Home Sellers Have to Know the Competition

Home Sellers Have to Know the Competition

When I go on a listing presentation, one of the first things I ask sellers is, "How much is your neighbor down the street asking for his house?" I am always amazed when they say they don't know. Really? How could you not know what your competition is asking for his home?

I tell sellers they need to know their competition in order to price their home right. The best way to get their home sold quickly is to know what the competition has his house listed for. But price isn't the the only factor buyers consider when making a home purchase. They also consider condition. Sellers need to know how their home stacks up against their competition. 

How can they do this? Actually, a couple of ways:

1. We can go look at homes for sale in their neighborhood. This gives them a first-hand opportunity to assess their home in comparison to others. Many sellers have difficulty being objective but are willing to give this a shot. It's surprising how many are genuinely impressed by what they see. Homes in this current market look like model homes. The competition is fierce. If sellers want to sell their home quickly, a home in good condition gets more looks.
2. We can look at homes on-line. Older couples don't usually want to traipse around looking at homes they know they aren't going to buy. They somehow think it feels wrong to put sellers out of their home to go preview for listing purposes. In these cases, I bring my iPad and show them the listings on the internet. Many of these couples don't own computers and aren't looking at their competition regularly on-line. Looking at homes on my iPad, may be the only way I can get them to see their competition. It's not the preferred way but sometimes it's the only way to accomplish this goal. NOTE: I always preview homes prior to a listing appointment. Once again, then I can speak about the competition from a first-hand account.

Once sellers have seen their competition, it's easier to transition into the price discussion. For instance, I pick homes of a similar size and amenities so we can compare apples to apples. After we've seen the entire home, I'll ask how much do you think this home is listed for? Then I ask, should this home be listed for more or less than your home? As I said previously, it's difficult for sellers to be objective. You can almost always count on them saying their home should be listed for more. But occasionally, I get a seller who is really honest and will admit that his home should sell for less.

The advantage of previewing homes is that it's easier to talk sellers into making changes to their home in order to get it sold. I'm not talking about major renovations. I'm talking about simple changes that can make an immediate impact, such as, painting, flooring, window coverings, bedding and light fixtures. 

 I commonly ask sellers how much money they are willing to commit in order to get their home show ready. I've had people say as little as $500 and as much as $3,000. I've even had people say nothing. For the couples who are unwilling to do anything to their home, I usually don't list. Unless, they are willing to price the home under fair market value to compensate for the condition.

Men usually have more difficulty spending money in order to get their home sold. That's when I like to compare home selling to NASCAR. In order to win the race, you have to have the best car. Not only does the car have to be the fastest, it also has to have the best driver. That's how to win the race.

The same is true of selling your home. Not only does it have to have a competitive price, it has to have the best appearance. If we can do that, then we can win the race of selling your home.

Just like NASCAR drivers know their competition--home sellers have to know the competition.