Posted on November 22nd, 2013 No comments
In the South Bay, as in much of the country, we are currently in a Seller’s Market. There is a lack of inventory and a lot of buyers. It’s simple economics: supply and demand. High supply and low demand is a Buyer’s Market; low supply and high demand is a Seller’s Market. And when supply and demand are relatively on par, we have a balanced market.
So if you’re a buyer in this environment, you have some challenges to face. You will be pitted against other buyers who are paying all cash or who are making large down payments or who are willing to shorten or remove contingencies quickly. You need to make your offer as competitive as possible if you want the seller to choose your offer over the others.
But for some buyers it can be even more complicated than this. Some buyers need to sell their home before they can buy a new home (their “upleg”). They are taking the money from the proceeds of the sale of their house and putting it toward the down payment for their new home. Consequently, the offer they make is contingent upon the sale of their home. It’s hard to compete with other buyers when you still have to get your home on the market, find a buyer, and close escrow. Most sellers are going to want as close to a sure thing as possible. An offer contingent upon the sale of the buyer’s property is not a sure thing. So in this seller’s market, it behooves a buyer who has to sell their home to get their home on the market first and lock in a buyer, and then make an offer on an upleg. The key is to sell their home contingent in that way letting the buyer of their property know that the seller is allowed to cancel the deal if they don’t find an upleg.
For example, Bob is selling Home A and wants to buy Home B. Bob should list Home A and sell it contingent upon buying Home B. Bob secures a buyer for Home A and the further along he can get in the escrow of Home A will improve his chances of getting an offer accepted on Home B. Here are some of the scenarios:
Bob does not have Home A on the market and he makes an offer on Home B.
Bob has Home A on the market and he makes an offer on Home B.
Bob has an accepted offer on Home A and makes an offer on Home B.
Bob is in escrow on Home A and makes an offer on Home B.
Bob is in escrow on Home A and the buyers of Home A have removed all their contingencies. Bob makes an offer on Home B.
As you can see, the seller of Home B will probably prefer the last scenario. The buyers for Home A are locked and loaded, and Bob is ready to move forward in an escrow on Home B with less risk than if he didn’t even have his home listed for sale yet. The further along you are in the process of selling your home, the better chances you have of getting an offer accepted on your new home.
Posted on November 19th, 2013 No comments
Selling your home is a big project… daunting at times. But if you put enough prep work into it, you can sell it quickly. In fact, the more effort you put into readying your home for sale, can actually shorten the amount of time it takes to sell it.
My latest listing in Redondo Beach is the perfect example. My clients and I sat down and made a thorough To Do list.
1. The first thing on their list was to rent a storage space. We needed to de-clutter their house. By re-arranging their furniture and eliminating some bulky pieces, we were able to properly display the floor plan and create a warm, inviting space. And since they would be moving anyway, it didn’t hurt to get a jump start on some of their packing.
2. We identified certain upgrades in the house that would bring the most bang for their buck. For instance, all the appliances in the kitchen were stainless steel except for the dishwasher. A $500 investment in a new dishwasher helped us complete the updated, polished look for the kitchen. Painting a light, neutral color in the living space freshened the home up and made it even lighter and brighter. And painting the exterior wood and trim gave the house an affordable and quick face lift. Finally, we replaced all the interior doors from a flat wood to paneled doors, immediately giving the home a more modern feel. They cleaned up the yard and planted some flowers to add some color.
3. They took care of some minor repairs prior to listing.
All in they spent approximately $10,000 but effectively raised their home from a $725,000 price point to a $775,000 price point. That’s what I call a good return on their investment! And they sold their home in 2 days with multiple offers.
There’s no one way to do this. Each home is different; each market is different. But it’s always a good idea to evaluate your home’s condition and determine if there’s anything you can do to improve how your home shows.
Of course, not all sellers have money to spend prior to selling, and that’s okay too. You do what you can and some projects can be done relatively inexpensively such as doing your own gardening. Or if you don’t want to spend money on a storage unit, you can get away with storing things in your garage. Sometimes power washing the outside of your home will do wonders, and it’s much less expensive than painting.
But most importantly, if you need to sell your home As Is without making any repairs or upgrades, then it’s crucial to market it accordingly. There’s nothing worse than touting a home with a gourmet kitchen and disappointing would-be buyers when they walk into a kitchen from the 1950s that has never been updated. You’re setting yourself up for failure. I’d rather have clients pleasantly surprised when they walk into a home, then standing there trying to figure out from which angle the photo was taken because the room looked so much bigger online.