In 2013, they (and the people who supported them) earned all the value it took 7 years to make once Twitter’s initial public offering hits the market.
When they were thinking about selling shares in the 2nd most popular social network on Earth, they personally didn’t have a clue how to
- find its market
- determine its value … or
- have the know-how and relationships to sell it
Hiring a team that understood what they were selling was their second biggest decision since it could make their decision to sell either brilliantly timed or an epic disaster.
Listing your home for sale has just as much at stake after you’ve decided its time to sell.
Here’s what you want your agent to know and do before bringing your home to market.
Find the market to sell your home in
Just because millions of people use twitter daily didn’t mean there were people ready to buy what Bill, Evan, Noah and Biz were selling.
The same holds true for your home.
Just because it’s located in a highly sought after neighborhood doesn’t mean it will sell.
There’s a reason buyer interest in any property boils down to location, location, location.
Researching sales trends by focusing on HOW buyers are purchasing can reveal a lot about the kind of property sales closing in your neighborhood.
Unfortunately, most brokers limit their research to closed sale price and what properties are on the market due to the training and supervision they get from their broker.
You want to be confident that any agent you hire should know the market for your property.
By re-labelling that whole “Location-Location-Location” real estate mantra to “Neighborhood-Block-House”, you’ll be able to assess whether she has real market knowledge or just faking it.
Arriving at your property’s value
Those 140 character guys may have thought that because of its popularity around the world, Twitter had to be worth a lot of money.
It’s a good thing their agent helped them drop that line of thinking because sign ups, users and number of tweets a day wasn’t where its value would come from.
Astute brokers are aware of this when they meet homeowners that point to upgrades and remodeling as sources of increased value and take the time to explain what drives property value in their neighborhood.
Unfortunately, these same homeowners will meet a broker who will nod and agree knowing that its not true.
These are the same agents that give listing presentations that consists of 80% agency marketing fluff, 10% agent bio and 10% about their property’s value.
If you already met that broker, then you’ve figured out they aren’t as knowledgeable about your home’s market value as you thought.
they’re only interested in listing your property for sale THEN figuring out what the market will pay for it later.
But if you haven’t met that broker yet, they’re the ones who offer to do a Free Market Valuation.
Free market valuations, or Comparative Market Analysis, use recent property sales and homes currently on the market to determine a list price.
While what sold and what’s for sale is important, whose buying and how they’re financing their home purchase are more important.
For example, if five homes that sold near your property went for an average $336 per square foot, would that be enough to know what your home should sell for?
If that was all you had to rely on, you’d have poor information to make a decision on whether to hire that agent.
But what if you had the following to consider;
- 2 purchases were without a mortgage
- 2 were 70% financed with a mortgage
- 1 was 50% financed with a mortgage
and all of the above sales closed within the 60 days of each other after being on the market an average 103 days.
Would that influence what your list price should be?
Having the relationships to sell it
The guys who built twitter into what it is today could easily have gone out and sold shares in it themselves.
But if their goal is to get the highest price per share, why would they waste time learning something they would need to do right once?
They knew that if a broker thought there was value in what they were ready to sell, they could offer a commission that gave them all the incentive needed to earn the best results.
It’s not different in property sales.
You’ll take the same approach as they did because there’s no value in learning something you won’t use again. Your time SHOULD be more valuable than that.
Your home’s value isn’t static, either.
Just as it took time to earn the equity you have, there’s no promise that tomorrow’s market conditions will hold long enough until you’re ready to sell it on your own.
And even if it made sense to list your home yourself, you still won’t have the know-how and relationships to broker the sale you want.
Know-how in the real estate business are the tools, resources and processes used to advertise and promote your property to the right home buyers interested in your property’s location, and manage its sale to closing.
Great real estate agents spend a great deal of time developing relationships with buyers and other brokers in their selling efforts.
Well established relationships with attorneys, title agents, mortgage loan officers and appraisers are how property sales get done.
In short, selling anything worth a lot of money will need a coordinated effort by a lot of people, all contributing to a single transaction’s outcome.
Just ask Bill, Evan, Noah and Biz.
In conclusion …
Listing your home for sale has a lot in common with a company’s initial public offering … when done right.
Way too many brokers offering Free Market Valuations and CMA’s in listing presentations fail to research Home Buyer Demand beyond recent sales and properties now on the market. More can be learned to know what kind of market exits.
And hiring the agent who can show she has real market knowledge, know-how and the right relationships is where your focus should be.
Now to you …
What experience would indicate a broker has all the capabilities described in this article to bring your home to market?
Let’s discuss it in the comments below or if you have a question after reading this article, click the box in the sidebar and send it to me.
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Until your next opportunity,
Your Broker Guide