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| Haverford Rd./ Wynnewood: Full-Price Offer Before Sunset. |
Fortunately for Sellers - who agreed, in principle, to accept that first, full-price offer of $329,000 - those Buyers chose to have protracted negotiations over minor lender and settlement conditions. It's understandable these Buyers and their agent thought they had leverage to steamroll the Seller's concerns about parts of the deal ancillary to price. In a Buyer's Market, such as we have today, one might expect a Buyer making a full-price offer to have his whims indulged by a starry-eyed seller.
Not necessarily the case.
Sellers, in this instance, had a well-thought-out and months-in-the-works Goal to sell and buy a downsizer before the autumn of 2012. Sellers knew that to effectively sell a home on a busy street such as Haverford Rd., they would have to make the house look great and price it aggressively. Throughout fall and winter of 2011, Sellers got painting and other handyman jobs completed so they were able to hit the market in early March, just ahead of our peak home-selling season.
Sellers' list price of $329,000 was nearly 10 percent less than they paid during last decade's apex of the housing hysteria. Not ideal, for sure, but Immensely Practical. Careful review of recent sales, current listings, and others' failed attempts to sell made it crystal clear to Sellers that listing at what they paid in 2006 would be anathema to the sell-and-downsize gambit. So many sellers are understandably either unable to financially posit or even entertain the notion of getting less than they paid 5-7 years ago. But the numbers don't lie. With few exceptions, houses are bought, sold, valued and appraised based on the amounts paid for recent comparable properties. It is what it is, and if the numbers don't look good enough, figure out a way to hunker down for another 5 years when conditions might improve.
In this case, my Sellers had to make the downsize happen in the 2012 market. Rather than overpricing and pining for bids- like the other half-dozen similar houses-for-sale in the neighborhood - these sellers chose to work from a Position of Power. Seems counter-intuitive that a lower list price can bring increased power, but it's frequently the case. When the house hit the market looking great and at a somewhat sub-market price, the Buyers circled like sharks at a submerged slaughterhouse. Yowsa.
When the full-price offer came in hours after showings commenced, Seller was gratified but somewhat underwhelmed by the buyer's out-of-state, no-money-down lender (see 'R5Realty News & Notes' March posting: Sellers Beware Thy Buyers Lender). Nothing can destroy a seller's dreams like a lender with no significant interest in seeing that the transaction executes seamlessly. For days, the Buyers cajoled and prodded to the Seller to accept their Midwestern lender and loan product. The Buyers even balked at providing a back-up lender who could step in if their preferred "unknown quantity" lender failed to perform in timely fashion.
Why the big deal about the Lender? When your goal is to sell in the peak of housing season so you can then go out and drive a good deal on your downsize, a Lender who overpromises and doesn't deliver can completely destroy a well-conceived Sell and ReBuy plan.
Longstory short, while Sellers continued to lobby for their Ohio lender and resisted inexpensive think-outside-the box alternatives, another buyer jumped in offering in excess of $10,000 more, and with no fuss regarding minutiae. The original Buyers were aghast when informed they had been blown out of the water by a party who saw Value dangling on a stick and swooped in to snatch it. Within a day after the new 10k-plus, Local Lender deal was signed, a backup offer for 6k over list came in as well.
What's to be learned? Aggressive prices - even in a buyer's market - can be an effective strategy to sell fast and still get a good number, as multiple parties bid up the price. Buyers know its a Buyers Market and are hungry for good values. A good deal is a good deal, and if Buyers can get a deal paying list price or above, it's a lot less hassle and stress than a Buyer having to lowball and convince a seller his house is worth less.
Some folks call the strategy of Pricing slightly under market value, "Power Selling". It's Power Selling because rather than passively hoping someone approaches your above-market price or ventures into an unsavory price-cutting negotiation, now you have a feeding frenzy and You are holding the fish (so to speak). Even in a Buyer's Market, feeding frenzies happen. I've seen it multiple times in the spring of 2012 and in each case, it's nice to see Sellers sharing in the position of power for a change.
