- The Washington Times - Thursday, February 24, 2011

Reports of gloom and doom about the national real estate market have led many people to think buyers have the upper hand in every neighborhood in the country. While most of the Washington area, like most of the rest of the country, is in a buyer’s market, there are home sellers in this region who garner multiple offers for their homes.

What makes these homes attract more than one buyer? In general, the answer is pricing the home at or below market value, but other factors also influence buyers.

“My feeling is that in sought-after neighborhoods such as in Bethesda and Arlington, the market hit a tipping point about 18 months ago in terms of inventory and demand,” says Mynor Herrera, a Realtor with Weichert, Realtors in Bethesda/Chevy Chase. “Fewer sellers were putting their homes on the market just as more buyers were deciding to take advantage of superlow interest rates. The demand is out there for good homes, but potential sellers are still waiting to list their homes.”

Cathy Poungmalai, a Realtor with Frankly Real Estate Inc. in Falls Church, Va., agrees that location is an important factor in whether a home attracts more than one offer. She says many of her listings receive several offers regardless of their price range.

“The three factors that influence how quickly a home will sell and whether it will entice more than one buyer are price, condition and location,” Ms. Poungmalai says. “A lot of real estate agents focus on pricing a home in order to sell it fast; I focus more on the condition of the property. At our company, all listings are staged for free. Once the price and condition are right, I market the property to create excitement.”

Mr. Herrera says multiple offers have been made in recent months on everything from inexpensive condominiums to million-dollar homes. Foreclosures often receive multiple offers because of their low price, but traditional sellers have experienced competition in some locations.

While some Realtors in the Washington area say they have seen more multiple offers on listings and have worked with buyers in competitive buying situations, this does not mean the local real estate market has returned to the frenzied days of a few years ago.

Jane Fairweather, a Realtor with Coldwell Banker Residential Brokerage in Bethesda, Md., says, “You can cause any home to get multiple offers if you price it low enough and have a highly motivated seller. But it is a rare phenomenon in a market like this one that has seven to 10 months of inventory available.”

Mrs. Fairweather says sellers who miss the good old days of competitive buyers should focus on the three factors they can control in a home sale.

“Sellers can control the list price of their home, the condition and how easy it is to show it,” Mrs. Fairweather says. “They can’t control the competition or market conditions such as the economy, interest rates or even the weather, and all those things impact how quickly a home sells and for how much.”

“Ultimately, price dictates everything,” Mr. Herrera says. “Even the most unappealing place, especially if it is in a good location like the middle of downtown Bethesda, will sell if it is priced at $100,000.”

Mr. Herrera offers list-price recommendations to sellers based on recently sold homes rather than on comparable homes on the market because homes that have not yet sold could be overpriced.

“I tell sellers, ‘I am not here to tell you what you want to hear, but to be realistic about the market,’ ” he says.

Mrs. Fairweather says she tells sellers there are three prices to decide among: the price that will sell the home immediately, the price that reflects the current fair market value, and the price the sellers would like to receive but which may be unrealistic.

“If a home has not sold within the first 30 days and 10 to 15 qualified buyers have seen it, then the agent should tell the seller that they are at least 10 percent overpriced,” Mrs. Fairweather says.

Ms. Poungmalai recommends that sellers hoping to attract multiple buyers price their home appropriately for the condition and location.

“An overpriced home will likely not attract any offers, or perhaps just one, but sellers do not necessarily have to underprice their home to receive more than one offer,” Ms. Poungmalai says.

She says sellers can attract multiple offers with a home that has been staged.

“It is so important for the property to show well, so sellers need to declutter their home, move furniture around and perhaps add lighting to make their home more appealing,” Ms. Poungmalai says.

“In some cases we have even done more expensive improvements, such as adding hardwood flooring,” she says. “In one condominium community, the sellers spent about $10,000 fixing up their home, but they ended up selling for $29,000 more than another home of the exact same size in the same development. That’s an extra $19,000 in profit for those sellers.”

Once a home has been staged, Ms. Poungmalai makes sure professional photography is taken so the property shows well on the Internet. She also films a video of each listing.

Ms. Poungmalai maximizes the exposure for each of her listings, paying additional money to have 30 photos on the MLS.

“I market my listings to create as much excitement as possible, sending ‘just listed’ cards to neighbors and the surrounding area and making sure the property is a featured listing on Realtor.com,” Ms. Poungmalai says.

Mrs. Fairweather says sellers and their Realtors should determine how much a buyer needs financially to purchase their home and then market to buyers who have the means to make the purchase.

“Once the sellers determine a price for the property, they can estimate how much income a buyer needs to qualify for a mortgage on that home and how much money they will need for a down payment,” Mrs. Fairweather says. “Then they can get an idea of where these potential buyers might live now and target marketing to that area.”

Mrs. Fairweather says there are six types of buyers: investors, first-time buyers, move-up buyers, move-down buyers, out-of-town relocation buyers and special-needs buyers.

“Sellers and their Realtors should figure out the type of buyers who will be most likely to buy their home and target their marketing to those buyers,” Mrs. Fairweather says.

Mr. Herrera lists his properties later in the week, usually on a Thursday, to generate momentum for the weekend.

“I make sure every listing is online on more than 30 websites within 48 hours of going on the market, and do direct mail to local agents and neighbors,” Mr. Herrera says. “Weichert always has at least eight signs for every open house. The goal is to generate a buzz about the property.”

Mr. Herrera says multiple offers are more common when there are few homes on the market and more buyers, but he says it is difficult to predict whether that situation will continue.

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