There are only 5 things between now and a successful sale
The 5 price influencers for a successful property sale. Here are the 5 price influencers that will determine the selling price of every property in any market, anywhere.
3 Buyer Management
4 The Market
5 The Real Estate Agent
They all play a central role and four out of five are almost completely in the owner’s hands.
Obviously, The Market is something a seller can’t control but there are some ways to use the market to your advantage, as you’ll see.
As I’m always closely watching the marketing and sale of every property in my area, I’m constantly amazed at the number of sellers and agents that miss even the most basic opportunities to enhance these key factors.
When seller and agent work together to make the magic happen, a better looking home attracts more buyers, sells faster and for a higher price.
Price influencer number 1. Presentation
Presentation is how a home looks, feels, smells and even sounds.
Presentation creates the ambience that forges a positive buyer experience.
Presentation will determine if a buyer decides to invest the time and trouble to look at your property.
Presentation will powerfully influence the one thing that makes a buyer ignore realistic price levels and what every seller is ultimately looking for: Emotional motivation!
Presentation will determine the time your property spends on the market.
Presentation is the foundation on which your entire sale is built.
Poorly presented properties attract fewer buyers, take longer to sell and generally sell for less.
People sometimes ask me if it’s worth investing in presentation to enhance the appeal of a property and how much can you expect in return.
The best way to answer that is “Yes” and “It’s impossible to say”.
But, as I’ve already mentioned, when the moment comes to pick up the pen to sign the selling document, it’s very comforting to know you’ve done all you can to present your property in the best possible light. There will be no regrets.
And the good news is that many presentation ideas, which can totally transform the look of a room, can be done on a shoestring budget. In fact, the amount you decide to invest in boosting your sale price is totally up to you. Every seller has different priorities and a different budget, which is why we’re flexible when it comes to preparing a property before the marketing campaign starts.
Sometime our clients need to consider major maintenance or condition upgrades like re-tiling, plumbing, kitchen, bathroom or landscaping work which is why we keep an up-to-date list of competent and reliable tradespeople and repair specialists who can supply fast competitive estimates for sellers who know they need to get things done before the go on the market.
Other clients need to do very little or nothing before buyers inspect their property. It all depends. Every property is different.
The easiest way to approach presentation priorities is to look at the critical marketing images you’ll be using once your marketing starts.
Chances are, most buyers will first become aware of your property from an Internet or magazine listing.
For a free-standing home, this will normally be an image from the outside. This single photo is what we call the ‘hero’ shot and I will get in to this in more detail under Marketing but the outside image is the main influencing factor here.
If a buyer, searching online sees a home they like, this will prompt them to spend more time looking at the property and start searching other images.
A buyer’s brain works fast. They know there are a number of homes they could buy and this is just one.
In a fraction of a second they will be see images of your property and decide if they really see themselves living there. They will be asking if they see themselves in the picture.
This primary engagement is central to your success as many great buyers miss their perfect real estate match because the hero shot didn’t really ‘sell’ the advantages the property offered.
The buyer’s brain will also be rapidly processing one listing versus the next and forming decisions on which homes to drive by, attend an open home or call the agent and make a time to view.
If you own an apartment, what’s your hero shot going to be? Is it a shot of the living room, the kitchen or the view?
Where is the ‘wow’ factor and what’s the main selling point?
In most cases, the best image for a free standing home is the home itself.
I can’t stress enough how important this image is. If this is the image that attracts that one extra buyer who will push buyer offers another $25,000 it’s worth it. And in all realty, you’ll never know.
So if you and your agent are comfortable the front of your property is your best marketing option, that’s exactly where you need to prioritise your presentation efforts.
So take a look at your home from the footpath. How’s your street appeal?
How’s the front fence? How the garden, exterior walls, roof and spouting?
Is this an image that will photograph well for your marketing? Is this your hero shot? If you’re unsure, ask a friend or better still, ask me. Even if you’re not planning to sell for a year or so, I can help you with a presentation program so when the time comes, your property looks as good as it can and is ready to be devoured by eager buyers.
Deciding on your presentation ‘hit list’
It’s not unusual for sellers to get a little confused and overwhelmed when preparing their property for sale.
It starts out with a couple of cool ideas that will make a room look fantastic then somehow grows into a monstrous ‘to do’ list of chores.
So here’s what I do when I’m working with a seller to prepare their property for sale:
If we agree a home needs presentation work and there are more than a few things that need doing, we sit down and write up a list.
We include every possible thing that will not only make our photos look great and also look for ways to enhance the viewing experience. These are the things that will ‘wow’ our buyers when they come through.
When our list is done, we look at each item and grade it in importance from zero to 10. Zero being not important and 10 being essential to helping us attract a heap of great buyers.
As you can probably imagine, the process from here is fairly straightforward. We target the tasks we scored as a 10 as our priorities and then move to the nines and so on.
This is what we call the ‘hit list’ and it works very well if you stick to the rules.
Many sellers take on too much which gets messy.
Suddenly there are multiple works in progress and things seem to grind to a halt. The best way to avoid this is to draw up your hit list then focus on the number one task before moving to number two.
When you have a clear plan, stuff gets done.
I guess it goes without saying but if you’re selling a property that needs a lot of work, there’s a point where you are better off doing nothing.
While a property that needs a lot of work will not photograph well, there is usually a strong sector of the buying public that would love the opportunity to pay less for a property and make their own improvements.
You will often see a property that is offered for sale or auction as part of a deceased estate that attracts lots of buyer traffic because savvy buyers understand the opportunities. These home are often located in popular established areas and may well benefit from the ‘worst home in the best street’ scenario.
So how much should you spend on presentation?
Sometimes there are things that simply must be done.
Let’s say you’re selling a home with damp issues or a property with a roof that leaks. If possible, you’re way better to address these issues before you start marketing.
Otherwise, there’s every chance your home will ‘fail the physical’ when the buyer brings a building expert through the home. In fact, these experts will often look until they find something wrong with the property so better to avoid disappointment from a failed building report later by acting now.
There is no formula for deciding what should be spent on a property to prepare it for sale.
Some homes need little or nothing, others need a lot.
My personal rule-of-thumb is to spend up to 5% of the property’s approximate value if required. After that, you’re sailing into unchartered waters.
How can I help?
- I’m often asked by clients to recommend a prompt, reliable and competitive tradesperson. Whether you need a plumber, painter, handyman or landscape gardener, I probably have your guy. Call or email me and ask for my ‘Trades List’
Price influencer number 2. Marketing
Now that your presentation plan is coming together, let’s take a look at marketing.
This is where your presentation efforts pay off. This is what you’ve worked for.
I like to think of marketing as the overall process of not only reaching out to potential buyers, but connecting on multiple levels using powerful, attractive images and great advertising copy.
We understand buyers have choices and we know when you’re selling a property that the enemy is other similar properties for sale competing with you for buyer attention.
That’s why we like to change the game wherever we can and go to the extra effort to position our client’s homes ‘above’ the rest.
This… is marketing!
The days of selling real estate ‘sausage factory’ style where each listing and advertising campaign is pretty much the same, are long gone.
And timing is critical as each area, suburb, town or city has it’s own selling window. This is also called Days On Market or List-To-Sell Time and defines the average time a property takes to sell from when it first hit the market.
This is important because history tells us a property that sits on the market for too long will normally sell for a lower than expected price.
When a property first hits the market, hot buyers who are ready to sign a contract and pay a deposit have their radar finely tuned so any new listings that come onto the market will quickly get their attention and become a priority.
This becomes even more intense in a hot or seller’s market where there are more buyers than properties for sale.
In fact, the whole industry is focused on getting fresh property for sale noticed by as many buyers as possible as quickly as possible.
This is because a new property, fresh on the market is big news to buyers looking in that price range.
There are a number of ways a hot buyer will become aware of a new property for sale. Let me explain each one so you’ll know what happens when you go live on the market.
- The main real estate portals. You may have done this and already know how it works but any buyer can feed their buying criteria into a buying profile or search and the real estate domain will send them an alert when a property that suits their specific search requirements is listed for sale or auction.
- Numbers show that most buyers today begin their search online. So even if they haven’t set up an alert on a real estate portal, their search will quickly reveal a new property for sale.
- Serious hot buyers will usually ‘stalk’ an area solidly to see if any new listings have come in to the market. This is where a good property sign is an essential part of the marketing mix.
- As I’m always connecting with new buyers and recording their specific buyer needs, my real estate software lets me create a ‘buyer match’ to target potential buyers I have recorded in my system. I then follow up with email and phone calls to let them know a viewing time or offer more information.
- Buyers will often become aware of a new listing when a friend, work colleague or relative tells them about it. This secondary marketing is very valuable.
- In many areas, newspapers and magazines play an important role in promoting new listings to potential sellers. While not as immediate as online marketing, print media tends to sit around a little longer.
As an agent, what am I looking for? What’s the one thing that will help me deliver a stunning result for my client, the seller? Buyer competition!
By carefully spreading my marketing mix and presenting my new listing to the market in the right way and with the right timing, I can possibly have 2 or more buyers competing to own the property.
Naturally, this is not always the case but it’s certainly the intention wherever possible.
Deciding on your Marketing Mix.
Your marketing mix is where and how you decide to build your campaign.
When building the marketing campaign, I need to get the ‘mix’ right in order to have the best chance of making sure my new listing gets in front of as many eyeballs as possible.
Without giving away all my trade secrets, I like to start with a great photo that summarises the listing then support it with other images that help a buyer appreciate the benefits and features the property offers.
I use my buyer response data to help me deicide where I need to focus my marketing efforts. Obviously, online marketing via the main Internet portals and our own website is always good for heavy traffic so that gets priority.
I like to work with my selling clients to explain the marketing options and build the perfect campaign to ensure maximum exposure and genuine buyer interest.
Building buyer excitement with an open home.
Many people believe an open home is just a convenient way for the agent to save themselves doing individual buyer appointments and while it’s hard to deny the efficiency of setting a single time window so all buyers can view a property at once, there’s another more important reason behind an open home:
When multiple buyers visit an open home, this sends a message to each buyer that the property is attractive and attracting. This doesn’t always happen but it’s a powerful marketing tool when it does.
We all want to own something someone else wants. That’s why a Van Gogh painting is so valuable. There is serious demand.
The fact is, buyers notice other buyers at an open home. They will often hear comments made and definitely pick up on their body language.
On the other hand, some sellers prefer their agent schedule private appointments where the environment is much more controlled. This might be for security reasons or personal preference. It real depends on the seller.
A private appointment means the agent needs to quickly interview the buyer to satisfy they meet three important qualifying criteria relevant to the property; The buyers is ready to buy, the home suits their needs and it’s within their intended buying price range.
Where the agent doesn’t do this they are wasting their own and the seller’s time.
Pricing your property for a successful sale
Naturally, every seller wants to make sure they sell for the highest possible price while every buyer wants to make sure they don’t (in their opinion) pay too much.
Managing buyer expectations and nurturing them through the process is one of the key price influencers and I’ll be getting into that shortly.
There obviously has to be qualified and informed discussion around price between seller and agent but I believe the agent’s primary role is helping the seller research a likely selling range and then market the property accordingly.
When it comes to researching a potential selling range or asking price, recent sales of comparable properties will usually provide the clearest evidence on which to form an opinion.
A good buyer is almost certain to be aware of recent sales of similar properties. In fact, they may have even been the losing bidder on one or more properties for sale. Their price opinion will be almost totally based on sales of similar properties and emotional attraction.
Every now and then a seller may be influenced by the asking price of a similar property for sale in their area but it’s only actual sales that count when you’re researching real estate values.
I’ve already talked about the fact that real estate has no recommended retail price, which often makes choosing an initial asking figure something of a challenge.
And just because all indications and thorough research of comparable property sold may point to a certain price, that doesn’t mean a property may not sell for substantially more.
One of the biggest personal rewards I can experience is working with a seller to build a marketing campaign that lets us achieve a sale price substantially higher than what we all thought.
I love it when that happens because it justifies our collective planning and attention to detail.
In order to test the marketing price of a new listing, I’ve devised a test before the full marketing attack begins that tells me if we are priced correctly within 48 hours! Please be sure to ask me about it when we meet.
How can I help?
- A great photo means a great ad, which is why I use an outstanding professional photographer. When you’re ready to go, let me know and we can make a time to catch up.
- My marketing mix often changes depending on where the very best buyer interest is coming from. When we meet I can show you where buyers are seeing our listings for sale and tailor the ideal campaign for you.
Price influencer number 3. Buyer Management
We can’t make a sale without a buyer so managing our buyers is central to the success of the project and a key price influencer. When it comes to parting with hundreds of thousands of dollars, buyers have a sixth sense.
They’re also looking for evidence to support the price a seller is asking for a home they are interested in. They are looking to satisfy themselves as to just how much your home is worth, or perhaps more specifically, worth to them.
Handling buyers can be tricky because this is a relationship that often begins from a cold start. Where there is no history between agent and buyer, there is no relationship and naturally, no trust.
From a selling agent’s point of view, building rapport and authority with a buyer will help the process in any number of ways.
We all like to purchase anything from someone we like and this is especially important when it comes to high-ticket items like real estate.
Have you ever found yourself in a buying situation where you just didn’t get along with the salesperson? You can’t quite put your finger on it but something wasn’t right and you felt uncomfortable. In fact, your discomfort my well have prevented you from completing the purchase.
When marketing real estate, we know that every buyer enquiry is a potential contract. When we first start communicating with a potential buyer, we need to be ready to respond to any number of situations.
We are building this relationship from scratch to develop rapport and trust as quickly as possible because we know we may soon find ourselves in a negotiating position.
Naturally, a buyer will be wary and guarded. They will often be reluctant to part with much information until they can establish the basis of a trusting relationship with the agent.
Typically, buyers come into the market for a length of time and undergo a period of research with their buying options including the location that most interests them and the type of property that best suits their needs.
A skilled agent will guide the buyer through the process and often help them address the all-important financial requirements like linking them up with a bank or mortgage broker if they don’t have one.
We do this because when the buyer makes an offer, we want to be know if they are likely to secure the loan needed to complete the contract through to exchange or settlement.
The buyer then moves into the actual buying phase where they start to get serious about actual putting pen to paper. They will start to make offers or bid at auction because they feel confident and comfortable enough with the market to do so.
Sometimes a buyer will appear ‘out of the blue’ and quickly buy a property but this is not the norm.
When I first meet a buyer, I don’t know how far along in the process they are so my main objective is to reach out and assist wherever I can.
To be totally transparent about this, it’s in my interest to build a relationship as they may become a future client.
In fact, many buyers I have met in the past have become valuable clients I have sold property for. It’s just the nature of our business.
But I need to be clear about who my ‘boss’ is in this situation.
When I’m hired by a seller to help them sell, I do all in my power to represent them to the best of my ability. I obviously need to build trust, authority and rapport with as many buyers as possible but the seller remains my ‘employer’.
Preparing a buyer to make an offer. (For Sale)
In a regular ‘For Sale’ marketing scenario, a property is presented to the market for sale and, unlike an auction, there is no deadline so an offer may come in at any time.
When a buyer starts warming to a property, they may start to indicate a potential offer amount. At this point there are other considerations, like which specific items are included in the sale and what are the terms of purchase the buyer is willing to look at including the deposit and when the full payment will be made.
Naturally, every situation is different, but long story short, these are negotiating points. I am there, as the seller’s representative, to ‘package’ the very best proposal from each buyer.
As soon as I’m aware an offer is likely to be made, I like to call my seller and let them know what’s going on.
The important point to mention here is that a sale cannot be formally recorded unless all legally required documentation is present.
So even if a buyer makes me a ‘dream’ offer within a few days of the property hitting the market, nothing happens without the paperwork.
In any case, a genuine buyer (or their legal representative) will want to look at all documentation before making an offer.
Helping a buyer prepare to buy is where the real ‘selling’ comes in.
To me, the process of selling is creating the best possible environment for a buyer to buy. This usually means one or more viewing appointments at the property and answering specific buyer questions to pave the way for the buyer to make an offer.
I also like to ask direct qualifying questions to establish if the buyer is interested and if I need to help them further. Naturally, each buyer is different and each has different needs.
Preparing a buyer to bid. (Auction)
There are selling situations and particular markets where offering a property for sale by auction will work exceptionally well.
Without getting into the specific mechanics of auction marketing, preparing a seller to bid at auction is central to the process. The agent needs to make sure the buyer is not only comfortable bidding to buy, but that they understand the process and their obligations.
How to handle an early offer
Sometimes a property hits the market and instantly attracts the attention of a hot buyer or buyers. Getting a great early offer brings the whole process forward as both agent and seller want to make sure they have every chance to capitalise on the opportunity.
A good early offer may be just the start of negotiations or it may quickly disappear.
This is where agent and seller need to review the offer and what will happen if it’s rejected.
Post Sale Essentials
Managing a contract for the sale of real estate doesn’t stop after buyer and seller have signed the document.
Naturally, every sale situation will be different, but managing the contract through to a successful completion is of critical importance.
For example, the contract may be subject to a building inspection or pest report. These reports may reveal unknown issues that need to be addressed.
This is where it’s critically important to manage the post sale process and the buyer’s expectations.
If a property is sold conditionally, meaning certain conditions agreed to by both buyer and seller need to be satisfied before the sale becomes unconditional, it’s important we help the buyer through the process step by step as the successful completion of the sale depends on their pre-settlement conditions being met.
Let’s say, for example, buyer and seller agree on a price, but the seller wants to make sure there are no ‘invisible’ issues with the property like rising damp or a leaking roof before they fully commit to the purchase.
The buyer will then arrange for a report and hire a building expert to come by and spend an hour or two looking over the property. They will look under the home (if possible) in the ceiling and on the roof. They will look at the electrical circuitry, the heating, cooling, hot water service and flooring so they can give the buyer an accurate report on the overall health of the structure.
Sometimes, especially with an older property, an inexperienced buyer will become alarmed at any negative finding the report uncovers.
This is where an experienced agent can quietly and methodically help the buyer understand that many homes require maintenance from time to time as that’s simply the nature of property.
Naturally, any serious defect like a termite infestation or rising damp will normally cause the buyer to either abort the purchase or seek a selling price adjustment to accommodate the cost of potential repair work.
The seller then has the right to decide if they agree or they may prefer to keep going and find another buyer.
The point I’m making here is that a good agent is always prepared to handle any post sale issues to represent their client, the seller as best they can.
There’s a common conditional that sometime occurs and it’s known in the retail world as ‘buyer’s remorse.’
This is where a buyer has second thoughts about their purchase after they’ve paid their money.
This may happen for any number of reasons and isn’t always based on logic.
The buyer may simply feel they have made a commitment they shouldn’t have and they become stressed and anxious about it.
When this happen to a buyer of real estate, the anxiety can be enhanced because of the amount of money involved.
A big part of my job is helping a buyer understand they may experience these feelings well before they actually do.
Naturally many buyers don’t experience buyer’s remorse but it is an issue for those that do, which is why I usually like to give a pre-emptive caution if I think it’s warranted.
The way a buyer is handled post sale plays a big part in keeping the sale together. Fortunately, I’m able to draw on considerable experience to make sure everything goes as smoothly as possible in order to preserve the top market result I’ve work so hard to produce.
How can I help?
- If you’re looking to buy a property as well, I can help in any number of ways. If you let me know you’re buying criteria I can tell you more about your options an offer some guidance. My contact information is at the front and back of this book.
Price influencer number 4. The Market
While the property market is one of the 5 key influencing factors in determining your eventual selling price, it’s the hardest to influence.
Where a market is hot and there are more buyers than homes for sale, the potential for competing buyers is much higher. As agents, these are the markets we live for. The excitement of offering a home in a high-demand environment doesn’t necessarily make our job easier, but it’s definitely more fun.
Being part of a process that helps a seller achieve a sale result many thousands beyond their wildest dreams is a very rewarding professional experience.
Whether the market is hot or not, doing all you can to present your property to buyers in the best possible way, will pay dividends.
In a hot market, buyers know they will need to lift their buying limit to buy and in a flat market, anything that can be done to enhance presentation is worth the trouble. So in either market, the seller wins when they follow the formula.
When you’re selling a property, your enemy is other sellers with similar homes for sale.
That’s why I like to make sure my sellers are aware of the competition and help them consider every possible way to make their property more appealing to buyers.
The Internet era has made this task somewhat easier as we can normally see how much traffic each property listing is getting.
For example, if a property we’re selling is receiving lots of online visits but few inspections, we need to look at our marketing to make sure we’re capturing maximum buyer attention. Traffic to real estate portals is a great barometer for marketing success.
Each specific property market has an average ‘days on market’ time window. This means the majority of real estate listings will usually sell within that window.
When a property takes longer than normal to sell, we need to establish what needs to happen to increase buyer interest. The last thing we need is for a great property listing to go stale.
How can we help?
Pricing your property to generate maximum buyer interest is one way you can influence the market. If I’m yet to give you my opinion, please let me know and I’ll stop by soon. This is obviously without any charge or obligation
If you’re not planning to sell for some time but would like some ideas on how you can influence your selling price, let me know. Many of the homes I sell we’re prepared months and sometimes years before they actually went on the market. That way, the sellers got to enjoy the improvements before they sold. (In some cases they even decided to stay!)
Price influencer number 5. The Real Estate Agent
Many sellers wonder exactly what it is a real estate professional brings to the table and I’m sometimes asked what I actually do to produce such great results for my clients.
A skilled surgeon repeats a similar operation on a regular basis. No two procedures are ever exactly alike but they are similar and the surgeon’s expertise, professional education and experience is enhanced each time a patient goes under the knife. But’s it’s normally only when things go wrong that the skilled and experienced surgeon knows exactly what to do. There are so many variables that will determine success.
A trial defense lawyer is trained to build a testimony of protection for their client so they can defend them to the very best of their ability. Again, no two trials will ever be exactly alike but an experienced and skilled courtroom attorney knows the key influencing factors that will influence their client’s chances of a ‘not guilty’ finding. They know whom they want as jurors and whom they don’t. They know which witnesses will help their client and which witnesses will not. They know which questions to ask a witness and whether or not to put their client on the stand. Again, there are so many variables that will determine success.
A real estate agent’s operational procedure is somewhat unique. Okay, we’re not managing life or death operations or defending the accused in a court of law, but we are almost entirely responsible for helping our seller secure the sale of their property for a substantial sum of money.
In many cases, we know and understand our client’s long-term financial well-being will be determined by our skill, experience and expertise to market their property and secure the highest possible selling price.
And while we follow a set procedure or formula that we’ve proven produces the best outcome, every sale is different. Every property is different, every seller has different needs and every buyer has their own agenda.
I believe real estate success is really about making two sales.
First, we have to sell ourselves to our client, the seller. To be appointed as their agent they need to be confident and comfortable we have what it takes to effectively and efficiently market their property, attract quality buyers and negotiate a contract for the highest possible price on the best possible terms.
Second, we have to go out and do it. We need to help our seller prepare the property for sale then build our marketing campaign to make sure we attract as many buyers as possible.
My first priority as agent is to make sure my client, the seller, understands the complete process as well as possible and naturally, every client is different. Some want me to handle everything and give them a regular update, others wish to be hands on and involved in as much as possible.
Either way is fine with me because my job is to accommodate my client’s needs and work with them on their agenda to achieve the result their looking for.
Each client is obviously selling for a specific reason so I try to extend my assistance and professional care to help achieve their desired outcome and deliver the ultimate real estate solution. If I’m successful, my client pays a fee-for-service. If I’m not, I go without.
Unlike the Surgeon or Lawyer, who receive compensation regardless of the outcome, my remuneration is entirely success dependent. That’s the nature of our business and the way our industry has evolved.
How can I help?
If you’re looking for an agent and would like to know more about me, perhaps I could supply you with the name and contact number of some recent clients.