mikehardingrealestate

Multiple Offers

If you’ve shown many homes, you might have noticed that some home buyers have a love-hate relationships with the properties they see. They either fall madly in love with a place, finding no faults, or are totally disgusted, even outraged that you would dare show them something so terrible. Quelle horreur!

For agents, this can be exasperating, as these terrible, horrible, no-good, very bad homes tend to be, actually, quite close to what the buyer requested or as close as they’re going to get to what they want, in their price range.

Sometimes, underlying a  buyer’s rejection reaction are their own irrational expectations or other psychological quirks. But other times, there are hidden issues that can cause a gut reaction of hate toward a particular home.

Here are a few I’ve seen time and time again:

1. Strange neighbor behavior.

I wish I could count the number of times I’ve witnessed buyers be turned all the way off from an otherwise likeable property because of tomfoolery (or worse) on the part of the neighbors. While cars on the lawn is the age-old example, there are many more frequent instances of strange neighbor behavior that arise and disgust buyers on the regular.  I’ve shown homes where:

• the back deck had panoramic views of the San Francisco Bay – and the rear neighbor’s pit bull breeding kennels
• the next-door neighbor’s tree roots threatened to upend the fence or cause plumbing issues
• the neighbor’s junky yard or poorly patched roof were the primary view from many of the property’s windows
• the home shared a foundation, wall or roof with a next door neighbor, the shared element was in need of expensive repair, and the neighbor refused to pitch in.

Scary incidents during property viewings with neighbors’ pets, “customers” (I’ll say no more) or unfriendly neighbors themselves are also common sources of buyer antipathy to properties which listing agents might never even hear about.

2. Rumors.

Rumors around town about coming building, development and zoning changes to an area can make a home less desirable to buyers than you would expect it to be. Schools and commercial growth which might impact neighborhood parking, re-routed freeways and incoming subway and light rail lines are all items which get broadcast to the public years before they happen – and years before the plans are complete, sometimes rendering properties in the proposed path of development or re-zoning less desirable even though they don’t end up impacted by the final plans.

Listing agents can help deactivate rumors impacting a property by including a message or accurate information about the current state of such proposals in the online listing materials or angling the home’s marketing to buyers who will be excited by any new developments being proposed.

Additionally, rumors that a home is haunted or was the site of a crime have a history of putting the kibosh on buyer interest in a place. It’s not at all bizarre in some necks of the woods for an agent to offer a feng shui session, smudging or blessing  as part of the closing bonuses for a property with a troubled past – or rumors of one.

I once represented the buyer of a multi-family property in which a tenant committed suicide during escrow. While she was disinclined to be overemotional in the first place, she was delighted to move the deal forward when the seller offered to completely repaint and refloor the unit, in colors of her choice.  If a home has a truly checkered past, neutralize buyer concerns by offering them upgrades that seem likely to create a money-saving fresh slate for the next residents.

3. Failure to Optimize.

“That’s a shame.”  “What a waste.”  “Too bad they did that.”  “Why would they tear that down/choose that finish/put that in?!” 

Buyers hate little more than to move into a home and spend their precious remaining dollars ripping out nearly new upgrades – especially when they feel like they paid a premium for the home having been remodeled in the first place.

Well, there’s at least one thing they hate more: a home that they came to see because of its perfect location or mid-century modern/Victorian/Craftsman architecture that’s been built or remodeled in a way that totally eliminates the advantages of the features they came to see it for.  A home on an ocean view street with few windows (trust me, they exist) is one case in point.  Another is the Craftsman bungalow that has been all modernized inside, built-ins removed and natural wood ripped out.

There’s not a ton you can do to neutralize this issue as a listing broker, except to market the property accurately and price it appropriately. Buyer’s brokers can address the issue by simply showing them lots of homes, systematically collecting their feedback and then previewing properties in advance of future showings to avoid teasing your buyers with homes that promise features they want and fail to deliver.

 4. Childhood beliefs.

Where I grew up, corner lots were generally the premium lots of a subdivision. But in the area where I currently live, apparently there was a time when there a series of serious accidents occured, with cars ending up inside homes in part because the lots were positioned in a particular way vis-a-vis traffic flows and stop signs.

I have had numerous clients over the years mention this, and specify that they are completely uninterested in living on a corner, for this precise reason.

If you’re a buyer’s broker, it’s helpful to flat-out ask buyers if there are any home features that would be a flat-out deal-breaker for them up front. I’ve used that question to surface these sorts of lingering childhood beliefs, figure out whether they might create a conflict with any of the other features the buyer insists they want or need and minimize the time I spend showing them places their inner child simply won’t stand for.

5. Furniture foibles.

Is it irrational to make a decision about buying (or not buying) a particular property around your furniture?  Probably so.  Do people do it every single day?

Absolutely.

Buyers who have a house full of furnishings of a particular style or scale might recall the time and money they invested obtaining it and decide to hold out for a property that has a harmonious look, feel or scale.  As well, many a buyer has hemmed and hawed about a house because their great-aunt’s/Grandma’s/Mom’s inherited dining room table would never fit.

On the listing side, home staging helps buyers visualize that a property might be gorgeously outfitted even if their favorite furnishings have to hit Craiglist because they won’t fit.  And buyer’s brokers do well to gently point out alternative spaces in a home that might make a good site for a beloved dining table – and, if all else fails, to point out that buying a home around a table is probably not a sound decision-making practice for an investment this important.

6. Competition fears.

I recently had a buyer text me the address of a home they saw for sale, listed within their price range. A moment later I received another text from the same buyer: a note that they know they’ll never be able to afford it because of all the traffic they saw at the open house and the multiple offers they assumed would result.  It’s great for buyers to have a realistic understanding of local market dynamics like whether it’s a buyer’s or a seller’s market, how long homes tend to stay on the market, whether they should expect to compete with other offers and how much above or below asking homes usually sell for.

But in a hot market this can result in buyers disqualifying themselves, mentally, from homes on which they should be making offers.  Listing agents can help keep competition fears from running good buyers off by keeping buyer’s brokers who show the place up-to-date on plans for accepting offers and what the competition level truly is (assuming the latter is fine by your sellers and any applicable Association rules).  Buyer’s brokers can keep competition fears grounded in reality by checking in with the listing agent about the number of offers expected or received and non-price terms of particular interest to the sellers.

7.The wants and needs of hidden stakeholders.

Have you ever watched House Hunters International?  I crack up every single time a family moving from Minnetonka to Dubai decides not to buy a given home because it lacks room for their friends and family when they come to visit. “How often do they think people are going to make that trip after all?!  And can’t they grab a hotel room when they do?” I always wonder (often aloud, to the puzzlement of my dogs).

While this particular example is comical (and possibly scripted for TV), the reality is that many real-life buyers consider the wants and needs of people their agents will never meet as they decided whether to love or hate a particular home.  For instance, over the years I’ve had multiple buyer clients refuse homes with stairs to enter because of aging parents who might only get to the place once or twice a year.  I’ve also seen buyers make decisions about homes they intend to live in for a very long time on the basis of children that don’t yet exist, roommates and tenants they might never have and expected age-related mobility concerns for their future selves, decades down the line.

Buyers brokers – use your experience to help your buyer clients sort out the reasonable, smart planning for future scenarios from the fear of mistakes that makes it tough for some to commit to a home that should work very well for them for a wise time horizon. In a rising market, that paralysis can lose a buyer great homes and even cost them money – help them understand the consequences of fear-based procrastination, and manage it with smart, realistic future needs planning.

Have you uncovered hidden reasons buyers hate homes? We’d love to hear – post them in the comments, please!

And one more thing: You should follow Tara and TruliaPro on Facebook.

It is a rare occurrence these days to have a home’s buyer and seller sit down around the kitchen table to make a deal. In some areas, they do still sit around the attorney’s boardroom table to close the deal, but by that time, the deal is done and the ship has already sailed on any avoidable mistakes.

So in the vast majority of home sales, buyer and seller never connect in person, never talk, and never exchange insights or information except in the most formal, written formats – despite being effective business colleagues in one of the single most important transactions of their lives. And here’s the rub: buyers sit on a wealth of knowledge that sellers crave to know, most of which could be filed under how to attract buyers and make them want to buy a home (or at least, not turn them off). So, since buyers and sellers can’t get together, allow me to reveal a handful of helpful insider insights that the buyers I’ve worked with and connected with over the years would reveal to sellers, if they could.

1. You should see what your home looks like online. No, really. If you did your due diligence before listing your home for sale, met with agents and reviewed their marketing plan they use for their listings, chances are good that you chose an agent who takes online marketing very seriously and said as much during your listing interview. But somehow, there are still hundreds of listings in every major city that receive a failing grade on their online presence, once the home has actually been listed.

Every day, online listings are activated on Trulia and all across the real estate web with:
only one or two pictures
no pictures at all
multiple photos that represent the home very poorly or show it in its worst light, in terms of the shots selected and included in the listing (e.g., photos focusing on the dumpster in front of the house, or the messy breakfast dishes on the table), or
listing descriptions that bemuse us buyers, but would befuddle and even anger the homeowner, like the homes whose descriptions start off with the attention grabbing: “This place is a mess!”
Sometimes, there’s just a glitch along the production chain that it takes to get a property marketed; other times, there’s an actual error in judgment that took place. But it’s free for you, seller, to hop online and just do a quick audit of the way your home is represented in the same listings, virtual tours, and property websites that buyers will see. And it’s often the only way these glitches will get caught, brought to the agent’s attention and rectified. So you should.

2. If your home is seriously overpriced, I’ll wait for the price to come down before I even come see it. You might be thinking the best plan of action is to list your home high, planning on the fact that prospective buyers will want to bargain the price down. And, in fact, this might be true for your area – your agent can brief you on what the standard negotiation practices in your neck of the woods are, and you two can then work together to factor them into your pricing strategy.

That said, even in an area where homes generally go for below-asking, buyers are willing to do some basic negotiation. They are not, generally, interested in correcting a seller’s belief system about their home and its value that are clearly not based in the realm of reality. That seems daunting and like too much work to do – as well, there are so many properties to see, and buyers have to invest so much time, energy and emotion in making an offer, they don’t like to do that in cases where the seller’s list price is so bizarrely above-market that the chances of coming to a meeting of the minds about price are slim.

If your home is dramatically overpriced, compared to the others in the area or compared to it’s market price range, most serious home buyers in the market for a home like yours will either (a) never come see it, because it doesn’t show up in the price range they are searching online, or (b) not come see it unless and until you drop the price, because it simply isn’t worth their time and energy until you correct your pricing into the realm of the realistic.

3. There are a whole lot of fish in the sea – I only have to find one. Agents and mortgage brokers talk to buyers a whole lot about compromising, and what they can expect on the market as a whole, and such. But my reality is this: home buyers are not in the business of market analysis. They are in the business of finding a home. Only. One. Home.

Yes, ultimately, every buyer has to make some compromises. No home is perfect, and every person who buys a home eventually gets that. But even in a heating market like the one we’re in right now, there are lots of homes coming onto the market every single day. Any given buyer only has to find one that works for them. To buy your house – any house – that buyer really does need to feel inspired by it enough to feel like it could work for their family, their needs and their life as their home.

If you take shortcuts when it comes to primping and prepping your home for the market, it becomes super obvious to buyers when they scrutinize it, even if it’s really priced well. On the other hand, the homes that were well cared for, prepared and priced shine above the others, at every price point.

4. If I nitpick your house, that probably means I like it. Every buyer’s broker has a horrific moment, at some point in their career, where they realize their buyer has been trash talking a home – its nasty wallpaper, vomitrocious carpet, silly stylistic choices, etc. and so forth – and the home’s seller has managed to overhear this diatribe. The pool boy who was at the property turns out to be the seller’s son, the sellers turn out to have been next door or in the basement through the entire showing, or the teddy bear-cum-Nanny Cam has advanced audio capabilities.

Here’s why this horrifies buyer’s agents: the buyer that goes to all that trouble to dissect precisely what they would do differently if a given house belonged to them is a buyer who is thinking about making an offer on that very house.

The more questions, critiques, nitpicks, “What I would do’s” and such a buyer rattles off about a home, the more likely they are to make an offer on it. Of course, the occasional curmudgeonly amateur designer likes to just rip other’s decor choices apart for the fun of it, but many otherwise lovely individuals do this when they get serious about a home as part of the exercise of visualizing the property as theirs, and envisioning themselves, their families and their stuff in it. This is how buyers take a place that might not be perfectly move-in ready for them, and figure out how they might be able to make it work.

So if you happen to overhear a nitpicky buyer dissecting your home and verbally tearing down walls or ripping up carpet, don’t despair. They might simply be mentally “trying on” your home as their home.

5. When it comes to staging, the bar is high. Really high. HGTV. Houzz. Architectural Digest. All these outlets which constantly publish beautifully designed and decorated homes have influenced what the average American expects their home to look like – and yours, for that matter. Additionally, all the do-it-yourself publications and shows along with the advent of home improvement stores which double as DIY design emporiums have given everyday people of modest means the power to live in beautiful and functional homes, without breaking the bank.

Beyond all this, professional home staging has taken off in recent years, as data has repeatedly shown that staged homes sell faster, for more, and more certainly than homes that are not staged, nor well-prepared by their owners. So not only is your home competing with the homes buyers are seeing on TV and in the magazines, it is also competing with professionally staged homes for sale right in your own neighborhood – homes that the very buyers who will come to see your home will also have seen, possibly right before or after they view yours!

So, if you want to and can afford to have your home staged, do. If you can’t, you should still take the preparation of your home very seriously, and include your agent or a stager you hire for an hour of advice in the process, taking their input on things like:
what furniture to get rid of
which improvements will get you the most bang for your buck with local buyers
and what paint, flooring and other finish materials will appeal to the broadest buyer segment in your area.
These pros often also have contacts with local handypeople, painters, landscapers and other vendors who can get your home ready for market in a time and cost-efficient manner.

Next week, it’s SELLERS’ turn to give BUYERS the advice they would if they could!

BUYERS: What other advice would you give to sellers, if you could, based on what you’re seeing on today’s market? Let’s be diplomatic and constructive, please.

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