Real Estate Revolution – How to Sell Your Home (and Get the Most Money) in a Seller’s Market

Last Updated June 14, 2022

Bend/Redmond and Eugene/Springfield are strong seller’s markets right now, with a lot of competition for very, very limited inventory. That means it’s going to be easy to sell your home, right? Well, yes and no.

Finding a buyer for your property probably isn’t going to be too tricky. But you don’t just want to sell your home: you want to get the most money possible. Hopefully, it isn’t spoiling too much to say that the number one most important factor in getting the maximum return on your investment is – don’t overprice your home. We discuss that and other pitfalls to avoid, both in the process leading up to putting your home on the market and leading up to closing.

Of course, we have our usual weekly market report with all the latest data and another installation of Kip’s Tips where he talks about the pitfalls of relying on automated online property values.

Voiceover: 0:03

Recorded live from a secret, undisclosed location at the LOHR Real Estate world headquarters, we are here to bring you the Real Estate Revolution.

Kip Lohr: 0:11

Hello, hello everybody. This is the Real EstateRevolution Podcast. I am Kip Lohr, your host, and we have Ryan Neal from our Eugene office, our trusty co-host in the studio today. Hey Ryan, how are you today? You know, it’s another wonderful day here in not so sunny Eugene, Oregon. It is. I thought, you know, the daffodils were pushing up through the ground, and we had a couple of frosty evenings, the last couple of days, and I thought, man, all the flowers are gonna literally croak, but the crocuses are not croaking. The flowers are out, and they are here to stay. Anyway, we have an exciting show for you. Today, we are going to talk about selling a home in a seller’s market. We have talked extensively over the last few weeks about buyers and the perils of being a buyer in the current real estate market in both the Eugene/Springfield and Bend/Redmond areas. We thought we would talk about selling your home. We are in the season, and a lot of you are going to think about getting out there and putting your houses on the market this spring. So, we’re gooing to bring you a show that is just for you today. And as always, we have our weekly market report, which Ryan will take it away. You have something interesting for us today? Yeah, let’s let’s get the numbers out of the way before we go into our discussion about selling your home. Sounds great.

Ryan Neal: 1:37

We’ll start with Eugene. So through February, we saw an interesting trend where homes at the lower end of Eugene’s market were getting grabbed up significantly moreso than homes at the middle and upper ends of the market. But in the first week of March, we’ve starting to see that trend reverse. So, there were 42 sales at a median of $458,000. And that’s a bit of appreciation from what we saw in February when the medium was closer to $450,000. So we’re thinking that this is really a preview of the sale prices we’re likely to see in Eugene in the spring, at least at the start of the buying season. There was a good deal more buyer activity than seller activity this first week of March with 59 pending sales compared to 48 new listings. So that balance should start to shift soon with more sellers encouraged to list their homes during the time of year when that traditionally happens. But if it doesn’t, buyers are in for a pretty difficult time at the start of the spring home shopping season. There’s going to be a lot of competition for a limited number of homes. In Springfield last month, and we’re seeing more activity in the middle to upper end of the market. But in the first week of March, we’re seeing these less expensive homes flying off the shelves. There were 36 pending sales, the median list price of only $379,000. So Springfield’s active inventory right now – there were 38 active listings with a median ask of $455,000. So that’s really close to what we’re seeing in Eugene, where the median ask price for active properties is $487,000. So, you know, whether you’re looking in Eugene or Springfield, you know, they’re really going to be different considerations. It’s no longer the case that Springfield is a cheaper alternative to Eugene. And what’s more is that in Springfield – we talk about Eugene having this incredible inventory crunch, but it’s even worse in Springfield. There’s just over a week of inventory currently available, and that’s just super low. In Bend, there are some indications that compared to what we saw in February, the market has plateaued, at least for now. In the first week of March, there were 74 pending sales, and these went for a median of $699,000. So that’s a significant decrease from the sale prices that we saw in February, where we were getting close to $800,000. So through the winter – you know through December, January, February, we saw a run on higher-end homes in Bend, but the lower end of the market is getting more attention as we’re heading into the spring. Buyer activity is still more robust than seller activity at most price points with 74 pending sales compared to 63 new listings. So the inventory crunch, it’s not over yet. We’re at record lows pretty much right now. As for Redmond, prices are still staying relatively flat, just like we saw in February. There were 23 pending sales at the median ask price of $500,000. Inventory is up slightly. We’re at about three weeks now in Redmond with 75 active properties. These have a list price of $600,000, which you know is a good deal higher than the properties that we’re seeing go off the market for. So in other words, people are grabbing up Redmond’s more inexpensive properties, but higher-end homes are sitting on the market a little longer than they are in Bend, where there’s just this incredible activity no matter what price point you’re looking at. That’s all for this week’s market update. Let’s go on to the main part of our show.

Kip Lohr: 5:01

Welcome back to The Real Estate Revolution Podcast. I am Kip Lohr, your host with LOHR Real Estate. And wow, those figures this week are very interesting. And for those of you who listen to our show on a weekly basis, I think you’ll be able to start tracing some trends in the numbers as we roll into spring and summer. It’s so dynamic right now, and being able to see those numbers on a weekly basis is really interesting. Really appreciate that, Ryan. Sure thing. You know, the numbers, they always tell a particular story. But you know, like Kip mentioned, it’s very dynamic right now, the story is always shifting. So that’s why it’s so important that every week we really go back to just what’s happening on the ground here. And, you know, that’ll give us a little bit of a window, at least into how what’s happening in our market right now might influence the decisions you make if you are thinking about putting your home on the market or jumping into the water, looking for a home. Yeah, so stay tuned on a weekly basis, because we’ve got really great information every week. So this week, we’re going to start talking to sellers and talking about what it’s like to sell your home in a seller’s market. Which sounds a little weird. Like, why would we talk about how to sell a home in a seller’s market? And really, it’s no different than being on the buy side. There are definitely some do’s and don’ts. So today, we are going to talk to you sellers out there, or you potential sellers out there. And I think we’ll start out with the question of “Should I stay, or should I go now,” like the song says. So, you know, some of the first considerations rolling into the spring, as you’re considering whether you’re going to put your house on the market is, what are the pros and cons of putting your house on the market right now? Is it time to pull that equity and run and go do something else with the money that you have accumulated in your homes? And if the answer to that question is yes, then what are you facing moving on down the road into another home? Whether it is, you know, you’re going to sell your house and Eugene and buy in Eugene, or are you going to move from Eugene or Bend and move out of area? I think these are questions that are definitely important ones to ask before you jump out there and throw a sign in the ground. And Ryan, what are you seeing as far as some of the people who are considering dipping their big toe in the pool of putting their home on the market? Well, if you’re thinking that you might be interested in selling your home, then the number one consideration you have to make as far as whether you’ll be able to do that or not, is really are you going to be able to find a place to move into? And if you’re planning to sell your home in the band or Eugene areas and want to find a replacement property, then? You know, that’s a really important question, because there just isn’t much out there. We’re at record low inventory levels in both markets. Yeah, so it makes you know, I think that that has prohibited a lot of folks from putting their homes on the market. And, you know, whether you’re retiring and thinking about downsizing, or you’ve got a growing family and you need more space, or in the age of COVID, we’re seeing a lot more remote workers out there that are able to work from home. But now that I can work from home, do I have the space to have a quiet space to be able to do the business that I need to do. And so, there’s a lot more pressure on people moving forward to, you know, jump into selling their home, and either downsizing or upgrading in size. And that dilemma that you’re talking about is really important. We could sell your home, for sure, in five minutes. But what are you going to buy? And so what are people going to do? What, you know, what are some of the things that we can recommend sellers consider before they decide to put their house on the market? So first of all, the question is, what are your goals? What are you looking to move into? And why are you selling your home? What is it about your current property that isn’t working out for you? And what are the features that you’re looking for? And are you going to be able to find those? You know, is it practical right now to look for what you’re looking for? Right? And if the answer is, I need more space, are there other other things that you could do rather than selling your home and buying something that’s a little bit bigger of a home? And I guess what we talk to people about often is doing remodels, adding a small addition. Can you create a relatively small office space in your backyard that is relatively inexpensive, and, you know, relatively easy to get through the building permit process. Do these are all definitely options that you can look at before jumping into, you know, selling your home. But let’s let’s just jump right into it. So you’ve decided to sell your home, and there are definitely forces out there and things that you need to keep in mind before you just throw the sign in the ground. And so for me, the most important element is getting the price right. And that might seem counterintuitive in a market where the conventional wisdom is that, you know, you could just slap any price on your home, and you’re gonna get it, which you and I both know is not necessarily true. Well, there’s really kind of a sweet spot where you’re going to attract plenty of buyer interest and potentially get a bidding war going and 100% of the time that is going to result in you getting the most value out of your sale. Yeah, and it’s a little counterintuitive from the standpoint that, you know, I think we’ve talked about this a little bit before, through the lenses of buyers out there. But we have seen, particularly towards the end of last summer in both communities, the Eugene/ Springfield and Bend/Redmond areas, where you can shoot too high. And you spend a few extra days on the market. And we’re not talking 60, 80, 90 days on the market, we’re talking about the difference between three days on the market and 15 days on the market, right? Where people start wondering, what’s wrong with this place? That’s totally right. I mean, the needle has just shifted completely in terms of what the time spent on the market means in a buyer’s eyes as far as what’s going on with your property. I mean, it didn’t used to be the case that it was anything unusual for a property be on the market for two weeks. But nowadays, buyers would be asking questions. If a home looks like has all these appealing features, but it’s been on the market for a certain amount of time, then totally, that’s going to raise some potential red flags in the eyes of buyers, right? Because both on the buy side and the sell side, the assumption is there is no price that is too insane. And so if it hasn’t sold in 10 or 15 days, a couple of weeks, three weeks, then the price is not the first culprit that people look towards in terms of what’s wrong with this picture. And the truth is that overpricing your home can happen even in this market. And what happens is you’ve lost your momentum. And I tell sellers all the time that in this current market, it is as important as ever to price your home correctly. And what does that mean? Well, you know, first of all, you want to make sure that you have an accurate snapshot of what the current market will bear. And once you have an idea of what that price is, then, in my opinion, you want to be marketing at that price, rather than saying, Well, okay, the market analysis says My house is worth $550,000. So I’m going to ask for $650,000, because I know I’m going to really be able to get 650, because I’m hearing all over town, people are paying $100,000 over list price. What’s the problem with that assumption? The problem with that assumption is that any agent worth their salt, who is working with a buyer who’s going to be looking at that property, they’re going to be running the numbers, they’re going to be doing a CMA. And they’re going to be seeing that this property is overpriced. So when they look at that, suddenly, you have your home listed at $650,000 and agents are coming back and saying, hey, you are overpriced. So the offers that are going to be coming in are going to be at a lower value than your ask price. Whereas if you have the opposite situation where, you know, maybe your list price is a little bit lower than what the market might bear, then people are going to look at that price and say, well, obviously, it’s going to go for a bit higher. So we’re going to offer above list. But you know, then you start thinking about, okay, this property has all of these features that are going to be appealing to other buyers. And they’re going to also be offering above list. So hey, we’ll make an offer above list, but how much, and then the imagination starts to run wild. And pretty soon, you get these offers coming either $50,000. $75,000, $100,000 over list. And it’s really just taking advantage of the psychology of the situation. That’s exactly right. And so the psychology is, if you are blatantly asking too much for your house out of the gate, you’re going to deter that initial enthusiasm about your place, and the ultimate result of that is that you’re going to net less money. And sometimes that can end up being $30, $40, $50, or $60,000 below what you could have, should have, would have gotten if you had just started out at the right price. So I guess the takeaway here is, even in this market, pricing your home correctly for the moment in time that we are in is still as important as it is when there’s more competition out there as far as inventory. And so the next step for sellers, once you’ve got your house, you’ve talked to a real estate agent – and I’m going to take a little bit of a sidetrack here because I don’t want to get off of the price part of this recommendation until we talk about how do we determine price. You want to make sure that the agent that you’re hiring is well versed in how to put together a competent – we call them CMAs, a comparative market analysis, and make sure that that number is on point. Later in the show during Kip’s Tips, we’re going to talk a little bit more in depth about that, but I didn’t want to point out that there are different methods of determining market value, and they’re not all created equal, and you want to make sure that you’ve got as accurate of value as you can in the really dynamic market that we have right now. So moving on, I guess, though, you decided what you’re going to sell your house for. And so what’s the next step?

Ryan Neal: 15:19

So the next step is that you have to get your home actually ready to be sold. And this is a process that is going to completely depend upon your particular property, what buyers are looking at, you know, in terms of comparable properties. You have to kind of size up the competition and determine what steps you may need to take in order to make your home competitive with them, in order to make your home stand out in order to fetch the maximum value possible. But at the same time, you know, you don’t want to be putting money into improvements that won’t actually net you a good return on your investment.

Kip Lohr: 15:52

Yeah, that’s right. And so what a lot of folks don’t understand is that you’re not likely to get a dollar-for-dollar return. The rare occasion is when you increase square footage, you increase the finish quality dramatically. And even then, you know, it’s not a short turnaround as far as getting a dollar-for-dollar return on your investment. And so it’s really important to put the emphasis on, first, curb appeal. So, that buyer is going to drive up to your house, they’re going to drive down your street, they’re going to drive up to your house, and their very, very first impression is going to be what they see when they drive up and then get out of their car and they’re walking up to the front door. This curb appeal is the most important first opportunity to sell your home for the top dollar that you’re going to get with a buyer. And so, people are going to forget about the dog that dug holes in the backyard. They’re going to forgive those things, because they’ve already developed their opinion of your home by the time they’ve almost walked through the front door. So making sure that your landscaping is on-point, making sure that any repairs that need to be made to anything in your home that is super obvious, especially from an aesthetic point of view. And that first walk up to the home is really important. So once you walk through that front door, what are some other areas that you could be throwing a little bit of money, or at least some thought into as people are walking through your home? When we talk about first impressions nowadays, of course, we have to talk about online listings and photographs. Because for sure, really, the first thing that most people are going to see about your home are the photographs that you have on the online listing. So really, that process is essential. You know, it’s kind of funny, we sometimes go back and look at sales that happened, you know, maybe half a dozen or 10 years ago, and the quality of the photography is really just – you look at the photographs, and it’s like, how are these people planning to sell their home if that’s the way it’s being presented. But what this is really showing is that the real estate buying landscape has vastly changed. You know, online listings, photographs are more important than ever before, and you know, making a good first impression. So professional photography is definitely a must. You need an excellent photographer going into your house, and somebody who not only is an excellent photographer, but they have experience with real estate photography. 100%. That’s absolutely right. You know, there are plenty of photographers out there who do great portraits. They do great outdoor action photograph. You know, getting great photos of your home, and the spaces within your home is a very particular style and skill set of photography. And I 100% agree about getting professional photos with somebody who really knows the craft of how to put together good photos for a home. And obviously, you know, the staging of those photos is super important. And there are definitely some photographers who are more than willing to suggest that you move this pillow over there, or maybe you get the laundry basket out of there, and they’re willing to, you know, make suggestions that are going to make these photos the highest quality and the best foot forward for you. And so another important quality is making sure that you’ve got a photographer who is willing to, you know, make those suggestions, because there are photographers who are just going to take pictures of whatever’s there when they roll up. And often that can be not the most flattering photography. Yep, they’re going to come in, and they’re going to snap photo after photo. They’re going to get what they need, and they’re going to be done with it. But that’s really not what you need in a real estate photographer. You need somebody with an eye for detail an eye for what people who are looking at a listing online are going to see and what these photographs are going to say about a home and how they’re going to present it in the best possible light. Yeah. And so I guess one question we get a lot is from folks that have already moved out of their homes, and should your home be staged? Should you have furniture in there? Should there be staging in your home? Obviously, we’re in a hot market. So people are buying homes that are empty. People are buying homes that are staged, people are buying homes that are lived in. What is your opinion on whether or not you would recommend that people pay to have their home professionally staged? Well, it’s just such a case-by-case question. Really? I mean, you know, in some sense, with any property, whether it’s staged or not, you have to leave it to the buyers imagination to be able to visualize themselves living in that space. But the truth is that having furniture there having staging in the home can kind of jumpstart that process. That’s right. You know, what most sellers don’t understand is, for the most part, buyers do not have the imagination to be able to envision what living in that home is going to feel like unless they have the cues of a lived-in look, as it were. So, you know, I agree that it’s a case-by-case basis. And it’s not an inexpensive proposition to have your home staged. Fortunately, we’re in a market right now where it’s a fairly quick, open-shut case, as far as getting somebody in contract. So you’re not going to have your home staged for several months at a time. So if it is within your budget, I am in the camp of recommending that you don’t leave it to chance that a buyer is going to be able to imagine that how the space is going to feel lived-in wise. It’s always nice to be able to help them with some staging. So moving on, what else are we looking at to get get the home ready? Or what’s the next stages for a seller when they’re getting ready to put their home on the market? Yeah, so when we talk about improvements, I would say that they’re really two different categories. You know, the first are basically cosmetic improvements, right? You know, repainting the exterior, or interior of the house, cleaning things up. And staging also falls into this category. You’re not making any fundamental alterations to the home, but you’re trying to present it in the best possible light. Now, the other category of fixes is, they’re actually fixes – you’re replacing countertops, you’re potentially altering the floor plan. There are a lot of different possibilities, if you look at any given property. Yeah, and I would say that for most folks, we are going to be making recommendations in the that first category of how we can spruce things up in an affordable way. Many of those things can be kind of weekend warrior types of painting and whatnot. And, you know, I think, also for folks who aren’t going to be moved out by the time they put the house on the market, it’s really important to pare down the personalizing of your home. You know, we walk into homes where all the walls are plastered with, you know, family photos and very, very personal keepsakes, which are all great and in a limited number actually create a very cozy vibe. But there is something to be said for putting a few things in boxes and allowing a little room for imagination, for a buyer to come in and to be able to, you know, make that house their own. And so there’s kind of this fine line between helping buyers envision this being a very inviting, very cozy, livable home. And then also feeling like this is very personal to the homeowner, and I’m having a hard time seeing myself, you know, moving into this place. And I think paint colors definitely can become an issue for folks, even though you move into a place and you can paint whatever color strikes your fancy. And sometimes those colors can get pretty wild. I mean, particularly today, sometimes people go a little bit wild with the accent walls, for example. You know, I mean, some some people are going to come into the home and really dig that. But there are also people who are going to come into the home who really are not going to dig it. And when it comes to these kinds of cosmetic improvements, really, you’re trying to tread this fine line between doing like you’re saying Kip, something that’s so personal, it’s only going to appeal to a fairly limited number of people and you know, something that’s just kind of boring and doesn’t have any character to it. That’s right. And one of the stories I tell folks is about my very, very first sale in real estate. I had a listing where the homeowner was extremely proud of this vaulted cedar tongue-and-groove ceiling that they had put in there, and even back in those dark ages, it was not a cheap improvement. And he was convinced that this was going to be what sold his home – this is going to be the selling point, and everybody’s going to be knocking over each other for this cedar, tongue-and-groove wood ceiling in the home. And so we sell the home. And a couple of weeks after closing, I’m driving by the home and I noticed the splintered remnants of the cedar tongue-and-groove ceiling laying in the driveway all torn out and not even torn out in a way that they could repurpose the wood. It was just torn out completely, and they’d gone in and drywalled the ceiling and painted it white. And so I knocked on the door, and I rolled up and I said, “Hey, would it be okay if I come and pick this up,” because I didn’t want my seller to come by and notice this torn-out cedar ceiling. And so you know, I learned really early on in my career that, you know, one man’s amazing, this-is-going-to-sell-the-house is another person’s first-thing-I’m-going-to-tear-out-of-the-house and, so it really is important to create this balance between something that is going to be a warm, inviting, cozy home. Your idea of what’s warm, inviting and cozy may be different than the folks who are going to come and take a look at your place. So I think, you know, the takeaway here is getting your home ready and having you know your agent sit down with you and help walk you through the do’s and don’ts and make suggestions of, you know, maybe let’s pull down a few of these photos, let’s pull down a few of the garden gnomes out of the front yard, and let’s, you know, get this thing ready to put on the market – that’s really just as important. You know, I think one of the takeaways I want folks to get right now is that we are in a seller’s market – this show is selling your home in a seller’s market, which, you know, on the surface may sound like well, I can do whatever I want. And what Ryan and I are trying to say today is that some of the basic fundamentals, regardless of what market cycle we’re in, still apply today and are important and and will help you net your top dollar. So once we’ve kind of gotten your home ready, then it’s about – when do we put the house on the market? When’s a good time? Timing is everything, right? So the conventional wisdom is that the warmer season is the home-buying season and the best time to list your home, and in terms of volume, you know, the vast majority of homes that get listed on the market in the Eugene/Springfield and Bend/Redmond markets are during the spring, summer and early fall. But really, we’ve just been seeing market dynamics taking place they call into question the basic assumption that the summer is the best time to list, period. You know, there are a few different considerations that you need to take into account. In 2021, what happened, basically, is that prices kind of spiked in the late spring/early summer, and then they plateaued for a while. You know, normally what we would see happening is that prices will kind of ramp up going through the summer, they would hit a peak around August, and then they would decline heading into the fall. That’s right, sure.

Ryan Neal: 27:55

But what we really saw this previous year and going into this year is that prices – there was that plateau. Certainly that happened in late summer. And like Kip has mentioned during several of our episodes, there was eally a situation in the late summer, early fall, where inventory was increasing a bit, homes weren’t just flying off the market like they were a bit earlier. But what we saw in the late fall, in the winter, and heading into the early spring right now is that inventory just became so stupendously low that we were seeing homes hit record sale prices in the late winter. That’s an unheard-of scenario. Now, that isn’t to say that even though inventory probably is not going to go back to the lows that we saw in February – you know, we’re going to see more people listing their homes, there’s going to be just more choices for buyers available, but we’re not foreseeing that prices are going to drop,

Kip Lohr: 28:47

100 percent they’re not going to drop. That’s for sure. And so, I think that’s a good point where you could say, well, maybe in this current market cycle, we’re seeing a couple of peak moments, right, where we’re seeing a peak in FOMO happening in the early spring, maybe into the early, mid part of summer. And then buyers get kind of sick of the competition. And they look at houses where they’re trying to make an offer for 100 grand over what the list price is, which in many cases is outside of the price point that is affordable for the folks who are looking in – you know, if you’re looking at a $600,000 max that you can buy, and that house goes for $700,000. And you know, that can be discouraging. And I think what we saw last summer is we had enough discouraged buyers where they kind of pulled back for a minute, and they were just like, “You know what, maybe I can’t afford it.” Or maybe I should wait and see what the market does. And then when we got into kind of that early winter, in November, December, all of a sudden the things that were available, people were starting to, you know, get excited about again. And so we got a little bit of another peak moment there. And so, for most sellers out there, realizing the peak dollar amount for your home is going to happen rolling into the next couple of months, in my opinion. And so, will you have the opportunity in the fall or early winter of this year? For sure. I think that’s true. I think we’re going to see similar patterns this year that we saw last year. And so, it’s important to say, well, you know when, what time of year to go on the market. But now we’ve decided we’re going to go on the market in the spring. So does it matter whether you go on the market on a Monday or a Friday? It does matter. People are out looking at homes over the weekend. You know, most people are working during the week. They have a limited amount of time to dedicate to viewing homes. So, you know, the weekend is really where a ton of activity happens. And with homes flying off the market in just a couple of days, you’re really, if you’re listing your home on Thursday, and it’s on the market Friday, Saturday, Sunday, you review offers on Monday, and then that’s really giving you the chance to get in the maximum number of offers possible and get the most people looking at your home before it flies off the market. Yeah, that totally makes sense. And I think that’s true – I think we see that a lot of listings are coming on late in the week, Thursday, Friday, and with the expectation that they’ll be on the market for maybe four days, five days. And it’s a little artificial, because in many cases, there will be an offer or two in the first day. So theoretically, they could be off the market in the first day. But what savvy listing agents are doing and sellers are doing is that they are making the expectation that they are going to create a bidding war – that dreaded bidding war. So, they’re creating multiple-offer situations where they can, you know, pit several buyers against each other to really pull out the top dollar that they can get for their homes. And so, you know, you create this artificial kind of timeline where you say, we’re going on the market on Thursday, we’re going to review offers on Monday, which is saying, look, we know we’re going to have multiple offers. And we’re going to give a deadline of sometime on Sunday. And we’re going to make a decision on Monday, which creates a another layer of fear of missing out for buyers, and so they get hot to trot. So I 100% agree with you that if you’re thinking about going on the market, I think this spring or early summer is is the right time of year, and then making your launch, your debut, you know, on a Thursday or Friday and creating a window of opportunity for buyers to get in. So, you know, ultimately we’re talking about multiple offers here. We’re going to get multiple offers, almost without a doubt, depending on the property. I mean, even properties that need a lot of help are still ending up with multiple offers. So what are some of the most important things to take into consideration when looking at these offers? How do you review them? How do you pick an offer? You know, what are your recommendations to the sellers that you work with? As far as, you know, how are you going to navigate 15 or 20 – I mean, we’ve had, we’ve had properties where we’ve had 30 offers. That definitely happens. And sometimes you hear about other markets where there’s something more like 60 or 70 offers. And it’s just it’s just, it’s just hard to imagine, because at that point when we’re getting that many offers, you know, I mean, your agent can make a spreadsheet, you can kind of try to map it all out as far as what the most attractive offer is in terms of returning your value. But really, that’s not going to give you as a seller the context that you really need in order to make a decision. That’s really what you really need to know is that a buyer is going to perform their end of the bargain. Because, you know, it goes without saying that the current market things are tight. There’s a lot of FOMO out there and buyers are making a lot of ridiculous offers. But a buyer can make a completely ridiculous offer and find any different excuse in the book not to perform on the contract that they’ve signed. And that is happening more and more often. Yeah, and, you know, to dovetail into what you’re talking about here, and we’ve talked about this in previous episodes in relationship to buyers, but we have harped on the value of relationships, right. And it’s equally as important to have your agent that’s representing you be able to help guide you through – okay, what lender are they using? What agent are they using? What title company are they hoping to use, and this helps guide you in, you know, feeling confident that a deal can be done. Not all agents out there are created equal. Not all lenders out there are created equal. Not all title companies are created equal. So making sure that you have confidence that all of those professionals that are being represented by that buyer are going to be able to perform and you have confidence. And I think that’s really important. And in reviewing these offers, often you get hit out of the blue with all of these different ways that buyers are trying to appeal to you choosing them over the other offers. And so I think it’s really important as a listing agent and as a seller to have determined what your most important checkboxes are. I want the highest price, okay, checkbox. Well, maybe you want a quick close, maybe you need more time to close, you need to be able to know that ahead of time. So as these buyers are, you know, swarming you with all of these offers, you can quickly go through your checkboxes and say, okay, highest price checkbox, quick close checkbox, all cash offer checkbox, or well-qualified loan offer checkbox. The agent that they’re working with has been in the business a long time, and we’ve done some deals with them -= checkbox. You know, I think it’s just important to be able to actually know what you’re looking for when these offers come, because you’re going to get some pretty wild shots in the dark as to what they think you want. And being able to sift through that quickly requires you kind of knowing what it is that you want in first place, don’t you think?

Ryan Neal: 36:29

And this is where communication between the agents who are representing both sides of the transaction is so important. I mean, a buyer’s agent can simply submit an offer. And there might not be any communication whatsoever between them and between your agent, and they’re not going to know the specific things that you’re looking for, what’s going to make their offer more appealing in your eyes, and create a better situation for you. So really, communication has to happen in a competitive market.

Kip Lohr: 36:58

Yeah, I agree. And so, you know, before we move on to our final portion of this episode, and talking about kind of the nuts and bolts of what to expect, as far as the the seller side of the process of the transaction – you have 10 offers, and you pick one. Great. Well, it’s also important to have a backup offe in your back pocket, don’t you think? Because sales do fall through for various reasons all the time, it’s certainly important to have a backup offer or even even more Yeah, because the worst thing that can happen is that you go on the market, you have to come back on the market after a failed sale. That is a huge ding to the profit center. And it creates a big question mark in buyers looking at you moving forward, It’s kind of a kiss of death. It is, it is. So that, you know – that’s the one place that you want to avoid as a seller, even in a seller’s market. So to, you know, kind of wrap up this portion of our episode, what’s a quick outline of the process once you’re in contract as a as a seller? What are we looking for? What are the benchmarks, what are the, you know, the waypoints in a transaction that the seller needs to keep their eyes on? So typically, in a buyer’s purchase offer, there are going to be one or several contingencies. So that’s really what you are wanting to keep an eye out for as a seller. You know, there’s probably going to be an inspection contingency. So the buyer is going to order a professional inspection, the inspector is going to go into the house, and they’re going to present their findings to the buyer. And from there, there’s either going to be in negotiation, or the buyer is going to say, okay, you know, I’m satisfied with the condition of the home, let’s move forward. But, you know, I’d say more typically, particularly when we’re dealing with the vintage of homes that we tend to see,particularly in Eugene, where it’s these 50s, 60s, 70s-vintage homes, that you know, there may be any number of things that are wrong with these homes that a buyer is going to look at and say, hey, you know, I’m going to need to do work here to be able to move into this place and feel comfortable. So that’s going to cost a certain amount of money. So, you know, I’m going to ask the seller to cover that in one or more ways, either through repairs, through a reduction in sale price, or through a closing credit. Right. And there also are instances where a buyer will say, I’m going to get an inspection for informational purposes only, with the implication that we’re not going to ask you for repairs. But if there’s any big ticket items, we’re kind of reserving the right to, you know, terminate the deal. And I think that, you know, it can be a double edged sword, this approach where a buyer is saying, Well, I’m not going to ask you for repairs, but I’m still getting an inspection, which still gives you the right to back out on the deal. And in my opinion, it creates a situation that could be more liable to end a transaction, because you’ve prevented out of the gate another negotiation, right? So maybe there’s, you know, some things that would in a normal transaction be negotiated? Well, you know, we’ve got a few electrical issues here, we’ve got a few plumbing issues there. But there’s no deal killers, as long as we can come to terms with negotiating a settlement between seller and buyer. But if we’ve eliminated that process of negotiation, maybe those things become a reason for a buyer to back out on a deal. And so I think, working for buyers, it can be a way to entice sellers to pick your offer, because you’re saying, I’m not going to ask for anything else. I’m giving up the right to do that now, which might sound appealing, but I think it also opens up the door to possibly having your sale fail in a situation where maybe it normally wouldn’t have.

Ryan Neal: 40:56

Yeah, and on the practical level, there’s always room for negotiation.

Kip Lohr: 41:00

For sure, for sure.

Ryan Neal: 41:01

And even if you specify in the contract that negotiations not going to happen in relationship to repairs – I mean, if a buyer comes back to you and says, “Hey, the inspector found that the foundation is crumbling, and you know, we also had a foundation expert come in, and they say it’s going to be a $60,000 repair.” You know, all of a sudden, you as a seller now possesses information that you didn’t have before, and you’re going to be on the hook to disclose that to any future buyers. So realistically speaking, you’re probably in a position where you might want to negotiate with that buyer.

Kip Lohr: 41:33

Now, I agree with that. And I think in that particular case, that does create a more obvious pathway for there to be maybe in a negotiation, even though we initially agreed to not negotiate. What I’m really talking about here is, let’s say there’s a $5,000 issue, or several issues that add up to $5,000 worth of stuff. And in a normal kind of buyer-seller negotiation on a repair, you might say, well, let’s split the difference, like give me a closing cost credit of $2,500, and I’m happy to continue on down the line. But maybe that buyer feels, I’m gonna have to come up with that $5,000, maybe I don’t have that $5,000. And so they’re more willing to back out on the deal. And maybe $5,000 is too small of a number, I mean, we are in a little bit of a crazy market. But you know, even a $10,000 situation – that might be a big enough deal where normally we’d find a pathway to keep this deal together. But we’ve kind of like, created this agreement through the contract that we’re not going to do that. And I agree with you that that still doesn’t prevent there from being like, well, you know, “These things came up 10 grand, and you know, my buyer is going to walk,” and, you know, a smart listing agent is going to say, “Whoa, whoa, let me go have a conversation with my seller, maybe we can still come to terms here. Don’t kill the deal yet.” But I think it also opens up the possibility for maybe less savvy real estate agents to not, you know, jump on that opportunity to keep a deal together when they could, at the same time.

Ryan Neal: 43:12

This is also where backup offers come in handy, because you have somebody who says, “Hey, I really don’t want to pay this $10,000 the inspector says I’d need in order to get this place up to snuff. So hey, I’m really thinking I want to back out. But hey…” And then you come back and say, well, actually, we’ve got these couple of backup offers in hand, they’re pretty much you know, almost at the level of your offer, and they’re going to jump in. So hey, take it or leave it.

Kip Lohr: 43:34

Yep, that’s right. So, you know, it’s a tricky situation. But from a seller’s side, the advice here is, don’t let your deal die. You know, put yourself in a position where you’re confident that you can get the deal done, and then have a back-up plan if, God forbid, your deal does fall apart. So you get through that process. And there’s going to be – I guess, the idea here is you’re going to have an inspector come in your home. So you’ve shown your home, you’re still going to have to people tromping through your home with the inspector, and then the next thing that’s going to happen is that an appraiser is going to need to show up and do an inspection of your home as well. So that’s going to be another point of touch for having to make your home available. But beyond that, then we’re kind of, you know – once you get past the inspection contingency, and your property comes in at value, or you’ve negotiated it if it hasn’t, then you’re kind of in the landing pattern at that point, right? Yes, assuming there isn’t any funny business with the lending side at the end, which, you know, unfortunately, in this business, we do see 11th hour failures to obtain financing. That’s right. And I guess that gets back to making sure that you’ve sized up the buyers lender, you make sure that you have confidence in their ability to perform. So I think for today, we have done a pretty good job of giving sellers an idea of what the process of selling a home in a seller’s market is like. Is there anything else Are we missing anything? We’re probably missing a ton of things. We are missing a ton of things. I mean, really, we’d have to dedicate several episodes to go into this in any sort of depth, but we’ve also covered a lot of ground. And I think that we’ve given some information that, if you’re thinking about selling your home in our local markets, you can really put to use. Well, as always, it’s a pleasure to have you in the studio with me, co-hosting the show, and we’re gonna take a quick break. And when we come back, we’re going to do our Kip’s tips.

Ryan Neal: 45:38

Sounds great.

Kip Lohr: 45:44

Welcome, welcome. Welcome back to The Real Estate Revolution Podcast. I am Kip Lohr, your host with LOHR Real Estate, and as always, we like to end our show with an episode of Kip’s Tips. This Kip’s Yip is: Zestimate, Schmestimate. And so for those of you familiar with Zillow, Zillow has a Zestimate. It is an estimate of the value of your home, which is kind of Zillow to provide for you. And I am going to basically say that Zillow has no hope of being able to give you an accurate opinion of value for your home. And so, you know, obviously, there are cycles in our market where Zillow can get closer and there are types of homes that are easier for Zillow to be able to estimate the value of your home. But Zillow themselves, they say that they use a “sophisticated neural network based model,” whatever that means, to help generate a value for your home. And essentially, what they’re saying is they use county records, they use the information provided by real estate agents through their listings, to help guide them in being able to come up with a value for your home. And the problem with this is the variability of the circumstances on the ground. You know the old saying of “Real estate is local.” And so values are hyper local. So they are very much, you know, like wine, their micro climates and micro neighborhoods where the circumstances of, you know, why the value of your home is X, Y or Z is very dependent upon too many variables to determine from 10,000 feet. And so, what happens is that you get on Zillow, and you see Zillow is telling you your house is worth $800,000. And then you have a real estate agent come over to interview for the job of listing your home and they come up with a value that is nowhere near that. And it could be nowhere near that as in $700,000. Or it could be nowhere near that as in $1.1 million. I mean, it can go either direction where the Zestimate is you know grossly out of whack with what actually your home is worth today. And obviously, if your agent tells you that your house is worth a couple hundred thousand more than what Zillow is saying, you’re going to be super excited. But if you’ve made the decision to put your house on the market based on the Zestimate or the Zillow estimate of the value of your home, and then you find out that your house is worth $100,000, less than what Zillow said, that might change the, you know, willingness or the desire to sell your home. And it also might change your opinion of the real estate agent who is telling you that your house is worth $100,000 less than what Zillow says. And so, just as I don’t like to show homes to buyers, before we know what price point they actually can afford, for sellers, it’s the same kind of thing where we need to make sure that the expectation up front is in line with what reality is. And even though we’re in a seller’s market, if your house is worth a million dollars on Zillow, it’s not worth a million dollars. And so getting excited about selling your home or making plans to sell your home based on the Zillow estimate can be really fraught with danger. So the idea here is that you hire a professional who is going to look at the homes and neighborhoods, hopefully your neighborhood, but also neighborhoods that are very much like your neighborhood that are going to be similar in square footage and similar in age so that they can create a opinion of value that’s very, very current and very, very specific to your home. And it can be a big difference between, you have all wood floors or you have middle-of-the-road carpet, or you have formica countertops versus granite countertops, or you have old almond or avocado or gold appliances from the 60s rather than stainless steel appliances. You know, I can go on and on about these things. But these all make a huge difference on what your home is worth and Zillow can’t know those things. They’re sophisticated neural network-based model cannot have those data points, or even if they did, they wouldn’t know what to do with them. So Kip’s tips today is – hire an agent to give you a comparative market analysis so you know what your house is worth today, so that you don’t either make a decision to sell your house when you’re really not in a price point where you’re ready to do that, or you overshoot what your home should be marketed for and you actually net less money because you started too high. There you have it. That’s this week’s show. Thanks again to everybody involved in our show today, and we will see you next week.

Voiceover: 51:02

Thank you for joining the revolution. We are over and out until next week, when we’ll continue to fill you in on all that matters most in our local band in Eugene real estate. See you next time on The Real Estate Revolution.