In our current real estate cycle, in which we have a completely tilted supply and demand curve (where 80,000 people are moving into King County annually with only 8,000 new units being built) the bidding wars have gotten a little out of hand. Given Seattle’s hot real estate market, I have met with sellers who have posed the following question: Why go with a full-service broker when there will be multiple offers anyway? Does marketing matter?
It’s easy to see why sellers ask these types of questions, in a market where multiple offers and bidding wars are the norm. But though we have seen what happens when the market goes crazy for a home, we’ve also seen what happens when it is not positioned properly or listed too high. When it moves past it’s offer review date, the question changes from “What is it about this home that I like?” to “What is wrong with this house?” At that point, the seller will not garner the price they are looking for and negotiations begin.
On the other hand, if the price is too low, the seller and listing broker run the risk of setting an anchor that will undoubtedly leave money on the table. Anchoring a cognitive bias where people tend to base their initial numbers upon the anchor price. Look at the infamous McDonald’s coffee lawsuit, for example. It wasn’t the first time the company went to court over coffee that was too hot. They had previously settled for $27,500 in Houston. During the infamous case, however, the plaintiff sued for $2.9 million a figure became the anchor and led the jury to award a $2.7 million judgment.
As a trusted advisor, a listing broker helps a seller navigate the pitfalls of over- or under-pricing a home for sale, to ensure they retain the best possible return on investment in the transaction process. And in addition to financial consideration, there is another key difference that separates brokers: the art of storytelling.
We have seen time and time again that today, homes are selling for way more than their current “market value,” with bids going higher and higher, moving far beyond list price or comparables. This tells us that we have moved away from decision making based on logic and into emotion. Any seasoned broker will tell you that no matter what type of market it is, emotions are an important driver to purchase. In a buyer’s market, homebuyers have the luxury of balancing logic with emotion when making their decisions, however this market affords no such luxury.
There is no logical reason that homes should be selling for as high has they’ve gotten, except that buyers are falling in love with a home and they simply have to have it. This is where the rubber meets the road and where a great broker can help you get the most for your home. It comes down to how you position your home on the market, the way it’s presented, the story it tells. It’s not about bedroom counts, square footage, or even how big and fancy the kitchen is. A great broker will tell the story through a presentation of what it feels like to come home from a long day at work, walk through the door, remove your coat and unwind. A great broker paints a beautiful picture that helps get the buyer emotionally involved. A great broker will help a buyer look forward to what each room will bring and all the possibilities that living life in your home will provide. They will also help, through targeted marketing, to bring in qualified buyers who will fall in love with the narrative because a good salesperson talks, but a great salesperson tells a story.
So, I leave you with just one question: Who are you going to have tell your story?