In this article, you will learn the top 10 mistakes that sellers make when selling their home in Arlington, Virginia.
1. Thinking it is a Seller’s Market
Arlington has been a big seller’s market for the past few years. Across the board, demand has outpaced inventory by a wide margin. Sellers have had the upper hand and buyers were left to fight it out in bidding wars by escalating offer prices and waiving contingencies.
But is that still the case?
The short answer is – it depends.
For a majority of detached homes and many townhome communities, demand is still high and multiple offers are to be expected.
But that is not the case for all submarkets in Arlington.
For example, the condo sector has seen a significant slowdown. Condos that used to see multiple offers are now sitting on the market for weeks and sometimes even months.
The issue is two-fold: 1) there has been a drastic drop in demand from buyers who are now able to work-from-home and do not need to be in the Arlington area. And 2) inventory has increased from those sellers who were on hold from March – June. This holding pattern led to a spike in inventory in late Summer 2020.
No matter what type of property you own, the demand for your home will come down to your pricing and marketing strategy.
Global pandemic aside, there are a few key mistakes that sellers make when pricing their home. The first is the idea of “leaving room for negotiation” (aka overpricing your home).
When you leave some “wiggle room”, you are essentially pricing your home higher than its estimated market value. Buyers see that as well and in their minds, they see it as an overpriced listing.
Instead of submitting a lower offer on the property, the buyer may end up forgoing a tour altogether because they do not feel like the seller really wants to sell the property since the home is not worth the price being offered. This is essentially the ‘needle in a haystack’ pricing strategy. You are hoping the right buyer comes along and falls in love with your home enough to buy it at an above-market price.
The second mistake sellers make when it comes to pricing is the idea that the list price should be equal to the predicted sale price. Stay with me on this one…
If your property is worth $500,000, you should list your property for $500,000, right?
Maybe…but let’s reframe the listing price.
Instead of thinking of the listing price as the fair market value, think of the listing price as a marketing tool.
Ask yourself, “What listing price would entice buyers to view the property and submit the highest and best offer?”
If your $500,000 home is priced at $500,000, that does not excite your buyer pool. Your target market expects your home to be priced at this price point. They may even think it is overpriced depending on how the pictures look online and how the property shows in-person.
In this same example, you would never list your $500k house at $1.00 – that low of a price would just be silly. Nor would you list your $500k house for $600k – buyers would see right through that price.
But what if you priced your $500,000 home at $485,000? How do you think the buyers would react?
They would see your home as a deal. They would get excited about your listing. And when buyers get emotional, they are more likely to submit a higher offer.
Buyers would think that your listing is much more attractive because it is a more desirable price. This strategy has the highest chance of creating a bidding war for the seller.
The best opportunity to get the highest price for your property is in the first month. An aggressive pricing strategy is imperative for a successful sale of your home.
3. Thinking Every Real Estate Agent is the Same
Let’s face it – you have a lot of choices for your next real estate agent. You could call the real estate agent you hear ads for on the radio. You could call the agent you see on the back of city buses. Or maybe you could call your Aunt.
Point being – there are lots of options, so how do you decide?
Research your agent on review sites (Zillow, Google, Real Satisfied).
Research your agent on social media.
Your agent should have a strong online presence and you should see multiple reviews or multiple pieces of content from them in the neighborhoods that you are looking in.
You are hiring an agent to market and promote your home for sale. It should be easy to find lots of information on your potential Realtor.
It is important to remember that all real estate agents are different and the terminology “full service” no longer has any sort of relevance among choosing real estate agents. I know discount real estate brokers that do way more for their clients and call themselves “full service” compared to traditional agents that barely lift a thumb and call themselves “full service.”
And if you are going to hire a friend or family member, hire them because they are a great agent and they just so happen to be a close acquaintance. Things might get awkward at Thanksgiving dinner.
4. Using Pre-Covid Comparable Properties
There is a reason that appraisers only use properties that have sold within the past six months: a lot can change in six months!
To give you an example, the number of active listings in Arlington County increased 72.1% from July 2019 to July 2020.
When determining your property’s value, be sure that you are using accurate comparable properties. If you start pulling properties from 2019 or from the start of Covid in early Spring 2020, you may be disappointed to learn that the market has shifted.
With so many properties on the market for buyers to choose from compared to previous months, it makes sense that sales figures from early 2020 are not an accurate representation of current market values.
Take a second and imagine the type of impact that a 72% increase in new properties would have on the market. Now pair that increase in supply with a sharp decrease in demand from buyers and you have the perfect recipe for a glut of properties that are on the market.
Work with your real estate agent to learn how the pandemic has affected the values of your type of property.
5. Not Taking Professional Photos
The online listing of your home will be the first place buyers will see your property. Professional photos capture the attention of potential home-buyers and they create an excellent first impression. While cell phone cameras have gotten better, they are a distant second place to professional photos. A professional photographer may also include additional services like HDR photos, nighttime photography and/or a high-elevation photo.
Your cell phone is great for selling your old dresser on Nextdoor. But for something that is worth hundreds of thousands of dollars, be sure that your agent is using a professional photography company to capture your property in the best possible light.
6. Having Unrealistic Expectations
You and your agent should have discussed and planned for the expected days-on-market, number of offers anticipated and final sales price of your property before you go on the market.
Of course, it is impossible to predict the future.
But you should have a very good clear picture of expectations before going live on the open market.
Here’s how an example conversation would go:
- The goal here is to receive multiple offers over the weekend and to review offers on Tuesday.
- By going with this list price, we should expect 2-5 offers.
- This should escalate the sales price to $5k – $25k over the list price
This was an exact conversation I had with a recent seller in Rosslyn. We ended up with three offers and the sales price escalated $17k over the list price.
And maybe you’re thinking, That looks too easy. Why don’t all sellers have that exact game plan?
Well, the short answer is – not every property has the same amount of demand (obviously).
Sometimes I tell sellers that we should expect an offer in the first 30 days.
Other times, for more boutique expensive properties, things may take at least 90 days.
Here’s what we don’t want:
A seller asking why their property does not have an offer in the first weekend when the average Days-on-Market in the neighborhood is 32 days.
A seller that wants to accept an offer on a high-demand property the first day on the market when multiple offers are expected over the weekend.
Setting expectations are critical when selling real estate in Arlington. Strategize with your agent before you go on the market so everyone has clear expectations.
7.Not Staging Your Empty Property
You could have the best property in the county, but if a buyer can not imagine themselves living in your home, then they will not move forward on writing an offer.
Buyers need help visualizing empty rooms. Staging shows off your home’s best features and hides its flaws. It turns weird spaces into usable spaces and creates a warm, emotional mood for buyers. Buyers will easily be able to envision themselves living in the space compared to an empty, vacant home.
Staging is single-handedly the best additional marketing tool you can implement to get the highest return on investment.
8. Not Properly Preparing Your Property
This one hurts to write. It is embarrassing.
It is embarrassing to walk into properties that are missing light bulbs.
Properties that are dirty.
Properties that do not have their lawn mowed.
It sounds so basic. So easy.
Who in the world doesn’t mow their lawn? Who doesn’t replace light bulbs?
More people than you would think.
Enough people to include it on this list.
You should have a checklist of items to do before you list your property for sale.
There should be things to do on your checklist that your agent recommends that you have never even thought about.
But make no mistake, this isn’t a “you need to renovate your bathroom” checklist.
That is for a different conversation.
The goal of preparing your property is to spend as little as possible while focusing on the items that will provide the highest return on investment.
This will usually include painting, replacing light bulbs (and light fixtures), rearranging furniture, decluttering, adding an air-freshener or two (don’t go overboard!) and replacing carpets.
It is easy as a real estate agent to tell sellers to spend the money. But what you want to do is strategically spend the money.
9. Making the Property Difficult to Show
The number one priority for both our clients and customers is the health and well-being of everyone involved in the real estate transaction.
As life has changed, everyone is attempting to find the safest route to proceed with each facet of their life; and that includes real estate.
How can you make it safe for strangers to tour your home while Covid fears still run large?
At this point, almost all properties do not allow overlapping showings.
Shoe covers and hand sanitizer are both provided to the buyer and buyer’s agent upon arrival.
These practices are now standard.
However, the unfortunate trend we are seeing is that sellers are making their home overly inconvenient to tour.
Limited showing times, short appointments (15-minute showings) and limited days to view (only during the week) make it difficult for buyers to view properties.
When buyers get frustrated to view a property, they may not even see the place in the first place.
If you are overly concerned about allowing strangers into your home during a time like this, that is completely understandable and it probably makes sense to hold off on putting your home on the market.
We want to balance making your home as easy to access as possible with the safety of everyone involved.
10. Accepting an Offer in the First 24 Hours
So you have done everything you need to and you have been rewarded with an offer in the first 24 hours that you have gone on the market. Congratulations! Now you accept the amazing offer, right?
Well, that depends.
What was your gameplan with your agent? Are you waiting until the weekend is over to review offers?
Are you expecting multiple offers?
Have you been slammed with showings or have you only had one tour?
If you have only had one showing or traffic has been slow, maybe it makes sense to consider accepting the offer.
But what if it’s been crazy busy…if one person submits an offer immediately, that usually means that others may submit an offer as well.
So if your goal is to accept the best contract with the highest price and best terms, it may make sense to decline an offer in the first 24 hours to give all interested parties a chance to submit a competing offer on your property.
Best of luck out there. If there is anything we can do for you, feel free to reach out to us directly.