Just over three years ago, a select group of brokers and agents in Grand Rapids, Michigan got together in a conference room at the local board. They had been tasked by the Board of Directors to study and make recommendations about a problem which seemed to be mushrooming across the local community. Foreclosure and Short Sales has jumped from being barely a bleep in the statistics to trending into the double digits over 10%.
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Meeting the Luxury Home Challenge!
As values tumble, the challenge of selling a home for a good price particularly in the luxury home market requires some special skills. Let's highlight a few areas in which a home owner can make significant strides towards ensuring that their home is more likely to provoke a second showing encounter!
Know Your Market!
Do you know who your clients are? Where are they likely to come from and what their motivation for buying will be?
It is a loose rule of thumb to estimate that the average move-up buyer will be purchasing a home at a price range which is approximately 50% above their current home value. So for instance, if your home is priced at $500,000, your buying pool will come from the $325,000 price range. It is prudent to make sure that you and your agent have a handle on the inventory and sale prices of the homes which will be likely to provide a source of buyer leads for your sale.
Present Properly!
I continue to marvel at the number of homes in the higher price ranges which don't have ANY pictures online or very poor quality shots. With record levels of consumers searching online and skyrocketing gas prices, it is a real disservice to your home not to have it marketed in the venue which drives the most traffic...online marketing.
Now, even the best photographer will be hard pressed to deal with a poorly staged and cluttered dwelling. If you're serious about selling a high end home, you'll have to put significant effort into making sure that your home stands out. Luxury homes should be artfully staged. They should also be clean, clutter free and available for showings. Recognize that a little inconvenience may be necessary to accommodate serious buyers. If you're in the market to sell, remain ready to show!
Price to Sell!
In the past 24 months, I have witnessed more multiple offer situations than at any other time in my career. Bidding wars are occurring on homes which are perceived to be a good value. A well know agent in our area recently made a comment that went something like this...'if money is not an issue, there is not enough quality inventory in the area.' This means that luxury homes which are staged, presented and priced competitively are still in demand.
Be Irresistible!
Remain irresistible and memorable! While staging your home correctly will increase the chance that your home will linger in the buyer's memory as they trudge through multiple home showings, being irresistible will make people stop and THINK about why they really can't afford to miss out on a deal!
Creative incentives when coupled with strategic pricing can make a real difference when it comes to selling luxury homes. We've witnessed home owners paying for 6 months of the buyer's mortgage payment or throwing in high end upgrades and even cars. While this may seem outlandish, when you consider that many home owners are reducing prices by $100,000 or more to entice an offer, it may be cheaper to be generous up front!
When You're Ready to Move...
Select the right agent! A good agent will provide a comprehensive market analysis and pricing strategy. This plan should include advertising your home online in a number of popular real estate portals in addition to traditional advertising mediums. In today's media savvy marketplace, the competition is driven by value and presentation.
If selling your luxury dwelling will require the negotiation of a Short Sale, it is critically important that you deal with an agent who has successfully handled transactions which involve negotiations with lenders who are owed more than the sale of your home can support. Don't saddle your sale with additional baggage by not entrusting your negotiation to a proven professional.
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We're always available to answer your questions and provide informed counsel and recommendations.
Copyright 2009 Audu Real Estate All Rights Reserved
Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. We've had the privilege of helping hundreds of clients succeed in their goals of purchasing and selling property including demonstrated success in the negotiation of Short Sale Transactions. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511.
We keep telling sellers that price is so important and they all want to find a reason why there home is the exception. Pricing gets them in the home but the presentaion after they get there sells the home.
Lola
The high end homes in foreclosure are accumulating, and nw the wave of commercial foreclosures is swelling. Pricing properties is such a key factor.
All of these are great points and absolutely necessary for representing any price range but particularly high-end!
Terry, it is a two pronged approach. If buyers don't show up, it's usually about price...if they don't buy once they're there, then it's usually about percieved value and presentation.
Tom...the commercial sector is facing some of the same challenges that the residential market has faced. There is a lot of inventory in many areas of the commercial market here in West Michigan.
Thanks for stopping to ready and comment Diane. The luxury home market does have some unique challenges, but homes in all price ranges will benefit from proper pricing and presentation.
I think the general rule of thumb out here has been put on hold, mainly because no one wants to buy something that has a higher mortgage than what they are paying right now. A lot of people will move from a 1,500-SF home to a 2,500-SF home right now because the bigger home is now selling for what the smaller home sold for three years ago, so it's the same monthly mortgage for a bigger place. Too many worries here about job security, economy, etc., to take on bigger mortgages.
Russ, in Michigan, we've seen very significant price drops in many areas. We're also seeing an increase in the number of multiple offers. When deals get really good...people push aside their reasons not to move forward. It's happening with greater frequency in the lower end of the market right now...but opportunities also exist in the luxury home market.