‘Keep expectations in line’: How to talk to clients in today’s market
Sellers may still hope to get multiple offers with minimal effort, but that’s not the reality in 2023. Pricing, prep are key to a faster sale.
- Agents need to “present a true picture” of the market when working with clients.
- Higher mortgage costs are making buyers more cautious about properties that need repairs and renovations, agents say.
- With more leverage than they’ve had in recent years, buyers can negotiate — with the help of an agent.
Sellers in 2023 will need to invest in preparing their homes for sale — and make sure the listing price is right.
That is the advice from Jeremy Applebaum, a Kansas City broker-agent who warns that overpriced homes and properties in need of repair are staying on the market longer in the cooler real estate market.
"If you are priced at yesterday's values, you cannot take advantage of what is still a very good market," said Applebaum, owner of Applebaum KC — Realty Executives of Kansas City.
Applebaum warns that the longer a home sits on the market, the harder it becomes to sell. "Buyers are seeing days on market as detrimental," he said. "They automatically think something must be wrong with the property, like it's a bruised banana or a dented can. When those situations occur, the seller loses control. It opens up the sale to negotiation."
It is important for the seller to be upfront and transparent about repairs, he said. Otherwise, there's a risk that a buyer will back out of a negotiation and continue to shop around.
"We had two years of properties selling in hours or days that maybe did not deserve to. What sellers saw was that 'I don't have to put the toilet seats down or the dirty dishes away.' They stuck a sign in the yard and the home sold," Applebaum said.
That is not the case in 2023. Home purchases are more expensive, and "buyers take notice when the seller is not making repairs, or painting those red dining room walls or fluffing up the mulch."
Use data to present a 'true picture'
Dee Dee Miller, an agent with Long & Foster in greater Baltimore, agreed. Today's buyer wants a move-in ready house priced correctly and with few repairs or upgrades needed, she said.
"While sellers would like to return to the 2021 market for a quick sale and potentially multiple offers with few or no contingencies, the reality is that market has passed," Miller said.
She uses statistics and data with easy-to-understand graphics to show sellers how the market has changed. "As agents representing clients in this new market climate, we must be sound on our statistical data and present a true picture," Miller said.
Buyers are shopping for value and eyeing properties with more scrutiny than in recent years, she said. "Buyers are being very particular about what they buy due to higher interest rates impacting their borrowing power," she said.
But Miller added that homes that "present well" and are priced at market or slightly under are still selling within 30 days.
Help buyers use their leverage
Heather Cook, an agent with the Curated Group of Real Brokers in greater Charlotte, NC, predicts that the home sales market will "normalize" this year. But it will be a new normal.
She said it's important for agents to understand how their local market has changed from a year or two years ago.
With sellers, Cook said it's essential to "be prepared to have firm conversations — backed with extremely recent comp data — to keep expectations in line."
With buyers, agents need to be adept as educators and negotiators. In a softer market, buyers may have more leverage over closing costs and repairs. But they cannot go it alone and need to rely on the skills and expertise of their agents.
"Everyone wants a good deal. But buyers will need the assistance of an experienced agent who's an expert negotiator to help them get the best deal on the home they want," Cook said. "True negotiation will happen and a much healthier market is in our future."