Listing Lessons: How I Got A Developer $50K More
Welcome to the first installment of the recurring column “Listing Lessons,” where real estate agents across the country share a listing story and everything they’ve gleaned from the situation. Whether it’s marketing advice, negotiating tips or suggestions for increasing a listing’s sales value, there’s a lot to learn from these tales.
I’ve got a story to tell you about perseverance and adversity — one that required a level of confidence and an even higher level of market IQ. A story that took what many may have left as a lost cause but instead, turned the very thing into a huge success.
This is a story of how I got a developer $50,000 more than their last offer as a for-sale-by-owner just months prior. But before we can get into what exactly led to such a great ending for my client, I have to start at the beginning of how it all came to be.
During the summer of 2020, I had just started working with a lovely family relocating to Kansas City from Texas. We had narrowed down their criteria to select neighborhoods, specific styles of homes and amenities desired.
After touring different options over the weeks, we eventually found our way to a newly constructed spec residence in a highly desired area. It was a property that I had come across via the MLS awhile back, but didn’t give much thought to at the time because it was still under construction.
However, when we went to view the home, we were pleasantly surprised by the first impression it made on us — which led to us making an offer. Now, at that time, I represented the buyer clients and of course owed a fiduciary duty to them. The developers chose to represent themselves as the sellers since they, too, were licensed.
I knew the property had been on the market awhile (which is sometimes typical for new construction in the area, especially if it’s still being built), but I further learned from the developer that no offers had been made prior to ours.
This was a red flag for me because the area was prime, the home was new, and it was priced very well compared to other new homes in the neighborhood. However, there were some questionable things that stood out to my clients and me. We assumed the same for other potential buyers, which was why it hadn’t sold.
Where the home was located on a corner lot, it had no privacy at the time (which made it feel like a fish bowl). In addition, there were some functional details that needed to be modified, as well as staging that would have helped buyers better envision themselves in the home (almost 3,500 square feet and no furnishing was a bit hard to mentally lay out).
That said, I did what I do best — negotiate hard for my clients. I noted all of those items and where we ultimately felt the value resided. We ended up going under contract in the low $700,000s, which was $65,000 less than the asking price. Unfortunately, under inspections, those items became harder for my clients to overcome, and it ultimately led us to cancel the deal.
At that moment, it would have been easy to just walk away and move onto the next thing. However, I truly believed that the property was just a few tweaks away from commanding its proper value — and more importantly, I believed I could add value to the developer.
As with most things, it wasn’t an overnight success. In fact, it took a few months of follow-ups and check-ins with the developers before they even considered giving me an opportunity.
The property ended up going under contract for a second time (after my client’s original offer) in October 2020, it but later came back on the market in December. It turns out, the developer was set to take an even lower offer than ours in the upper $600,000s (which would have been a steal at the time).
I realized that going at it alone, while possible, was most likely not going to land me the opportunity to work with this developer and list the property. Instead, I decided to partner up with another agent at my office who had a relationship established with the developer and also could bring a high level of expertise to the transaction.
Late January 2021, we finally got a face-to-face meeting at our office. With no guarantees, we put together an analysis and history of the property — on why it wasn’t selling, the drawbacks that seemed prevalent, and our suggested changes as well as estimated budgets to complete them.
From the first meeting, the goal was to add value and show why we were the right professionals for the job. We understood the market, where the inventory levels were heading, and what exactly this house needed to overcome its most common objections.
Taking it a step further, we also established for the developer a practical schedule for getting the recommended changes completed, and the marketing that would take place pre, during, and post the list date. Finally, we put together a sensible timeline for making any pricing adjustments if the property sat on the market for too long.
Impressed with the presentation we had put together, they decided to give us a go and to also complete the recommended changes. With inventory dwindling down further, the spring season approaching, and a new influx of buyers ready to purchase, the conditions were prime to establish the house as “new to market” (no pun intended).
We implemented a luxury landscaping plan, modern décor staging, new professional photos, commentary and a social media blitz to build buzz. It all paid off because within three days of listing the property on a Friday and doing an open house on a Sunday, we had multiple offers, ultimately taking the one that was $25,000 over our list price of $729,000 and more than $50,000 over the developer’s last offer as a FSBO.
Understanding the market’s inventory and what potential buyers are expecting at certain price points, is key to your success as a real estate professional. Taken a step further, having the know-how to tell your clients what they should implement or change not only allows you to add value, but it also sets them up for success.
Had I not had the confidence to believe that I could add value to the developer’s business, there’s no telling what may have resulted with that property. It very well could’ve found its way to having the necessary changes implemented. However, what I know for sure is that I would not have been a part of such a wonderful success story for my now client.
Anthony West is a real estate agent, the founder of The Luxury Life KC at Moffitt Realty, and an entrepreneur in Kansas City.