- Agents should be investing time in helping their clients earn top dollar for their homes or finding the best home for their clients' dollar.
- After the dark years, buyers are not flush with sufficient cash to improve their homes after buying. Therefore, buyers pay more for updated, move-in ready homes.
- Sellers have to be more aware of current trends to get top dollar because buyers can now see what’s inside the house from their couch and will pass on viewing dated properties.
The phone rings in my office, late in the day on Thursday back in 2012. The caller tells me he has been looking on Zillow and wants to talk to me about selling his house. We make an appointment to meet (he doesn’t know it yet, but I’m going to get him top dollar for his house).
As it turns out it was Andrew Sams, who I worked with at a software company about 10 years ago. Sams had owned this house for many years and was tired of being a landlord. I arrived at the home and realized that he has linoleum floors in the kitchen and bathroom.
Moreover, the interior of the house had not been painted in about eight years. The appliances were approaching 14 years old, and the carpet was original, though the home was well-maintained. Sams told me he was hoping to squeak out a tiny gain on the sale of this house.
Being honest with clients
At this point in my career, I had been a devoted buyer’s agent for eight years, with my business averaging 66 percent buyers and about 33 percent listings. As a dedicated buyer’s agent, I was committed to previewing homes for my clients.
As my business grew, I was previewing about 800 to 1,000 homes a year, but during the dark years, it was much more, as inventory was abundant. I had begun to watch the “Property Brothers” show on HGTV, and the hosts would find a steal on a dilapidated property and fix it up to create their buyers’ house of their dreams.
As I stood in the family room next to Sams, I told him that I had started to see a trend that buyers were not flush with cash due to the economic downturn, and they would pay more for a move-in ready house. I told Sams that if he invested money into fixing a few outdated and worn items, his house would sell faster and for top dollar.
Ultimately, I convinced him to spend $7,500 in the hopes of getting back $1.50 to $2 on every $1 he spent when it sold. He made the repairs also, in hopes of selling the home in less than 30 days instead of the house sitting for 90-120 days and selling for a lower price.
Based on my experience of viewing thousands of homes and watching which homes sold for specific dollar amounts, I knew upgrading meant Sams would be getting top dollar.
Sams, with much trepidation, agreed to go along with my plan. My assistant and I set up multiple interviews with contractors we had worked with in the past. I also told Sams I would pay to clean the home, the windows and the yard if he made the investment and paid for the upgrades. I wanted to have some skin in the game with him, and I hoped to make the home more marketable. Once Sams made the decision to proceed, the work took about a week.
We also implemented our full marketing package, including holding an open house, and we sold Sams’ house in less than seven days, for $18,000 more than he thought he could get, thanks to multiple offers.
Sams was shocked, as the market wasn’t great at the time, but he was also excited to net over $10,000 than he originally planned. This was the beginning of something special.
Learning from listing
I had visited the top agents in Arizona, and saw their house preparation and marketing, and I was very impressed. I had raised my preparation to these standards, but I also was looking to differentiate myself.
I love helping people and found a way to use my house expertise. I had been in over 12,000 houses, mostly in North Scottsdale, and I was starting to notice many trends. Buyers were paying top dollar for these premium features and upgrades in a house.
I had never been much of a listing agent, but as I began to get listing appointments, I realized most of the houses I visited were not what my buyers were asking me to find when I met them over the internet. I had to find a solution.
At the same time, I was working with tons of buyers from my website, who were looking for homes in Arizona. They had specific needs, so I was hunting the existing inventory to find what they desired.
As I viewed hundreds of homes, I realized that many agents just listed the house exactly the way the seller had lived, and many had too much furniture in them, which made them feel small. I was shocked because I noticed these agents were not educating their sellers about the practices that would enable their seller to get maximum dollar for their home. I decided I would never let my sellers lose value by listing their homes in this condition.
A new business model
Fast forward to the present: we have helped over 100 homeowners do the same thing, ranging from $500 investments to over $100,000. I provide a stager after the listing appointment to help sellers with the list of my recommended updates, repairs and suggested staging and to assist the seller with getting the items done promptly.
Sellers are already busy with life before we start the sales process of preparing their home for sale. They need help getting their house ready, as well as the confidence to invest the time and money on the right things.
Our stagers do not bring furniture into the house unless there is an unusual floorplan or quirky space. At least 40 percent of our sales are under $500,000 where there is low inventory, and the market is strong, and this leads to quick sales for top dollar. We also work in the luxury market of Scottsdale and Paradise Valley, where implementing these upgrades is a way to differentiate homes where there is excess supply.
Real estate agents spend the bulk of their time working on relationships, calling canceled and expired listings and calling their clients trying to get listings. I’m not saying you shouldn’t do this at all, but if you are focused on this with the bulk of your time, how is that helping your client?
Most coaches in our industry focus on how to get listings. I have grown my business in the past five years by 400 percent — now doing over $50 million a year — by providing a level of service that is unmatched in the industry.
I have been to seminar after seminar on how to grow your business, and these seminars focus on selling, converting leads and how to get listings. This is a broken part of our industry, and we need be to more focused on helping the consumer through service and educating them on the market.
I want to help the industry improve our level of service. We need to service our clients better, going forward, and exceptional service will be a good start.
Jeff Sibbach leads The Sibbach Team at Realty One Group.