The Importance of Your Agent’s Pre-Market Plan for Your Property
When considering selling, research tells us you will most likely begin your search for an agent on the internet. In doing so, you will most likely come across similar advice in many subjects from different agents. One of the most common things you will hear is an urging to pay attention to the showing condition of your home. The DIYers may take this advice and start sprucing up the front yard; adding flowers, trimming back overgrown trees, etc. Some will turn their attention inside; deep cleaning the home, jamming closets and the garage full of clutter to deal with later, cleaning the carpets and windows and more.
A practice that has become almost code for many top producing agents is to hire a professional stager. The stager can act in many capacities; some will come and provide a lengthy list of “to-do” items and leave the homeowners with the list and a deadline. This is often the least costly way of incorporating a stager. Many agents offer to pay for this consultation service as part of their marketing plan for your home. (Always ask your agent, if they are suggesting staging, who is paying for what.) Other stagers can come in, roll up sleeves, and get down to helping you move furniture around, remove family photos, de-clutter and add color; some will even shop for accessories for you. Most commonly, stagers have crews at the ready to move heavy items, paint, pack and more. All of this comes at a cost, of course, but the return is well worth it. Statistics show that staged homes sell faster and for more money than homes that were not prepared in advance for marketing. Staging is one thing that works for certain and is highly recommended. But what do you do with a home that was tenant occupied for years by occupants that did not care for it as if it were their own?
The time has come to consider selling because the market is proving some great equity returns and you want to maximize your profits; you are left staring at an overwhelming project and aren’t sure where to start. You start interviewing agents and asking for market comparables to establish your value. Everything that is presented to you is coming in under what you had hoped for. You have to decide to rent again or sell, but either way there is work to be done in order to get the most money out of the investment. What is your strategy?? Let’s look at a recent case study here in Manhattan Beach: a Manhattan Beach top agent helped a seller maximize equity in a tough case study which resulted in a Cinderella story.
The subject property was vacated by long-term tenants and left in terrible condition. There was writing on the walls, badly stained carpets, staining on the walls & ceilings, old, sticky kitchen cabinets, holes in the walls, dead/brown landscape, wood damage and more to deal with. To sell this house, as-is, was a definite possibility. Most likely a builder would offer to pay lot value and scrape the lot for a new build, or an investor would offer to pick it up at a value and then do the work and flip it. To re-rent this house for top dollar and attract a higher end renter, there was still much work to be done. The owner wanted to maximize their equity in the home but was faced with a daunting task.
By hiring a seasoned, experienced market specialist, the agent went right to work for him. Armed with a vast network of qualified and cost-effective vendors, the agent’s team went to work establishing a game plan that would attract the most buyers while also spending as little as possible on the rehabilitation of the home. The agent helped the seller determine where to spend and where to save. Quickly gathering estimates, working with a rehabilitation designer/project manager, and establishing a working timeline, the agent and his team set about transforming the property into an attractive starter home for re-sale.
One of the major decisions was whether or not to go through the home and “iron-out” the kinks or leave it as is and just to corrective cosmetic work. The older tract homes, typically built in the 1940’s or 50’s, started with a typical 3 bedroom, 2 bath floorplan with about 1100 sf in the original footprint. Smaller galley kitchens were common, and larger yards were found than what is available in newer homes today. As families grew and changed over the years, many of these homes were remodeled, added on to, and altered (some not permitted) and this began to create what was functional living space 30 years ago, into what is now “odd” configurations for the wants and needs of today’s family.
This home in particular had the benefit of an add-on that was done in the 1970’s which created a large, spacious family room. It was added on to the back of the home, so it took away the back wall of one of the original bedrooms; it also absorbed the window wall of the family bathroom, which had been glass bricks. The addition also created another bedroom that was accessed by way of the new family room. There was a large closet in the new family room that actually passed through to the new bedroom closet by way of adjoining space. Needless to say, this was odd. Also, a great deal of the yard area was absorbed by the new family room, reducing the outdoor space. Other quirks were an electrical switch to the exhaust fan in a bathroom being located in the hallway; a tiny closet door in the master bedroom that banged into the door to the master bathroom; a large hole in a master bedroom wall where the tenants had cut into the drywall to create a shelf for their large TV; an orphaned closet door what was the 3rd bedroom, but what became the “den” that passed through to the new family room, and a quirky laundry space in the kitchen.
The pluses were that the home had both formal and family spaces, a newer roof, limited termite damage, and the structure was sound. The addition expanded the house to a 1700+ sf footprint and it was located in a desirable neighborhood near outstanding schools. Working with the project manager and the agent, the owner was able to determine some important changes to the home that would help make sense of the floorplan by “smoothing it out”. The changes, the agent explained, would help a buyer mentally add value rather than detract from it as they walked through the home. Instead of looking at what needed to be done to make the home work for a young family and mentally calculating the costs of what would need to be done to the home after purchase, buyers would be able to walk through the home and agree that this home could work for them for many years before any additional funds would need to be put into it, thus maximizing the potential profit on the property for the seller.
In about six weeks time, the home received brand new interior and exterior paint and brand new landscaping; all the hardwood floors were re-surfaced and re-stained and came out beautifully, new tile was laid over the floors in the kitchen; the low ceiling in the kitchen was opened up, creating height and space; the doors to the laundry area were removed, a butcher’s block folding shelf installed and the area opened up to create more depth to the kitchen; new hardware, fixtures and appliances were installed. The strange glass blocks in the family room (from the back wall of the bathroom) were removed and the area patched in. A medicine cabinet was installed where the glass blocks once were.
In the living room, the dated solid oak around the brick fireplace was painted a crisp white, while a ceiling fan was removed from the small dining area and was replaced with a new, modern chandelier. Old speakers in the ceiling were patched over, and new trim was installed in the dated recessed lighting. An electrician came through and tested out all the outlets and switches, then removed obsolete switches to clean up the circuits and make sense of the switches throughout the house. The weird switch in the hallway was moved into the bathroom where it belonged.
The 3rd bedroom that once was, became a proper den, by walling up the closet in that room and giving the space to the master bedroom on the other side of that shared wall. By absorbing that little closet, it was possible to create a new large closet in the master; the tiny door near the bathroom became a set of sliding doors to the new closet and a second set of sliding doors was added at the other end for easy access. The area between was pre-wired for a future wall mount TV. This then gave 2 closets—a “his” and “hers” closet in the proper master bedroom. A utility closet on the outside of the home was absorbed and allowed the newer 3rd bedroom off the family room to be expanded. The two closets on that end of the house were separated and proper space was created. In addition, all bedrooms received brand new ceiling fans, as this is a great draw in the summer months in older homes. The agent also assisted in communications with neighbors to each side and helped negotiate for a new addition to an existing fence to detract from neighboring views.
Finally, the end product resulted in a clean, fresh home loaded with original charm, that would function very well for an entry level buyer for many years. The home sold with multiple offers and established a new record for similar homes in the area, closing at over $1 million. It wasn’t staged and it wasn’t flipped. It was considered for the seller’s end game and a broad cross section of buyer’s needs. You’ll note that once complete, the seller did not stage the home, that’s because the issues that staging normally helps a buyer gets past were answered in the rehab project results. So, one might say the rehab was the staging perhaps . . . If this home had been truly “flipped” about another $30k to $50k would have gone into it, with deep updates to the kitchen, baths, windows, heating and more. So it wasn’t really either one, and that was a collective decision between the seller and the agent.
Had the owners sold it “as-is”, the market price would have been between $920,000 and $940,000. By spending appx. $25,000 to make the corrections to the property, the home sold at $1,010,000, netting the sellers an additional $45,000 (at least). Had the agent recommended a sale in “as-is” condition, the sellers might have only broken even on their original investment. With the correct guidance, teamwork and plan in place, this home was instead a true Cinderella story. This is an extreme case, but an important one, because not everyone wants to sell to a builder, and there are plenty of entry level buyers in the Beach Cities looking for homes like this one and don’t want to/can’t pay a premium for a flip.
A great agent will know what the hot points are for buyers and what the work-arounds are in order to bring a property around to its best performance level . They will have a trusted team of vendors at hand to employ and coordinate in order to achieve a timely result in a cost-conscious manner. They will know when it’s appropriate to employ a stager and when the job might be bigger than that. They will have your best interests at heart, will be committed to your real estate goals, and will help prepare your property for market, regardless of the size of the job.
When beginning your search for your agent, make sure to have a lengthy discussion about their pre-market practices, the experience of their vendor network, how much they can assist in the process up-front, and be sure to get referrals from past clients if you can. There are many, many things to consider when selecting the agent to work for you, but pre-market preparation planning is one of the most important, especially in a fast-paced,competitive real estate market like the one here in Manhattan Beach. [Disclaimer: The Caskey & Caskey Team listed & sold this property in Manhattan Beach, CA in Fall of 2014] To discuss our pre-market strategy, please call Dave direct at 310-374-1800 or drop him a line by emailing firstname.lastname@example.org.