Selling a Home in Redondo Beach CA: Avoid these Mistakes

Almost every homeowner has heard that it is a "Seller's Market" for Real Estate, nationally, locally, in LA and at the Beach. If they didn't read it online or in the news or hear it on TV, no doubt dozens of Realtors have door knocked them, cold called or sent some mailing to let them know they "are working with a family looking for a home in their neighborhood". (Yes, sorry sellers, that's just a line Real Estate agents use -  except of course when I say it when it is 100% truthful.)

So seriously, it is a Seller's market. What does that mean? Less than 3 months of available inventory "on hand" ie listed for sale in the MLS. My previous post indicated that at no point over the last year of so have we had more than 3 months of inventory is North Redondo Beach, there were times when it was under one month, and for the most part we have been looking at 1.5 months of available inventory. Currently as of this blog post, there are 70 homes listed for sale in 90278 and there have been 309 sales so far this year. So we've been averaging about 41 sales per month meaning we have 1.7 months of inventory on hand. (Currently 56 properties in escrow - some will fall out.) Seller's Market.

But there are also 39 properties that are over 39 "Days on Market" (DOM), of which 28 have been on the market longer than 45 days, 23 longer than 60 days, and 11 longer than 90 days.  So if you start to factor out the ones that are lingering with no buyers, what you see happening is that a number of properties sell very quickly and others sit. Why. Or more appropriately I could also have titled this Blog Post: Why isn't my Redondo Beach House Selling?

It's a multi-part answer that comes down to 4 factors: Price, Presentation, Marketing, and "Your Property Has Some Really Major Issues".

Let's look at each of these.

PRICE: Speak with the more pessimistic, jaded, Realtors and they'll always tell you it is price. I'm neither pessimistic or jaded but sometimes it is price so don't make this mistake. You home is not worth $25K more than the most recent comp just because the market is going up or there's no inventory or any other of a number of factors that may tend to weigh in your favor. You and your agent need to be brutally honest with yourselves and price it right. By right I mean certainly no more than the most recent comps and if you want offers the first few weeks than 1-3% less than the most recent comps. Here's why. The listing is hottest when it first hits the market. You will get showings and activity but if buyers do not perceive it to be a "deal" they will not write offers and just wait until it gets lowered. On the other hand if the public thinks it is a great deal, you will see offers, often over the asking price and quite frequently a lot of them. I see it all the time. A property that would get no offers if it were listed for $775K gets bid up to close to $800K if it is priced at $749K. I agree that it makes no sense but let's face it, a lot of this is emotional. So if you neighbors home which was identical to yours sold for $849K, price yours at $835K or even better at $829,900. You will be very happy with the outcome.

The response I often get to this methodology is "Don't we need room to negotiate?".  No. Let me repeat that. No, no no. Here's why. Buyers who have missed out on a few properties because they didn't offer enough will be well aware of the value and in order to not miss out again will make an offer over the last best comp. I see it every day. Multiple times. You don't have to go to the extreme of listing it at $799K which I see some agents do (shame on you). Just 1-3% below the most recent comp.

The key to this is being very honest with yourself about the condition of your home vs the currently active competition, what's in escrow and what has sold. If your house has original bathrooms and kitchens and the most recent comp has updated kitchens and bathrooms, make the appropriate adjustments because the buyers most definitely will. Just remember that at the end of the day the "market" not you, not your agent, sets the price.

PRESENTATION: You want to get the highest price possible, make your home as appealing as possible. It may rub some people the wrong way but once you decide to sell, you have to look at your home, all the memories, all the emotions gone and it is now a "product" that has a value that you want to enhance to the greatest extent possible.

So how do you do that?

Well every situation is different but you can most likely start by clearing out the clutter. And getting it professionally cleaned (including the carpets.) And in some instance painting or putting in new flooring. And make necessary repairs. The buyers will want to deduct from the price for the roof that is near the end of life (or water heater or furnace or who knows what). But once those items are updated they go from being negatives that will be deductions to positives that will add value. You will get your money back and more. Why? Because by advertising new roof, newly painted, new furnace you are showing pride of ownership even if you only did it to sell.

So to be clear, I am not recommending doing a major kitchen remodel to sell because for all you know the buyer may have totally different taste than you do. But I am recommending that if the roof is gone, replace it. Plant some nice flowers out front. Yard browned out, put in some grass. You get what I'm talking about.

MARKETING: You know my saying "It takes more than a yard sign and an open house to sell". So what does it really take to sell for the highest price? Massive exposure however you can get it. Hint, that does not mean print ads in the Beach Reporter or Digs. You want the maximum exposure on all the public facing portals (Zillow, Trulia, Realtor.com), YouTube, a single property website, and every social media site you can leverage.

Part of marketing though is also availability of showings. While open houses are great to make it convenient for buyers (and their agents) to see your home truthfully your buyer is just as likely to come for a showing with their agent. So you have to ask yourself, how do they get in?

If your house is vacant because you or your tenants moved out, the easiest simplest solution is for your agent to put one of those blue "Supra" lockboxes on it allowing access anytime. Well almost anytime as long as the lockbox is not "timed out" to limit access.

If you are living in the home and want to limit access but make it available, your agent can place the lockbox out of site or in a place not easily seen and indicate in the showing instructions in the MLS "call first". That may not prevent some of the pushier agents from coming in unannounced but most people will be respectful and polite.

Lastly is "by appointment only". It keeps out a lot of lookey loos but also maybe a few real buyers. And you agent has to be willing to do the private showings (I am).

"Your Property Has Some Really Major Issues": Ouch. This is a tough one and ultimately the only solution is price as in lower it, lower it and lower it again. We're getting to the point where some North Redondo Beach homes really have what is referred to as "functional obsolescence" meaning that the house might be structurally fine but the floor plan and layout doesn't work anymore and even worse can't be fixed. An example that comes to mind are the older SFRs in the Golden Hills that are more like "long and skinny" than "tall and skinny".  This floorplan has 3 bedrooms upstairs and only one bathroom that is too small by current standards and situated in a way that would make expanding it very costly. And the houses have small one car garages.

Another example of major issue problems are related to location. For example on Inglewood Ave or very close to it. Or under the power lines. Or too close to Aviation.