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Still another example of a realty association shooting itself in the foot with a "news" story it had control over:
http://www.albertleatribune.com/2012/11/21/states-home-sales-rise-8-percent-in-october/
The above story is based on a news release from the Minnesota Association of Realtors. The story begins with a most positive spin, statistically supporting how home sales were up, as well as home prices, for the month of October 2012. And this report was issued before the end of November, thus making it reasonably "fresh" news.
This should be a positive for current home sellers, as well as those thinking of listing their home. However, instead of continuing the press release with more positives, the next few sentences go on to reveal that almost half of the regions of the state covered did not show these positive results.
If this was an investigative report, or a story not provided by the realty association itself, I could understand these facts being provided.
However, if I was an agent, or a current home seller located within any of the six regions which "were flat or had fallen" in comparison, I'd be very steamed at the Association right now.
This story becomes the equivalent of going on a job interview with a superior portfolio, being asked back for a second interview, and then saying "although I missed 20 days of work due to various illnesses just last year".
In real estate these days, the saying "Any publicity is good publicity" does NOT apply, when millions of dollars and the economy of the nation are at stake.
Then we get news stories such as this one:
http://www.ctpost.com/news/article/Police-Trumbull-Realtor-stole-competitor-s-for-4057770.php
This story was done by a local reporter, but it puts realty agents in a bad light in the eyes of some consumers. Sure, one bad agent doesn't make the rest bad. But one more negative story at a time when there should be a lot more positive reporting, is bad.
If more than half of your friends and family members bought a new car this month, would that make you go out and buy one?
I didn't think so.
But some unknown reason far too many people think this way about the real estate market, and therein lies at least some of the problem. Statistics and philosophies have become dominant. Not overly positive, and not overly negative (for a change). Just dominant.
If you want positive stores about the real estate market, you don't have to spend as much time looking this month as you did a few months back. Here is one example:
http://www.heraldnet.com/article/20121105/SCBJ02/711059889/1011/BIZ02
Although the above story provides encouraging statistics for the local Washington (state) market, I find one important element lacking in this story. Specific local market reasons why. The story fails to provide even one reason for the increase. It's as if they think that buyers and investors are going by the statistics from six months or a year ago.
Personally, I have not been to the area featured in the above story link. But after reading that story, I have no idea WHY those properties seem to be more in demand this month when compared to the recent past. Is there a lot of new construction? A new shopping development? A new expressway? Did the property taxes drop?
In other words, what is the cause? Now, I don't mean for this to be negative. What I do mean is that, just as the realty agents and associations should not be releasing negative market statistics (like they have been doing non-stop for the past three years), they also need to provide a positive slant.
I'll put it this way. Home sales in that area are clearly on the rise. But that also means more people are selling and getting out of there. Or does it? With nothing to indicate WHY people are getting out, it could negate the positives of why others are moving in. I don't have the answer. But that's my point.
Yet, it is not just statistics. There are those who are overly philosophical. Over the past three weeks, I had several potential clients (for advertising services) tell me that they "want to wait and see how the election turns out". The 'wise guy' in me wanted to call them on Wednesday morning (hours after the election was complete) to ask them if they are ready to move forward.
I'd love to have been able to ask them what they thought could change. Aren't they still going to be in business and needing to attract more clients after the election, no matter what?
All houses are not the same. Some are larger, some smaller. The number of bedrooms and baths differs, and so on. It takes a lot more than statistics and philosophies to get them bought and sold. If only that information was more readily available.
This is still another story about an upcoming business and residential development in the Houston area, separate from the one I referenced last week.
http://www.chron.com/business/sarnoff/article/Sarnoff-Another-project-rouses-from-its-slumber-3965709.php
If you are a real estate agent or a current or potential home seller within minutes of the referenced area, my suggestion is to take heed of this valuable information.
If you are a real estate agent or current or potential home seller not in this section of Houston, you should start looking for information such as this which is pertinent to your area.
Buyers and investors are not looking at statistics about sales and prices from months or a year ago. They are looking for a good deal, and for future potential.
Using this Houston area as an example, homeowners near that development now have the opportunity to sell an ideal location where more jobs will soon be available. Where more shopping, both in terms of quantity and quality, will soon be available. Chances are this development will enhance or add to current local public transportation options.
In other words, don't look at it as though you are "close to an empty lot". Start looking at it in terms of the opportunity you will have to offer a potential buyer seeking a quality place to work and/or to shop nearby.
A sharp realty agent should be researching how and WHERE property values have risen upon the opening of such a development in other parts of the same region. If you can't find anything close by, keep looking. You can also look by population. So if you can't find anything similar in terms of eventual sales success in Houston, then perhaps you will find something in Dallas, or Philadelphia, or some other city as large as Houston, which you can use to "sell" the potential.
Chances are that the home you will want to sell is not the only "3 bedroom 2 bath home with...." (whatever amenities it offers) in your region. But if your home is closer to this development, and the jobs, shopping, and transportation it brings, you have a selling point that your competition does not.
You are marketing more than just the home and the property. A little research, especially ongoing, can go a long way toward a faster sale at a better price.
Real estate agents, as well as sellers, need to look at more than the local home sales and price trends, although it appears that not very many do.
You can know the neighborhood as well as or better than everyone else, but it's how you use that knowledge toward generating home sales that makes the difference.
Just last week, I saw a business news story from Texas about a grocery chain expanding in the Houston area by adding 3 full-size food stores in the region. Granted, I don't see every newsletter, flyer, or web page that comes from local agents. But I have yet to see or hear of any of the area's real estate agents mention this in any way.
What does another grocery store mean to a specific area in terms of housing? Actually, plenty. Stop to think about it. Having a new grocery store increases local competition, provides those living nearby with a significant added convenience, and creates more local jobs. For starters.
If you are looking to sell a home within a square mile of any of those new locations, wouldn't this be helpful information? You bet!
You would soon (based on the scheduled completion of the store) have the ability to save your buyer or tenant travel time in the car on every shopping trip (which saves time and gas money).
This is another example of why real estate agents (or the advertising/marketing specialist they retain, if I may toss in a hint) should be on top of local business stories and activity. This sort of story should be a reason (or "excuse" if you must) to contact local home owners whether they are your clients or not. You can remind them that if and when they are thinking of selling, they now have an additional hot point with the brand new major grocery store coming in.
And, you can alert them that if anyone in the household is looking for local employment that you know of an opportunity for them. Between those two possibilities, a sharp agent should be able to generate some local phone calls.
Back to the main point. Factors such as a new business (employment, growth, etc.) should really be more of an influence than the number of homes that sold in the same neighborhood 6 months or one year ago.
For example, since most large cities have increased local transportation costs this year, the need is greater than ever to point out homes which are (really) close to transportation. Point out the savings if a buyer can avoid a car ride or extra bus fare every day by moving to close proximity.
To that point, the National Housing Conference has just released its study about the impact of transportation and other costs on the housing market. Although it's not positive, it does offer some good insight in terms of what is (or should be) important when selling or buying a home:
http://www.nhc.org/media/files/LosingGround_10_2012.pdf
Crunch some numbers for a potential buyer.
Suppose your home is listed at $5,000 more than other homes in your area, but yours is the closest to the commuter train station (or commute needs of the buyer). Show that potential buyer how they could save at least $5 per week ($20+ per month). ("No using up gas plus having to pay $1 to park at the train station when you live here!") Next, point out that they would still have at your home, because the $5,000 additional on the purchase price comes out to only about $14 per month more on a 30-year loan. Your "additional savings" outweigh that.
OK, you might be able to poke holes at that idea, but it's the concept that's important. It seems as though agents and sellers don't think that way. And they would otherwise reduce their price by $5,000 to not lose out to a home that is further away and doesn't offer the same benefits.
New grocery store or not, that's food for thought, too.
Here is another example of my overall point that a BIG part of the real estate crunch is because of how poorly marketed it is. And it's not just the shoddy advertising of properties that plagues the residential real estate community.
Now the Niche Report is informing us about the MILLIONS of home owners who could be benefitting from the HARP Program, which is designed to enable "under water" home owners to refinance at a lower rate. In many cases, it's the difference of being able to keep a home or being out on the street with years of consequences.
http://www.thenichereport.com/uncategorized/harp-is-failing-3-4-million-homeowners/
Let me tell you there is a lot to be said for the "Some people don't know about it" reference in this story. Personally, I am in contact with at least 200 mortgage lenders and banks (which handle mortgage loans) around the country every week. Yet, only a small handfull devote even a portion of their outside advertising to the HARP Program.
Even if more of them did, it doesn't mean that the road is easy. Frankly, it's not, and it should be. This Niche Report story doesn't even begin to tap the surface of how ridiculous it is out there. Some of these lenders, including the banks, don't seem to know to execute the program properly even when they get applications for it.
I recently had a situation where Fifth Third Bank "blamed" a computer glitch for not being able to complete a HARP loan application. That didn't explain why the applicant was not notified that the loan couldn't be completed until AFTER the scheduled closing. Then the manager who "decided" this ducked e-mails, phone calls, and an in-person visit attempt to clarify. The applicant got another bank to correct this supposed "glitch" within 2 business days - and to eventually complete the loan. (Even though the promised deadline was missed by nearly 3 weeks.)
So, yes, unfortunately it takes more than educating the public about this. Some of the lenders and banks need to be educated about servicing what they sell, and customer relations, just as badly.
This totally impacts the real estate community as much as the mortgage lenders. The more people that can afford their home, the more buying and selling there will be.
Normally I dislike additional fees and government intervention, one community is taking an important step to help renters. It's time someone did.
No matter what the local real estate market is now showing, in terms of home prices and sales, the reality for many people is that they don't have the ability to qualify and/or don't choose to take the financial risks of buying.
However, renters have been faced with higher rents and tougher guidelines because so many consumers have been put into that situation. In what seems like the majority of instances, the local real estate community has not helped, fearing that helping making it smoother for renters means fewer people looking to buy. It remains to be seen whether or not those consumers remember that down the road if and when they start looking at buying.
Even worse, there have been scattered reports of crooked landlords doing things like renting out units and then walking away, leaving tenants to be victims of foreclosures on these landlords and being forced to move with little to no notice.
Buffalo Grove IL, a northern suburb of Chicago, has decided to take action. Landlords in the Village will be required, starting in January 2013, to pay an annual fee of $75 (for single family houses which are rented out) and, more importantly, to submit to annual inspections. For apartment buildings, the landlord will pay $150 per year plus $30 per rental unit.
A news article in the local Daily Herald newspaper about this contains a quote from a Village official admitting that they likely won't have time to inspect every available rental building. (I would include the link, but that newspaper goes by sign-ups and I won't link my readers to something that isn't guaranteed to come up, so blame the Daily Herald.)
The idea is for the Village to "license" its landlords, thus increasing or maintaining responsibility toward the tenants.
From where I sit, this looks like an excellent idea. Even the threat of an inspection by the Village and the added accountability should be a comfort to renters. If and as Buffalo Grove is the only community in the area to adopt this plan, it could be good for the local economy by encouraging renters to consider and to stay.
It's good to see this community looking at it in terms of "residents" rather than just home owners. Having solid and responsible landlords helps to assure that all property taxes are paid and regulations are met.
Hopefully more communities will explore and implement a similar program.
As I continue to review home sale "news" from around the country, I continue to be astounded at how the real estate community stays in the same rut day after day instead of working hard to seriously market properties.
In Riverside CA, media outlets are reporting that DataQuick's sales statistics for the month of August 2012 "are down 3.4%, compared to the same month a year ago", and that "home prices are up $20,000 from the same period". The same published report states that "A total of 3,520 homes changed hands in Riverside County last month".
Sorry, but two negatives out of three "facts" does more harm than good.
First, telling the public within and well outside of the Riverside area that homes are not selling as well as even one year ago makes the area seem less appealing to a potential buyer. That potential buyer knows how poor the real estate market has been over the past 4+ years, and can easily find statistics on other areas which have shown an increase in home sales over the same time.
Next, telling potential buyers and investors within and well outside of the area that "home prices are up" is also a negative when presented in this context. Why? The message sent is that "fewer people are paying even more" to live there. Thus, an investor looking for a good deal sees that he/she is highly unlikely to find one or more in Riverside County in the near future.
A potential seller in Riverside County could take notice at selling prices being higher. However, the negative publicity about home sales in the area being down also tells that potential seller that it could still be long hard road toward attracting an interested and qualified buyer/investor to their area.
Yet, the statistic that "a total of 3,520 homes changed hands last month" could be a significant one. Frankly, the local realty agents and offices should already have separate press releases circulating today focused only on that piece of information. If potential buyers and investors ONLY saw that information without the negatives, it might make them take notice.
The news media is going to report the statistics they are given, even when they don't make a lot of sense or generate positive local favorable publicity.
Meanwhile, many other parts of Southern California were able to report improved sales compared with recent months (not worrying about last year) along with some rises in average home sale prices. Usually, I continue with my research to compare with such information from other areas.
This time, I decided to search for additional "home sales" news specific to Riverside County. Yet, all I could find were these mostly negative - and unnecessary - home sales statistics.
Frankly, if I were a current or potential seller in Riverside County at the moment, I'd be furious. More needs to be done to make areas still struggling to seem more appealing. Everyone benefits.
For example, in Ohio, the Cincinnati Area Board of Realtors issued a report showing how their area had the "best August in five years and a 16.8% gain from 2011" as the lead portion of the story. These positive statistics serve all concerned very well, and appear much more significant due to the absence of negative reporting. The additional part of the story showing a slight increase in sales prices, in this case, becomes a positive.
NOW, it shows that more people are buying and pushing prices up, which indicates there is a demand. The message is great for the marketplace. It alerts potential buyers that they might want to look sooner rather than later since the 'good deals' are starting to evaporate. It alerts current and potential sellers that perhaps there is a reason to pursue a listing and sale once again. And hopefully it alerts the local realty agents to increase their marketing and advertising efforts to surrounding areas.
Just like the house itself, it's the same with these statistics. They need to be in tip-top shape, ready for "showing" and highlight only the positive!
I know I have pointed this out before, but it happened again today. A Chicago Tribune article about a former player for the Chicago Bears listing his home for sale appeared today.
Yet, even with not one but TWO agents sharing the listing, the story shows that both "declined to comment on the listing":
http://www.chicagotribune.com/business/breaking/chi-exbear-punter-maynard-lists-long-grove-mansion-20120822,0,2019545.story
It's certainly not necessary to the story, but as an advertising and marketing expert specifically for real estate and mortgages for the past 23 years, I'd certainly like to know why both of these agents would "decline" to comment on a listing.
In these days of mostly negative real estate news and statistics all over the media, I would like to think that an agent would seize the day at the opportunity to "comment" on a prime listing.
Face it. If this home was not owned by a former local pro football player (or anyone with celebrity status), this home being listed would not be "news". There are numerous other properties in this and higher price ranges that have come on the market within the past 30 days, but were not picked up by the biggest newspaper in a city the size of Chicago.
Positive publicity, as well as individual publicity of this magnitue, for any agent is hard to come by. What a blown opportunity.
How can they "decline to comment"?
Is there something about this home that will keep it from selling? Is it not priced right?
Don't get me wrong. I am not implying that there is a problem with the listing or that it will or won't sell at the pace set by the current market.
These agents do not have to comment about the former football player or anything personal in order to make this the positive opportunity it should be.
What at least one of the agents should have said:
"I hope the buyers are as happy there as the previous owner."
"This home won't last long. It is the best price in the area."
"What an ideal place to raise a family in luxury."
"Such a rare opportunity to live in beautiful Long Grove. We don't get listings of this caliber very often at all."
I could go on, but (obviously) these agents are not advertising or marketing clients of mine. You get the idea. One comment along those lines from the listing agent and it results in thousands of dollars of free publicity for them and for the property.
What do you think when you hear someone answer even a simple question with "No comment"?
Exactly. It isn't good.
When you are next selling (or representing) a property, the agent or seller had better be ready to "comment" about it at any opportunity.
The more positives in real estate news, the faster things will turn around.
The agent doing this is not one I recall every speaking to, nor a marketing client of mine, but I give him a ton of points for coming up with a real estate marketing innovation.
Here is the story which calls attention to this:
http://www.bizjournals.com/albany/blog/2012/08/two-old-bank-buildings-one-novel.html
He realizes that, unlike residential real estate, not all commercial investment properties have a "location location location" priority. There are often companies or investors seeking a certain amount of space, and/or including external possibilities for warehousing, supplemental administrative staff, meeting or conference space, and/or to be able to appear to compete with a primary business. It could also be to house a wholesale and retail division, executive offices, or storefront with separate administrative offices.
When a business or investor is seeking more than one location, it means they need to review separate sets of property data and combine to fit their specific needs.
By marketing two buildings as one listing, a potential buyer can more easily gather the needed data, such as total square footage and overall facilities available. If this can truly be marketed as one transaction rather than two, it saves significant time and money compared with seeking two separate properties simultaneously and then attempting to negotiate separate deals on both.
Kudos to Rick Kessler of Prudential for taking this approach on these listings.
This is exactly the sort of thing that needs to become the norm in the real estate community. Based on the article, the buildings' owner had zero takers to this point. Without investigation, I'm guessing it was the usual two separate buildings advertised along with other commercial properties in a publication or two and on the usual web sites, and few cared or responded.
Yet, now, see what difference creativity could make. Granted, I'm not looking for commercial property near Albany, NY. However, the writer of the article was attracted to this story and saw the value to interest his readers. I saw the story, read it, and now know that I have a wonderful idea to add on to my advertising and marketing clients.
It already has me thinking how this concept could be adapted toward residential property selling as well. On occasion I'll see neighboring homes listed for sale through competing realty firms. Now I can suggest to my residential agent clients that if and as this happens to them (a neighboring property for sale via another agent) that they consider working together.
You won't get a situation where in-laws or brother/sisters with families could move in next to each other if you don't promote it as a possibility!
Let the others waste their time coming with up the statistics about home sales six months ago. Find the ways to get available properties sold.
As I tell my real estate agent advertising and marketing clients, a lot of the most helpful information they can find during the course of a day is the local Business news.
Interesting story about how Sugar Land TX, a Houston suburb (about 20 miles outside), is about to add a 6,500 seat concert and event facility to its current offerings in the hopes of attracting even more Houston area residents to visit the community.
http://www.sugarlandtx.gov/tools/np/program/view.asp?ID=12498
What does this have to do with area real estate agents? The answer should be "a lot more" if the Real Estate market is to make a comeback.
Adding this venue means a lot of near future construction and engineering jobs, and later on many jobs related to events and operation of the venue.
For current home owners in the Sugar Land area interested in selling, this information makes now a much better time to place their property on the market. The listing agent could be advertising it in a union or construction related publication and/or web site in search of unemployed or underemployed workers who are currently renting in areas with fewer employment opportunities.
Of course, adding a large venue also means it is likely that more restaurants, shops, and possibly hotels will soon look to add or start a new location within proximity of this venue. Again, more construction and more jobs for these establishments being created over the next couple of years.
Real estate investors are probably already seeing this opportunity to buy "low", upgrade, and hopefully turn a profit a couple years (or sooner) down the road when the construction and upgrades are in place.
Potential buyers should be made aware of the growth potential within the Sugar Land area, in the event they would consider moving to a new growth area adding larger businesses. This is also likely to be sure that streets and upgraded to handle the traffic flow.
On the other hand, current property owners who may wish to get away from the coming additional hustle and bustle now have an opportunity to plan an exit before others with a similar philosophy realize the idea.
Meanwhile, separate and unrelated business stories in the Chicago area have two large corporations, United Airlines and Motorola, both announcing (coincidentally) within the past week that literally thousands of workers are going to be relocated from suburban offices to downtown Chicago locations.
This is (or should be treated as) a bigger story for realty agents than anyone else, other than those who will be impacted by the move.
Such an announcement is right now putting many workers in a challenging position. Right now, there are hundreds, if not thousands, of employees of each of these companies who live within a 30 minute drive of their workplace. They enjoy free parking and a suburb to suburb commute, not necessarily involving use of a busy expressway during the heavy traffic periods.
Having to commute to downtown Chicago from these suburban areas could add one hour or more to their commuting time each workday. This will send many to instead take commuter trains and to make the changes of routine that go along with it. It does not mean fewer expenses by not driving to work when it really means increased train fares as well as driving and parking at the train station.
From a real estate marketing standpoint, this news does not only impact those workers who have decisions coming up. At least, it shouldn't only impact those workers.
Anyone looking to sell that lives within a reasonable walking distance of a train station within range of the current locations of Motorola and United should be on the phone with their listing agent by the end of the day. Agents with listings in the downtown Chicago area should be targeting those same suburbs.
There are potentially thousands of people who will be forced to make some decisions as their jobs are relocating in the months to come.
You can't sit back. It's amazing that people don't react to these types of news stories, and they happen daily in many more places than Chicago and Houston.
I have my own example. The Realtor I most recently used is not one of my clients. Even with her 25 years of local experience, I actually provided her with statistics relative to local home sales based in "my" area showing how proximity to area train stations has a direct impact. She was not aware of that research. Only THEN did it start appearing in her advertising of my property.
Taking action on this information now means a lot more than waiting for statistics on whether home sales went up or down in these areas last month.
Start looking for 'news you can use' to your benefit. The Business section is an ideal place to start!
Another day in the world of real estate, and another set of statistics about homes being bought and sold, and how recent trends compare with previous months and years. That means another day of little to no information to help those who truly need to sell their home.
In the Chicago area, one of today's news stories is quite alarming for hopeful sellers, even if it is encouraging for buyers and investors with some serious money. Realty Trac Inc. published several statistics for the month of July.
For the 7 county area including and surrounding Chicago (in Illinois only - does not include any of NW Indiana or SE Wisconsin), the service reports that 3,274 homes went to court ordered sale during July. Keep in mind - that is for ONE MONTH. In addition, they report at an additional 3,237 homes became "bank owned".
Total those up, and it means that within one expanded major metropolitan area, more than 6,500 homes are just sold or NOW available, mostly at discounted prices compared with their earlier value.
If someone is looking to buy or invest in the Chicago area this week, they don't need to look on a realty office web site or search the local Real Estate section to find the true "best deal" on a property. Yet, the web sites and publications featuring area homes for sale continue to show the "regular" listings for sale as if nothing else is going on in the marketplace.
Where is the "argument" to look at these properties instead of the "now" stock of discounted properties? More importantly, WHAT is the argument to look at those properties?
Suppose the typical 3 bedroom home in a western suburb is listed at $250,000 and shows up on a local realty firm's web site with the typical "move-in condition, must see" advertising and not even a photo of the interior. The listing agent is waiting for responses and telling other agents about this home being available.
However, the savvy buyer or investor instead can find out about upcoming court sales and REO homes, most likely at much lower prices. He/she/they could go in and bid $200,000 at an upcoming court sale or offer it to the bank which "owns" it. Part of the "argument" for the $250,000 listed home is that the buyer knows the condition of the property and can get it with due process at a pre-determined time.
Yet, part of the reasoning "against" it is that the buyer at $200,000 could spend, say, $10,000 on improvements, and still save $40,000 over the "regular" listed house.
My theory stands. Part of the problem in today's real estate market is within the advertising and marketing of properties. The "home for sale" ads are too similar. And now they are comparing against other "home for sale" ads, and NOT against the discounted homes now abundant in the market. (Certainly not just the Chicago area.)
Those looking to sell a property, and the agents representing them, need to address the real competition they are up against. Tell potential why this property is a better deal than a discounted home with similar qualities. Something has to give.
Here we go again. Fewer and fewer home owners in the USA. Many of us feared it and/or expected it. Today it is confirmed.
http://economistsoutlook.blogs.realtor.org/2012/08/06/home-ownership-rate-forecast/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsOutlook+%28Economists%27+Outlook%29
The above linked analysis points out that the number of "new" homeowners is on the rise as if to provide hope of a market turnaround.
However, the statistical charts fail to point out an important factor. We don't know what percentage of these "new" home owners are really investors buying up the foreclosures and REO properties around the country. After all, they count as a statistic the same as a young family of 4 just starting out.
Another news story out over the weekend makes for an example of where home sales are often coming from:
http://www.freep.com/apps/pbcs.dll/article?AID=2012308030121
This story is about how an investment group essentially purchased almost an entire town, acquiring more than 600 properties via auction, the majority at substantially discounted prices. Granted, this acquisition is not a part of the graphics shown in the first story, but it provides a picture that "new" homeowners are not quite what the graph shows them to be.
Yet, the big concern should be that the ownership forecast, which shows how the number of home owners has dropped significantly over the past 6 years, was issued by none other than the National Association of Realtors.
While it is an Association function to keep on top of market statistics, their release of this information and the graphics to back it up is another instance of shooting itself in the foot. I could understand if Bloomberg or WSJ (or other such quality news gathering organization) developed these graphs and statistics by investigation. But the realty association?
This information does not help its hundreds of thousands of member agents and brokers. It does not help the thousands and thousands of people hopeful of selling a property who have it listed through an Association member. And it certainly doesn't help the market.
Somehow, this is backwards. It should be that the Detroit Free Press is reporting the negative statistics about the drop in home owners over the years around the country to alert its readers. And the National Assn. of Realtors should be reporting that more than 600 properties in a town in Michigan were purchased in one day.
It's nice to see something positive come from another set of real estate statistics, as the National Association of Home Builders has just issued a report showing reasons to be encouraged based on June 2012 statistics:
http://www.nahb.org/news_details.aspx?newsid=15401
The past month's increase brings the Housing Market Index (HMI) to its highest point since March of 2007, which happens to be around the time the real estate crash started hitting hard.
Yet, there should be more to this story. Although it could be a positive indication, those within the real estate community need to be alerted to continue or begin to take action to help the upswing.
Since this report is from the Builders Association, these indications are based on "newly built" homes around the country. However, many areas of the country that continue to have a huge number of homes on the market, have not had recent construction and therefore are not reflected.
I'm not pointing this out to shoot down these NAHB findings. I am pointing out that these findings, while positive, have their limitations in certain regions, and this is what needs to be in the mindset of those in real estate.
Obviously, realty agents are in business to earn money, and it has been a challenge over the past five years. Reports like this one from the NAHB are likely to drive more agents representing buyers to steer them toward the "recently built" properties, since these statistics seem to favor them for purchase.
That's fine for the agents who do and who now will do this, and fine for buyers looking for new or newer construction as a factor in their upcoming purchase. But it's not "fine" for the thousands (or should I say "millions"?) of home owners looking to sell an older property.
For them, this NAHB report is more of a thorn than a help. There is no "older home" bureau or agency to create and distribute statistics to make buying them more favorable, such as the NAHB has just done for newer construction properties.
As pointed out here on numerous occasions, the local (and even the national) realty associations seem too consumed with putting out negative and/or meaningless statistics about local home sales, but fail to make any distinction about the age and condition of those homes.
Sellers of homes more than 15 years old, and the realty agents representing them, need to be asking the question, "Why would a buyer want this home when they could have a much newer one?".
The answer might be price, amenities, proximity, schools, or hopefully a combination of those and other key elements.
Whatever that answer is, THAT is what should be advertised and marketed to help sell that home. Agents should be coming up with their own local statistics, where applicable, about how many "older" homes are selling compared to newer ones within their farm area.
If "older" homes are not going to be publicized and marketed as they should be, it means a much longer recovery time for the overall real estate market. Shorter is better. In this case, if it was built long ago, they should still come. It just takes more reminding.
Consumers still do not buy or sell properties based on statistics. This week, the news stories reflect how "new" home sales are up while others, at the same time, reflect that used home sales are down.
If consumers really must see this constant barrage of statistics, perhaps it is time for the real estate community to be working on statistics which really could or would encourage home sales. Or, at the very least, start to establish a hint of faith that the real estate market will improve in our lifetimes.
Simply put, homes should be sold "against" other similar homes, and not based on sales statistics from weeks, months, or years ago.
In order to encourage sales, the time has come to use recent sales of specific categories of homes in specific regions. Make it positive and current statistics only.
The realty agents and offices should be finding and including only the most favorable statistics for their local area(s) within their approach. Never mind the "fewer than two years ago" crap.
Tell us that "Five more north harbor homes were sold last month than in the south harbor area", or that "More homes were sold in East Springfield than West Springfield over the past two months". This type of statistics promotes the fact that homes have sold in each of these "local" areas very recently, which is more important than one area out-selling another.
At the same time, a listing for sale in West Springfield (the 'lesser' sales area) could be advertised with "More homes priced under $150,000 were sold in West Springfield than East Springfield" as an appeal to people looking in that price range.
The point is that this is the type of statistic that will reach the potential home buyers. A family which is qualified for a $140,000 property in the Springfield area will jump on the above statistic a lot faster than reading that the local Realty Association "reports" a decrease in home sales for the month of May compared with the two previous years.
Like with sports, TV ratings, and many other financial avenues, there are true statistics out there to make most any property statistically attractive. This is what the realty agents should be spending their time finding and "reporting" via their advertisements, blogs, and social networking. Remind local consumers about which areas and categories are most recently selling compared with others, and you'll be planting the seeds for future business.
If two other homes on your block have sold within the past three months, but none within two blocks either way, that should be making your home a lot more attractive.
Everyone needs to keep in mind that a home for sale is in competition with other homes in the same general area to be sold. Not with what did or didn't sell months or years ago. I'm 100% sure of that.
No, it's not a negative slant on a specific property or location. Actually, this is a question that every real estate agent should be asking themselves when about just before talking with a potential buyer or seller about a listing.
Yet, I personally see very very very little evidence of this within the literally thousands of property advertisements and sales presentations I have worked with over the past 23 years for residential properties. Making important changes in the way that residential properties are advertised, marketed, and presented, is a more significant step toward improving the real estate market than the constant stream of negative and/or meaningless statistics.
I'm so tired of seeing advertisements (whether online, newspaper, magazine, flyer, etc.) for homes that make them seem like 20 other houses in the same neighborhood. It's no wonder that buyers often do not express what they are looking for very well.
What needs to happen is that real estate agents (who insist on creating their own advertising copy instead of letting a pro handle it) need to start thinking of each home they have listed as if it is a person and they are creating an ad for the personals.
You want to arrange several "dates" for the home in search of the perfect match, and you know what you are looking for in a buyer (just like a man or woman).
Several of my real estate advertising/marketing clients start to give me the "You can't mention specifics - it's discriminatory" lecture either just before or right after they hire me. I have to tell them how well I understand that, and how well I know how to work around that.
Potential buyers have a general idea of what the home they want needs to include. A certain number of bedrooms and baths, for example, and within a certain price range and area. Based on the large inventory of homes on the market today, the basic criteria is easy to find. What the selling agent (and/or the seller) needs to do is take the marketing of the home one step further.
If you were a single middle-aged woman and noticed that 7 out of 10 personal ads for males between 40 and 55 all said not much more than "attractive, employed, and enjoy watching pro sports", chances are you would be rather frustrated at the similarity of the selection. Keep that in mind and look at advertisements for 2-bedroom homes within a 5 mile radius of your neighborhood. If it weren't for photos, you would have a hard time telling the difference and probably be swayed more by price than anything. That's my point.
There is no specific reason to want to live "there" as opposed to a similarly priced home 3 blocks away. And that's the key. It's not only what the house "has", it's what it "does" that needs to be pointed out, and quickly.
Who should live there, and why? It's not as though you could say "Asian couple with 2 kids ideal for this 3-bedroom condo...." in your advertising. Or "For middle aged empty nest professional couple".
But the advertising could appeal to the target audience for the property, and not be the same as if it were for either of those groups.
Using that "middle aged..." scenario, here is how an ad for a home geared toward them might read:
"2 + 2 single level near 20 minute train ride downtown approx. 600 feet from Starbucks in quiet pet friendly sub division with island kitchen and upgraded appliances." You are saying it without saying it. Most people seeing this description understand this is a home for at least one professional person that can easily get to and from work and easily cook their meals. A '20-something' just starting out may not care about getting downtown or the Starbucks or the single level. But that '20-something' is not a likely candidate for this house - just as that '20-something' would very likely not respond to a personals ad for someone in their 50's.
Catchy phrases such as "Where 3 kids successfully grew up and moved out" tells a large family that there are obviously schools nearby and room for kids. That could be more of a factor than "vaulted ceilings", "move-in condition", "must see to believe" and a lot of the content currently wasting money and space in property advertising.
Of course, this line of thinking should not be limited to the outside advertising. Don't think of it as the "2-bedroom ranch on Western Ave.". Think of it as the "place where a single female would have solid security", "a family with at least 2 young children could grow up", "house that is 5 minutes away from the theatre district", and so forth.
Think of a home for sale as if it is your single brother you are trying to find the right girl for. Who "should" be interested? Why? There is how to advertise and even talk with inquiries on the phone and online about. Maybe you can find him a house where it's easy to take long walks on the beach.
The L.A. Times story from May 1st regarding "U.S. Home Ownership at 15-Year Low" certainly caught my attention as I continue to wonder why certain real estate related statistics are published during the current market crisis.
http://www.chicagotribune.com/business/la-fi-0501-homeownership-20120501,0,2726084.story
There is certainly cause for alarm, especially the statistics about how the number of home owners younger than 35 is at "its lowest point since 1994". This is not surprising. It is actually quite understandable.
The 21 to 35 age group no longer sees the value of owning a home over the long term. When those of us over 50 were growing up and venturing out into the real world, we were shown the value of home ownership. As long as you took reasonable care, your home would increase in value. You could live in it for as many years as you want or need, and then when it is time to move on, you could sell it and most likely make money for your effort. Even if you broke even, there was an expected financial benefit to ownership, and the feeling that in most instances (barring a financial emergency, death of a loved one, sudden job change, etc.) you would not be at risk to lose thousands of dollars when the time came.
However, this generation, especially those in their late 20's, has not seen that formula come to fruition for parents, family members, and parents and relatives of friends. Look at the "big ticket" spending habits of most people over the age of 40.
Many people I know would upgrade to a new (or newer) car every 4 years "no matter what". Now, 100,000 miles on a car means merely another maintenance checkup instead of "get rid of it". The increase of prices and the decrease of quality of many new cars have "forced" people to keep their current cars longer on average than ever before, and to avoid the "extra" transaction.
Now, after a few years (that is YEARS) of housing prices dropping, increases in foreclosures and underwater mortgages, and credit restrictions, there is no guarantee that a home buyer today can make any money by selling it years down the road.
A growing percentage of 20-somethings now are staying "home" to live with parents or family members, or teaming up with other family members or friends for a residence. They see doing so as a way to save money "now", whereas the 40+ generations used to see buying their own home as a means to financial security down the road.
The 40+ generations did not have 401K's and similar long-term investment opportunities available when they finished school and entered the job world. Saving money in a bank account was better than it is today, but was never a solution. Buying a home that could bring in $50,000 more ten years later (for example) was a viable option.
Unfortunately, today's statistics and real estate market give little to no indication that a home buyer can or would profit down the road. While a qualified and thorough buyer can get a great deal based on today's market, there are not enough indications that this is a long term investment with a reward at the end of the tunnel.
Remember the Wendy's commercial years ago, "Where's The Beef?". That could now be done with potential home buyers asking "Where's The Profit Potential?".
Never mind the "more homes sold today than 2 years ago this month" crap we keep reading. Show consumers, especially the younger ones, why they should purchase a home due to long term potential gains, and we'll have some serious movement in the marketplace. Talk about easier said than done.
There I was in the midst of an all too rare real estate sales story with a positive slant when a quote segment from a local agent took the wind out of the sails. This business story about the increase in home sales during the month of March along with a dip in housing inventory 'should' be the best possible news for current sellers as well as real estate professionals to come along in quite some time.As much as I preach to agents that I provide either media coaching or advertising critiques or assistance for that you need to get the name out there and be a local "expert", a big part of this process is most definitely saying the right thing at the right time.Normally, being the only agent quoted for a San Diego Union Tribune story appearing in the Business section would be a wonderful thing for a local realty agent:https://www.utsandiego.com/news/2012/apr/17/spring-homebuying-season-heating/ However, the section about agent Clemente Casillas clearly hurts the cause. Saying, in effect, that it's too soon to tell and "could be a fluke" and revealing that Casillas had a listing on which there were "no calls" until the price was reduced were actually damaging things to say.Bad publicity is not always better than no publicity, especially in this case. Casillas seemed to have overlooked the "message" she sent out to thousands of local home owners by those quotes. Some of the readers are certain to "believe" that if a an agent prominent enough to be quoted in the major local newspaper is not convinced that the market is improving ("could be a fluke") that there is no reason for them to think so either. And more properties will sit for even longer.Other readers who might be considering looking for an agent to help with a sale or purchase now are aware the Casillas carries listings which are not priced right, as evidenced by publicly admitting that there were "no calls on it" until the price came down. In other words, this golden opportunity Casillas had to make the local real estate community AND herself look good to thousands of readers went down the drain because of a couple of quotes.I also understand that Casillas wanted to be quoted for the story and needed to have an angle to be sure quotes were included. But they should not have been damaging ones, nor did they have to be.All she needed to say was something like "I hope this trend is here to stay, even if it is too soon to know for sure. I can tell you that I had a listing that has been getting calls lately after a slow start."Not to make an example out of Casillas, but the point needs to be made to other realty professionals and to current and potential home sellers. An agent is supposed to be positive and show the positive about the current market, rather than telling thousands of people it "could be a fluke". An agent is supposed to walk away from a home in which the seller wants an unrealistic price in today's market, let alone reveal that it "wasn't getting any calls". Instead, the only positive I got from her quotes is that I'm glad she doesn't have any listings for anyone I know. It's not what agents "think" about the current state of the housing market. It is what they are doing about it that matters.
Whether you live in Houston or not, this rather disturbing story has surfaced by way of the Houston City Council, indicating the possibility of local officials raising property taxes, increasing the fees for garbage pickup, and a host of other costly plans:http://blog.chron.com/houstonpolitics/2012/04/city-could-study-tax-and-fee-increases/Of course, we can all understand that city budgets are suffering just about everywhere. But to further penalize home owners would prove to be an absurd move. It was only a few weeks ago when I address some of the problems with the housing market in Houston, and how foreclosure sales are so prominent.Perhaps instead of pumping out the negative statistics about the current market, the local realty associations should be lobbying and protesting these actions on behalf of the home owners they represent.If these increases do go through in Houston, it will make it even more difficult for sellers than it already is. And, of course, as politicians go, if it passes in Houston then other big cities will implement it, and the real estate market will be further set back.
Another bothersome day in the struggle to gauge the real estate market. This morning's real estate "headlines" contained 2 separate stories. One about "home sales up" and another about "mortgage applications down". And both covering some of the same time period.There are a couple of problems here. Home sales being "up" is only if compared to one year ago. Mortgage applications being "down" means that fewer people are applying for financing. That is not a reflection of how many (or how few) were turned down for a mortgage. The statistic is based on the number of applications and not the results. Hence, some will be turned down and the number of closings will be even lower.This constant comparison of real estate sales statistics compared with one year ago or five years ago is not doing anyone any good. Well, except for those few who get paid to research these comparisons, since it keeps them employed. I have yet to learn of anyone who has attempted to purchase a home or a property based on what the market was like a year ago.Now it appears that mortgage rates are headed back up, even though these are still rates much lower than they were a couple of years ago. Some people will panic over this, as if it spells doom. However, it reflects times of years ago when mortgage rates were at least 2% higher, yet more proerties were selling. Meanwhile, I have been hearing the "It's becoming a sellers' market" crap coming from more and more realty agents within the past month. This is hard to swallow. If homeowners start to believe that, we'll have a flood of people looking to list their homes at much higher prices than they should be. And some agents who will go along with them in order to get the listing. If it doesn't sell, they (listing agent) don't lose out. Practically every home owner would sell if they got an outrageous enough offer.What that does is harm the truly motivated sellers out there, already competing against the foreclosures and distressed properties dominating the market. And what that does is keep things as stagnant as they have been for the past two years. So help me, I had an agent in the Phoenix area tell me that the current inventory of available homes there "has dropped to 15,000" and how it signals a "sellers market" their. I have no idea how this could be, considering that if I were looking to buy in that area, there would likely be hundreds of homes to choose from in the price range I'd be looking at. Before the rest of the neighborhood decides to list their homes too. Frankly, there would need to be at least one less zero in that amount for me to even think of that being a "sellers market". I wonder how many different states one would have to research before finding 15,000 serious and qualified buyers for a home. After all, if there were that many potential buyers in Phoenix, there wouldn't be time, or the need, for all of the meaningless statistics about home sales. Unfortunately, this isn't anybody's market at the moment.
There is both a funny and a serious side to the concept, now supposedly available for the western states, of buying a prefab house already furnished and having it delivered. My first reaction to this was to have fun with it:http://consumerist.com/2012/03/now-you-can-buy-an-entire-house-from-ikea-for-86500.htmlVisions of convincing a bank or credit card company that it is a legitimate purchase, but how it cannot be shipped to the address on the account since it is a "new" house. Chances are the delivery people are not including hauling away the current house on the property as part of the deal. Wondering how the delivery people will find the address to bring the house, since there is no house currently on the property.Then there are matters such as having electrical and plumbing facilities in place so that the new house can be fully functional upon installation. And in the right place at that. This doesn't even include any local ordinances and comparing the size of these prefab homes with those in the neighborhood.Try getting conventional financing when there is no home in place to be appraised, and the price is the price, including furnishings and appliances.However, if this is serious, there is opportunity here for consumers and for realty agents. An enterprising consumer could probably get a great deal on residential land in a lot of areas where little to nothing new is being built. Heck, a large lot might be able to hold two of these things and enable an entrepreneur to possibly live in one and rent or lease out the other. There are not many opportunities in most areas for 2 furnished and "ready to go" homes to do such a venture for less than $200,000 (although this does not include the cost of the land).Even at one prefab house for less than $90,000 (not including the land), it seems a reasonable deal since it includes furniture and utilities, as well as the setup.I'm wondering if a realty agent could come out with a commission on the sale of the land, and then not have to go through the hassle of issues with the prefab home, since that is a direct purchase. It would make for a much "easier" commission for agents who see this opportunity. More importantly, it would get more people into more homes. That's what it should be all about. Some developer or investor could do well with a 'discount' purchase of residential land, and then by filling it up with prefab housing. In and near larger cities, they could do a 10-year "lease to buy" of $1,000 per month, and likely save the "tenant/buyer" quite a bit of rent money. After the 10 years, the developer/owner pockets $120,000 (for the $86,000 home), and can then charge a "move-in" fee of thousands more. This after the depreciation of the homes and paying off on the land their group of prefab houses sits on. All without design, building, and installation costs and hassles. Sure, the furniture company involved in these wants to find more ways to sell its items in volume. But my hope is that realty agents, investors, and unconventional lending sources will take a serious look at these opportunities. This is "easier" than dealing with foreclosures and REO's, and would help to spur the real estate market.That part is not prefabricated.
Another instance of a poor decision in the marketing of a property, and this comes from an agent that handles multi-million dollar homes in a city the size of Chicago. It is not just the state of the current real estate market that's entirely to blame for this situation. Some serious exploring of how properties for sale are advertised and marketed would be a definite help.Eric Ferguson is a media celebrity in the Chicago area, based on his role as co-host of the extremely successful morning show on WTMX-FM. Therefore, when he decided to sell his Lincoln Park area mansion and listed it for just under $3 million, it became a news item.Listing agent Joanne Nemerovski of Prudential became the beneficiary of a ton of "free" publicity about this when the Chicago Tribune picked up the story:http://www.chicagotribune.com/business/chi-the-mixs-eric-ferguson-selling-lincoln-park-mansion-for-2995-million-20120223,0,4863058.storyHowever, she flat out blew this opportunity. The newspaper story starts out by providing a description of the property and some of its amenities. The agent could not buy this type of publicity. Thousands of fans of Ferguson and the radio station, along with thousands of regular readers of the Business section of the Tribune in print and online were reading a positive vibe about the property. Until the last paragraph, that is.She "declined to comment" about why Ferguson is looking to sell the property, with the story adding that Ferguson did not return a call. I can understand Ferguson not returning the call to comment. It is not his role to provide the newspaper with a reason for his decision. But I absolutely do not understand Nemerovski's reasoning behind the "declined to comment".Some will argue that she is "representing" her client by not commenting. She should have been ready for this prior to issuing the listing. It's up to her as the agent to have her "story" ready from the Fergusons for when this came up. As it is, the story also mentions that the Fergusons are asking $540,000 more than they paid for this mansion back in 2004 although it does not specifically mention any improvements since it was built. A potential buyer or investor could be motivated to explore the listing details to find out if a $540,000 "increase" is justified or not before possibly proceeding. After all, homes no longer automatically increase in value in this market, especially by more than a half-million dollars in an 8-year period.Working in the media, even in one of seemingly the more secure jobs in radio, there has to be at least one solid reason for the Fergusons to make this decision. However, by not playing the public relations angle and having an 'answer' ready, this "declined comment" could delay the sale of this property even further.Nemorovsky and the Fergusons should have been ready for this. All she needed to do was to respond something like "Eric wants to downsize" or "Eric wants to return to the suburbs where he grew up" or "There are some family matters making this necessary", and this story would have come off like a commercial endorsement to benefit all.Even if not completely true, it would not have tarnished the marketing effort.Instead, that neither the agent or the seller would "decline comment" about the house makes it appear that there is something about the property being hidden. That may or may not be the case. Now, all of the advertising in the world may not overcome that neither would comment about a reason for the house being put up for sale, and leave thousands of readers skeptical.Any buyer or investor capable of qualifying for or paying cash for a multi-million dollar property is extremely likely to explore the reason for the listing going on sale before proceeding. It is not as though this is the only multi-million dollar home available in Chicago or its metro area. Other such properties where the seller "is looking to move to Arizona", "wants to retire", "is looking to downsize", and/or "selling at a loss", are far more likely to get an inquiry for the agent over one for which the seller AND the agent "decline comment".This has nothing to do with the current state of the market, recent home sale statistics, the flucutation of home prices, or problems with mortgages. Based on the asking price being higher, this is not a Short Sale or an act of desperation either.It has everything to do with the marketing. While it is true this is a newspaper story and not a paid advertisement, it is the agent that is supposed to be representing the property and her client as best possible. Putting it out there as if there is something to hide does not do that.If there truly is nothing to hide about this mansion, or any other properties for sale, people should know that. Like with the home sale statistics and the mortgage problems that continue to plague the real estate industry, we all need answers.
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