That seems like a silly question to ask but every day home sellers decide to sell for less.
In April I was having lunch with a friend at The League in Avery Ranch. My friend said the real estate market must be hot because his neighbor didn’t even need to list his home and they sold it off market for $900,000. He was surprised when I said his neighbor could have sold it for at least $200,000 more if they put it on the market.
You can’t blame most home sellers for not keeping up with real estate prices. In many cases homes are selling for significantly over recent comps that sold only a month before. We are in an area where the demand is higher than the supply and it can be unpredictable how much someone may pay for your home.
That’s why it’s risky for a seller to sell off market. What selling off market means is not advertising to all the buyers and Realtors. In the case of the home that sold for $900,000 the listing agent only reached out to 2 Realtors, myself and one other agent. The buyer I was representing already had another home under contract so he wasn’t interested which meant the buyer who did buy the house didn’t need to compete with any other buyers.
What is especially risky is when someone sells a home that has what I call a “feature stack” off market. A feature stack means when a home has several features that are attractive to buyers and are hard to find in combination with one home. For example, the home that sold for $900,000 had 5 bedrooms, a pool, a 3-car garage, backs to the greenbelt and in a cul-de-sac. It is very difficult to find a home with these features. What we have learned over the years is homes that have a feature stack tend to sell for much higher than what you would expect if you simply added up the expected value of each feature.
The reason why I expect that home could have sold for $200,000 or more than it did is because I was in the process of selling another home in the same neighborhood. The home I was selling was much smaller, wasn’t on a greenbelt or a cul-de-sac and only had a 2-car garage. Because of the staging and pre-listing marketing we did we had so much interest before the home came on the market, I expected it would sell for over asking price. In the end, the home we were selling on the market did sell for $990,000 which was $195,000 over the original list price.
Before you sell your home off market make sure you understand how much money you could be leaving on the table. If you have any questions about the best strategy for your home contact us at 512-791-7473.
What Is Really Happening With Multiple Offers
Every day I get to see so many interesting things happen behind the scenes that you would never know about if you weren’t reviewing so many offers with sellers. When you hear about a home selling with multiple offers you probably think all the offers are about the same price.
Sometimes that is how it works. Lately as prices have gone up, we are seeing the difference between the top offer and the 2nd offer can often be huge. In June we sold a home where the sales price was $80,000 above the 2nd offer and in May we sold a home where the contract price was $195,000 above the 2nd offer. That goes to show you how buyers are making emotional decisions and paying higher prices because they have the expectation someone else will beat them out.
That’s causing a challenge for me because owners want me to tell them the market will be higher next year. The question is higher than what? Let’s say a home sells for $780,000 and the 2nd offer is $700,000. What would you consider the market value of that home today? It’s an interesting question because it could be $780,000 or $700,000 or somewhere in the middle. You can easily see a situation where the price for that home would be higher than $700,000 but less than $780,000 next year.
The Appearance Of Your Neighborhood Matters Now More Than Ever
Something else interesting is as we are having more and more virtual showings where agents are FaceTiming with buyers the overall appearance of your neighborhood is more important. Recently I was doing an open house at 2 homes where agents were using FaceTime to show buyers the home. I noticed before they came into the house the agents were spending a lot of time showing the surrounding homes.
I thought this was interesting because in a real life showing we don’t focus on the other homes as much. When I asked the agents about that they both told me because the buyers are buying sight unseen the agents are more concerned about making sure the buyers know about the homes nearby to protect themselves from the buyer moving here and blaming the agent for something they didn’t know about. Things that might not bother a person in real life might be just enough to keep an out of area buyer from making an offer because their agent over-emphasized something about the neighbor’s house. As we all know, it’s those buyers from California and Seattle who are driving up the prices, often with sight unseen offers. Not getting an offer from out of area buyer can significantly affect the final sales price of your home.
You can call me at 512-791-7473 if you have questions about the real estate market or you want our help buying or selling in the area.