We can all agree that right now, lack of inventory & insatiable Buyer demand clearly makes this a Seller's market.
Positioning your home to go into multiple offers requires a clear strategy. In the case of 5716 Mount Normandale Dr, Bloomington MN we sought to maximize the value in a number of ways we will cover below in this blog post. The result was a listing that sold in a matter of a few days in multiple offers for over $140,000 above list price.
Given the current supply chain challenges on nearly every front, now more than ever, Buyers value homes that don't require many improvements. Because of this, Sellers are handsomely rewarded for move in ready homes. Properties that are thoughtfully updated and present well to the buyer market command the hight prices. When getting any home ready to list we spend a lot of time in preparation fair amount of time in preparation to focus on updates that can include handyman work, painting, deep cleaning, window cleaning and landscaping. Some of the items we focused our efforts on with this property was the exterior, specifically getting the hardscape around the home sealed, the front door and garage doors sanded and stained for that first impression feel. With the interior of the home we dialed back all of the rooms furniture and accoutrements as well as ensuring the paint color palette felt consistent throughout the home. Spending the right amount of time on the front end would pay dividends in how Buyer's would perceive this property.
Price & Context
The most important marketing component in any list is the pricing strategy. A good agent will take a look at sales comparables and make a pricing call on a few metrics. A great agent will take the time to build a for the Seller to consider that nets them the highest price possible with the best terms and conditions. The importance of how compelling a listing enters the market will define how much traffic it receives and in turn how many offers surface. In the case of this property, which was on the upper end of the pricing spectrum for all of Bloomington, Minnesota, it was absolutely critical that it didn't resonate as just another competitive listing in the market but a compelling home for Buyers that had not considered this niche area of the market in the past. In this case, it was a matter of attracting Buyers with search criteria based around Edina and Eden Prairie tastes. Getting the most eyes on the property required ensuring that we were casting the widest net possible.
In testing out our pricing strategy prior to hitting the market, we engage with 2-4 agents from other brokerages who have successfully sold homes within this price strata and more importantly this area of market. The goal is to gain feedback from their perspective, we like to know their opinion of list price, probable sales price, recommended repairs and required repairs. Sharing this feedback with the Seller ensured a more thoughtful, collective approach to a compelling pricing strategy instead of a singular point of reference.
It Is All About Timing
The day listings hit the market truly matters, we have tested this in a variety of ways over the last decade. The best results come from listing on Mondays with the caveat that showings do not begin until Friday. This is intentionally meant to bottleneck buyer interest and fan the interest level for the listing all week. Showings begin promptly Friday at noon, go through Saturday morning at 8am-8pm and through the middle of Sunday before we have a pre-determined deadline for highest and best offers. Depending on the offer velocity, we can expedite the highest and best timeline to Saturday evening.
And Clearly Setting Expectations...
Take a step back and think about the psychology of Buyers walking into a new listing without any context. They walk through and like the house. It doesn't matter the offer price, it is simply human nature that a buyer will offer list price for a property a day or two on the market without any other offers on the table . Now imagine the Buyer's agent walking Buyers through is made aware that there are a dozen showings and likely multiple offers on the horizon with an incoming deadline? If the Buyer's agent clearly articulates these conditions prior to the showing, the Buyer's are obviously going to be in a completely different headspace. This is compounded when that same agent is made aware that there are multiple offers on the table with a deadline. In setting these expectations to Buyer's agents and Buyers we are making markets for our Seller clients every weekend.
A Bidding War
The most common question every Seller asks me is: Am I obligated to take the first offer that is full price? Once Buyers and Brokers start coming through offers will begin rolling in the first evening showings begin. ANY agent can simply collect offers and present to the Sellers. A GREAT agent is keeping every Buyer's agent and Buyer updated in real time on offer activity and most importantly working every offer against another to get them to come up with better terms and most importantly the highest price! Think about it, we live in the passive/agressive capital of the entire world! Buyers will always stretch when there are more offers on the table because it validates their decision to make an offer. We capitalize on the euphoria within the first few days of hitting the market and calling for all highest and best offers within 24-48 from the time showings are allowed is critical to maintain existing buyer offers and gain additional offers to the table.
In the case of 5716 Mount Normandale, we hit the market as a Coming Soon listing on Monday with showings beginning Friday. There were 17 groups the first day and 5 offers on the table. The first few are mainly offers at or around list price. At first glance they do not appear to be of much substance however they are the catalyst needed to get much better offers and offers #3, #4 & #5 were indeed substantially better with pricing 20-75k over list price. More often than not, a buyer writing an offer in multiples who knows there is already a handful of offers on the table think differently about writing. They know competition is fierce. They psychologically prepare for this and let their guard down on what it can take to be the winning bidder. Offers #6 and #7 started to dance around the terms my Sellers were looking for in addition to being 100k over list price. Saturday night I let all of the brokers who showed the property know that highest & best offers would be due Sunday at noon. Sunday still brought plenty more showings and another offer (number 8!) and right before noon I started working the agents that wrote the initial offers informing them how competitive it is and if they wanted to be in a compelling spot to win this home. Coaching every broker is important so they can set exceptions with their Buyers clients. The biggest problem of multiple offers is a listing agent that fails to keep everyone in the communication loop. Ofcourse a few offers raised their prices and one of the first offers that wrote came raised to $140k over list price giving us the terms and conditions we were looking for. Terms and conditions are some of the most overlooked components that truly define a strong offer. Tight inspection timelines, waiving financing contingencies and letting Sellers pick close dates are some of the terms that are on successful offers in right now. It is this unique approach that sets us apart from the rest of the real estate agents in the market to being market makers.
Posted by Ben Ganje on