Rules for Achieving a Successful Sale for Sellers & Buyers
Updated: Dec 1, 2022
November 2022 - By Amber Nestor Professional TN Real Estate Broker
Rule No. 1 - Trust your real estate agent, and follow their professional advice, but if you doubt, ask for details to help confirm and verify. Additionally, allow a reasonable time frame to be provided with these details. Your professional, full-time, agent studies this data daily, for many years, and putting into a set of reports that is meaningful to you may take a few days.
If you are selling property, and when you purchased that property, you were not working with an agent who was able to assist you in purchasing property at rock bottom, low, or discounted prices during a "Buyer's Market" environment, is it reasonable for you to expect to sell at a net profit? Probably not.
There are a lot of factors that go into this, and there is not enough time for me to explain all of those in a blog this morning, but any seller, or buyers, who would like to understand this may text me and request that I set up a phone conference with you to discuss these many factors.
If you are selling property, and you have done improvements, of any kind, to that property (land or structures or infrastructure), should you expect to sell at a net profit? Probably not.
There are also many factors that go into this, but if you did not purchase the property at a discount or extra low price to begin with, your profit margin, if any, will be minimal. Additionally, if your cost per sq ft of development and improvements was above the lowest CPSF rate in the last 10-15 years, it will additionally be difficult for you to achieve a considerable net profit. Each situation is unique.
Think about purchase stock in the stock market. I will break this down in a way that is simple, even if you are unfamiliar with stock. Consider a can of BBQ beans.
Let's say the grocery store owner order 100,000 cans of BBQ beans, and when he made this order, he did not price around. He did not make sure his cost per can of beans was low, in comparison to others in the market place. He paid top dollar for his beans, and he felt good about it. He figured, "These are the best beans, the man who sold them to me said so, and I am probably going to eat these beans one day, so no harm, no foul."
The grocer did not do any marketing or advertising. He ignored his store, and his cans of beans.
15 years go by.
The grocer starts to panic. He thinks, "Well, look at all the money I spent just trying to run this grocery stores that focuses on selling beans?! Look at the fees I have paid just to keep the lights on (yearly county taxes), and the doors to my store open renting this space (the yearly HOA fees), and the money I have spent improving the parking lot and landscaping (driveway development, landscaping, tree removal).
He decides he's going to change the price on of each can of beans to sell it to get back all of his original expenses in the beans, PLUS the money he spent keeping his store open and maintained. He hopes to himself, "I will get back everything I have invested in this venture!"
But, unfortunately, over the last 15 years, other stores opened, many ONLINE shopping options opened, and the markets are more competitive than ever before, and in new and different ways.
So what can this seller do?
This seller can take the advice of their professional agent, and price the property so that is can compete with the others that are on the active market, while taking into consideration the time on the market, and what has sold recently. Lastly, their agent will consider the swings of the marketplace, and where those swings are currently headed. Interest rates and cost of materials and labor also factor in, etc.
You win some. You lose some. And you re-coup some.
Sometimes it is not about a net profit. Sometimes, it is about re-couping what you can within reason based on the realistic expectations of the buying marketplace.
If you would like to sell, then sell.
I hope this helps.
Amber Nestor - Professional Real Estate Broker and Data Analyst for TN