What defines compelling? There are numerous factors that determine whether a house is compelling.
4) Lot size
7) The Market
I am going to use my "Dented Tin" analogy to explain my theory.
Let's say shoppers need to buy a tin a crushed tomatoes, There are "Normal" tins and a few dented tins to choose from, do they choose the dented tins? No, not unless they have been marked down! Even though it's the same product inside! Let's take this a step further, No Name tomatoes and Brand Name tomatoes, more than likely the same tomatoes inside. (I knew someone that worked for Kraft Foods back in the 90's. He told me that No Name Jello and Jello Brand Jello were exactly the same! He toured the factory, they just change the boxes.)
Why do people pay more for a brand name, even if the no name may be the exact same product?
Presentation & Marketing!
Next scenario; Perhaps I should have used toilet paper, plastic gloves or any other product that has been in high demand recently! If there are ONLY dented tins, buyers will pay full price or even more, depending how much they want/need tomatoes. What if only a few stores have tomatoes and one has nice tins and the rest have dented tins, will all of the buyers drive to the "Normal Tin" store? Probably not, this is where location comes into play!
Before you list your house, you have to know; What type of "tin" you have and how much demand there is for that tin. Before you list your house you have to make it compelling and keep in mind it may already be compelling! For example; you have a 1,600 sq ft, 4 bedroom bungalow on a 50' lot, near a school with a park behind it. This house is in desirable neighbourhood full of 1,000 sq ft. 3 bedroom, 2 storeys on 25' lots....your house is compelling!
If you have a 3 bedroom, 900 sq ft bungalow and there are 50 other similar houses for sale, you are going to have to make yours compelling. If you have a "dented tin" you're either going to have to turn it into a nicer tin and/or price it correctly to make it compelling.
How do you make a nicer tin? The most cost effective ways are; clean, declutter, paint and the "Honey To Do" list. There are some things that don't make financial sense, like replacing the windows, unless they are broken. Other things you will have no control over; like location or layout of the house. I had a client once that had an enclosed kitchen and the majority of buyers are looking for an open concept. This client insisted their kitchen was more practical than other kitchens. Fanny Packs are also practical, but they're not in style and very few people use or want them!
Your REALTOR® should consult you on what are the most effective ways to make your property as compelling as it could be. This would include showing you what has recently sold, what the competition is and the most cost effective ways to improve your house prior to listing it.
They should also have a detailed marketing plan that will get your house maximum exposure in the first 14 days! Putting a sign in your front yard and listing the house on the MLS® is NOT a marketing plan. They should understand the demographics of what buyers would be interested in your property and how to reach them. Do they have a great website? 94% of home buyers start their search online. Do you think out of town buyers are looking a recognized, global real estate company? Chances are they have no idea what or who the local "No Name Brand" companies are.
Does the agent understand how to use Social Media and Google to market you home? Making ads for Facebook is fairly easy, designing them to reach a target market and getting them to click on the ad is a whole different skill set!
Does the agent understand and use modern technology? Are the implementing Virtual Tours, Virtual Open Houses, Facebook and Facebook Live, You Tube, Instagram, Linkedin, etc. Do they have electronic signature capabilities to make your life easier.
Does your agent provide a weekly update that informs you of the activity concerning your listing?
Your REALTOR® should also explain that there isn't a specific price a house will sell for, there is a range it will sell in. I offer clients a 3 price range strategy; Top, Middle and Lower
1) Top of the range - This range you need a buyer that absolutely loves your property, your property checks all of the important boxes for the buyer. I have seen houses sell for a lot more than I thought they should (I have also seen them sell for a lot less as well!) Here is an example; A client knows that a house sold near them and it sold for a good price, the client fixates on that sale, ignoring the fact that other homes in the area have sold for less. Don't make that mistake! In this case the house that sold for a higher price was purchased by a buyer that had grown up on that street, their parents still lived on that street and would be able to provide child care for them. This strategy could take a few days to a few years, it depends when your perfect buyer shows up!
2) Middle of the Range - In this price range buyers are willing to overlook some flaws in the house and are willing to forgo some of their wants and needs. The houses listed in the Top of the Range are making these houses look like a better deal. This strategy could take a few weeks to a few months, depending on how compelling the property is!
3) Lower Range - This strategy will usually get your house sold quicker and possibly for the same price or more than the Middle of the Range strategy! The buyers that are seeing the Top and Middle range properties are drawn to price of this property, especially if it is presented well! Let's look at the following example.
We have a price range of $435,000 - $415,000
Top) $435,000 - could take a year or more to sell for $430,000 - $425,000
Middle) $425,000 - could take 3 or more months to sell for $422,000 - $418,000
Lower) $415,000 - could take 3 days or more to sell for $420,000 - $415,000
Why would the lower end get more money in less time? This price will attract so much interest that buyers won't want to miss out on the deal. It could lead to multiple offers that are willing to pay asking price or more! Compared to the mid range the selling price is not that much different but what if you have already purchased a new house? Now you are paying carrying costs on both properties (Mortgage, taxes, utilities, condo fees, etc) If your $425,000 price sold for $420,000 3 months after you listed and you incurred $6,000 in carrying costs, you netted $414,000. Doesn't it make more sense to list in the lower range?