The Four P’s of Selling Your Home
Today we have an article written by Rhonda Wilson, of Revealing Assets Home Staging and Decluttering Services. We have partnered with Rhonda and she has helped many of our clients prepare their homes for sale with phenomenal results.
Clients always ask me if there is a “Magic Equation” that can be applied to ensure a timely and profitable property sale. My answer is, “There absolutely is an equation that needs to be applied. But, there is no magic involved.”
My equation is coined “The 4 ‘P’s of Home Selling.”
Product, Presentation, Promotion and Price
Once you, the seller, have achieved a perfect balance, or a match, across these four categories, you are Golden. I always advise my clients to take a very pro-active (another ‘P’) role in the sale of their property. Let’s break down the three ‘P’s further.
This category broadly defines the “bones” of your property. This refers to the inner-workings and architectural features of your property. The Product is defined as exterior and interior structure, walls, floors, ceilings, fixtures, storage, windows, air quality, heating, electrical, roof, chimney, garage, trim, foundation.
Is your product market-ready? How does it measure up to your competition on the market? Is the furnace on its last legs? Is the exterior storm-door hanging from one hinge? Does your electrical system qualify under today’s standards? Have you had any water leakage/damage anywhere? Are there fissures or cracks in your foundation? Could the shingles use replacing? What condition is your flooring in? Have you updated it in the last 10 years? Are your kitchen appliances still Harvest Gold? What colour are your walls painted? How long ago were they painted?
Most buyers will keep searching until they find a property that is “Move-in-Ready”. They don’t want to have to invest more money or have to complete any work in order to move in to their new home. If you would like an idea of where your time, effort, and money would be best spent when it comes to maintenance and/or upgrades when selling, here are some 2009 survey results provided by HomeGain.com:
So, you have done your research, determined which repairs/upgrades to complete, and have completed all tasks. Now, your task at hand is to show off that asset! You have already gone through the process of emotionally detaching yourself from your “Home”, and are now seeing it for what it is – Your Product. What do we need to do when we want to sell any product? We need to merchandise it for sale. And, because we want to sell our product in the shortest time possible for the most money possible, we really need to pay attention to detail. We need to highlight and draw attention to our product’s best features.
We need to start with De-cluttering the product inside and out. This is followed by the most thorough cleaning job we have ever done. This is also referred to as “detailing”. A sale of a property is much like the sale of a vehicle. We shine, buff, dust, wax, shampoo, wash, and shine some more. An immaculately clean property shows pride of ownership, and tells the buyer, immediately, that the seller has probably taken great care of the property. Great foot to start out on!
We then need to analyze traffic-flow and available floor-space throughout. Are there areas that are tough to navigate through due to placement or overload of furnishings? Will buyers have a rough time walking right up to windows, the fireplace, or other important features? Are there spaces that feel a lot smaller than they actually are due to overload of furnishings/accessories? What are buyers looking for? The answer is SPACE. If our product is showing as though it is lacking floor space, when it isn’t, you are likely to lose sales all over the place.
It is imperative that we are mindful of which furnishings/accessories we do leave out on display. We need to ensure that our decor is not overly personalized or showing off too much of our individual personality. This is where the necessary analysis of our target market(s) comes into play. Who will be interested in our particular property? Will it be a young, growing family? Could it also perhaps be a retired couple who are downsizing? I, through experience, firmly believe that there are at least two “target markets” for every type of property, with the exception of “Adult only” communities. This makes it crucial that your decor is neutral enough to appeal to a wide demographic. Also, because the buyer is viewing your property due to the fact that they are interested in purchasing it, let’s not distract them from seeing our Product. To avoid this, we need to beware of too many conflicting/busy patterns, too many colours in a palette, and any accessories that could be viewed as controversial.
“Room-role” assessment is also mandatory when we are selling. It is human nature to alter intended space functions over time to accommodate our lifestyles and add convenience to our lives. For example, how many of us can attest to using a guest bedroom as a craft room, or letting the dining room table be the “catch-all” for items we will deal with “later”? These are just a couple of examples. When we are selling, buyers want to easily see all that a property has to offer. If they read in your listing that there are 4 bedrooms, yet, when they arrive to view in person, two of the bedrooms are not presented as bedrooms, this will confuse their senses. This is especially problematic if this buyer is a family with two children and another one on the way. We want to take any and all guess-work out of the equation for the buyer.
I am simply skimming the surface on the topic of Presentation, but have explained some key points.
Lets face it, you could have the best product, presented the best way, for the best price, but if it is not promoted it will not sell. In other words, no matter how great it looks or how well it is priced, if buyers can’t find it they can’t buy it. Believe it or not there are degrees to how well your home is marketed in the MLS® system, look at your competition and see which homes are well promoted and which are not. Think like a buyer – where would you look for a home? Search the Internet and see which homes are easy to find. If someone is doing a good job promoting those homes, they could do the same job for you. If your neighbour’s house is impossible to find, you might not want to use the same agent, even if they are the “neighbourhood specialist.” One thing is for certain, different agents offer different services and have different marketing plans; some work better than others.
I left this one for last, but don’t be fooled. If you ask anyone in the Real Estate Industry what THE most important detail is in any Property Sale, their answer would be, hands down, PRICING!
Every property will sell for a Price. Every property is worth something. But, the two most important questions here are, how much is your property actually worth, and how quickly do you want to sell?
You have done all of your prep-work (all laid out above), and you have chosen your agent. Your final step is before you. And, yes, you do have the final say. You are the one who decides what your property gets listed at. But, have you done your homework here yet?
I am not authorized to give pricing advice to anyone, as I am a Home Stager. But, I cannot stress the importance of accuracy in pricing enough.
It is absolutely heartbreaking to me when I Stage my clients’ properties for sale, only to see them list it for way more than it is worth. I have also been known to refuse to Stage a property that is already listed and over-priced. I cannot, in good conscience, have a client invest money in my services when I know that the property will still not sell.
As I stated in the introduction to this post, buyers simply will not pay more than your property is worth. If you have over-priced your home, the market reaction will indicate this immediately. It will sit on the market with little to no interest. No matter how great your property looks or how much you have put into upgrades, your PRICE is what determines whether or not it will sell.
Another thing to keep in mind is that the majority of buyers will have to go to a lender to obtain financing to purchase your property. So, even if you manage to snag a buyer who is silly enough to pay way too much for your property, they still have to have it all approved by the chosen lender. Guess what the lender’s first step is in the approval decision process? An Appraisal! So, now the whole sale is in the toilet due to the fact that your property doesn’t come back appraised at the price you are asking.
REALTORS® provide you with a market evaluation based on sales of comparables in your area. These are accurate numbers, and there is no reason for them to skew these results. They are seeking a win-win situation. Remember, they only make money if you do, and the amount they make all depends on the amount the property is sold for. They are educated, experienced, and only interested in getting you top possible dollar for your home in a decent amount of time.
So, when it comes to Pricing your asset, I have a few pieces of advice. Do your market homework, emotionally detach yourself from your Product, follow your agent’s guidance, and Price it appropriately for the current market. If you have truthfully decided that selling to move on in life is what you want, then you will need to Price it right for the market.
In conclusion, if one follows the above Equation for Success, the 4 ‘P’s, there is no way to fail.
As soon as there is a lack of balance, a breakdown in any of the categories, or inconsistencies, the market will undoubtedly make you painfully aware of it.
Rhonda Wilson – CCSP™
Owner/Operator of Revealing Assets Home Staging and Decluttering Services
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We transform properties into highly sought-after products that sell in half
the time and for 7-10% more money. Through personal experience, extensive
research and training, and a compassionate approach, we De-clutter living/work spaces for up-lifting and positive life changes.
About Sara MacLennan
Sara MacLennan is the Director of Marketing at Liv Real Estate and a licensed Real Estate Associate. The bulk of Sara’s experience and wealth of expertise lies in on-line technology and marketing both for agents and consumers. Sara is the former National Director for Interactive Marketing for Coldwell Banker Canada where she was responsible for an extensive training program traveling to offices across the country training agents and brokers on marketing and technology. Find Sara on Twitter @edmontonblogger.