In a strong sellers' market it can be tempting for homeowners and investors (and, unfortunately, a few agents) to skip going the extra mile in preparing a home for sale. After all, the home will likely get offers with or without things like staging, professional photos and a strategic marketing plan. The difference, though is in how strong those offers are and how quickly they come in. That difference can equate to tens of thousands of dollars and more.
Buyers tend to develop feelings for a property, either positive or negative, very quickly after seeing the first photos or stepping through the front door. The way a home is styled and furnished has a huge impact on this first reaction, and ultimately the offers that buyers will make.
With an occupied or already furnished home, a professional home stager or knowledgeable seller's agent can provide the owner with room-by-room suggestions on exactly what to clear out, rearrange, and specific items to add. Cleaning and decluttering alone makes a major difference but it's almost always worth going a step further and making some minimal investments in a few key up-to-date accent items in the right places or repainting a certain room in a more neutral color.
Vacant properties can see an even more substantial impact on the bottom line when they're at least partially staged. We recommend staging at least a living room, dining room and primary bedroom and adding a few accessories or accent pieces to the kitchen and bathrooms. Good agents will have recommendations for home stagers who can supply and install everything needed and remove it in time for closing. Some investors choose to purchase inexpensive furniture and resell it just before closing or offer it to the buyers of the home. Others, especially those who build or renovate several properties per year, find that it's worth keeping their own inventory of staging supplies. This of course does require some design expertise and knowledge of current trends.
The investment in staging (usually between $1,000-$7,000) can really pay off. According to research by the IAHSP, staged properties sell between 5-11 times faster than others. Not only is a faster sale far less stressful for sellers than spending months on the market, early offers tend to be much higher in price than those that come in after a property has been listed for a while. An NAR study found that staging equated to a 1-5% increase in sales price; definitely a solid return on investment.
How Not to End Up Homeless After Selling a Home in a Sellers' Market
The competition for available homes on the market in the Greater Boston area (and across the country) has never been higher. What this means for lots of would-be sellers is that they're faced with the very real possibility of selling their current home without having found a new one. This is not a position anyone wants to be in, and luckily there are ways around it.
Because demand from homebuyers is so high, sellers are in an excellent position to dictate the terms they want. What many don't realize is that this goes beyond simply suggesting an offer that comes in at a great price. A good seller's agent will guide potential buyers to draft an offer that's both strong in price and terms that allow the sellers some time and flexibility in figuring out their next steps.
One strategy is to sell subject to sellers finding suitable housing. In a seller's market, it is MUCH better to ask buyers for this accommodation than vice versa. Making an offer on a new home subject to a home sale contingency is very likely to go nowhere in this type of market. However buyers, especially those who are currently renting or have flexibility in their closing timeline, are often very willing to move forward with a purchase knowing that it may take some time before closing for the sellers to get an offer accepted on a new home.
A second option that can be more appealing to buyers since it allows them to close and lock in an interest rate sooner is to request that they lease the house back to the sellers for a period of time after closing. While this does come with an eventual end date it can often give sellers 60-90 days between the offer and closing plus the agreed upon lease period which is often up to 60 days after closing. Having this 4-5 month cushion plus the advantage of having the proceeds from the sale in hand before closing on the new house can make a huge difference in having both the time and budget to close on the new home.
With careful planning and strategies like these it is entirely possible for homeowners to take advantage of high sale prices while minimizing the risk of not finding a new home. As with any major transaction, it is always important to discuss pros and cons with your agent before moving forward.
With extremely low inventory levels in early 2022 (just take a look in changes in inventory for both condos and single family homes in Massachusetts) and slight increases in interest rates doing little to dampen record levels of buyer demand, getting an offer accepted in the Greater Boston market is no easy feat.
Over the last year our agents have seen multiple offer situations where the winning bid has included terms like free lease-back periods for the seller, all expense paid vacations, uncapped escalation clauses and of course waiving all contingencies. The good news is that there are ways to get an offer accepted that don't involve selling your firstborn child. Here are 7 of our favorite strategies, but it's always important to discuss the details of any terms you're considering with your agent: