Usually when we think about selling a home, we think about the property appealing to that one buyer (or many if you're a lucky seller), who falls in love and buys it. But in reality the process is not that easy nor does it involve just one step. When you are selling your home, you ultimately have to sell it three times over. First, you need to sell your house to the Broker; second, to the Buyer, and third, to the Bank. There's just one caveat - at every step of this three-part selling process, the pricing and perceived value of your home is an essential part. In other words, your home must be "priced to sell" as they say - not inflated or unrealistic. Because if it is unreasonably priced, simply put, it just won't "sell" to the three B's. And most of the time, all of these steps in the process need to successfully and sequentially happen in order for your property to sell.
When I first heard* this concept of selling your home three times over to the three B's, I loved it. I thought it was brilliant and summed up the selling process perfectly. So that being said, let's indulge ourselves and take a closer look at what this means:
- Step 1 - Selling your home to the Broker - This is generally the first step in the process, and it's quite important. If the brokers think your property is fabulous, which in essence means it's well priced for the money, they will go out of their way to try to sell it to their buyer clients. That's why having a broker's open house just after putting your house on the market is a must. This way the brokers get a chance to view the property, and assuming they see the value, they will get on their iphones, ipads and computers and start spreading the word and selling it to their clients immediately. (P.S. Keep in mind that if your home doesn't "sell" to the Brokers, then it will not likely advance to the next step of "selling" to the Buyer.)
- Step 2 - Selling your home to the Buyer - So let's say that one of the brokers, who came to the open house, has sold it to her buyer client, and he is walking into your house for the first time. Now you need to "sell" your house to him, the potential buyer. He needs to see and understand first-hand the value and appeal of your home. And once he does, he will make an offer. (Another P.S. If your home doesn't "sell" to the Buyer, it's not likely to advance to the next step of "selling" to the Bank.)
- Step 3 - Selling your home to the Bank - Assuming we have accepted the offer, we're on to the final step in the process of "selling" your house to the bank, a.k.a. the appraiser. If your home doesn't "sell" at the agreed-upon purchase price to the appraiser, and the value of your home comes in at a lower number, we have a problem. If this happens, the result is generally a re-negotiation of the purchase price to a lesser figure - either that or the buyer goes to another financial institution for the loan. But the latter option requires time, and as we all know, time is of the essence in a real estate transaction. Adding another four weeks or so to the mortgage approval/commitment process isn't usually acceptable to the seller. So this ultimately results in a lower purchase price. Yet on a positive note, more times than not, once you've reached Step #3, your house does "sell" to the Bank, and you move on to a successful closing. Cheers!
Through my years in residential real estate, I have seen this three-step selling process happen time and again, but "time" is the operative word. Often, the process does indeed take time.... What are your thoughts on this subject? Have you experienced first-hand "the selling of your home three times over to the three B's"? And did the process proceed forward smoothly or did it happen in fits and starts? I can't wait to hear.....
* As an aside, this is not my concept or phrase. Elaine Bannigan of Pinnacle Residential Properties, my boss and the owner of my firm, shared it with us during a recent office meeting.