Seller Top Questions

Seller Top Questions:

1. Does Staging Really Work?

Staging started with developers in model homes over 70 years ago. It started approximately 25 years ago in the Bay Area and has become very popular in the past 10 – 15 years. Generally, staging works very well. It can be adapted to any budget. With "the latest style" of current furnishings, a staged home can look quite up-to-date even if it is dated. Even for a home that has been beautifully remodeled, complementing that with quality furnishings and art "set the stage" to complete a fashion-forward look that will appeal to the target audience. In studying staging projects for the past 10 years, we have seen returns from 200% up to 2000% (for example, $10,000 invested has gained a return on investment of $20,000-$200,000. What's most typical for that type of investment would be 300% – 600%) Some of the results have been astonishing. Good, smart staging can really make a difference.

2. What Is the Best Time of Year to Sell?

That is kind of a trick question. Traditionally, there are 2 seasons in which the sellers strategically put their homes on the market and the majority of buyers are in the market. The spring market usually has the largest selection of inventory and also the most amount of buyers in the market competing for homes. Spring and early summer provide the opportunity for families with children to get situated in a new school, flowers are in bloom – the sun is out and buyers, sellers & agents are excited about the new opportunities. The 2nd official season of the year is near the end of summer, most of the buyers, sellers and real estate agents are back from vacation by mid-August and there is a 2nd shorter window in which the inventory surges and new buyers come to the market. That being said, some experienced sellers work closely with their realtor and may consider finding other times of the year when the inventory is down (thus less competition) and the weather is good.

3. I’m Ready to Sell, but Not Ready to Move. Can I Stay in the House After Selling?

Yes – Particularly in a "sellers’ market" (as we are currently experiencing) a seller may negotiate for a "rent back" after the property closes escrow and the seller receives their proceeds from the sale. In a hot sellers’ market, sometimes buyers will even offer the sellers rent back at "no charge" other than continuing to pay utilities. In a more balanced market, market rent is what is typically used as a rental amount and prorated for the length of the rent back. Lenders (opinions vary) typically prefer that the rent back be no longer than 60 days after closing of escrow. This is because it could then be termed an investment property for the "owner occupying" buyer.

4. What Are the Advantages of Getting Inspections Before the Property Comes on the Market?

Smart sellers have been getting the key inspections in advance for a number of years. Old school style was, you would put the house on the market and the buyer would get inspections. Sellers enjoyed not paying the cost of inspections upfront. Turns out that is "Penny Wise/Pound Foolish". The 4 key inspections required (at least in Marin County) are:

1. Termite inspection
2. Home inspection
3. Sewer lateral inspection and
4. City Residential Resale Inspection. These may cost $1000 – $2000 depending on the size and location of the house. However, here are the benefits to a seller for making this investment:

1. 1. The seller can minimize surprises by having the inspections done in advance. Also minimizes the chance of losing the buyer.
  2. Increases the likelihood that a buyer may have a much shorter inspection contingency (or possibly eliminated altogether)
  3. Without these inspections, many buyers use the advanced information from these inspections to go back and do another round of negotiating with the seller. You can avoid that.

5. Is It a Good Strategy to Start the Price of My Home High? I Can Always Come Down, Right?

Old school thinking once again. For years, real estate agents and sellers said "let's start high, I can always come down". New school is to do their homework regarding comparables, evaluate strategic pricing and find the "sweet spot" which constitutes an attractive market price. Top real estate agents and experienced sellers have had much better results with a compelling price that shortens the marketing time and has buyers offer much earlier before a house has an opportunity to start to languish on the market. In the sellers’ market, we have invariably seen multiple offers with homes that have the right price and check many of the other boxes as to what the typical buyers are looking for in that price range. This applies more unfailingly in the mid & affordable price ranges. In the luxury market, depending on market conditions, a seller may want to leave a little negotiating room in the event the home doesn't sell as quickly as they would like.

6. I’ve Been Hearing About “Off-market” Sales. What Does That Mean and What Are the Advantages of Selling Off-market?

"Off-market" is actually, finally became become a thing. For years, an agent or buyer might find an occasional home "off-market". It might have been word-of-mouth, soliciting a certain neighborhood or agents networking with one another matching buyers with sellers who might be on the fence. Now, off-market has become much more scientific. In the past, the off-market sales might be under market value. There's a possibility that that still might happen. However, homeowners, their representing agents, and sellers have become more sophisticated. Now, off-market usually happens in one of 2 ways:

1. A home that is "Coming Soon" that is not fully market-ready for whatever reason but a seller might consider making an offer.
2. It may be a seller who for whatever reason may prefer to avoid full exposure. This could be personal reasons, preference of privacy, don't want traffic of agents, looky-loo’s and buyers/open houses, etc. There are a number of defined top agent network groups that frequently meet, tour properties together, and/or network digitally via email that can share off-market possibilities with buyer needs.

7. What Questions Should I Ask When Interviewing a Listing Agent?

1. Describe your sales record for the past 12 – 24 months in our County. What about in our neighborhood/city?
2. When do you think is the best time to sell this home?
3. Would you please describe your marketing plan?
4. How do you conduct & why should I do open houses?
5. Do you recommend any cosmetic changes like painting, carpeting, change of decor prior to putting the house on the market? Why?
6. What is your recommendation in regards to staging our home? How much does it cost?
7. How much commission do you charge? What % do you share that with the broker who represents the buyer?
8. In what areas of the process do your negotiating skills apply? Could you please give me some examples?
9. What would your 3 most recent sellers say about your performance?
10. I have heard that much of real estate marketing is now done online. What types of special online, digital, social media marketing do you and your company provide?
11. Why should I choose you as a listing agent?

8. When is the current seller’s market going to end?

Conventional wisdom might suggest that the robust sellers’ market that the Bay Area has been experiencing for the past 7 years should be slowing down and starting to switch over to either a balanced or a buyers’ market in the not-too-distant future. However, this is a crystal ball question. Pacific Union’s (our broker) 2 sets of economists feel that the switchover is likely to happen around 2020. Real estate cycles are usually cyclical and the average range is 4 – 6 years (however, that's only an average and now more than ever is subject to economic and world conditions, cost-of-living, traffic, price sensitivity). We are starting to experience some sensitivity to the highly appreciated values along with some owners and would-be sellers starting to feel the impact of fewer tax benefits as a result of the recent "Tax Cut”. On the other side of the coin, so many people are attracted to the Bay Area with its strong job market, fantastic amenities and year-round lifestyle opportunities that the sellers’ market has lasted longer than most economists might have predicted and could continue.

9. What effect have the increased interest rates had on the market and value of my home?

So far, the successive rise in interest rates with both the Fed rate and mortgage rates, has had little effect in softening the values in the Bay Area. Typically, market softness appears in outlying areas (farther away from major hubs like San Francisco or Silicon Valley). Additionally, as the market softens with increased rates and other contributing factors, the luxury price range tends to soften 1st. That is partially because there is less demand and less buyers that can afford the more expensive properties. The affordable and mid ranges tend to be the last to soften. Are you feeling lucky? That could be an upcoming opportunity to sell your affordable or midrange home and buy up into the luxury price range where you have less competition after receiving multiple offers on your midrange/affordable home.

10. If I’m downsizing, where do I go?

As a range of options for downsizers.

1. If you are looking for a smaller home but need not downsize dramatically in price, you may find a home with less square footage/#of bedrooms & baths, as the family may have left the nest and you don't need all that square footage or land/yard to keep up. You may still love the County you live in but are ready for a change. Downsizers might move to a close to town location to enjoy the ability to walk to restaurants, cocktails, coffee or socializing or go the other direction to a private setting, with views and no yard to take care of. Many consider condos of which there are a plethora coming on or have recently come on the market brand-new in San Francisco.
2. If you'd like to downsize in physical space, yard size and value, you may want to lower or eliminate your monthly payments altogether, moving outside of the immediate Bay Area often provides a less expensive cost-of-living. We assist our past and new clients in evaluating the qualities they want in a neighborhood, community, county and state and then assist them in finding the new versions of what they'd like to find. Some of the popular destinations for downsizers have been Arizona, Texas, varied states and communities in the Midwest, Oregon and Washington to get more house for the money.