For the first half of the year, listed home prices in the Denver metro meant little, as many sellers received offers tens of thousands over their list prices within days or even hours of putting their homes on the market.
But after rising interest rates helped cool the sales frenzy, sellers are again required to work with their agents and put some thought into pricing and marketing strategy.
Felecia Montoya with 8z says sellers will need to be more realistic. “Sellers got used to picking a number and throwing it at the wall and 99% of the time they would get it or an even better price,” she says. “Now we need to be more strategic.”
The change has been challenging for some sellers. “They need to understand they won’t get a stack of offers that first weekend,” says Amy Terry with 8z.
Setting the price
Malisa Eakins with West+Main says realtors need to work with their clients to manage expectations.
“First you need to help them understand what the rising interest rates mean for the potential buyers’ purchasing power,” she says. “The increased rates created a hard shift in the market.”
Sellers need to work with skilled realtors who know how to use the available tools to help set the price using:
- Days on market
- How many showings before a home goes under contract
- Pending sales
- Sales of similar properties and neighborhood properties
Terry urges sellers to look at other homes as if they were buyers. “Take a look at the competition,” she says.
Barry Willmarth with Willmarth Real Estate Services recommends sellers focus on homes with similar floor plans, square footage, age, condition, and proximity. “Stay in the neighborhood if you can.”
Putting your best foot forward
With more homes on the market, sellers need to ensure they set their homes up to show successfully, Terry says.
“For a couple of years, people didn’t have to do much to show their property,” she says. “Now you want to make it a 10 out of 10 before you show it if you want to maximize your profit.
She recommends sellers use professional cleaners, photographers, and videographers. She also pays for 30 days of staging.
“It’s important to make a great first impression,” she says. “People fall in love with a property first online, then they confirm with a showing.”
If the property is occupied, the stager works with their belongings and brings in fresh bedding, throw pillows, or artwork.
“Mostly we work to declutter and clear out,” she says. “You want to make sure a buyer can envision living there.”
The return of the home inspection
After years of buyers waiving home inspections, they’re back, and buyers are demanding sellers make fixes before sales proceed, Eakins says.
Home inspections are good for buyers and sellers.
“It takes the liability off the seller and ensures the buyer will be able to live somewhere without taking on lots of home repairs,” she says. “It’s important for buyers to do their due diligence. The last thing anyone wants is a lawsuit.”
Some agents who started working in the past few years may need to learn how to write an inspection objection, which lists any problems and asks the seller to make repairs or reduce the price.
Eakins urges sellers to take a critical look at their property before listing it and make repairs before listing the property.
Interest rate buy down
The changing market also encourages sellers to offer more incentives like cash to buy discount points at closing to lower interest rates.
While some sellers may offer a bonus of $10,000 for a full-price offer, Willmarth counsels his clients against making that offer initially.
“If you do that, you may end up with a buyer who comes in and wants both the buydown bonus and a price reduction,” he says.
“Set your price so it’s better than the other things on the market, then see what the buyer asks for and negotiate. Don’t pigeonhole the seller.”
The art of negotiating
When sellers received multiple offers, there was no incentive to negotiate, Terry says.
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The changing market also is testing agents’ abilities to negotiate.
“It’s a skillset some people haven’t used in four or five years,” she said. “For a while, it was just who could get in with the fastest with the highest offer. That wasn’t always the best move for the buyer.”
With more properties available again, buyers can take more time to consider whether a purchase is right for them.
“I’m excited people can sleep on it again before making a decision.”
The news and editorial staffs of The Denver Post had no role in this post’s preparation.
