed is recorded and the money changes hands. This time can make or break a real estate agent. This could take 30 days or more, during which any number of things can happen to destroy the transaction. The buyer may not be able to obtain financing, the appraisal could come in low, one party of the transaction can change their minds, and so many more examples that it would take a phone book to fill up.
What we do here, and what every good agent must do, is force everything to happen just a soon as possible. The sooner the inspections are finished, the sooner we have loan approval, the sooner we are all finished, the sooner we will have that recording and the changing hands of the cash. To sum up our approach here; we stay on top of every single item no matter how insignificant; we make things happen; and we make things happen fast!
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