“Not only did we get $53,000 more than we were happy to accept, Restate also saved us close to $7,000 in fees” – Robert & Beryl Stevenson
How does something like this happen, you ask?
I will get to that in a moment, along with some important takeaways, but let me first take you back, so you have some insight into Bob & Beryl’s situation.
Going into the first discussion with a client, I never know what to expect. Sure, we can pull information about the property, it’s sale history, size, rateable value and recent comparable sales, but it’s almost impossible to predict what we are going to find. Then, of course, there is the most important part of the puzzle – the clients themselves. Their specific needs, goals and reasons for wanting to sell are unique and deserve individual solutions.
And that’s why it boggles my mind that most agents go into their initial meeting with not only a predetermined idea of the price, but a ‘one size fits all’ approach to selling it, along with a ‘one size fits all’ approach to their fees. No assessment, no diagnosis or questions, and no choices. Just a canned presentation and a lot of assumptions.
We take a different approach. In our eyes, it’s the only responsible approach to take. We come to the first meeting armed with a blank pad, our own curiosity and a list of questions to ask.
Why? Because experience tells us that before we can even begin to discuss an accurate prescription, we must run a battery of tests. Bigger picture, it’s a lot easier to figure out how the puzzle pieces will fit together by first getting a good look at the cover of the box. I’ve said it before and I’ll say it again. Prescription without diagnosis is malpractice.
Within seconds of walking in the door, I could tell this wasn’t a spur of the moment decision. Bob & Beryl had a plan. The house was absolutely immaculate. And I mean A++. They were in the middle of touching up minor paint imperfections and old sheets were down protecting the new carpet in high traffic areas.
With a cup of tea, sitting around the dining table, we got to the most critical part. What were Bob and Beryl wanting to do? What was most important to them? I won’t share their private business, but let me put it this way… They wanted to sell “yesterday”. Their major concern was “Could they actually sell it?” They’d seen similar type properties wallowing on the market for months and didn’t want to suffer the same fate.
The other interesting thing was their price expectations. It’s pretty seldom we come across clients who have a low opinion of the value of their home. More on that soon.
After an hour of discussions, plenty of questions [both ways], some recommendations, and making sure we were all on the same page (after all it was not only important for me to understand their needs, they also needed to be comfortable with us and how we work), I left to prepare an in-depth market analysis and tailored recommended approach to the market.
By our second meeting Bob & Beryl had already actioned earlier recommendations. Final presentation jobs were almost complete, the LIM report had been ordered and the photographer was booked. An electrician had also been arranged to inspect the wiring and provide a written quote for any work required to bring it up to insurance company standards. (This is very important for pre-1940 homes. Most insurance companies now have the policy that “all wiring must have been replaced within the last 30 years”. If the buyer can’t get insurance, they won’t get their finance approved and the sale could fall over). You are much better to know what you are dealing with before you go to market than discover a major issue after you have accepted an offer… spinning you into ‘damage control’.
It turned out that there was $6,000 – $8,000 worth of wiring work required. Bob and Beryl were worried. Would this hold up the sale? Would they need to do the work before they went to market? How long would it take to get the work done?
Because they wanted to sell sooner rather than later, we decided a transparent approach was the best solution. We would go to market disclosing the wiring work required and providing the quote ‘up front’. That way, buyers could make their offers knowing full well they would also need to immediately invest another $6 – $8k on top.
Taking that into account, I gave them our recommendation of the ideal market strategy and where we felt they should initially price. To my utter surprise, they vetoed me. “No Carl, we want to sell and are happy to accept lower than that. We do not, under any circumstances want to still be here in two months time”. I immediately went on record that the price they planned to ask, in my opinion, was under market, and again suggested they start higher. Still, as long as they’ve been given transparent information, have fully considered their options, and what they instruct is ethical, we are ultimately here to follow through on their decisions.
This clearly wasn’t a matter of – would they sell or not? Bob and Beryl had already decided that. It was more a matter of how quickly they sold, what price they ended up getting and how much their fees would be?
It would have been so easy to write up the first offer on day one, then clip the ticket for a large percentage of their equity. But that’s not the way we roll. It’s not what we are about. We see it as our duty to maximise how much they bank. Even though they wanted a quick sale, I wouldn’t sleep at night if we allowed them to leave funds on the table. There was no doubt in my mind, this needed to be handled correctly to protect them. I agreed to go ahead on the condition that before considering any offers, they would allow us enough time to give all genuine buyers the opportunity. Also, for their situation our “Smart Fee” structure would be much more efficient than a traditional commission. They agreed, we shook on it, and a launch date was set.
As you can imagine, upon hitting the market, it caused quite a stir. We even had folks accusing us of “purposely underpricing it” and “trying to drive local real estate prices down”… huh … as if? Sure enough, within days, several buyers were pushing us to present just their offer close to asking. Within the week a total of 23 buyers viewed the property. Six registered their interest, of which four ended up drafting a contract in a “best offer” situation. The winning bid was totally unconditional, with a possession date to suit our clients and a whopping $53,000 over what Bob and Beryl would have happily accepted. Sure, we were confident it would sell for more, but nobody could have predicted that much more. We invested $761 dollars in marketing and from the first buyer crossing the doorstep to unconditionally sold, we did just under 7 hours of direct work on their behalf.
This case study is instructive. It offers numerous lessons to achieving a great result when selling your home.
- Prescription without diagnosis is malpractice. Your personal situation, needs and wishes are unique. They deserve a tailored approach to both strategy and fee structure. Beware anybody pushing ‘one size fits all’. They are not ‘consulting with you’, they’re ‘selling you’ on all they’ve got to offer.
- Take the time and make the effort to present your property at it’s best. Or pay the price.
- Preparation is the key to avoiding disaster. Identify and prepare for any potential issues that may hold up a sale, before going to market.
- Transparency does wonders for your bottom line. Openly and upfront disclose any issues you have not already fixed. Provide recent reports and written quotes for any major repairs needed. Hide nothing. If you don’t try to ‘pull the wool’, neither will the buyers.
- Value is an opinion. It’s subjective and charged with emotion. What something is worth to you is different to what it’s worth to the next person. Therefore nobody, and I mean absolutely nobody, can possibly tell you what somebody else’s opinion might be in advance. Ultimately, there are only two opinions that count. Yours, as the seller, and the buyers. Your agents’ job is to bring you the buyer with the most favourable opinion. For that to happen…
- Strategy and competent execution jointly rule the roost. Regardless of where you, as a seller, choose to price, with the right strategy in place, competently handled with care and skill by somebody truly acting in your best interests, it’s almost impossible to undersell your property.
- Choose your counsel carefully. This sale could very easily have been butchered by a hungry salesperson chasing a quick easy commission.
- Paying a large percentage of your equity, regardless of the work involved, is just wrong on so many levels. Even including a healthy bonus for helping them bank more, Bob & Beryl’s fees were still close to half of what they would have paid in traditional commission. They banked more and we were still handsomely rewarded for serving them. That’s what we call a win/win.
We are absolutely delighted and can only praise and endorse the enthusiasm, care and attention we received from the whole team at Restate. – Robert & Beryl Stevenson
