When speaking with sellers in this seller’s market, the comment I get frequently is that in this hot market, the homes simply sell and set new record prices themselves. Agents don’t really play a significant role in the equation.
Yes, this certainly may be the perception from reading and watching things on TV. The market is so hot that every sale sets a new price record. There is not much skill involved in getting the highest price in this market. It is an understandable perception.
But as with many things in life, things are not as simple as they seem.
A good way to illustrate this point is by looking at recent sales of condominiums; in this case a highly sought after community called Mission Terrace in Santa Clara. The units are pretty much in the same condition and for most part the same layout with same number of rooms (2 beds 2 baths). And they were all sold within a couple of months of each other during the summer. There were no other drastic differences that would explain away the dramatically different results.
There are, however, some things to consider in understanding how condos are sold and what are considered important factors.
Location. Top floor units with no one living above you typically command higher prices.
Size. Units with larger square feet typically command higher prices.
Off Market date. This is the date when a unit went into contract. This means as of this date, the status changes to Pending, and not available for purchase any longer until escrow closes. The difference between the Off Market Date versus List Date will tell you how many days the unit was on market before someone made an offer.
Timing. Typically the most recent listings have the benefit of using previous sale prices as benchmark prices. Sold Date is when the final sale price becomes available as public record.
The simplest way to view things would be to believe that the units with the largest square feet on the top floor that sold most recently would be the ideal candidate for record setting sale price. This is what I hear from sellers who believe the units sell themselves in a sellers market and that agents don’t play much of a role. Which leads to the conclusion that it doesn’t really matter who you hire to sell your home.
The unit that sold for the highest price ($820,000) was not on the top floor, was not alone in being the largest in size nor was it the most recent unit sold. It did not possess the qualifications which would permit it to be the record setting price. And yet that price has still not been broken.
So what was the differentiating factor? Why would a ground floor unit with non-exceptional views and nothing particularly outstanding (read the remarks and how the units are described) go and set the price which still stands?
Everyone basically had the same unit to sell, yet the final sale price differences are very dramatic. The price difference between the highest and the second highest was $18,000. The greatest difference was $80,000. Why? There must be a catch……
Yes. There was a catch. I would argue that the agent’s ability to negotiate better terms, conditions and price is what differentiated the lower sale prices versus the highest sales price. The catch is negotiation skills that all clients seek from agents, do play a tremendous role in the final equation: that is ultimately the special sauce. Have someone who has the experience and exceptional skills watching your back to protect your most prized asset. Who you hire absolutely matters!!!
Some additional sales data since the writing of this post.