The stakes are high in this real estate market, and I would vehemently argue that they’ve never been higher.
What I mean by that is there has never been more fluctuations between sale prices of similar properties, and there have never been more buyers paying “crazy” prices for houses and condos.
I’m not going to turn this post into an advertisement for “why to hire an experienced, full-service agent,” but I am going to tell you about two listings I had late last year where we took our time, did things right, and smashed records in the process…
I use that term a lot.
It’s not intentional; it’s not that I’m trying to differentiate myself from the masses each and every time I explain what “most agents” would do, but rather I have always felt (as you can tell from this blog) that honesty is the best policy. And so I like to detail how “most agents” would handle a given situation.
“Most agents,” or “most people” in life, do things the “usual” way, and they might expect the “usual” results. But in real estate, where the asset has no fixed value, and can sell for more, or less, than fair market value, there’s always an opportunity to break free from the norm and the pack that strives for mediocrity, and do something extraordinary.
When I get called in for an evaluation, or a “listing presentation” as it’s called in the business, I don’t bring any paperwork with me.
I’m honest with the sellers, and I tell them that I’m interviewing them, as much as they’re interviewing me.
Some people don’t like this, and that’s fine. A seller has earned his or her right to a massive power-trip and ego-boost by calling twelve real estate agents in for an interview, but I’m looking for somebody I can work well with; I’m not looking to “beat” other agents in a series of “listing presentations.”
Those “listing presentations,” in my world, are simply chats.
I tell the sellers that I don’t bring paperwork with me the first time I meet them because it’s probably not necessary. We’re not going to sign anything, because firstly, we need to decide if there’s a mutually beneficial relationship to be had, and secondly, because if we do things my way, we’re a ways away from listing.
“Most agents,” I explain, “Want to get your property on the market tomorrow, but that’s not the way to sell real estate in this market.”
And it’s true. Most agents will look to sign that listing agreement at the earliest opportunity, and would do so in the front hall as they take their shoes off, if they could.
Last fall, I received a phone call from a seller who was looking to put his loft on the market.
He and his wife had purchased a new home, and they wanted to know what I could do for them, and how I could list, market, and sell their condo.
I knew the building very well, and I researched their unit as much as I could. But the irony of these “listing presentations” and evaluations is that you don’t really know what a unit is worth, or how you would sell and market it, until you’ve spent some time inside it.
The building was A+ all the way, and the unit had the potential to be A+, but it was not.
And I told them this.
The average price per square foot in the building based on the most recent sales would put the value of their unit around $950,000.
But their unit was, as I also told them, in below average shape.
In its current condition, I explained, the unit was “worth” about $895,000.
This was certainly not what they wanted to hear, but they listened, and I could tell that they weren’t tuning me out based on hearing something unpleasant or unexpected.
Previous sales were clustered in the mid-$900’s, but a unit identical in layout to theirs had just sold for a whopping $1,030,000. The first and only unit of this size to break $1 Million, and this was because it was gorgeous, and “fully renovated.”
I put “fully renovated” in quotations, because I hated the renovations. Just because somebody spends $100,000, doesn’t mean they added $100,000 in value. But somebody jumped on this place, and they set a record in the process.
This model unit was an open concept loft, with 20-foot ceilings throughout. Not those stupid lofts that advertise 20-feet ceilings like this:
I mean this unit had real, true, 20-foot ceilings, from the kitchen wall right to the balcony door.
The unit has so much potential!
But the unit had sub-par, original-builder-grade finishes, which the sellers, after an hour conversation and a couple of beers (don’t worry – I drank water) eventually admitted.
The unit was a loft, and should have had “loft-like” features, but some of the features were, as the sellers put it, “1990’s sub-division quality”
Instead of a sleek glass-and-steel railing, there were light-brown wooden spindles, which didn’t make any sense in this unit.
Rather than having a beautiful, sliding loft door to the den, which most people used as a second bedroom on account of its size, there was simply, nothing.
The kitchen had no backsplash – just drywall in between the counters and the cabinets!
The bathrooms were outdated.
And after sitting with the sellers for an hour, and just being really honest, and with neither of us having any sort of agenda, we all agreed.
So then what?
Did we list the condo for $895,000?
No. We didn’t.
We plotted a course of action, and immediately started a five-week process of renovating and preparing for sale.
“Most agents,” as I told them, “Would just get your condo on the market, and hope for the best. Most agents wouldn’t go down this road with you.”
Again, I’m not writing this to toot my own horn here. You know that’s not my style.
I’m writing this to make two points:
1) You have a very high chance at getting bad advice
2) If you’re willing to do some work, you can get an incredible, tax-free return on your investment.
From that initial meeting, it was five weeks until we were on the market, and we did a ton of work on the condo.
We cleared out about 60% of everything they own, to make the condo look and feel larger, and cleaner.
We installed a very cool sliding loft door in the den.
We enclosed the den where it met the staircase (for some odd reason it was open) with a frosted glass panel.
We replaced all the wooden-spindle railings with glass and steel.
We refinished the staircase leading up to the second level.
We installed a new kitchen backsplash.
We installed a new kitchen sink.
We installed new kitchen counters, and moved the “island” back to its rightful place in the kitchen, which separated the kitchen from the dining area, as opposed to having that “island” facing the wall.
We painted about half of the condo.
We put a new vanity in the master bathroom, re-grouted the shower, and installed a glass shower door where there was a curtain before. I believe we even added pot lights in there as well.
We installed custom closet organizers in the master bedroom, and fixed the doors and the tracks.
We had property management refinish the front door in the hallway, which had really shown some wear. And while they were there, we got them to refinish the back of the door, which was inside the unit, and split the cost too.
We refreshed the main bathroom with new grout and caulking, new hardware, new mirrors, and another new glass shower door to replace the plastic curtain.
And finally, we staged the condo too, while using some of their existing furniture, but we moved out some furniture items and moved others in, to maximize the space, and give it the “style” we felt would work with the loft.
We brought in the best photographer (there is only one that I use, and he’s so good that I will LITERALLY move a listing back a day or a week if I can’t get him), put together all our marketing material, and lined up the listing date with the completion of all marketing initiatives, including having the building’s Status Certificate in hand (95% of agents order this after a deal is done, meaning you’re conditional for two weeks).
We left absolutely no stone unturned.
It took five weeks from that initial meeting until we went to market, but we completely transformed this condo, and did so far, far under budget. My clients were amazing at finding deals, and the money they spent was probably 40% less than the average person would have dropped on the same project.
Our target was $1,000,000 from the beginning, but once we saw how the condo looked, we figured it might be worth more.
But I chimed in and said that nobody looking at this kind of unit really knows whether it’s worth $1,010,000 or $1,090,000; they simply see the photos on MLS, and want to come have a look. In addition, listing at $1,015,000 would make no sense. Why list just over $1M?
So we listed at $1,079,900, even though the price made absolutely no sense.
The same unit, with better finishes, sold for $1,030,000 a short time ago.
But from the very beginning, I told them that our target market was a young playboy, or playgirl, with money. I know, I know – you hate hearing this. You work hard for a living, and so do I. But some millennials have their parents’ money, and those kids are out in full force buying condos downtown.
We were on the market for, I believe, four or five days, before we got an offer.
We sold for $1,050,000 – a new record in the building.
And the buyer, as you might have guessed, was a 20-something.
My clients’ hard work paid off big-time.
They probably got a 4-to-1 return on the money they spent, which is to say that had they not done the renovation, their unit wouldn’t have shown well, wouldn’t have sold quickly (probably not at all, and we’d come back on the market in 2017), and it would have sold for around $900,000.
There was a “right” way to do this, and we did it, without hesitation, from the start.
I love working with clients like this. They trusted me, never doubted me, and I got to show them the payoff in the end. They were fantastic to work with, great people, and I can say that the project at every given moment was “fun” for me.
I love a challenge, and I love a job well done.
I also feel that any job worth doing, is worth doing well.
This is the way you sell real estate in 2017.
People who chime in with “a house sells itself in this market” are missing the bigger picture.
No property is ready to go to market “tomorrow,” and I’ve yet to see a property that you can say is “perfect.”
So on Friday, let me tell you a second story about the “right” way to sell real estate, and how that job worth doing can be well-done, only this doesn’t involve a renovation, but rather how to deal with “life” as it interferes with buying and selling real estate…