How To Have The Right Approach When Selling
If you’re looking to sell a property, or are working as a real estate broker, you may be watching the market and paying attention to fluctuations. Be aware that there are a lot of factors in a sales process you won’t be able to control. That’s why putting yourself in the best position to optimize a sale is important.
While everyone wants to sell when the market’s high and buy when it’s low, sometimes you may not have that luxury. You might have a loan coming due and need to sell, even if it’s not the best time to be in the market. In a challenging environment, figuring out how to best position a sale is an essential piece to either turn a profit or try to recoup as much equity as you can in a distressed sale.
Follow these guidelines to outperform the market when selling a property:
1. Sell with a Great Team
If you’re trying to sell on your own, you may miss out on the opportunity to present the property properly to the market and get the maximum exposure. By working with a broker, you could get help with putting the property in the best light and receiving a higher price than you might gather by yourself. That said, not all brokers are the same. Check what your broker’s marketing plan is and ask if they are going to fully expose the property to the market, or if they’re just going to make a couple of phone calls about it.
2. Look for Multiple Offers
Keep in mind that the sales process is often a numbers game, and having multiple offers on the table can be effective. In a competitive bidding environment, you could look at getting both the best price and the best terms. In addition, if someone drops out, you have another bidder in line. There’s a bit of an art to this, and you’ll want to work with the right broker who knows how to manage the process. If you only focus on one potential buyer, and the deal doesn’t go through, you might have to go back to the backup bidders in a position of weakness.
3. Have the Right Timing
Sometimes I see owners wait when selling a property, hoping something better will come along. They might do this when they have a loan coming due. In extreme circumstances, they may even be in default with a lender. The risk in this is that they may be backing themselves further into a corner, and if a higher offer doesn’t show up, their financial situation could get quite difficult.
For a marketing campaign in a primary market, I generally advise that six months from start to finish is a typical timeframe to expect. It could take a week or two to get marketing materials ready, and another four to six weeks of exposing the property. In the second month, we’re usually calling for bids, followed by negotiating and getting contracts out and signed by the third month. Then there could be another 60 to 90 days to close.
In efficient markets like New York City, you can usually command a non-refundable deposit without any due diligence. When a buyer signs a contract, they’re buying the place as is. If you go to a secondary or tertiary market, buyers might put down a soft, refundable deposit, and have time for due diligence to investigate the property. In such a setting, the sales process could take a year or longer.
While market conditions fluctuate, having a strategic approach can help you get both the optimal price and terms. Working with the right team can help you get the maximum exposure for the property and draw multiple offers to the table. Look for a broker who can property manage the timing of the process, so that you’ll be able to get a sale that outperforms the market.