4 Ways To Get Buyers to OVERPAY For A Property
Anyone selling real estate for profit is always trying to figure out to get the highest possible sale price for the property they are selling. Here are 4 things anyone selling real estate can do to maximize their sale price.
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#1 Capitalize On Low Supply
A developer friend of mine was always complaining about how there was no good inventory in Center City Philadelphia between $700,000 and $1,000,000. There were nice homes below $700,000 and very nice homes above $1,000,000 but nothing in the $700,000 to $1,000,000 price range that many of his friends were looking to spend. What did he do? He put a lot under contract and built four homes, each with 3000 sq.ft., parking and a small yard, and proceeded to sell them, before complete and without listing on the MLS, for $825,000-$950,000 each.
Another prominent condominium developer in Philadelphia made a career out of controlling supply to make profit. In every building he would develop he would keep a number of condos and sell the rest off. Every year he would watch the MLS to see what was listed and when a certain type of condo was scare, he would list one for sale at a price greater than comparable sales. He successfully executed this strategy is dozens of high end buildings in Center City and by controlling the supply of condos in a particular building he was able to create mini feeding frenzies and sell for top dollar.
What’s the lesson here for all of you flippers and developers out there? If you are able to identify niches in your real estate market where supply is insufficient you can create a product that caters to these particular buyers and sell the product both quickly and for top dollar.
#2 Take Advantage of Demand
It’s no secret that the real estate market operates in cycles with the spring market and fall market being the points when demand is at its peak. There has been a long standing tradition of making listings available for April 1 when demand is beginning to increase, or in early September when families have returned home from vacation and the kids have gone back to school. By timing your purchases and renovations such that your product will be released at a point of high demand, you will give yourself the highest likelihood of obtaining the greatest possible sale price.
#3 Pristine Condition
It’s a known fact that poorly conditioned homes take longer to sell and sell for less than homes in excellent condition. How do you make sure your home is in pristine condition? – 3 ways:
- Pay a licensed inspector to do a pre listing inspection of your home. Sounds silly I know but by doing this you will get in front of any issues that could present down the road. You will also assure yourself that when you do negotiation a sale price you won’t be forced to renegotiate the sale price after the Buyer completes his home inspection.
- Repairs/Touch Up – pay a handyman to fix any known issues or issues identified on the inspection report. Have paint and drywall touched up and make the home look like brand new.
- Professional Cleaning – pay a professional, high end cleaning service to come in and clean the entire house from top to bottom.
Once the property is in pristine condition pay a professional photographer to take wide angle, HD quality photographs for distribution on the MLS and nationally syndicated real estate search portals.
#4 Offer Slightly More Than Your Competition
By offering slightly more than your competitors your product will seem superior by comparison. An example of this would be something like if everyone in the neighborhood is carpeting second floors and bedrooms consider using hardwood. Another example would be to offer a finished basement or allow buyers to select custom paint colors. Other things like seller’s concessions are also a big hit with buyers. Things like offering a 1 year home warranty, a seller’s assist, paying down interest rates or paying some portion of buyer closing costs can go a long way towards helping the seller get the net price he is looking for.
When flipping or developing real estate if you are able to capitalize on low supply, time your product to be released when demand is high, deliver a product that is move in ready and in pristine condition and you offer slightly more than your competitors you can be assured that you will obtain the highest possible sale price and maybe even get a buyer to overpay for your property.