How to Attract Multiple Offers For Your Home
Selling your home in Pasadena, Altadena, Los Feliz, Silverlake, Eagle Rock, Highland Park, Mt. Washington and other areas in LA County is very nuanced. You want a stress free transaction to happen quickly and naturally, you want the most possible money for your home. Here are the key ways to make that happen and how to pull it off.
How Offers Come In
Why you Want Multiples
Pricing Strategy
Remember the Appraisal.
Promote it Like Crazy
How Offers Come In
The start of the sales process is pretty straightforward. You find an agent you have confidence in, you sign a listing agreement, set a sales price and timeline and then the home is listed to the real estate MLS (Multiple Listing Service). This populates sites like Zillow, Redfin, Realtor.com and new sites like Compass.com. Buyers and the agents of buyers see the listings, do a tour and those interested submit a written offer. Your hope is to get an offer for the list price or more. However, every step here has strategy and pitfalls. Let me elaborate.
Why You Want Multiple Offers
You will only end up accepting one offer. If there is only one, you try to make that one work. However, if there are multiples, you can pick the highest one or bid them against each other to drive up the price beyond the list price. We are living in a multiple offer world right now due to the lack of houses for sale. Tales of homes receiving 40 offers are not unheard of. When you have that many offers, the demand will greatly exceed the listed sales price and you can pick the most qualified buyer. This is where you want to be.
Pricing Strategy for Multiples
When some may think, “Why not just list it at the top price and draw in just that top offer?” Well, psychology tells us why this will not work. Pricing at the top of the market or over the top of the market is a sure-fire way to draw in zero offers. People will tour the home under the scrutiny that it is not worth it well before they have developed an attachment to the home.
There is also the nature of how people discover homes. Sites like Zillow, Redfin and Realtor.com account for 75% of all home searches beginnings. Would-be buyers set filters in round numbers. $800K, $950K, $1.5M etc. If you price your home at $975,000 all of those with $950K and below filters will never see your home, yet once they do, they would easily see the difference in monthly mortgage between $950 and $975 is a mere $200 a month. This is why we see homes listed at $949,000 and not $950,000.
Whenever a client of mine prices a home for sale at the top end of the value, there are a couple of offers, those that price well under value receive five to ten offers or more. Once there are multiple offers we can issue a counteroffer to the top offers and see who is willing to incrementally pay more driving up the final price. Always price under. Remember, you do not have to accept any offer you don’t want to.
Remember the Appraisal
In 2019, 75% of all home buyers used a loan to purchase a home. All-cash buyers will be less frequent in 2020. When a buyer goes to secure a loan the lender will send an appraiser to appraise your home. This appraisal is based on six sold comparables within a half-mile of your home. Their values are adjusted to match yours. If this value is less than the agreed price you may have a problem. The buyer may ask you to come down to this price or, they could walk away from buying your home. This factor is another reason you want multiples. There are some ways around the appraisal contingency but I will go into that at a later date.
Promote It Like Crazy
To draw multiples it will take more than just price and the MLS. Your agent will need to be a true marketer. Professional photos, video walkthroughs (not an animated slide show), telling the history of the property and what has been done over the years is something I always personally take on for my clients. Advertising the listing through advanced social media efforts (posting alone won’t do it) and other creative efforts will get the most possible qualified buyers to see your listing.
To add to the challenge of selling in Los Angeles, we can no longer hold Open Houses so every showing is a private showing. This is why marketing and pricing is so key, it has to be uber-attractive to get in the most possible buyers today. Managing a flurry of requests to make sure that no potential buyer is lost, will take expert juggling on the part of your agent. Your cousin that just “got his license” is probably not the best move these days.
The task of deciphering which offer to accept takes experience and some detective work, if a house “falls out of escrow” it is because this step was skipped. It happens, it will delay the sale of your home by 30 days or more and could mean a loss in the sales price.
If selling a home is on the near horizon, your first and greatest challenge will be hiring an agent that gets the market. If you are reading this, you already know one.
Looking to Buy or Sell a Pre-War Home? Send Me an Email for a Free Consultation.
Michael Robleto
REALTOR®-Compass Real Estate
213-595-4720
Michael Robleto is a Los Angeles based REALTOR® that specializes in Historic Pre-War residential properties and those with architectural merit in Pasadena, Los Feliz, SIlverlake, Eagle Rock, and Mount Washington. Michael uses his vast knowledge of historic homes, residential construction, and modern-day marketing to predict and solve the many problems that arise in real estate transactions. His client accolades of insight, prompt communication, integrity, and hard work support the fact that he is not your average agent.
Michael leverages his personal passion for historic architecture to provide his clients with the unknown insight into the pros and cons of older homes. Michael, the son of a contractor, a California native, grew up in an older Bungalow home and has spent 23 years in Southern California admiring the unique architecture of the region. Michael brings 20+ years of negotiation and sales experience to his seven-year career in residential real estate. He often writes on homeownership strategy, historic residential architecture, and related topics that can be found on Facebook, YouTube, Twitter, and Instagram under the common profile name of his blog; BungalowAgent.
Michael is a committee member and frequent volunteer for the preservation efforts of Pasadena Heritage and the LA Conservancy. When not working you can find Michael on hiking trails statewide with his faithful German Shepherd Axel.
