PREPARING TO GO TO MARKET
It’s easy to prepare a listing before putting it on the market, isn’t it? Wash the floors, tidy up a bit, take some snapshots and then list it on a few websites, right? Wrong! Far too often, sellers don’t take the necessary steps to really get their apartment ‘market-ready’. The preparation process can take weeks.
*Complete a thorough CMA
*Understand the market trends
*Know your neighborhood market/listings
*Prepare the home (paint, depersonalize)
*Stage the property
*Obtain all of the correct paperwork
*Create a targeted marketing plan
*Generate marketing materials
*Generate mortgage materials
(Real Estate Agent, Attorney, Accountant, Management)
*Hire a professional photographer
CHOOSING THE RIGHT AGENT
When you put your home on the market, you want to align yourself with the best agent for the job. Be thorough with your selection process, and take the time to interview a few candidates. Treat the process like a job interview – you are doing the hiring. The right agent should be experienced, passionate about selling your home, possess a wealth of market knowledge and be able to clearly justify their market assessments.
Some questions to cover:
*What is the current state of the market and how does that effect my property?
*Are you seeing trends in the marketplace? What are they?
*What is the current inventory like?
*What is your background? What makes you different than your competitors?
*When are you available to show my property, and what do you do when you have a scheduling conflict?
*What type of buyer do you plan on targeting for my home, and how do you foresee reaching them? (Please go over a marketing plan specific to my home.)
*How will you price my home, and may I see a comparative market analysis?
Once you choose the best agent, you will sign an ‘exclusive agreement’, giving that agent the exclusive right to sell your home. This formal contract will also delineate the offering price, commission and the length of the agreement.
There is no exact science to pricing a property and remember that ultimately, the market will dictate the value of your home (what a buyer is willing to pay for it). However, pricing will make or break your sale from the get-go. Overprice and you’re destined for a long journey of price drops. Price strategically in the right market and you might have the good fortune of multiple offers. Regardless, be sure you (or your real estate agent) have a very thorough understanding of both the market and the comps prior to settling on your listing price.
For the best comparisons, look to your building for approximate fair market value. With this strategy, you are certainly limiting the variables immensely. In order to achieve a quality sales comp analysis, one must hold as tight to an ‘apples to apples’ comparison as possible. Understand that a building comparable may need to be adjusted for:
*Floor number / View / Light
*Condition / Renovations
*Special features (outdoor space, terrace, fireplace, etc…)
UNITS IN CONTRACT
Search out apartments that have recently gone to contract. Again, it’s always helpful to look to your building first here, but do also investigate how apartments are faring within a 10 block radius of your home. Your agent should be knowledgeable about similar properties in the area and the general price points wherein those units are moving to contract. Be sure to take note of the ‘time on market’ as well.
Take a week or two to check out open houses in your neighborhood, focusing on comparable apartments that are in buildings similar to yours. What does the current competition look like? Is your price point in line with the offerings of similarly priced units? A ‘competition check’ is a good way to see how realistic your asking price actually is.
A MARKET INDEX CHECK
While not always as accurate, comparing your apartment against the city’s market index can, at the very least, give you a general zone for pricing.
Some sellers opt to hire appraisers to assess the value of their home. While this may be good for bank-related purposes, it may not prove to be accurate in relation to current market competition. Appraisers focus on closed and pending sales. A real estate agent, on the other hand, takes comparable and pending sales into account along with list prices, the market, inventory and average sale time. Essentially, the appraiser looks backward for data while the real estate agent forecasts.
Some owners are looking to the internet to value their home. This may not be the best route. Searches, for example, on sites like StreetEasy, Zillow and Trulia may yield three different sets of numbers. Each site uses different metrics for valuation, which only serves to confuse the pricing issue.
Below are examples of how different sites evaluate price per square foot:
· Takes an average of all active resale listings in an area
· Does not include new developments
· Asking prices rather than closing prices
· Uses an area’s median listing price rather than average price
· Focuses on what a seller ‘hopes’ to get rather than closing data or what a buyer will actually pay
· Bases their figure on an average of recorded sales
· Counts deals that have been filed with property records
· Numbers are recorded on a rolling 3-month average
A comparative market analysis begins with science and real data and ends with the art of adjustment.
PREPPING AND MARKETING
A comprehensive marketing plan is necessary when putting your home on the market. Who is your targeted buyer and how will you reach them? What story are you telling to convince buyers to visit? How many different avenues will be explored to entice them? Your real estate agent should stick to a definitive plan and additionally, he or she should help you identify what you need to do to prepare your apartment for a smooth sale.
PHOTOGRAPHY, FLOOR PLAN & VIDEO
Professional photos and floor plans are an absolute must when listing your home. Videos are an excellent tool in attracting that on-line audience as well. Be sure your home is prepped appropriately prior to scheduling these.
GETTING YOUR HOME ‘MARKET-READY’
Depending on your property’s condition, you may need to consider these tasks before opening your home to buyers: repainting, depersonalizing, de-cluttering, re-grouting, renovating, refinishing, upgrading, rearranging, staging, cleaning, removing, repairing, organizing.
EXPOSURE TO BUYERS
Roughly 90% of all real estate transactions include both a Listing Agent (representing the seller) and a Buyer’s Agent (representing the buyer). Plain and simple: With NYC’s 29,500 real estate agents, your property should reach those with access to as many buyers as possible. In addition you'll need to be sure the following are included in any agent's marketing plan:
QUALIFYING THE BUYER & NEGOTIATING
It is of utmost importance that you pre-qualify your buyer prior to accepting or negotiating any offer. Not only must you be assured that the buyer can secure a loan, if you’re selling in a co-op, you will need to see whether they have the financial muster to pass the board. Be wary of the following situations as well:
*Letting your emotions get the best of you
*Rejecting low-ball offers
*Thinking only about the price
*Handling multiple offer scenarios
*Sharing too much information during the negotiation
*Refraining from continuing to show the apt
HIRE AN ATTORNEY
Do not wait until the last minute to hire your attorney. You should have representation lined up early, preferably prior to listing your property. After you and your real estate agent have successfully negotiated a deal with a buyer, your attorney will begin preparing a contract of sale. A deal is not a deal until contracts are fully executed and the buyer has provided their deposit (10% of the purchase price). The buyer’s mortgage application process will start thereafter.
It is imperative that you work with an attorney who specializes in NYC residential real estate.
THE BOARD PROCESS
SUBMITTING THE BOARD PACKAGE
You rarely get a second chance to make a good first impression. Pay close attention to the way your buyer’s purchase application is organized. Your real estate agent should review the entire package and check for spelling and mathematical errors prior to submitting. If there is anything confusing in the package, chances are the board will be confused as well. The mere presentation of the board package can pave the way to an easier approval.....or a difficult turn down.
THE BOARD INTERVIEW (CO-OPS)
Co-op boards generally take 3-6 weeks to review board packages. If your buyer’s board package passes the review, they will be invited to interview with the co-op’s board of directors. Getting the interview is a very positive sign. Once interviewed, there is a usual wait time of a couple days to a couple weeks for the board’s response. Your real estate agent should keep in touch with management for updates.
For condominiums, there is usually no formal interview required, and the process is much faster.
Once the board has approved your buyer, your real estate agent should let all parties involved know of the good news. Your attorney will aid in coordinating the closing (usually within 2-3 weeks of board approval) and should be in touch regarding what is required of you at the closing table.
Be sure to work with a real estate agent you trust when selling your home. It can be a long, complex process, and you'll want to know you're in good hands.
Licensed Real Estate Salesperson