Why Listing High Can Backfire

“Let’s try it at a higher price first, then reduce to the broker’s suggested price later if we need to.”
I can’t tell you how many times I’ve heard clients say this. While it is a pricing strategy that gets used a lot, in my experience, it isn’t usually the best one.

Say your experienced local broker suggests listing at $349,000 but you want to try higher – $399,000 for example. You list your home at 399,000$ and all the buyers who have been looking rush to see your home in the first two weeks. They have seen everything on the market already, so they know what they can get in the $399,000 price range. And your home doesn’t compare; it’s either smaller or not as renovated as the other homes they have seen. As a result, you don’t get any offers. Meanwhile the people in the under $350,000 price range won’t visit your home because it’s out of their price range, even though your house would have been perfect for them.

Sellers often say to “tell the buyers to make an offer” but buyers in the higher price bracket won’t make a low offer on your home because they want something bigger or more renovated. Buyers in the lower price bracket won’t make an offer because they won’t even visit a home they can’t afford on paper.
So where does that leave the seller? Cleaning and prepping their house for visits that won’t yield offers. When the broker finally convinces the seller to reduce their price, the buyers in the lower price range think there is something wrong with the house because it has been on the market for so long.

I’ve seen sellers wait too long to reduce and miss the busy Quebec spring market. Buyers overwhelmingly want to move in July once school is out. There is also the quirky July 1 moving date that can affect first time buyers. Tenants in Quebec have to give notice to their landlords by March 31 that they are cancelling their lease June 30. Thus, they must buy a home by the middle of March in anticipation of a July 1st move. The sellers of these homes must then buy a new house with occupancy for July 1st, creating a snowball effect for 2nd and 3rd time buyers who all end up having to move around July 1st. Why do you think movers in Quebec can charge 3x their normal rate the last week of June?

If you over-priced your home and missed the influx of buyers in the spring market you can take a break from all that cleaning because you won’t see as many visits during the summer holidays. Mind you, this year maybe a little different with the travel restrictions.

In today’s market, many savvy home owners and brokers are pricing spot on or just under market value to create a frenzy in the first few days of listing and encourage multiple offers, which in turn drives the sale price over the listing price. Lately, seeing 3 to 5 offers on a property within two days of listing is a common occurrence. In the last two weeks alone, I have seen listings selling from $2,000 to $30,000 over asking within two days of listing the property. The owner only had to clean and prep for a day or two and it was sold – no months of visits!

So, if your home has been on the market for months and you’re still waiting for the right buyer, remember there are three reasons a house doesn’t sell: Location, Condition and Price, and price fixes the first two!

The moral of the story is don’t over price your home and hope for offers. Work with an experienced local broker with strong a marketing strategy, price it right, price it tight and you won’t have to hope –  the offers will come to you.

Preparing for visits

The most common complaint I hear from sellers is the need to keep their house clean and ready for visits. More than a few clients have told me they wish they could just move out until their house is sold!

Preparing your house for visits by potential buyers is extremely important and yet, I’ve seen houses where the owners clearly didn’t understand this. If you don’t clean you house before visits, even the best broker is going to have trouble selling it.

Smell

You might not realize that your home has a smell to it, but someone visiting it for the fist time will – especially if it smells bad!

Some culprits to consider:

– Pets. Make sure the cat litter is clean and, if possible, out of the house. Dog beds smell like dogs, so wash them regularly while your home is on the market, and store them into the garage during visits.

– Basements. Basements tend to be damp, so they need dehumidifiers. Musty-smelling basements are a huge turnoff for potential buyers.

– Cooking odours. Do not cook especially fragrant foods like bacon, curry or fish the day of a visit. The smell lingers and visitors might find them offensive. The smell of baking cookies, on the other hand, can leave people with a positive impression of your home.

– Fragrances. Do not go overboard with scented candles or scented room sprays. They can be overpowering, and visitors will think you’re trying to hide something.

To try instead:

– Flowers. A beautiful bouquet can freshen up any room. With a little TLC, they can last a week or two and are worth the investment.

– Natural cleaning products. Replace your usual cleaning products with all-natural, lemon-scented products that leave a pleasant fresh smell without being overpowering. Another option is plain vinegar, which leaves no smell at all once it dries.

Sight

De-clutter, de-clutter, de-clutter!  You want potential buyers to be able to imagine themselves living in your house. With this in mid, pack away as many of your personal effects as possible, clear out closets and cupboards, and minimize furniture. Then give your house a thorough cleaning.

Kitchen and bathrooms are especially important to buyers, so make sure that yours look their best. They should sparkle! The bathroom should feel like a spa, so buy some new fluffy towels and a bathmat. Clear countertops of personal items and – please – make sure the toilet lid is closed!

Aside form the obvious de-cluttering and cleaning, you should also think about:

– Packing it up. Purchase a few large plastic storage bins and when visitors come, quickly sweep everything off the counters and tables into the bins. Then store them in the cupboard with the lid closed – or better yet, put them in the trunk of your car and leave with them.

– Lighting. Bright rooms are more welcoming and look bigger. So turn on all the lights and open the curtains and blinds (unless the view is terrible!).

– Access. Walkways should be cleared of snow, wet leaves and toys. Potential buyers shouldn’t have to come in through the back door because you haven’t bothered to shovel the snow. Every visit should start by way of the front door. For your visitors’ safety, stairs should be kept clear as well.

– Details. Finally, when was the last time you clean your light switch plate covers? You may not notice the smudges and fingerprints, but I assure you the buyer will.

Sound

Soft music is always welcome, but the key word is soft – as in turned down, low background music. The buyers aren’t there to rock it out!

 

Get out!

You, your kids and your little dog too! Buyers don’t feel comfortable wandering around someone’s home while the owners are watching them. Buyers will rush through their visit so as not to inconvenience them.

If you can’t leave, try to be as inconspicuous as possible. Do not be that owner who follows around the buyers to show them all the good qualities of your home. This backfires more often than is successful.  For example, if the you tell the buyer there are a lot of kids in the area, the buyer may imagine he will be over run with kids screaming, when truly there are only 5 kids living close by. Everyone interprets things differently!

 

Make a good impression

Often, after a day of visits, I hear buyers giving nicknames to the houses we’ve seen. Do you want to be the dirty house or the dream house? The smelly home or the house with the great light? How about the bra house? The owner of one home we visited had her bras and underwear hanging to dry in the bathroom! I have even had the naked house, where a man walked out of his bedroom bearing all. You can imagine how that visit ended!

So take a good look around your home. Walk around and look at it as though it were your first time seeing it. Will it make the right impression?

You may think buyers look past your belongings and your clutter to the house and its layout, but most of the clients I’ve worked with are influenced by how the house is presented. You want buyers to walk away remembering all the positives – that’s when you’ll get an offer.

***The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.***