Three Golden Rules of Selling a House in Carmel
Know Your Motivation to Sell
When selling in Carmel, you will be “competing” with as many as 140 different sellers at one time. Are you selling to purchase another home, because your needs and or wants have changed? Do you want to down size or move into a larger home? Do you need to sell to have money to put into your next home? Each of these scenarios are motivating factors which require a different strategy when selling your house. Do you “need” or “want” to sell right away are just a few of the questions to consider to help clarify your motivation before listing your home for sale.
Understand the Buyer We are Marketing To
For Carmel-by-the-Sea and surrounding areas, we know where our buyers are coming from. The San Francisco Bay Area, the Central Valley, the state of Texas and international are some of our main feeder markets. As a result, we focus our marketing efforts on those areas. (keep in mind that 1 in 4 buyers that buy in the Carmel area not from the state of California are from the state of Texas). Further, our buyers tend to be very tech savvy, higher income levels, higher levels of education, and higher expectations in the quality of homes when buying real estate. Understanding what type of buyer you are marketing to helps create an effective marketing plan to sell your home in the least amount of time and for the most amount of money.
What Do I Need to Do to Get My Home Ready for Sale?
This is always a great question to ask. There are a couple of things that I suggest to do to get anyone’s property ready for sale. First, in order to inform the buyer on the value and condition of the property, I will often ask the seller to provide me with as much data as possible to support the value of their home. For example, what are the monthly and annual energy costs? What have you done over the life of owning your home to enhance and or maintain the home? This would include any improvements, monthly or annual maintenance, items you would consider leaving in the home. As a courtesy to my selling clients, I bring in my team of preferred architects, handymen, landscapers, and contractors to suggest constructive changes to my selling clients to make the house the most appealing to interested buyers. I also have a staging company that can come in and add furniture to the property for vacant homes to give the property a warmer feel. Lastly, if clients need the additional support to keep the property clean during the sales process, I have a cleaning service I can arrange to help them with that. I would also encourage the seller to perform any necessary inspections prior to listing the home. That way we can have an idea of any repairs that may need to take place and can have the property in the best condition possible for the lucky buyer. By doing inspections first, we are usually able to save the seller significant amount of money in the long run.
Top 5 challenges that make selling a house in Carmel different than surrounding areas
Knowing Your Competition
The first challenge that makes selling a house unique in Carmel is the level of competition you will face when selling your property. At any one point there is about 100 to 140 homes for sale in Carmel. If you think about it, that is a lot of homes for sale in a small community like Carmel of only 2,000 homes. Out of those 100 to 140 homes that are for sale, I divide them into a “need” and a “want” to sell. If you “need” to sell, you’re going to price your home very competitively. If you “want” to sell, keep in mind there are a lot of second homeowners in Carmel that don’t have to sell but will “if it makes sense”. So, you’re competing with a lot of other homes with a lot of different sellers that have different levels of motivation to sell their property over yours.
The best way to overcome this challenge is to make sure you are working with a real estate agent that is familiar with the Carmel competition and is going to help you create a strategic plan, including marketing, staging, presentation, showing, educating buyers and agents about your home, so you can compete against the other homes in the area to get the best buyer that helps you reach your real estate goals for selling your home.
Know What Type of Buyer’s You are Marketing To
Another issue that makes selling your home in Carmel challenging is understanding the type of buyer you are marketing to. You have to understand what type of buyer is going to purchase in Carmel and where they currently live. We already know that Carmel is in high demand for their outstanding school district and a retirement hot spot that attracts thousands of buyers to purchase in the area.
What’s interesting is that from the research I have done, one in four buyers that buy in the Carmel area that are not from the state of California, are actually coming from the state of Texas. So it is extremely important for the agent you are working with to understand that and have a marketing plan and presence in place so your home can have exposure and be viewed by the interested buyers in those areas.
Condition of the Property
Another unique challenge about selling a home in Carmel is making sure the property you are selling is in the best condition possible to attract the best buyer to help you reach your real estate goals. The key to over coming this challenge is to work with your real estate agent to put yourself in the “buyers shoes”. What the buyer is looking for? What are they going to want? From my experience, buyers in Carmel like recently remodeled kitchens, bathrooms, spacious master bedroom and master baths. I help my selling clients focus on the things that people are buying. Keep in mind, I’m not a big proponent of my clients spending money to update your home, but if you want to be competitive at a price point, you’ve got to make sure that your master bath, your master bedroom and the kitchen is as appealing to buyers as possible.
In an event that you are thinking of a complete remodel before you sell to improve the condition of the property, keep in mind that you will most likely not get a full return on investment when updating. For instance, if you are planning on remodeling your kitchen and it’s going to cost $20,000 for the remodel, you most likely will not receive a full $20,000 more in the sales price of the property when you sell.
What I usually recommend is that I bring in my team of preferred architects, handymen, landscapers, and contractors to suggest constructive changes to my selling clients to make the house the most appealing to interested buyers. In some cases, it makes sense to bring in a property stager to add additional appeal to the property for potential buyers. That way each home and homeowner has their own specific plan to have the property in the best condition possible before listing the property for sale.
Creative Selling Tools
The next challenge that sellers may face when selling their property in Carmel is buyer commitment and financing. These challenges can be overcome by offering creative selling tools. Let me explain, at times, there are very motivated buyers that are looking to move to Carmel however at the time, maybe they are not 100% convinced they want to move to Carmel fulltime and buy a home, or maybe they don’t have enough cash saved or all of the requirements necessary to obtain a loan, or maybe they only want to own a home part time in Carmel because there are only certain times of the year they know they will be visiting the area. This could limit the ability for the seller to sell their property unless they have additional creative financing tools to sell the house to these types of buyers.
Some creative selling tools that could be offered to a potential buyer is what’s called a lease option. A lease option is where a buyer agrees with the seller to rent the home for a term and at the end of the term, the buyer has the option to purchase the home. This is a great option for someone that is not 100% certain they want to move to Carmel full time and buy a home. This way the buyer (or tenant) is able to experience the lifestyle and community of Carmel prior to purchasing the home from the seller (or landlord).
Seller Financing would be another tool to offer a potential buyer. This is where the seller is the buyer’s bank instead of the buyer receiving a loan from a lending institution. This could be a great tool for a buyer that perhaps doesn’t have enough cash saved just yet to buy their dream home or perhaps the buyer that does not have all the necessary requirements to obtain a loan at the time of wanting to purchase a home in Carmel.
The last creative selling tool that could be offered to buyers that only want to own a home in Carmel for certain times during the calendar year is called fractional ownership and is similar to a timeshare. The buyers, maybe 2 to 4 of them, buy a home with cash and have the agreement that they own the property for “X” amount of months throughout the year. That way, each homeowner has the chance to utilize the property and visit during their sectioned ownership time.
Understand “Your Why behind the Why”
Probably the most important challenge to overcome when Carmel homeowners are considering selling is to understand what I call “your why behind your why”. To simplify this, it’s finding out your motivation behind selling your property. Because there is so much competition to sell a home in Carmel, I have found that helping my clients gain clarity on their selling motivation, we are able to work together to create a strategic plan to help them not only compete with other sellers but also reach their real estate goals of selling their property. I have a series of thought provoking questions I ask my selling clients to help us discover their why behind the why together.
How does Team Beesley’s knowledge and experience give our Selling Clients and edge in negotiating to sell a property?
Three words can be summed up in what I provide to my sellers to create and edge: Experience, Relationships, and Creativity
When I take a listing, I realize that much of the negotiation happens after the acceptance. For that reason, I encourage sellers to do all of their inspections up front and give those inspection reports to any prospective buyer to inform them that the asking price is based on the accompanied disclosures. As a result, the buyer has very little margin to ask for repairs during the disclosure/inspection process and the seller keeps more of what he want which is profit. In dealing with other agents/brokers, I make it a part of my business to know them well. As such, much of the negotiation is understanding the buyer’s motivations including their “haves” and “wants”. If I can learn these through strong positive relationships with other agents, much of the uncomfortable negotiations can be avoided. Finally, it helps to be creative in negotiating. Seller financing, personal possessions, timing of closing, associated closing costs, possession all should be considered in negotiating as long as the seller is aware and gives approval to move ahead accordingly.
How does Team Beesely’s knowledge transfer into giving our Selling Clients an advantage when selling a home?
The selling and buying process, although can be similar, are also very different. Typically, in Carmel-by-the-Sea there are anywhere from 100 to 140 homes for sale. That is quite a bit for a community just 1.1 square miles. For comparison purposes, Monterey (right next door with 4 times as many residents and significantly more homes available) has on average 10-40 homes for sale.
In addition to the amount of homes for sale, any seller should understand their own motivation and the motivation of their competition. With almost 2/3 of the homes second or third homes for the homeowners in Carmel-by-the-Sea, the relative “need” to sell is different than most communities. As a result the individual sellers motivation should be taken into account.
If a seller needs to sell, condition and price are two factors any seller can control. My job is to educate any seller on what is selling relative to their home. I also educate sellers on who the buyers are that are buying their home. Where are they coming from, what are they looking for and what do we need to do to ensure we get the attention and eventually offers to get their home sold.
With so many homes on the market, you might believe that it could take longer to sell, which for many is the case. And a seller should be prepared for that if they are not willing to be aggressive in their asking price and or not willing to get the home in the condition to promote a quick sale.
What helps give our Selling Clients an edge when negotiating to sell a home in this area and hopefully getting multiple bids?
Pricing, location and condition are going to be the main factors when negotiating to sell a home in Carmel. The seller of the property will be able to control two of those factors, pricing and condition. For instance, if the condition of the property is not great, the seller can control the price to list the property at an amount that will generate multiple bids. Additionally, if the seller doesn’t have the greatest location, they may want to consider the condition and the price to attract multiple bids to the property. If the seller has a great location, they may not have to be as competitive with price. So, by using the matrix of price, location and condition when selling the house, the seller will be able to get the most activity possible on the property, which will lead to multiple bids, which will lead to the seller profiting more money.
Another thing to consider when selling a property and have an edge against other sellers is to do home inspections before putting the property on the market to sell. I strongly suggest this to take place prior to listing the property so the seller can do the appropriate repairs prior to attracting a buyer. If a buyer has their offer accepted by the seller and starts doing inspections that find something wrong with the property, the buyer will most likely want the seller to reduce the price to compensate for the property condition and needed repairs. However if the inspection is completed up front and the seller discloses to the buyer prior to agreeing to accept the buyer’s offer, then the buyer knows exactly what they are getting into so, it limits any surprises and there is less likelihood for them to ask for a reduced sales price which helps keep more money in the seller’s pocket.