A Job Worth Doing, Is Worth Doing Well (Pt2)

Let’s pick up on the topic of conversation from Wednesday, and discuss the “right” way to sell real estate in this market.

I’ll often lay out a theoretical, “What you could do” to the sellers, which represents a road they’re not interested in walking down.  But then when they hear the price they could get if they were to do so, suddenly, they seem a lot more willing.

I had another listing last fall that took over a month to bring to market.  Let me explain…

ScissorsGrass

If you had asked me last year, “Are the stakes higher when selling a condo or a house?” I would have probably replied, “house,” without a doubt.

So far in 2017, through two weeks of action, the houses are still selling in multiple offers, for well over asking, but so too now are the condos.

And while the massive price fluctuations seem higher on $1,399,000 houses that sell for $1,700,000, I’m seeing a lot of condos that wouldn’t ordinarily sell for over the list price doing exactly that, simply because of the lack of inventory.

We’re seeing most condos hit the market with set “offer dates,” and many condos are selling beyond what any “comparable sale” might hint at.

So in 2017, I would say the stakes are just as high for condos, as they always were for houses.  And since the “extra” $10,000 on a 1-bedroom condo sale might mean more to a seller than $50,000 on a 4-bed, 4-bath house, you might argue that the stakes for condo sales are actually higher.

On Wednesday, I led you through a story about a condo I brought to market after a renovation that worked out quite well for my sellers.

That story was about the condition of the property, and how to fix it up, and sell it for more money.

But what about when the “to do” in the listing/selling process has less to do with counter-tops and paint colous, and more to do with life?

Some clients of mine purchased a new home in the west end, which they would be renovating over the course of 8-10 months, and wanted to sell their house in order to finance the project, and take advantage of the hot fall market.

The “problem” in this case, as I said above, didn’t exist in the form of features of the home, but rather features of the sellers and their lives – namely they had a family.

Ah yes, kids!

I can speak first hand about just how much life changes when you add people into the mix!  My 8-week old daughter is making noise in her bassinet as I write this, and I’m just praying she doesn’t wake up…

My clients had three young children, and as just about any parent would attest to, a family “home” looks and feels different from just about any other home.  It’s lived in, it’s busy, it’s vibrant, and it’s usually packed to the brim with stuff.

The house was an absolutely jaw-dropping 1880’s Victorian, full of original character and charm, but with the added modern conveniences and features, such as a dug-out, 8-foot basement with heated, polished concrete floors!

But with three kids running around the house, and with the accumulated possessions of five family members, the house didn’t show as well as it could have.

Of course.  What else is new?  As I said on Wednesday, show me any property, and I’ll show you how to make it look better.

After walking through the house for the first time, I sat with the sellers, and I asked them, “Do you want me to be honest with you?”

They replied, “Yes,” with a smile, palms-opened and raised upward, as if to say, “duh, of course!”

But “yes” is the knee-jerk reaction to a question about honesty.

What was that line in Old School when Luke Wilson catches his girlfriend cheating on him, and he says, “Be honest, tell me this is the first time this has happened?”

She replies, “Well……do you want me to be honest, or do you want me to tell  you this is the first time this has happened?”

I told my clients, “You’re not going to like what I have to say, and you’re initial reaction is going to be that I’m wrong, but here goes.”

And then I told them: “If you want to maximize the sale price of this home, you have to take everything out of it, including yourselves.”

There was silence.

They looked at each other, then myself, then each other.

They said, “What do you mean by ‘everything?’ like what, exactly?”

I told them, “Everything.”

I explained that I don’t take half-measures with a house of this calibre, and when the stakes are this large.

If this were a 1-bed, 1-bath condo, we could finesee it a bit, no problem.

But a 3-storey, 4-bed, 4-bath, Victorian, in a prime location, that could be “the” listing of the fall in that neighbourhood?

You simply take no chances.

I explained that rather than taking out a few items, and bringing in others, I wanted my stager to have carte blanche with the house.  Whatever she says, goes.

I probably did 30 projects with my stager in 2016, and I trust her emphatically.  So if she says she wants a piece out, it’s out.  If she wants it in, well, you know who’s going to win that battle…

I then further explained to my clients that they had to move out of the house two days before we listed, and they couldn’t move back in until we sold.  They’d be out for about ten days, but this was all part of the process.

For this house, I expected between 70 and 100 showings in seven days, and they just wouldn’t be able to work around that with three kids.  In fact, they wouldn’t be able to work around that with zero kids!

They mulled this over, as they facepalmed, shook their heads, sighed, and bit their lips.

Then the question I always get, was asked, “How much do you think this house is worth now, as-is, and how much could we get if we staged it?”

I told them $1,500,000, and $1,600,000.

We’ll come back to the latter number at the end.

They laughed when I told them it was “only” worth $1,5o0,000, as they knew it would sell for more.

I told them that it wouldn’t.  I told them how fickle buyers are, how buyers purchase with emotion, and how when a buyer feels that somebody else wants the house, they want it even more.  And while the house was worth $1,500,000, if somebody walked in here, today, and made an offer based on how it looked, they might not even get that.

They mulled this overnight, and told me the next day, “We’re in.”

Then the fun began.

I was working on the listing with a colleague of mine, Nic Martin, with Bosley Real Estate.  And for the next month, either Nic, myself, or both of us were in that house every single day.

We hired “packers” to come into the house, and the sellers could simply point and shoot at what they wanted done.

We started by packing up all the stuff they would be taking with them to the new house, that they wouldn’t need for 8-10 months.

Then we packed up all the stuff they would need once they moved into a short-term rental in 2-3 months.

Then we packed up all the stuff they wanted back after the listing.

We colour-coded each box so that they’d be easy to find and decipher when the time came.

We itemized every item, listing them on every box.

And we put some items in short-term storage, and other items in long-term storage.

My stager wanted to keep some of their furniture, and she told me, “Sorry, David, you’re wrong about that dining room table!  Do you know how much that thing is worth?”

Well, I’m a real estate agent, not a stager.  Go figure.

She liked a lot of their pieces, which we kept, but we added a whole houseful of furniture and wares.

We painted a large percentage of the house, as paint is just about the best return on investment you can make.

We added a few improvements to the house where we could.  Fix a light here, lay patio tiles there, power-wash the cedar deck and trellis, paint the fence, clean the porch, etc.

The house was nearly 3,000 square feet, and we staged every single inch of it.

But the staging couldn’t have happened if we didn’t first clear it out.

Staging, as I should really explain in a dedicated blog post, always rubs the sellers the wrong way.

Sellers have their own tastes and preferences, and they have furniture, or artwork, that could be expensive, or have sentimental value, or be something that they cherish.

And when you come into their home, take these items away, and replace them with something you plucked out of a warehouse full of stock items, sellers can go ballistic.

Can, and do.  It happens several times per year in my experience, and the sellers aren’t wrong.

The problem is: they aren’t right either.

Maybe their “chest of drawers” really did cost $20,000, as one client of mine explained to me when it was replaced with something that cost 1/10th the price.  But you have to depersonalize a home, neutralize the decor, and make it appeal to as many buyers as possible.

My 3,000 square foot Victorian was had irreplaceable family heir-looms on the walls when I first entered, but by the time we listed for sale, the walls had neutral, modern furnishings.

It took us over a month, but we were ready for sale.

And as I always do with my listings, I had everything done well in advance, with a backup list date in case anything went wrong along the way.

This is how I like to display my marketing:

EU

There’s your 8-page, colour, glossy feature sheets, your MLS listings, your list of renovations and improvements, your floor plans, your home inspection summary, and your complete copy of the home inspection. And just for good measure – the actual home inspection itself.

When buyers walk into a listing that’s presented, and represented like this, they think and often say, “Oh…..yeah…..this place will do well.”

There are so many elements that go into listing and selling a home for it’s maximum value, and then some.

You have to make potential buyers think that other buyers are going to be interested, and you have to make their agents think that you are going to take this listing to the top.

We ended up selling this house for $1,800,000, which absolutely blew away our expectations.

I told the sellers $1,600,000, but I was hoping for $1,650,000, maybe more.

$1,600,000 was what the house was truly “worth” in my mind, but when you take a home to this level, you always have the outside shot of attaining something extraordinary.

$1,800,000, for this house, was exactly that.

And once again, I give the credit to my sellers, who didn’t kick me out when I said I wanted to pack up the contents of their 3,000 square foot house, put it in storage, and send them to live with their mother-in-law for two weeks.

There were disagreements along the way, no doubt.  You often have to take a bumpy road to get someplace special.

But in the end, we smashed records, and exceeded expectations.

And I thoroughly enjoyed the ride.  It was awesome.

I wish every house or condo were sold like this, but if they were, then the prices out there would be even crazier than they already are!

There’s a condo for sale right now in King East for $324,900, holding back offers, likely to get well over asking.

I sold the identical model to a buyer-client in December for $310,000, that was poorly represented, poorly presented, and overall, listed improperly.

A job worth doing, is worth doing well.

Especially in the crazy 2017 Toronto real estate market…

10 Comments

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  1. Condo TO says:

    Do you know what the King east condo sold for that you mentioned in the blog? ($324,900 and holding back offers?) Thanks 😉

  2. Ralph Cramdown says:

    I always like to contrast these stories of “staged to perfection for an extra $100,000” with “today’s real estate buyers are savvier than ever,” and “the real estate market is efficient.” Bidding an extra $100k or more based on a few thousand in decluttering, staging and paint does not strike me as savvy. But I absolutely believe that it happens all the time.

    1. Appraiser says:

      “Think of how stupid the average person is, and realize half of them are stupider than that.”

      ― George Carlin

  3. PL says:

    And, what is the range of cost? Packers, movers, short term storage? Staging?

  4. Tony says:

    I was at the open house for this place. Probably the best Victorian I’ve ever seen. My girlfriend was flipping out. Then I had to tell her I was about a milly short on the price! Great job man this place was beauty.

  5. Essie says:

    Who normally pays for the painting, storage, packers etc? The owners or the agent?

    1. GinaTO says:

      I’m wondering the same thing… Is it part of the commission to the realtor, or is it all extra on top of it?

      1. Appraiser says:

        Clearly the buyers paid for all of it and then some, don’t you think?

        1. Condodweller says:

          The house sold for $1,800,000, the seller received, assuming standard commission, $1,710,000. My vote is the seller paid for it.

          The buyer paid for the entire house as presented. His/her turn to pay for marketing the house will come when they decide to sell it.

    2. Andrew says:

      The agent would pay for all staging which includes storage, the painting paid by the sellers normally but this could differ agent to agent.

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