Selling your Condo
1. Get Educated
Specifically, get educated about your local neighborhood. Even within San Francisco, some neighborhoods can be on fire while others languish. Market education is especially critical in South Beach and SOMA, as these neighborhoods are the first of their kind in the city, and a lot of the old rules don’t apply. In South Beach, for instance, the physical neighborhood itself is undergoing tremendous changes which affect the value of every condo in the area. They may not be building more land, but they are rapidly increasing the amount of condos available… does this help or hurt your property value? The only way to answer this question is to carefully research upcoming developments; a new park and retail center, for example, may increase your condo’s value, whereas a view-blocking tower will obviously hurt it.
In addition to the neighborhood, the market varies dramatically by property type. Single family homes are dramatically different than condos, and they often attract different buyers in different phases of their lives. In a given year, the average condo price might go down while the average for single family homes may go up. Be sure the statistics you use focus on condos specifically, and if possible specifically in your neighborhood.
2. Interview Professionals
Even if you’re set on selling your condo yourself, there is nothing to lose by meeting with professionals and getting an accurate estimate of what you should sell for. Savvy buyers love finding uneducated sellers, and I’ve personally seen savvy buyers “steal” a property for as much as $100,000 below it’s fair value and resell it within a year. You wouldn’t sell your car without consulting the blue book; why not get a free estimate from a professional who spends every day looking at condos in your neighborhood?
Regardless of what you decide, at the moment there is no mechanical or online substitute as accurate as meeting with a professional. Almost all professionals will provide a free consultation and estimate with no obligation. Indeed, even if you decide to sell on your own after meeting, many professionals will still be happy to help you in the hope they can find a buyer for your condo or that you will refer them to your friends who prefer professional representation.
3. Ask the Right Questions
Condo-Specific questions to ask during the interview:
- Do you focus on my neighborhood?
- South Beach and SOMA are dramatically different than other SF neighborhoods, with dozens of new developments changing the landscape almost weekly. It’s critical your Realtor® focuses daily on your neighborhood. If they say yes, ask them to prove it with materials, websites, etc. they’ve created specifically for your neighborhood.
- Do you focus on condos?
- Condos appeal to different buyers, they’re more difficult to market (try sticking a yard sign in a concrete sidewalk!), they require much more paperwork, and they have a range of different issues than a single family home. Make sure your Realtor® is a specialist, not a generalist. Again, ask them to prove it with materials they’ve created specifically for condos.
- Are you familiar with my building?
- If your Realtor® isn’t familiar with what makes your building great, how will he communicate those benefits to buyers? Buyers can only pay for benefits such as heated pool, earthquake insurance, a well run HOA, etc. if they know it exists. These benefits can add thousands of dollars to your sale price… don’t sell yourself short!
- Can you show me real, tangible results?
- Most Realtors® are professional and provide great service, with testimonials to prove it. Go beyond testimonials and ask for specific results:
- Have they set any records in other buildings for highest sale price?
- Have they set any records for shortest time on market?
- What did their listings sell for compared to others in the same building?
- Most Realtors® are professional and provide great service, with testimonials to prove it. Go beyond testimonials and ask for specific results:
- Do you have a condo-specific marketing plan?
- MARKETING MATTERS! Don’t just gloss over this part of the presentation. How your condo is marketed can add or subtract thousands of dollars from your proceeds. I’ve seen similar 1 bedroom condos with similar views in the same building sell for a difference of $40,000. Condos don’t sell by luck; they sell by great marketing. Review your Realtor’s® marketing plan carefully and ask them for proof of the results they’ve had in the past. In the end, more buyers coming through the door has a funny way of turning into more money in your pocket.
4. Decide: Professional or on your own?
This choice depends on a variety of factors, including your comfort level, expertise, risk tolerance, and free time. Make the choice that works best for you, but be sure to include all the factors.
Often, sellers only consider one factor: saving on the commission. When considering selling yourself, keep these facts in mind:
If you sell for less than a professional could have gotten, you’re not saving much money. If you sell for a lot less than a professional, you’re actually losing money.
Most buyers are represented by Realtors, and if your buyer is you’ll be expected to pay their share of the commission.
Your time costs money, too. Unless you’re unemployed, factor in the cost of your time for marketing, showings, open houses, negotiations, etc.
Peace of mind. Realtors® are professionally licensed and insured by their brokers for any errors or omissions, and they have systems in place to ensure that no required legal documents are overlooked. Consider your tolerance for risk.
5. Negotiate
If you’ve made the right choices so far, you should receive an offer within a reasonable amount of time after listing your property for sale. After this, negotiation is what makes or breaks the deal. Careful negotiations ensure that you get the value you deserve, while still respecting the rights of the other party. Buying or selling a home can be an emotional process, so be very careful if you’re negotiating directly with the seller. Once emotions get involved, it becomes dramatically more difficult to successfully close the deal.
When it comes to selling a condo, negotiation is more than simply haggling over price. Your Realtor® should be able to clearly show the value of your property, using a thorough knowledge of comparable sales in the building. Go beyond the numbers: maybe that bigger condo two floors up only sold for less because the seller had to immediately leave town for a new job? Maybe the “stunning bay view” of the comparable sale could only be seen by standing on the toilet in the bathroom? Knowledge is most certainly power; don’t expect the buyer’s agent to know these details. Buyers can only pay for the value they know of; the negotiation period is your final chance to make sure they see everything.
6. Coordinate
Once you’ve both signed a purchase agreement, you’re now “in contract” and the escrow period begins. Carefully monitor the details throughout the escrow period: appraisers, inspectors, and others will need access to the property to conduct their inspections and provide the buyer with their due diligence.
7. Celebrate!
Selling a home is a major event that requires a great deal of effort and expertise… pour yourself a glass of champagne and celebrate!