Vanilla Upgrades Will Attract Vanilla Offers

People love to brag about the things they buy and when it comes to buying a house, people love to make their friends and family jealous. Understanding psychology is key to selling your house for the most money. Many times home sellers are thinking of things very pragmatically. Wanting to focus on the practical benefits of a home like added insulation 2×6 walls, the decking material. I hear things like “the roof is really new and the HVAC is great.”

When it comes to buying a house it really comes down to what will make my sister jealous or my mom and dad proud of me. When you’re sitting down with your budget and you’re trying to figure out what things you’re going to do and what things you’re not going to do. If you are going to cut corners on every single little thing and you’re going to make everything, let’s just use this word vanilla, you’re going to get someone who feels vanilla about your house.

If you’re willing to spend some money on the things that get people really excited, you can overcome a lot of negatives that would otherwise draw in a low ball offer. So things like granite counter tops, stainless appliances, and let me just tell you really quick guys. I have a contractor who puts in granite counter tops in my client’s houses for an average of $2,000 and we recommend a used appliance store where you can get all stainless appliances for about $1,500.

For $3,500 if you could take the average kitchen and put in stainless appliances and granite counter tops, and now give it a wow factor, that is an exponential improvement. But the point that I want to make here, guys, is you have to be looking at this home sale strategically and understanding the psychology or what makes people make decisions is crucial to positioning yourself to get the most money.

Don’t Let Your House Be A Hot Deal

I think I paid $22 for this tripod. If anything ever happens to it, I can just throw it away and buy another one because it’s only $22. The greatest thing about this tripod to me is not anything to do with the tripod, it’s the price. You don’t want the person buying your house to think the greatest thing about it is the price! Unless of course, you don’t care how much money you make selling your house.

Understanding the psychology of how people make decisions and the buying process is really important when it comes to selling your house. Now think about whenever you’re talking to your friends and they’re talking to you about something that they bought and they’re bragging about some feature or whatever. People love to talk about the things that they bought and why it’s better than what someone else has.

You want to give the buyer something to be excited about so that they’ll give you the most money. In my experience, most of the time women make the home buying decision and the things that are most important to them are the kitchens, the master bedroom, and then the overall decor. You don’t want anything that has a cringe factor in it.

One of the things that we do at The Mayer Group is we hire a home staging consultant to come to your house and tell you all the things that you could and should do to get your house ready to sell and also explain to you what things will help get a buyer excited in today’s market. What are Millennials looking for and what are the people that are most likely to buy your house looking for, and how can we use your budget in order to be able to identify those things and then maximize that potential?

Many times what the homeowner thinks buyers are looking for is often different than when buyers are actually looking for. We will help take your budget and use it in a different way to help maximize the profit.

I talked 3 People OUT Of Buying A House

Just because a house is the best house on the market doesn’t mean its a good deal or that you should buy it right now.

In order to properly evaluate a home purchase its important to see what sold in the past 12-24 months to see the likelihood of another even better deal coming on the market. Based on your timeframe it might make sense to wait for a better house/deal to come on the market.

Get a list of every house that sold in a price range with photos and detailed descriptions. Go through the list and determine how many houses that are equal or better came on the market and evaluate the house you are considering. Look at the days/market | original price/sold price | Closing help paid by the seller | and based on your data you can make an educated decision for or against the house you are looking at and considering.

Skip Your Refund & Build Real Wealth

It’s no secret that Americans do not save a lot of money. In fact, compared to the rest of the world we are near the bottom and it’s going down. Many people use their home as a way to force themselves to save money and for good reason…

You need a roof over your head and why not make some money while you are paying for it. I was talking to my mortgage lender and we were discussing the fact that many Americans do not adjust their withholdings to match their tax return and end up letting Uncle Sam hold their money until they get it back in the form of a tax return. I asked him to help me figure out on average what would happen if a person invested that money into their home and here is what we came up with.

Would You Rather Avoid Losing 10k Or Making 10k?

 

People are more motivated by avoiding pain than they are to gain pleasure according to science. It’s a factor of x2. So I want you to imagine for a moment as a home seller, if we were sitting across the kitchen table from each other and I said mister or misses home seller… If you don’t spend $2,000 on X, Y, and Z, when you get the offer on your house, they’re going to take $10,000 out of the offer. Or mister and misses home seller, when you get to the settlement table, they’re going to take $10,000 out of your profit sheet!!!

Now imagine the same conversation like this: mister and misses home seller, if you spend $2,000 fixing up your house while getting ready to sell doing X, Y, and Z, when it comes time to sell it, your offer is going to be $10,000 higher!

What I found is that most people are more motivated by not losing money than they are by gaining money. But really guys, it’s the same $10,000 and what people don’t understand is that houses sell in a, in a range. There’s a price swing effect. Some houses sell at the top of the market, some at the bottom of the market, and according to the National Association of Realtors, a national statistic is 46.5% of houses actually fail to sell.

We feel like we have an obligation to tell you all of the things you could and should do to sell your house for the most money or avoid losing the most money. We hire a home staging consultant or a professional decorator. Their job is to come to your home and go through every room and tell you all of the things that you could and should do. A lot of those things don’t cost any money…

Things like- get a storage unit and put all this stuff in there, move all this furniture from one side of the room to the other, maybe do some painting, some decluttering.

Using the above metric, we have found on average that it cost our home sellers about $2,000 using a contractor that we found to put granite countertops in a house. According to my appraiser, (BTW we pay for an appraisal in all of our listings), if you get granite countertops in your house in the average house in Calvert County, your net profit will be about $10,000. Using that analogy, if you have dated countertops you’re going to either lose $10,000 or gain $10,000 depending on how you look at it.

When a buyer is previewing a house, all of the things that they think that they need to do to either fix up your house or to fix it. If there’s something wrong with it in order to get it the way that they want it, according to statistics, they multiply that by a factor of six. So the $2,000 countertops in their mind, you know, according to science is $12,000 countertops.

Not Knowing How Much Your Home Is Worth Can Cost You

So the way that I bought this boat was, it was on the side of the road and I called the guy selling it and I said: “Hey, I’m interested in taking a look at this boat.” He says, well, I’m going to tell you, I’ve got a guy who’s coming tonight to look at it. He’s pretty interested and he wants to give it a test trial.

I said okay well let me tell you, I have the ability to come to meet you in 20 minutes and give you cash. And if I brought you cash full price offer right now, would you sell me your boat? He says, well, I’m a businessman, absolutely bring me the cash and we’ll make a deal. So I bought the boat BUT before I did, I looked up the price on the NADA Price Guide.

I bought it for 50% less than the low retail price. You know how they give you the range? Like the trade in value versus the retail, which is about a 50% difference on this boat. I paid 50% less than the low end! And the point that I want to make here is that a lot of people sell their house without any expert advice. Apparently, only 21% of homeowners use a real estate agent to set the price of their house….

Recently we sold this house in Owings that appraised for $40,000 more than what the previous 2 Realtors told them their house would sell for. We actually sold it for $2,000 more than what it appraised for so they made out with $42,000 more than they thought they would!

What I find that people just don’t know how much their house is worth because unlike a car, there’s no black book, there’s no blue book, there’s no NADA guide that will tell you all that information and here in Southern Maryland houses are so unique and so different. They’re all built at different times by different builders on different topography in different areas and is nearly impossible to be very precise about how much a home is worth That’s why? That’s the reason why at the mayor group we order an appraisal for all of our listings.

That way you know how much the home is worth and we know how much the home is worth to a very tight, precise window. It could be still sold within a range but within a very tight range and in many cases it’s worth a lot more money than you think it’s worth or I think it’s worth…

I Got Fired!

I Got Fired Here Is What I Learned

I got the phone call today that every real estate agent dreads, and that is, we decided to go with another realtor. It stings even worse when the client had already agreed to use me and told me how excited they were and that everything was gonna be great. Only to find out that they changed their mind after they said yes. That’s one of the hardest parts of real estate!

What I was told is that the reason why they decided to go with another realtor is that we order an appraisal and that because I didn’t tell them how much their house was worth at our initial meeting. That made them uncomfortable and I should’ve done a better job explaining why it is that we order an appraisal.

I want to go over some of those reasons: The first thing that I’ll say is that we, as real estate agents, wear a lot of different hats. We are marketers, negotiators, counselors, advisors, decorators …sometimes. (I don’t do that but some of them do) and the photography, I don’t do that, either…

We can’t specialize in everything! I can’t be the best at every part of the process and my thought process; there are some really important parts to selling your house. One, maybe the most important one, is finding the price. The second one is gonna be getting the house ready to sell and fixing it up to get the most money.

We hire people that are specialists to handle that part of the business. I could tell you how much your home is worth and I’d probably be really close. But why not hire somebody whose job it is, when they wake up every morning, the sole income for their family and the way that they put gas in their car and clothes on their back and a roof over their head is to figure out how much houses are worth? That’s literally my appraiser’s job. That’s all he does for a living. He’s been doing it for 25 years and he does hundreds and hundreds of appraisals every year. He’s a specialist. He’s an expert.

It’s like when you go to a general doctor and then your general doctor refers you to a specialist. The other thing that the appraiser does is take some of that tension off of the relationship between the real estate agent and the homeowner. If I think your house is worth less than you think it’s worth, then you’re always gonna be second-guessing everything I’m telling you to do, and you might second-guess my ability to properly assess value. You might think that somehow I don’t appreciate your house or I’m gonna undersell it. I think another one is, if I think it’s worth less than you do, then I won’t get excited about it and I won’t push it as hard because I don’t believe in it. The owner wants the realtor to believe in their price.

I would say by getting the appraisal, it creates a different scenario where now we’re both on the same page, where I believe in the appraiser’s price and hopefully you believe in the appraiser’s price so now our goal is to get to that price or even over that price.  I think the appraisal is really important for us and our business, and I feel like that it’s gotten our clients a lot of money. Because again, one of two things can happen. The house will be worth more or less than what you or I think it is. And in the cases where it’s worth more, then we all just high-five each other, and guess what? If you hadn’t had that appraisal, you might’ve listed it for less and you might’ve given your equity away for free. And if it appraises for less, you might’ve listed it for higher, make it sit on the market longer than it should have and missed your opportunity to make the most money, and then been disappointed when it finally did sell because it took too long. You made a bunch of mortgage payments unnecessarily. You had to lower the price. You felt defeated, frustrated. And then it went from what is normally a great experience to a rough experience.

How To Sell Your House During The Summer

Selling During Summer Break

 

3 Tips For selling your house between June 15th and August 20th.

#1) Pre-plan the entire process and give yourself time for contingencies. Figure out when to list based on the fact that most offers take 30-45 days to settle. The days on market tend to be around 60 (The Mayer Group 26 In 2018) and allow time for repairs and upgrades prior to listing. In our experience getting a house ready to sell in most people’s minds takes 2-3 weeks but in reality takes 1-2 months in many cases.

#2) Next is to have your house Pre-Appraised Pre-Home Inspected and meet with a Home Staging Consultant. (At The Mayer Group We Pay For Everything)

    1. So let’s start with the appraisal. Once you know exactly how much your home is worth you can position in the market so that it is most likely to  sell inside of your window. If you overprice your house you’re going to have to wait and you’re going to lose some equity by not hitting the window of opportunity. You also might miss your timing window and then you get scared, you lower it even more, and then your equity flies out the window! The other concern but not knowing how much it’s worth is if you price it to low you just give away your equity for free.
    2. The Pre-home inspection is key to being able to get repairs done prior to going on the market. It’s been proven that repairs cost on average 50% less when they’re done prior to putting the house on the market. The other thing that allows you to do is if you found a repair that you’re not willing to make or you want to negotiate for you can pre-negotiated one thing to keep in mind is once you’ve already received an offer and agree to it in writing your profit margin can only go in One Direction.
    3. The next part of the process is to make sure that you meet with the home staging consultant that way you can learn how to get your house ready for today’s home buyers what are the things that are attracted to them what’s most important to them and how do you get your house ready to make it look absolutely fantastic so that sells quickly and you can hit your target of selling it in the summertime.

#3) The third piece of advice is make sure that you’re working with a Certified Home Selling Advisor. Somebody who’s been certified by the National Association of Expert Advisors.

Less than 1% of Realtors Nationwide hold this affiliation. And what it means that we’ve been extensively trained on how to sell houses for up to 18% more money and much faster using a proven process is a back by extensive market research.

Which Upgrades Get The Most Money When Selling A House

Which Upgrades Are The Best?

People always ask me how to get the most bang for your buck when selling a house. There is no answer that fits everyone the same but there are some general rules. Firs that putting effort into the process is ALWAYS A GOOD IDEA!

From there focusing on the kitchen, master bathroom and decorating the home to sell are where your attention should be.

Understand that buyers are willing to pay the most money when they are excited about a house and believe repairs and upgrades are 2x – 10x their actual cost.

Buyers typically purchase a home with little to no money so whatever the condition of the home during purchase will likely stay the same for months/years to come and when there are cringe worthy rooms or decorations they will cost you big $$$!

At The Mayer Group we hire a home staging consultant to meet with all of our clients to tell them everything they could and should do to sell their house for the most money. That is the goal after all!

 

Overpricing Your Home To Sell

The Downside To Overpricing Your Home

Here is what happens in the majority of the cases where people over price their house. People start high and by the time they get to what the price of the house is really worth, they have already lowered it 10k, 20k, 50k, 100k, even $200,000. In their mind they are thinking “I’ve lost all that money!” that’s money that they never had to begin with!

But now you’re already in a mentality of scarcity and you’re trying to hold on… You don’t want to spend any money getting your house fixed up because you have already lost tens of thousands of dollars! “I am not putting any money into this house, I am not giving it away!” (btw if you are giving your house away call me, the homeless shelter is looking for a home in SOMD to house people in need)

Everyone Is On Edge

The real estate agent gets frustrated because they feel like that you don’t trust them which creates a contentious relationship. If they keep telling you that your house is worth 400k and you keep wanting to list it at 450k, basically what you’re saying “I hear you but I don’t trust what your saying so we’re going to do it my way…” That does create a disconnect and it makes the person feel like you don’t trust them which is basically what it is…
So when the house sits on the market for a long time you feel like you lost money, you’re not really happy with the real estate agent who didn’t sell your house, or perhaps your Real estate agent told you that your house was worth $450k just to get the listing (make sure you watch my video on Biggest Mistakes Home Sellers Make)
Your frustrated about losing money, your frustrated as a real estate agent, and now your window of opportunity get the most money is long gone, what do you do???
You Need A New Plan
The best way to solve this overpriced house problem is getting an appraisal! Get a neutral third party involved to set a benchmark on the actual value. This solves several problems:
  1. There is no tension with the Realtor
  2. You can price it in the market to sell for the most money
  3. You can negotiate with confidence because you know the value
  4. You can use the appraisal to raise an offer from a buyer
  5. You can use the appraisal to support the offer once received (assuming its not over the initial appraisal)

At The Mayer Group we order an appraisal for all of our new listings. If you don’t like the figure, we have a no questions asked walk away guarantee. We will give you the appraisal for a huge discount and we part as friends. There is a better way!