I tell my clients something really important when transitioning to a new home.
Take the counterintuitive approach: “Sell fast. Buy slow.”
I have observed this behavior often. A couple has invested money in their home over the years and has an unrealistic idea about what their home is worth based on the improvements they made. A problem arises when the improvements are over five years old or they are specific to the taste of the homeowner. Even though they spent a lot of money, the improvements are not attractive to a large number of buyers.
So, believing their home is more valuable than their neighbors, they price it high hoping for that one buyer who has exactly their taste and a pocket full of extra cash. They may even say “We don’t have to sell, we have time.”
This couple is “Selling Slow”.
There is a problem with this strategy. In the first 30 days, they will have some traffic through their home. (For homes below 275k a competitively priced home sells in the first 30 days in this market.) Then next 30 days they will have less. Then the next thirty even less traffic. Those buyers on the internet are highly skilled. They do their research. One can’t fool the tools online. They know within 3% the value of homes in your neighborhood.
Then the sellers, after getting fatigued of having realtors and buyers walking through their private world will begin a price reduction strategy yet 80% of the potential buyers have already seen their home and are now bypassing it on purpose in their internet searches.
Finally, one day, a buyer finds their home and recognizes it has been on the market for over a 100 days. They think “hmmmm, these sellers are probably desperate, maybe tired of all this.” They then “low ball” the sellers with a ridiculous price. The sellers have been on a barren journey with few offers, so they knee jerk and begin a negotiation with fear of not getting a deal. This ultimately ends in them taking less than they would have if they would have priced it more competitively in the beginning.
Now the sellers are on a search for a new home. They have effectively made themselves homeless. The emotions are running high. They need a roof over their head and they are feeling their life being disrupted. So they see a few homes and choose the most comfortable home they can find in their price range.
Seeking comfort, they check their rational mind at the door. They choose beautifully staged homes with the latest paint colors even though the fundamentals of the home may not be solid. The HVAC is on its last leg. The roof is in need of replacement. Or the home has structural defects. This couple is now “buying fast.”
When a home “sells fast” it actually sells for more.
This is because the market place recognizes a good deal and rewards it with fear driven buyers who “don’t want to miss out”. In addition, the likelihood of a bidding war is much higher. That more often ends at or near list price sales here in Tulsa.
When a client “buys slow” he/she is taking the time to research and watch when a good deal hits the MLS.
They have done their homework and carry an active knowledge of where they want to live and the home prices in that particular neighborhood. When they see a home with good fundamentals that has a low price, they jump on it and are armed with information to negotiate a meaningful deal.
No one wins in real estate by buying too high. Yet buying right is the only way to win.
This means looking at a few more houses. This means taking a little more risk on the front end. Even possibly moving in with parents or a family member. It is counterintuitive.
If you want to go on this journey to transition well, give me a call. This is not work for me. I am graced with a profession I thoroughly enjoy. The process is a blast when done well.