Seller’s market case study from the Seattle Times: A view from the streets

Big Seattle Times real estate case study on the “craziest-ever-market” that featured newer agents in our office: Shelley and Sarah. Nice write up sisters! This article did a pretty good job detailing buyer and seller approaches, but I have a few observations for my sphere. 

1. Although the market favors sellers, buyers can succeed in Seattle.

You can succeed at buying in this market, but you can’t “dabble.” Many serious buyers are competing, so a winning offer requires a strategic, committed approach. This requires realistic expectations regarding price, supply, and demand. Often buyers need to lose out before they win—to sharpen focus and set expectations. There are many strategies for winning an offer (if you are close on price), but if you are not realistic you may as well buy a lottery ticket. That being said, not every house receives multiple offers and as this article shows, there may be some tough choices to make in order to get into contract, even without a competing offer. Having the market experience to guide buyers cannot be understated. This article shouldn’t scare buyers away, and negotiation strategies for buyers with skilled buyer’s agents in this market are crucial. 

2. Expertise around price and value are the key. The art and science of pricing requires experience and clear-eyed judgment.

Pricing a listing is where experience is invaluable. In the article (and based on subsequent conversations), I don’t believe Shelley and Sarah planned to underprice the listing to prompt multiple offers. But regardless their intent, the sellers still expected escalation. Many sellers feel like they need multiple offers to get “top dollar,” but this approach is risky—it often deters serious buyers, undermines credibility, and leaves money on the table.  While the general environment is scarcity, small factors can derail the hopes of a bidding war, such as listing in late summer when buyers are distracted by vacations and feel fatigued from a grueling months of shopping or a more attractive competing listing unexpectedly drops and pulls buyers away.
 
I never recommend low-ball pricing. “At market” pricing (to the degree that we can nail it) is the way to go. If demand drives up the price, that is icing on the cake. Multiple, escalating offers are common due to the large number of buyers (and limited supply), so it still happens. But it is far less extreme when buyers and sellers have top-notch representation.
 
The best route to the largest return is to prep the home show its absolute best—staging, paint, cleaning, repairs, etc. We can’t control the market, but we can control how great the home looks and how well it’s marketed. Even in a “crazy” market, these factors are the best way to attract and hook motivated buyers. 

3. Clear-eyed counsel is essential. Buyers and sellers gain confidence from negotiation and communication based on realistic expectations. 

Realism is the foundation for the best outcomes. Sellers salivate over (fantastic) stories of bidding wars where dozens of offers escalate hundreds of thousands over list price. It’s fun to be the beneficiary of this demand. While there may be invisible demand that simply cannot be predicted, the majority of those stories begin with a poorly priced home. Just because it escalates does not mean you netted the most money! It may be less glamorous to choose between two offers and to tell people that it only sold for $15K over list price, (eg. http://3424fortyfifth.com), but that is what a more sustainable (predictable, evidence-based) market looks like.  

No comments yet.

Leave a Reply