Advice for selling in seller's market?

[Penelope Vandergast]

Next spring/early summer we are probably going to be selling in a very hot urban neighborhood with limited inventory. We are in a spectacular location. House is in B+ condition (buyers will probably want to renovate 15-year-old kitchen and bath, but structure is good, roof is 6 years old, house is recently insulated and will be freshly painted inside and out. Many houses in this area are in similar condition).

Most properties sell within a few days. I just saw several that went for $30K over asking and one that went $50K over. Prices are up 20% in some parts of the neighborhood since a year ago -- it's kind of insane. (Even so it's still cheaper here than in a similar neighborhood nearby, which is probably why prices just keep jumping.)

We are going to FSBO as I don't see why I need an agent in this market. Assuming all goes well, though, I would love advice on how to handle multiple bids and how long to wait before accepting one.

I'm also wondering if there is any advantage to having the property inspected on my own, and having that info ready for buyers. I guess if it was me about to plunk down a huge sum in a hot market, when I had to make a decision in a really short time frame with minimal information, I'd feel better knowing what I was buying -- and I might be more likely to go a little higher than otherwise.

Of course, there's always the chance that the inspection will bring an unpleasant surprise that will cost me a lot to fix!

I also am wondering what you all think of the technique where you price the property a bit low in order to get people emotionally involved and incite a bidding war. A friend selling in this neighborhood did this with her agent's advice, and indeed the place went for $30K over asking.

Thanks in advance.

[englishteacheralex]

Following--we are in a similar market and I've always wondered about FSBO.

[srob]

congrats on selling in a hot market--that is exciting!

I have sold FSBO once and bought FSBO three times. Had a lawyer help me the first time, other times the title company took care of the details.

In a hot market you might not need an agent. It helped us the first time (in a cooling 2009 market) that the neighbor had their house listed, and potential buyers would often take a look at ours too.

I probably wouldn't bother getting your own inspection. I think that most buyers would be wary of a seller-provided inspection and would still want their own.

I don't have experience with the pricing low strategy, but in a hot market you might not need it very low to incite a bidding war.

Realtors will give you a free walk-through estimate...you could get a couple of these to make sure that you are listing it at the best price.

[Goldielocks]

IMO,  it will be difficult to get multiple offers without an agent.   The agent knows how to pre-market the property (privately to other agents as well as public) before it goes on sale, to generate a buzz and interest, and knows how the local system works for accepting offers -- efficiently, without scaring anyone off completely.

You may be able to figure this out, but I bet many buyers would just offer full price or hold back to see if you will "break" as a FSBO first.


So, calculate if the increase in multiple bids is more than an agent's fee.  (interview several about their approach to multiple bids, too, if you decide on this approach, not all agents are good at it themselves)

You don't need an agent to sell at a fair price, in a hot market, but getting top dollar may be harder.

(source -- I suck at holding off for multiple offers, even when I intend to, the sheer work and "unknown" of the sale process does me in)

[Enigma]

IMO,  it will be difficult to get multiple offers without an agent.

I would be inclined to agree.  With one property that sold for 50k over asking price, I would probably seek out that realtor or try and duplicate that process.  (If that was a FSBO then even better).

All properties that I have bought that were FSBO were lower than a listing realtor.  First reason is they tend to stay on the market for sell longer, seller becomes antsy to get rid of the property, debt keeps going up, etc.  A good realtor is excited and motivated to sell your property putting their own money towards advertising and pushing the property along.

[ender]

If you do FSBO, you are far more likely to get offers if you list you are willing to work with a buyer's agent.

The overwhelming majority of potential home buyers are using agents and most of them are "stuck" with them even if they wanted to FSBO. Your likilhood of getting multiple offers if you are unwilling to work with FSBO is a loooot lower.

[2Cent]

I don't think reports will help normal buyers much. Especially ones that are given by the seller. The kind of buyer that will pay most are the emotional buyers. So what helps is good presentation. Nice pictures, clean and decent at showings. You could even make a floorplan with https://floorplanner.com/ and let people draw their furniture into your house. I really liked that one when buying my house.

[Penelope Vandergast]

Hmm, interesting. I am not at all sure I'd try to play the price-it-low-on-purpose game myself, I think of that as something agents do. I don't care if buyer agents come, but I am not sure why I would therefore have to pay them. Maybe more people use buyers agents than I am aware of?

I have had 3 real estate transactions in my life (2 buys, one sale) and none involved an agent. So I admit that for me I don't get the value-added here. 6% of sale price could be something like $30,000. I really don't get why the 3 or 4 weeks that are likely involved in my case would be worth that -- but maybe someone can try to convince me...

Staging. I already know to clear out the personal clutter (we should actually be mostly moved out by sale time so most furniture gone too), how to take good photos; we are doing a few renovations too. It will all be newly painted and professionally cleaned. I'm a professional writer so that helps for the description.

I have also been following the market here for years -- I think I have a pretty good idea of what kind of price is reasonable.

I did plan on having 2 or 3 agents do a walkthrough. If they all said I could get way higher than I was thinking on my own, then maybe I'd consider it just to avoid the pain in the neck.

On the other hand, if I got an offer close to asking and I was happy with it, why not just accept and be done. I don't want to spend weeks trying to finagle another $10K or something when I just want to get out of the house.

[BugJuice]

I'm a real estate broker that primarily does transactions for my own use (fix and flips) but occasionally will will help a friend sell a property. Unless you have a lot of experience I would not suggest doing FSBO (especially in a hot market) for a number of reasons.

1. You will almost certainly be compensating a Buyers broker whether you want to or not. In a Seller's market Buyers almost have to have a broker represent them, otherwise they will be too late to the party anytime a property is listed. In hot market even if they have a broker I have heard plenty of stories of Buyers making 1/2 dozen offers before they get an one accepted. Any buyer going it alone will almost certainly abandon that plan relatively quickly because they just can't move quickly enough by themselves. If you choose not to compensate the Buyers brokers most agreements will require the Buyer to pay their agent which ultimately means they won't be able to offer you as much to buy your property...thus you are paying for the Buyers agent whether you want to or not.

2. A good Selling broker will be very savvy at handling multiple offers to get top dollar. It's a combination of art, science and psychology to manage this process effectively and experience is the only way to acquire these skills. Any friend I've ever helped has been so happy they were not handling the transaction on there own.

3. There is so much more to the process than managing offers...the biggest being managing the finacing process. Finacing has become much more complicated with all sorts of potential ways for a deal to go bad...especially in the week before closing.

4. A broker listing your property on the MLS will reach a far bigger pool of potential buyers (in a metro market) than doing it FSBO. Concentrating all that interest and traffic into an open house on the first week creates a sense of urgency for buyers and brokers which drives prices up.

To give you an idea of how important I think a broker can be to the process I will hire a listing agent to sell some of my properties if they are in a market I'm not as experienced with because I know the value (higher price) they bring will more than cover the costs.

And don't forget all commissions are negotiable, especially in a Sellers market...but the broker willing to work for the lowest commission might not be the best or most experienced. 

Hopefully this gives you some other ideas to consider.
Best of luck.

[clarkfan1979]

It might be hard to get multiple offers if it's not listed on the MLS.

What about the discount listing companies that list on the MLS only and don't really do anything else. I think they charge 1.5%. I think that fee would be worth it if you are trying to get multiple offers. If it's a seller's market and you know what you are doing, I would do this.

Getting an agent doesn't guarantee that they are better than you with negotiating. They are more concerned with closing the deal than getting top dollar.