Dawn and Albert Schick knew they owned a special house. The 7,500-square-foot, Victorian-style house, located in Richmond’s Fan District at 1853 West Grace Street, had been built in 1910, and it still had all of its original moldings, chandeliers and hardwood floors. It was a grand property with particularly striking woodwork, and the Schicks had successfully converted the property into a popular bed-and-breakfast called the Grace Manor Inn. So when they put it on the market, they expected it to sell fairly quickly, even with a high price tag.
It didn’t. And at least a partial explanation lies in the history of the street itself.
For much of the late 1800s and early 1900s, West Grace Street had been one of the city’s premier residential streets. As city residents moved to the suburbs in the 1960s and 1970s, though, the street’s reputation declined, and many of its grand houses were converted to apartments. In recent years, as interest in city living resurged, the trend reversed, with new homeowners converting several apartment buildings on West Grace Street back to single-family residences.
Recognizing the street’s renaissance wasn’t universal, though. Several real estate agents the Schicks interviewed seemed unable to recognize the street’s resurgent value, Albert Schick said.
After an extensive search, the Schicks found an agent they liked, and they asked him to list the house.
“We enjoyed working with that agent very much,” Schick said. “He was extremely professional and thorough. Unfortunately, after 12 months, the house had not sold, and we needed to make a change.”
So they hired a new listing agent. The Schicks weren’t satisfied with the new agent’s marketing efforts, though. Even worse, the house still lingered on the market. That’s when they approached Chris Small, a real estate broker with Small & Associates Real Estate. Small toured the property and offered a clear-eyed assessment of why it had lingered on the market.
“He was very frank with us that we needed to make it look like a home and that it needed to be staged, repainted and modernized,” Schick said. “We were not selling it as a bed-and-breakfast, and that is what it was reflecting.”
Small presented a plan that included coordinating with a local stager, as well as a timeline that accounted for each step of his plan.
“He followed through on everything he said he would do and met his deadlines,” Schick said. “He kept us on task, and he got the job done. Those changes are what let a family see it as a home that they could live in.”
The Schicks relisted the house with Small as their agent, and it sold for $1.1 million in 59 days. It was the highest price ever paid for a single-family residence on West Grace Street.
“The price would have been even higher, if the house had been one block away on Monument Avenue,” Small said.
So why did the house sell so quickly? It came down to finding the right agent.
“Chris was absolutely the reason the house for sold for more than $1 million,” Schick said. “If the person selling the house does not believe it is worth more than $1 million, then it will never sell for that amount. He absolutely believed, 100 percent, that our house was worth more than that. He was able to frame the house in such a way that other people could see that, too. We give him huge kudos for that.”
Bidding war! How to navigate a low-inventory market like a pro
Bidding war! How to navigate a low-inventory market like a pro
In the last several months, Greater Richmond’s real estate market has seen upticks in the number of listings that receive multiple offers and close over the asking price.
At Small & Associates Real Estate, for example, I’ve seen multiple offers on 46 percent of my transactions this year, up from 32 percent in 2017. And 60 percent of my listings have sold over asking this year, up from 38 percent in 2017.
Those are significant upticks.
So why are we seeing these increases? It comes down to two words: low inventory.
Right now, for example, there are no mid-priced listings in the Museum District. And if you look for houses that are listed for more than $500,000 in the Fan District, you’ll find just five.
We’ve seen low inventory drive up prices in the last two or three years, of course, especially in the Museum District and the West End. But these days, I’m seeing it in other neighborhoods, too. Citywide, we have almost no inventory.
For sellers, that’s great news.
I can put a client’s house on the market on Thursday, have an open house on Saturday and announce we won’t consider offers until Monday. And we’ll get 10 offers on Monday.
Of course, I did a lot of work well in advance to get the house ready – I’ve advised my client about what to renovate or modernize on the house, I’ve overseen the work, and I’ve gotten it photographed for marketing materials afterwards.
But planning those final days leading up to the open house and the bidding process is crucial. It’s a simple strategy, but it works because it takes advantage of the low-inventory market by channeling potential buyers’ interests into a narrow time frame. And they show up on Monday with strong offers.
Bottom line: It boosts my client’s chances of seeing multiple offers and a winning bid that’s substantially over the asking price.
Here’s a recent example. I represented a client whose house was worth $350,000. But I gave him a plan to update and renovate the house so that it met buyers’ expectations, and we got multiple offers and ended up getting $510,000 for the property.
When I represent the seller, that’s my job. I look at the property and see what I can do to maximize the sale. And in a low-inventory market like this one, clients who follow my marketing protocol can see significant gains.
For buyers facing low inventory, it’s a different story. Offering a low price with a lot of demands might not work. And trying to remove emotion from your decision might not be beneficial, either. People should be happy in their houses, and a part of my job representing buyers is to help them find a house that is truly a good fit for them.
So in this market, buyers need an agent who can explain all their options. Can they make an all-cash offer? Are they comfortable buying a house without inspections? Can they make an offer without demanding a close date? An all-cash, no-inspection, no-close date offer is the best offer a buyer can make, but they each impact the seller’s likelihood of accepting an offer. And the buyer’s agent needs to explain the pros and cons of each of them.
Perhaps most importantly, a good agent will ask his client, “How much do you want that house?” And he’ll help to prepare an offer that’s strong, and likely to win.
Here’s an example of what I mean. Recently, I represented a buyer who was interested in a house that needed work but was in a great location. It was definitely underpriced at $440,000. So we looked at it at an open-house event, and I explained to my client why it was worth bidding above the asking price. It was on a block where all the other houses were worth more than $1 million, and once the house we were looking at was renovated, it would be worth $1.2 million. After I finished, my client said, “What do I have to do to get it?” I guided him through the bidding process, and we closed for $665,000. I feel strongly the value is there, and the buyer does, too.
The bottom line: Buying in a low-inventory market can be frustrating, but with the right agent, you can navigate through the process and find your dream house.