Marketing a $3.5 million dollar listing is always a challenge, especially when it is located within a busy Chicago north side community away from Lake Michigan.
The push for this home is to promote the less common amenities, which for the featured Cortland Street property include a large wine cellar and a 300 gallon fish tank.
Although these are among the unique features of the home, marketing this listing is not being done for the entertainment value. Of course, it is 'fun' for people to have that daydream of having a 300 gallon fish tank in their home.
However, creating that daydream actually fails to bring the proper attention to this as a real estate listing. To put it bluntly, the number of potential buyers actually looking for a fish tank of that size for their home is most likely lower than the number of potential buyers looking for a $3.5 million home in that neighborhood.
Meanwhile, the prominent photos in the property profile also do not do this property justice. The top photo of the exterior actually reveal what appears to make this a smaller property than one would expect for a multi-million dollar home in the area in which is located.
As a general observation (without statistical backing), there figures to be a percentage of qualified potential buyers that would seek a home in this price range which is closely surrounded by neighbors and has limited space.
For example, the photo of the pool makes it look to be more like an expanded bathtub placed outside rather than a place to totally relax.
There are better ways this listing can be promoted. Not having an exterior photos within the presentation would be a start. Highlighting interior photos would better serve to make potential buyers want to see the inside. At the very least, when they see how cramped the location is, they would be at the property and could still fall in love with the interior amenities.
While a 300 gallon fish tank is interesting, perhaps other amenities of this property would be an even better fit for the right audience.
The idea is to have the most effective copy and photos, and have them compliment each other. In this case, right fish but so far it's the wrong bait.
Zones are called that because they bring financial gain to investors with large
While this is not a commission opportunity for licensed agents and brokers, there is a definite "service" opportunity for clients who have recently invested. It costs you nothing to fill in your clients about this opportunity. If you save him or her thousands of dollars they would have otherwise handed over to the IRS, you increase your chances of that client referring business to you.
you how this works, and how you can benefit with thousands and thousands of
dollars in tax savings.
We start with
a couple of “Would You Rather” questions……
rather pay taxes now, or invest your money NOW and push off the taxes until
The answer is
to invest now. Take out most of your money now, tax free, and only leave a
little of your money tied up.
rather pay NO taxes on the new investment OR continue doing what you are doing
and pay the taxes?
The answer is
“Pay No Taxes”
the Tax Cuts & Job Act of 2017. This is the biggest tax reform in years.
It’s more innovative program is the Opportunity Zones.
How does this
You roll over
Capital Gains into an Opportunity Zone Fund. It does not matter how you got the
Capital Gain. It could be from the sale of a property, the sale of a business
(not just assets), or selling of stock.
The fund must
invest the money inside an Opportunity Zone.
By doing so,
you PAY NO CAPITAL GAINS TAX NOW. What you are able to do is to defer those
taxes for 7 years. Then, you pay them, but with a 15% discount in 2026.
months of the time, the money goes into the Fund, although some money can be
held in reserve.
plenty of Opportunity Zones around the country. In fact, there are more than
8,000 of them. All of them have one thing in common.
They are all
underperforming areas, whether they are in metropolitan areas or in the middle
What do you
get by investing in an Opportunity Zone?
money is invested, you can do pretty much anything you want with it. This Act
was written by people who believe in Capitalism. Let the market do what it does
best. Find opportunities and maximize return. Let the government get out of
in these depressed areas, you pay NO Capital Gains taxes on the new investment.
You MUST hold the asset for 10 years from the original date, and you MUST
substantially improve the asset.
just park your money there for 10 years.
How does it
What you can
do is take out the money as long as you continue to own the asset. For example,
by refinancing. Once the property improvements you make are done, you can
refinance and take your money back out. You are still tax free.
clarify, there are some things you cannot do within an Opportunity Zone. These
include not being able to invest in what are considered to be “sin” businesses.
These would be gambling establishments, liquor stores, or adult entertainment
establishments. You also cannot invest in marijuana distribution establishments.
nothing else to it!
there are a ton of regulations, since this is the IRS.
idea is that you have an incentive to put your money into an economically
depressed area. You help make something happen there, and you pay no tax on it.
If you or your client has Capital Gains of six figures from 2018, the "deadline", per the IRS, to secure an Opportunity Zone is June 28, 2019.
The http://Invest-Aware.com has information about a "ready to go" Opportunity Zone Fund, which saves you time and effort and can get your program started as soon as possible. This also becomes a passive participation, as their people handle the bids, permits, rehab, rentals, and property management.
There is also more info about this on the IRS web site:
Real estate agents and (unlicensed) real estate investors are all wanting to make money in real estate and are looking for their next transaction to be involved in. In my role of providing a variety of marketing services for both on a regular basis over the years, I continue to notice differences in how they each operate.
From a business standpoint, it might be more important to be aware of those differences, whether you decide to adjust them or not.
A large percentage of agents, based on my experience, talk about "getting leads", whereas a large percentage of real estate investors talk in terms of "getting properties".
To be perfectly honest, this is one aspect of marketing from which agents can learn from investors.
If you are an agent, you are confident that you can bring a buyer to a "good deal" and "have no problem selling a good deal". However, I have many agents, whether marketing clients of mine or not, ask me about "getting more leads". In this case, "leads" are people and not properties. People may or may not be considering buying or selling at any point in time, and may take months to act even if they are.
All day long, marketing companies are pitching agents with "leads" opportunities, with some making a big deal about "exclusive leads". What they really mean is "exclusive to you through our company".
Either way, you get names and contact info on people who may or may not actually have serious or immediate interest in pursuing a deal and become a part of your database.
Compare this to what a real estate investor does. They aren't spending hard earned dollars paying Zillow (or other "lead generation" sources) for a list of people who selected their zip code while browsing one of many web sites. Investors are looking for their next deal, if buying, or next buyer or investor if selling. Their time and effort is spent on research, whether on their own or by having an agent that knows their criteria and finds potential deals for them.
The point is that you do not have to rely on lead generation companies to find sellers and/or buyers. If you have the properties with the best deals, buyers and sellers will find you.
As an agent, you should never accept the "There is no inventory" claim. If investor groups know how and where to find distressed property owners, so should you. It takes some digging to come up with lists of properties facing foreclosure, under a tax lien, in a probate, or coming up for auction.
Investors find these, make offers when it makes sense for them, and are on their way toward rental income, a flip for profit, or toward rehabbing a property to increase its value to sell for a bigger profit.
Events happen in peoples' lives, such as job loss, medical emergencies, relocation for employment, divorce, and family concerns. The "flip"houses are not just in the crappy neighborhoods you don't work in.
Suppose you can uncover a distressed property for which the owner needs $100,000 and the comps show it would sell now for $175,000. That owner doesn't have time to wait for weeks. However, you know that you could sell it right away for significantly less while helping a satisfied seller.
That seller is not going to go on some web site and click for a brochure to become a lead for an agent. You would not find that seller if you didn't do your research. The more hidden "good" deals you can find, the more likely you are to attract buyers and sellers.
How does doing this attract sellers? As soon as you close on a great deal you found, especially one not found on the MLS, you have your local success story. By spreading the word through your marketing channels, you let others know that if they have, or know someone that has, a problem property, that you are the local agent who can get it sold before it ever reaches the MLS.
THAT is the best kind of lead you could develop, and it is all yours, truly exclusive.
Randy Johnson, the Hall of Fame pitcher (known as The Big Unit), just had his mansion sell at auction for $7.3 million dollars. While commanding that much for a mansion of that magnitude normally commands media attention, this one actually got the attention for the wrong reason.
It seems that this 25,000 square foot home which sat on five acres at the base of Mummy Mountain in Paradise Valley, had no takers last fall when the price was reportedly reduced to $16.5 million. The auction of this property resulted in a purchase price which was less than half of the listing price following a price reduction of more than $3 million.
What does this have to do with real estate marketing?
Unfortunately, there is an answer to this question. Had this story appeared as a result of investigation by a reporter, that would be one thing. News which is not positive gets published, especially in the age of social media and fewer secrets.
However, this information got out because of a Press Release issued by the agent team of the real estate firm which had the listing. Say what? While looking to make news to promote the sale of a multi-million dollar property is understandable, that is far from the case here. In real estate marketing, the adage that "any publicity is good publicity" does not apply.
This agent just told owners of the mansions in this area that his firm couldn't even sell a listing they voluntarily took for half of the price. Worse yet, this additional publicity could wind up costing nearby property owners millions in lost revenue if they decide or need to sell in the near future because of how this damages local comps.
At the same time, it's hard to imagine a potential seller looking to work with this listing agent in the near future based on this result. There is more to it than getting less than half of the price. It shows a savvy seller that this agent team accepts listings which are not priced correctly.
Adding to the mix is that the sale of this mansion was the result of bidding at auction, and not even a negotiation involving the agent and/or his team.
How an agent (or agent team) markets their listings and how they market themselves are ideally tied together.
Bragging about a failed listing, especially one of this magnitude, is poor marketing.
Must the industry continue to shoot itself in the foot? Unfortunately, as we begin 2019, consumer confidence in the housing industry is not what industry professionals hope it would be.
However, the issue remains that industry associations need to keep it quiet when the statistics are not in their favor.
Take this actual headline from a release this week from Fannie Mae:
Housing Confidence Down as More Americans Believe It's a Bad Time to Buy a Home This headline is more damaging than the information it provides, yet they put it out anyway! If these statistics were not published, or, at the very least, if this headline wasn't so blatant, consumers considering purchasing a home and investors looking for "deals" wouldn't be seeing that people "believe it's a bad time to buy a home". Even though consumers most often purchase a home because of their living situation, the hope is that real estate will also be an investment which will pay off for them down the road. Take out part of that equation - and you give potentially thousands of people a reason to rent instead of buy, or stay put. Real estate investors look for "deals" to wholesale or to fix up and sell at a higher profit. If industry agencies and associations are putting out data to discourage buyers, they have fewer reasons to invest, thus harming the income of real estate professionals and affiliates. There are (or should be) two possible ways to handle this, whether it's a national organization such as Fannie Mae or the local realty association telling people that local sales are down. One way is to not publish negative statistics. Only hit the positive elements. The other way is to tone down both the headline and the delivery of the story. For example, just say "December 2018 Home Sales Statistics" and let it go. Let those who will take the time to look come up with their own conclusions. At the same time, those who purchase property based on their own financial, investment, or living needs that don't base it on current market trend statistics wouldn't even know that it's a "bad time to buy".
With all of the uncertainty at the moment, the takeaway from the Fannie Mae story (and others like it) should only be "IT'S A BAD TIME TO PUBLISH THIS INFORMATION".
Dave Kohl brings his 30+ years of expertise in marketing, advertising, electronic media, and sports reporting, to us on a regular basis.
Mr. Kohl has sold more than $12,000,000 worth of internet, newspaper, TV, radio, and phone advertising within the past 10 years. Real estate related clients have included an official publication of the L.A. Assn. of Realtors, Re/Max of Texas' Houston TV homes showcase, Premier Real Estate Magazine, and the "Real Estate Buyers Hotline" phone service for which Kohl personally created more than 12,000 individual property ads.
Sports reporting and play-by-play experience includes Associated Press Radio and ABC Radio, radio stations including former Chicago stations WXFM and WDHF, and several writing assignments. In addition, Kohl taught Sportscasting and Radio Play-by-Play classes for 7 semesters at Columbia College Chicago, and has reported from World Series, NBA Finals, and hundreds of pro and college sports events. Kohl was among the first to write a sports media column for a midwest weekly in the late 70's.
His work also appears on sites such as RadioRecordings.com, MajorLeaguePrograms.com, and various publications and blogs.