Any Schlub Can Sell in a Seller’s Market
I admit it. It’s not that hard to sell a home in today’s San Francisco real estate market. I’m not saying that anyone can do it. Real estate sales are complicated and full of risk and liability. Most homeowners are way too subjective or emotional to effectively market and sell a home themselves, ergo FSBO (For Sale By Owner) is exceedingly rare in the more expensive markets like San Francisco. But, I am saying that it does not take a genius real estate agent to get the job done under today’s hot market conditions. (Down markets are a different story!)
It’s All About the Benjamins
So why hire (and pay for) an expert when selling a home in San Francisco? Why hire a Realtor with years of experience prepping homes for sale and over a thousand successful negotiations when it’s a seller’s market and just about any newbie or part-timer can do it?
As the Wall Street Journal pointed out in Saturday’s article, In San Francisco’s Bidding Wars, Home Prices Go Ballistic, “In the San Francisco Bay Area’s hot real-estate market, the question for many sellers isn’t whether they’ll get an offer. It’s how much over the asking price the offer will be.”
“It’s easy to sell,” said Ken DeLeon, a real-estate agent based in Palo Alto. “The key is getting the extra $100,000.”
I whole-heartedly agree with Mr. DeLeon, except in San Francisco, it might be that extra $200,000 or more if you hire the expert and do it right. The article goes on to say, “Even in an extreme seller’s market where bidding wars are common, upfront prep work and smart marketing are essential to getting top dollar for a property, homeowners and real-estate agents say. Sellers who invest $15,000 or more when listing their homes can recoup their costs many times over.”
Visualize the Long Tail (We Heart You, Seth Godin.)
When meeting with a potential home seller, whether for a Noe Valley listing, a Mission Dolores condo, or a Bernal Heights single family home, I like to explain that every home has a fair market value bandwidth. You could do nothing but slap a lockbox on the house and put it in the MLS and the home would likely sell within this band, albeit on the low end. But, and this is a big but, if you want to make sure you get every possible penny out of your home, you’ll want to hire the aforementioned expert Realtor, the one who knows how to advise you on the best presentation and pricing strategy for your home.
One size does not fit all when it comes to staging and listing price. We develop a custom game plan based on the specific property, its location and the seller’s personal situation. What we are doing is figuring out the optimal way to sell the home that’ll get us to the tail end of that home’s price range. In today’s San Francisco real estate market, we often go beyond. Imagine a bell curve with a line running down and to the right. That is where we want to be.
We want the winning offer to be out beyond the norm, beyond the cluster of offers in the middle. And let’s be real, that cluster represents the home’s actual FMV (Fair Market Value). We achieve the “long tail” sales price because of the pre-sale enhancements, the listing price strategy, the relationships with other top-selling San Francisco agents, the contract negotiations and yes, the market conditions.
The Seller’s Market: Up, Up, and Away
“The Bay Area’s latest market boom has been driven by an influx of high-paying tech jobs and, in some areas, overseas buyers looking for investment properties. A scarcity of listings is sending prices to new highs.
In June, the number of new listings in San Francisco was down 23.1% from a year prior, according to the San Francisco Association of Realtors. The average listing spent 26 days on the market, compared with 31 days in June 2014.
Median sales prices were up to $1.177 million—a 12.1% jump from a year ago. Real estate agents say bidding wars are most common on properties priced below $2.5 million, and that buyers often make offers on numerous properties—anywhere from two to 20—before finally winning one.”
What Goes Up…
Those of you who know me know that I can be a tad cynical or at least apprehensive of prevailing mindsets. Having survived (thrived!) in up, down, and all-around real estate market conditions, I know that when the NYT, the WSJ, the SFGate, and my friends at the water cooler start talking about the “Seller’s Market,” things are going to change soon.
We will have a tremendous autumn housing market here in San Francisco and 2016 is likely to be pretty good too, albeit on more of a plateau, is my guess, but all markets are cyclical and we’ve been in this real estate boom for years. In other words, if you’ve been on the fence about selling, you may want to get motivated. And if you want to buy, get in while the rate-getting is good. Just be sure to buy a home you’ll be happy in for 5-7+ years.
Don’t trip over my soap box on the way out. 😉
Photo Credit: “SF Filbert St North Beach CA” by Daniel Schwen