Your co-worker Steve is a great storyteller. Sometimes (though he’d never admit it) he even stretches the truth a little bit to make his stories that much more impressive. So when Steve told you about getting an offer $53,000 above his asking price on his newly listed home? You definitely took that with a grain of salt… only Steve wasn’t exaggerating. Today’s extreme seller’s market affords unique opportunities to anyone looking to sell their home publicly in the metro Milwaukee area.
Your home is worth more to a competing buyer than what it’s worth on paper. (See my most recent article about pricing your home for more info on this!) Today’s average home buyer has to contend with half a dozen or more competing buyers, and will therefore offer 8, 10, even 15% above an asking price just to stand out above the competition. They’re also more likely to assume more risk by offering to waive otherwise standard contingencies, like a home inspection or a professional appraisal. Whether it’s in their best interest or not, this is the current trend that we’re seeing in buyers, and this extremely competitive culture is ultimately benefiting sellers in the public market.
You can always choose not to list your house publicly. Selling privately is an old– if pretty unusual– practice in real estate, whether for-sale-by-owner, as a “one party listing” through a Realtor, or to your co-worker Steve’s son who desperately wants a home. However, a private home seller today will likely miss out on tens of thousands of dollars in potential net proceeds. Think about it like this: if a single buyer knows they are likely not in competition because of the private nature of a sale, what would motivate them to pay any more for a home than they absolutely had to? Or get them to waive a home inspection or guarantee an appraisal?
When placed for sale through a Realtor in MLS, a property is marketed to and found by every potential buyer with a search criteria that matches the profile of the home. Over the course of several days, dozens of qualified buyers can tour the property and, if interested, craft the most competitive offer possible, knowing they likely only have one shot to stand out and make an impression. Private listings simply don’t get the same benefit because they aren’t in the public eye. So by listing a home in the free and open market and offering all qualified buyers an opportunity to bid on it, a seller can maximize their net proceeds and minimize the risks traditionally associated with selling a home.
Contact Ben Mullikin, Broker/Owner