Editor’s note: This story is the second of a two-part RISMedia report on how to calm sellers’ fears and rationalize situations that may arise when homes similar to theirs and in close proximity are on the market. For part one, go here.
Preparing a home to be sold isn’t difficult. But when there are similar ones next door also for sale, there can be an added challenge. All homes on the market in a town compete with each other, but when For Sale signs are within view of your seller client’s home, there must be a strong push to try and make a “grass is greener here” statement.
Previously, part 1 focused purely on pricing in such situations. Here, we ask residential real estate pros questions related to what sellers should do above and beyond the usual strategies to turn a For Sale sign into Sold!
Do you check the other houses for sale nearby carefully?
“Absolutely. It’s real estate due diligence 101.” – John Walkup (JW), co-founder of UrbanDigs, a real estate analytics firm
“Yes. There is no reason not to.” – Lindsay Barton Barrett (LBB), a broker at Douglas Elliman in New York
“For any listing, it is important to gain as much information as possible about active, in-contract and recently sold properties. House size, room count, lot size, lot shape, age (of the house and of the building systems), condition and any special features (e.g., parking, swimming pool) are all important. For the subject property, it is important to ‘tell the story’ of the house and to highlight any features that would make it stand out in comparison with the others.” – Andrea Saturno-Sanjana (AS), a broker with Coldwell Banker Warburg in New York City
“Absolutely. I make it a point to preview the neighboring homes so I can understand how they compare and what unique features each one offers. That insight helps guide my strategy whether I’m representing a seller or a buyer.” – Stephanie Mancilla (SM), an agent with RE/MAX Heritage Properties in Flanders, New Jersey
“As a listing agent, we must see all similar listings on the block together so that we can price correctly and know how to highlight features. How is the light, is it a corner, views, finished basement, deck. Sometimes this can be deceiving since signs are left up until the home closes. I showed a house recently with three properties listed on the block. One was under agreement, the second received multiple offers over the weekend and the third was in a different category—total rehab.” – Pam Rosser Thistle (PRT), an agent with Berkshire Hathaway HomeServices Fox & Roach, REALTORS®, in Philadelphia
How do you guide owners who may be worried about how their home stacks up with ones for sale close by?
“It is not unreasonable for a seller to head toward panic mode when this happens. However, it takes an experienced agent to walk the seller off the ledge. When there are several competing homes for sale, you need to be sure your home stands out and delivers value in the eyes of the buyer. Often, the neighbor’s home is not a direct match. Your home, for example, might have larger square footage. Thus, you will want to highlight your home’s distinguishing features and lifestyle advantages using a Feature Sheet. It might include, for example, a 2nd-floor laundry room, 4 bedrooms all on the same floor and a fenced-in backyard. Additionally, if your home’s overall condition is more updated than the neighbor’s home, specify the improvements made along with the year completed, such as a new roof or HVAC system.” – Suzy Minken, an agent with Compass in Short Hills, New Jersey
“Buyers often make decisions based on comparisons, and presenting several options in close proximity allows them to evaluate and contrast features, prices and conditions more effectively. A home achieves its highest sale price when its location, condition and listing price align optimally. I guide homeowners in showcasing their property’s full potential. I advise on decluttering, deep cleaning and addressing before putting on the market any issues that might raise red flags. Through strategic staging, I ensure the home presents itself at its best, attracting top offers.” – Debbie Lang, an agent with Berkshire Hathaway HomeServices (BHHS) Fox & Roach, REALTORS®, Princeton, New Jersey and BHHS Florida Realty, Boca Raton, Florida
“Sellers suddenly become hyperaware of their pros and cons: outdated kitchen, awkward closet door swing or even listing photo lighting. The anxiety is somewhat justified because buyers have a side-by-side benchmark, which can be a rarity.” – JW
“It might light a fire under a seller to do more to distinguish themselves. They know that they have direct competition, so even if they’re in a great location, they can’t just lean on the fact that it’s on the best block of the neighborhood, since there are others on the market. They may listen to more of our suggestions about preparing the home for sale whether it is staging, decluttering or home improvements.” – LBB
“Most owners do worry, and it’s completely normal. Sellers want their home to shine, and seeing a similar one next door with a new kitchen or fresh paint can cause stress. That’s why I walk them through the comparisons and show them how we can highlight their home’s strengths, even if it’s not as up to date, and if possible make minor changes within their budget.” – SM
As a buyer agent, do you show all three houses?
“If they all meet your client’s criteria, yes. It may present an opportunity to get a good deal. Also, if there is a reason people are selling, you’re that much more likely to find out the info.” – LB
“Yes, buyer agents love situations like this. It’s efficient, clear, and allows clients to comparison shop.” – JW
“As a buyer’s agent, you have a fiduciary duty of disclosure to the client. If the buyer would like to tour one property, and they are unaware of the other, similar properties, offering the buyer the opportunity to tour all three would be prudent. If the buyer is aware but only interested in touring one property, then that is the tour the agent should schedule. More information can often help a buyer to reach the decision that best meets their needs.” – AS
“Definitely. Buyers love options, and in situations like this, touring all three can actually help them feel more confident in making a decision. They get to compare features, layout and feel, all in one afternoon.” – SM
What strategies do you impart to a seller to help make their property stand out?
“Don’t be overpriced, since value will likely be how your unit is judged. Consider offering incentives, such as covering a portion of closing costs or a new lighting fixture. Highlight anything truly unique. In a vertical market like Manhattan and Brooklyn, one floor could make a big difference in views.” – JW
“It is entirely property-specific. Sometimes it’s staging, sometimes it’s being more flexible on the closing date.” – LBB
“First, do your research. It is important to know how the subject property compares with the other properties, and to be aware of its specific strengths and challenges. Second, highlight any unique features in the property marketing, both online and with a sign rider attached to the For Sale sign. It might be that value is a unique feature, so pricing correctly to reflect this and to attract more buyers might be the best strategy.” – AS
“Thoughtful pricing, standout marketing and little details like staging or small upgrades can go a long way. I also like to connect with the neighbors. Sometimes just letting people nearby know there are multiple homes available leads to a referral from someone who knows someone wanting to move to the area.” – SM
Any other thoughts on the subject?
“Multiple homes for sale close by can be a positive in a low-inventory market; it gives people more reason to come because they will see other things. In a low-inventory environment, it can be hard to get people comfortable with a price sometimes, because they may feel they don’t have enough information to make the right decision. But if you have all three houses that are largely similar, it gives you something concrete and comparable and substantiates the price.
“If your property doesn’t stack up to the others in some way, it’s one more reason to price attractively so that people have a reason to choose this property over the others, and price is the strongest motivator there can be.
“We have also seen that if one home is on the market and there are multiple bids, it can provide you with the most motivated buyers who have a baseline for the price. Buyers who may have been outbid on the other homes know they need to bid more aggressively on yours. At the end of the day, like so many things in this business, it’s about proper pricing. If you price it right, nothing will stand in the way of a successful sale.” – LBB
“I remind sellers that buyers aren’t looking for perfection, they’re looking for potential. We can’t control what’s next door, but we can control how we present their home. Whether it’s improving curb appeal, adjusting the price or focusing on features that the others don’t have, there’s always a way to stay competitive.” – SM
“It really is case by case, keeping in mind the seller’s priorities and communication styles. Do they need to sell now? If not, could they wait until the house next door goes into contract or sells, creating a fresh data point of a higher sales price for the neighborhood? Then, the seller could list with some minimal updates to refresh the home, citing that in-contract or closed sale to their advantage.
“Beauty is in the eye of the beholder, and there is a buyer for every home. Often the seller is too close to the home to view both its strengths and challenges objectively. Even if they understand that their home might not fetch as much as the one next door, and they would be more than satisfied with a price range within which their home was likely to sell, the change of selling, moving, relocating or a life change could be the real factor driving their nervousness.” – AS
