Having been licensed since Moses’ son died, I’ve been through markets tilted towards buyers or sellers a few times. Sometimes it’s kinda sorta pronounced, and sometimes it’s ‘Ya gotta be kiddin’ me’. Ask buyers what it was like in the legendary seller’s markets 1976-79, 1986-89, and the mother of all seller’s markets, 2001ish-2005. Opening offers on half decent properties began at listed price. After the seller was able to stop laughing long enough to counter ‘that callus insult’, the buyer’s E-Ticket ride began in earnest. As a real estate broker, you quickly learn that in any extremely unbalanced real estate market, half the time you’re holding four aces with a king kicker, the other half you find yourself gamely trying to hold your own with a 10 high nothin’. That’s when it comes down to experience, knowledge, and the big one, real expertise. The kinda expertise that produces the only commodity in which savvy investors are really interested — RESULTS.
Investors with income properties in areas like San Diego, and there are a few of those areas around the country, have seen the value of those properties headin’ south for quite some time. It”s a fact of life these days — being a seller now means you better be one very serious camper. But that begs the question, ignoring the 900 pound gorilla sittin’ in the corner.
Why would an investor choose to sell one or more of their props in a overwhelming buyer’s market?
There’s lots of answers — want ‘em in numerical or alphabetical order?
Those are reasons that come to mind quickly. There are many, many more. The point is, if the decision is made to sell or exchange, you cannot simply try to Gump yer way through. There’s no puttin’ your raggedy old income property on the market, hopin’ the MLS and a cool sign will get ‘er done. Not happening. This ain’t my first rodeo — sellers in a buyer’s market must be serious as a heart attack.
But how does that kinda serious present itself when push comes to shove?
The majority of our local clients own more than one rental. Most of them by far are 2-4 unit properties and/or rental homes. Selling in San Diego now means you must stand out big time. No pimples, no bad haircuts, and for sure no crummy lookin’ clothes. Here’s an example, with some property details altered to maintain client privacy.
We just sold a triplex in 72 hours. And before you say what yer thinkin’, no, we didn’t sell it for pennies on the dollar. In fact, it’s the highest sales price for a property of its kind in its area in the last 6-8 months. Not my opinion mind you — that statement is based on closed, duly recorded sales, verified by yours truly and Josh. (The other Brown.) It hit the market on a Tuesday, and by Friday we pretty much had a deal.
The property was examined by our in-house interior designer. Yeah, I know, everybody’s a designer. My thinkin’ exactly. Not this one though. Before she moved to San Diego so many moons ago, she used to be flown all over the midwest and northeastern parts of the country on developer’s company planes in order to give them her opinion of their product. She works for us now. How cool is that?
She gives our clients a punch list of repairs, modifications, additions and sometimes even subtractions, to be done on the property before it hits the market.
Here’s what we did to the triplex, based upon her orders. NOTE: One of the units was in very good condition, requiring only some paint. The other two were, um, not. They received 98% of our attention.
Since two of the three units were vacant due to all the work being done, we advised our client to keep one of them that way purposefully. (All 3 units identical.) This allowed our designer to stage the unrented unit with some pretty cool stuff, showing it off at its best. Fortunately the landscaping both in front and back was way better than average. Didn’t hafta do a thing. The curb appeal was magnificent. Which brings us to the next step.
What a pretty girl, all dolled up at the spa without any pictures? Back up the truck, Jack.
We brought in our own nationally known commercial photographer to make her look extra alluring. And boy did he. It was the photos that made the difference. Though we sold this property before we could get its own stand alone website up, or for Heaven’s sake even a dang sign, the buyer saw them and loved what he saw. The sign we’d of put up would’ve had a picture of either an interior shot or the gorgeous backyard with the newly designed covered patio. You’d be surprised the number of people who will literally stop in the middle of the road, then back up just to ensure they saw what they saw.
BawldGuy Takeaway: When selling in a serious buyer’s market, your property better present itself as flawlessly as possible. It better knock the socks off of all who see it. It’s competition should be embarrassed to be viewed anywhere near it. Get the drift? Slappin’ a few gallons of paint and some cheap carpet won’t cut it. This ain’t 1969.
And that’s how we were able to sell a client’s income property in three days instead of 3-5 months — the norm for San Diego. Oh, I did mention we sold it for more than any other triplex in the area in the last six months, right? So when next you think it’s silly to sell a property in a market akin to today’s — think again. Only this time, think Purposefully, it works much mo betta.
OK, here’s the deal. You get a hold of me and we’ll figure out how we’re gonna get you from Today to Retirement. Sound like a Plan? Take that first step and we’ll be with you the rest of the way. Have a good one.