Seems simple enough: List, sell! Bidding war? Bring it on! Why waste time and money on a pre-listing home inspection, staging and repairs when houses are practically selling themselves?
Well, it’s true. A significant proportion of new listings get offers fast. Sometimes, bidding wars ensue. But what is evident, and many brokers caught in the trenches can tell you, is that a number of deals fall apart during the period of time between the acceptance of the offer, and the fulfillment of conditions.
Think about it – picture yourself as a buyer. You put an offer in on a house you want, and you find out that it has competing bids. You regroup, come back at a higher price. Perhaps it maxes out your budget. Obviously, under these circumstances, you make your offer contingent on a satisfactory building inspection. At that price, you can’t afford any surprises, right? And at the price you’re paying, that house better pass inspection with flying colours!
Sellers should take note – no matter how favourable the market is to you, it’s best to be prepared.
Consider these two sellers with very different approaches:
Seller 1, lets call him Steve, knows that the current market conditions are in his favour. He wants to sell, and sell fast. Like we have been doing for years now, we recommend a pre-listing building inspection to anticipate potential hiccups and identify and complete repairs or obtain estimates. But, nah. This seller reckons the house will be snatched up quickly and that buyers won’t bother looking for problems since the demand is higher than the supply.
Well, Steve received 3 competing offers in his first weekend on the market He accepted the best one, above the asking price, pending financing and, of course, inspection. The buyer’s building inspection yielded a hefty list of repairs of varying severity and involving several trades. The buyers wanted every item on the list addressed before closing, otherwise they’d walk away from the deal! A quick occupancy date meant Steve had very little time to get competing quotes, and he found himself scrambling to coordinate the completion of the work in the timeframe allowed.
Seller 2 (lets call her Anna), on the other hand, had a very different approach. Anna made sure that her house would sail through the gamut of buyer inspections by taking our advice and having her home inspected first. Minor fixes were completed at her pace, allowing her to contact as many professionals as she needed to feel that she got the best value for her money. Quotes were obtained for work not completed, in order to be shared with potential buyers. Expert analyses recommended by her building inspector were done. Thus, the home’s condition was fully declared and supported with a paper trail a mile long. Anna was ready to handle any buyer getting “cold feet”:
“Is that vermiculite in the attic?”
“It was analyzed – it’s asbestos free! Here’s a certificate to that effect”
“Is that aluminum wiring?”
“It is, but the entire electrical system is certified by a master electrician.”
When Anna’s house was in fighting shape, we hit the market. The familiar frenzy ensued, and multiple offers were presented. And lo, and behold, the best offer contained no inspection condition! The strategic work that Anna completed before listing her property resulted in an exceptionally smooth transaction, and she achieved her goals without ever being in an oppositional stance with her buyer.
The supreme art of war is to subdue the enemy without fighting.
-Sun Tzu, The Art of War
There is no doubt that this market favours the sellers. But, even in these winning conditions, there are victories and there are triumphs. Let Team Broady help you navigate these new challenges. There is no reason to cut corners when we can help you see around them!