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.
Showing posts with label agent. Show all posts
Showing posts with label agent. Show all posts
Wednesday, April 18, 2012
Friday, March 18, 2011
The Industry Still In Denial
It was just another day of reviewing real estate news looking for something other than the usual real estate professionals releasing negative statistics. Until I came upon a story from Springfield IL.
Of course, the story contains several negative statistics released by the local Association of Realtors. What makes this story so incredible is how the Association President blames "the weather and high gas and food prices" for the drop in home sales.
See for yourself:
http://www.sj-r.com/top-stories/x1777816246/Weather-economy-cited-in-24-3-percent-home-sales-drop
It's time to blame the Assn. President for not giving this story a much needed positive twist. If I had read that during Feburary 165 home sales were completed in the Springfield IL area, I'd could have been impressed. That month included a severe blizzard, a substantial increase in gas prices, etc. Yet, during that time, an average of more than 3 homes were sold every day. Someone could have figured maybe there are reasons to buy in that area.
It can't be that so many agents are in such denial. At least, I hope not. This is perhaps the worst case of the "You wouldn't want to buy a home here, would you?" syndrome I have seen coming from industry members.
We should all be working on solving the current problem. It is getting more serious every day. Many of those who are not afraid to purchase and can afford to can't get a mortgage. Even more can't get rid of their current property to make their next purchase.
Yet, this guy wants us to believe that if there was not a snowstorm, if gas was still at $2.40 a gallon, and the food crop was better this winter, more homes would have sold.
Not exactly a solution.
Here is it a month later. The snow is all gone. I'm still putting gas in my car, and still eating my regular meals every day. But my house still hasn't sold after more than a year on the market.
I suppose that's because of the St. Patrick's Day parades? Guess we'll find out next month.
Of course, the story contains several negative statistics released by the local Association of Realtors. What makes this story so incredible is how the Association President blames "the weather and high gas and food prices" for the drop in home sales.
See for yourself:
http://www.sj-r.com/top-stories/x1777816246/Weather-economy-cited-in-24-3-percent-home-sales-drop
It's time to blame the Assn. President for not giving this story a much needed positive twist. If I had read that during Feburary 165 home sales were completed in the Springfield IL area, I'd could have been impressed. That month included a severe blizzard, a substantial increase in gas prices, etc. Yet, during that time, an average of more than 3 homes were sold every day. Someone could have figured maybe there are reasons to buy in that area.
It can't be that so many agents are in such denial. At least, I hope not. This is perhaps the worst case of the "You wouldn't want to buy a home here, would you?" syndrome I have seen coming from industry members.
We should all be working on solving the current problem. It is getting more serious every day. Many of those who are not afraid to purchase and can afford to can't get a mortgage. Even more can't get rid of their current property to make their next purchase.
Yet, this guy wants us to believe that if there was not a snowstorm, if gas was still at $2.40 a gallon, and the food crop was better this winter, more homes would have sold.
Not exactly a solution.
Here is it a month later. The snow is all gone. I'm still putting gas in my car, and still eating my regular meals every day. But my house still hasn't sold after more than a year on the market.
I suppose that's because of the St. Patrick's Day parades? Guess we'll find out next month.
Friday, March 4, 2011
How To Win The Buyer vs. Seller Matchups
As I have said throughout the real estate crisis, advertising and marketing continues to play a significant role in turning the market around. Not only how much, but how.
Agents advertising their listings need to, more than ever, focus on who the most logical potential buyer is. I’m not talking about ethnicity or nationality, or anything else that cannot be included within an advertisement. It is where and how you advertise a listing that makes all the difference in today’s market.
If you are a buyer, or an agent fortunate enough to have a sincere buyer, consider their needs. When you have an individual or group which is investing, that is when you might look closely at “fixer-upper” listings. At least, any which are at the lowest of the low in terms of price for the area the property is in.
This way, an investor can be presented with two options. Point out that he/she/they can look at flipping the property in the near future if local price comparisons would work in their favor. Or, point out how by contracting certain improvements over the next few months could place the property in the caliber of a comparable “move-in condition” home in the same community.
For example, suppose you have a 3-bedroom fixer-upper reduced to $175,000. Your research shows a nearby 3-bedroom home in “move-in” condition listed at $188,000. Let the investor see what needs to be done in order to equal or “beat” the $188,000 home, and let the investor determine the approximate cost to make that happen. If there is a fit, the investor then has a direct reason to jump all over the $175,000 home.
Why only show the “fixer-upper” to investors? Frankly, too many agents pushing listings should know the answer but don’t.
With the huge amount of inventory out there, many agents overlook that buyers looking for a home for the family or even themselves don’t need to purchase a “fixer-upper” and spend and work themselves crazy to save a few thousand dollars anymore.
They are finding ready-to-go homes that don’t need much work for right around the same price. Conditions have changed because of all of the lower priced homes out there in most communities. Families no longer have to buy the house without a floor but with cracked walls for less money in order to move in to the area they want. Chances are they can get a great price on a “ready to go” home that lets them spend Saturday afternoons at the movies instead of on their knees scrubbing.
Agents need to keep these factors in mind when trying to move their new listings. That includes advertising and marketing. Some buyers want the best place to move into and have it be functional. You should be able to point out that “for $5,000 more, you save the $10,000 worth of work and the hours of your labor to fix up the other property” to a family.
At the moment, the way to go is to think in terms of matchups. What fits best for the situation. In basketball, the best scorer on your favorite team doesn’t always match up against the opponent’s best scorer. It depends on which player is best equipped to defend. When it comes to a job opening, it isn’t always qualifications. It is often which candidate best fits in with others on the team that determines the hire. And in real estate, it now needs to be the buyer with the “best fit” for the seller. But first, it needs to be pointed out.
Agents advertising their listings need to, more than ever, focus on who the most logical potential buyer is. I’m not talking about ethnicity or nationality, or anything else that cannot be included within an advertisement. It is where and how you advertise a listing that makes all the difference in today’s market.
If you are a buyer, or an agent fortunate enough to have a sincere buyer, consider their needs. When you have an individual or group which is investing, that is when you might look closely at “fixer-upper” listings. At least, any which are at the lowest of the low in terms of price for the area the property is in.
This way, an investor can be presented with two options. Point out that he/she/they can look at flipping the property in the near future if local price comparisons would work in their favor. Or, point out how by contracting certain improvements over the next few months could place the property in the caliber of a comparable “move-in condition” home in the same community.
For example, suppose you have a 3-bedroom fixer-upper reduced to $175,000. Your research shows a nearby 3-bedroom home in “move-in” condition listed at $188,000. Let the investor see what needs to be done in order to equal or “beat” the $188,000 home, and let the investor determine the approximate cost to make that happen. If there is a fit, the investor then has a direct reason to jump all over the $175,000 home.
Why only show the “fixer-upper” to investors? Frankly, too many agents pushing listings should know the answer but don’t.
With the huge amount of inventory out there, many agents overlook that buyers looking for a home for the family or even themselves don’t need to purchase a “fixer-upper” and spend and work themselves crazy to save a few thousand dollars anymore.
They are finding ready-to-go homes that don’t need much work for right around the same price. Conditions have changed because of all of the lower priced homes out there in most communities. Families no longer have to buy the house without a floor but with cracked walls for less money in order to move in to the area they want. Chances are they can get a great price on a “ready to go” home that lets them spend Saturday afternoons at the movies instead of on their knees scrubbing.
Agents need to keep these factors in mind when trying to move their new listings. That includes advertising and marketing. Some buyers want the best place to move into and have it be functional. You should be able to point out that “for $5,000 more, you save the $10,000 worth of work and the hours of your labor to fix up the other property” to a family.
At the moment, the way to go is to think in terms of matchups. What fits best for the situation. In basketball, the best scorer on your favorite team doesn’t always match up against the opponent’s best scorer. It depends on which player is best equipped to defend. When it comes to a job opening, it isn’t always qualifications. It is often which candidate best fits in with others on the team that determines the hire. And in real estate, it now needs to be the buyer with the “best fit” for the seller. But first, it needs to be pointed out.
Tuesday, December 22, 2009
Listing of the Day - Nashville TN
In an effort to improve the impact of the marketing of listings, I randomly choose current listings around the country in a variety of price ranges and comment on their effectiveness. No current clients of mine are used, nor do I know any sellers or buyers or have any additional information about the property.
7009 Red Apple Rd. Nashville $249,900 3 + 2 1/2
http://www.homefinder.com/TN/Nashville/50033886d_7009_Red_Apple_Rd
Even though there is only one photo in support of this listing ad, the exterior photo is an excellent choice. It is easy to see the size, scope, and beauty of this home right along with the detailed landscaping.
This home appears even newer than having been built in 2003 (as shown early on the left column), and seeing that it has approximately 2,600 square feet reinforces the size we can see on the photo.
However, the description copy kills the momentum and the positive vibes for a potential buyer. The agent (or whomever wrote the description) overlooks that he is asking the buyer to invest 1/4 million dollars by giving us one sentence split apart by dashes.
The opening phrase of "Great buy in the cane ridge area" is supposed to read "Cane Ridge" (as it does further down the page). This is not a good reflection on the agent. Next it says "showings by owner". Red flag!
Do you mean to tell me that a home that photographs this well won't be shown to a potential buyer by the listing agent? As if the owner is going to be able to answer potential buyer questions about the community?
Next, the "description" copy tells us that the "mailbox is at 501 appleseed ct.". For one, it should read "Appleseed Ct." with proper use of capital letters. For another, that information has no place at the point where the copy is supposed to entice the buyer to want more information. Does this mean that the eventual buyer will have to walk to the corner every day just to get the mail?
Then, the end of the description copy, which reads "landscape lighting & irrigation- " Say what? Does that mean the ditch is lit up?
There is more. This is a large 3 bedroom home, and parking is always an important factor. Yet, further down in the facts column for Parking, all it says is "Concrete Driveway, Electric Door Opener". Besides the fact that NOW capital letters are used when not necessary (as opposed to street names), the writer of this ad has overlooked something very important.
What does the "Electric Door Opener" open? You see, I read over this entire page several times, and never did find any mention of a garage. And there is none in the photo. If there is a garage, does it hold 1 car? 2 cars? We are not given the slightest hint.
Based on this ad, if this property ever sells, the listing agent should give the "owner" the commission.
GRADE: D+
Note: This commentary is uncompensated and for marketing purposes only and is no reflection on the featured property. Its accuracy is not guaranteed. Neither Dave Kohl nor First In Promotions shall be held responsible for any representations.
At this time, I have openings for more realty agent/office clients to critique current and brand new listings on an hourly basis. No current or past client listings are featured on this blog.Random listings are chosen around the country.
Your comments are most welcome!
7009 Red Apple Rd. Nashville $249,900 3 + 2 1/2
http://www.homefinder.com/TN/Nashville/50033886d_7009_Red_Apple_Rd
Even though there is only one photo in support of this listing ad, the exterior photo is an excellent choice. It is easy to see the size, scope, and beauty of this home right along with the detailed landscaping.
This home appears even newer than having been built in 2003 (as shown early on the left column), and seeing that it has approximately 2,600 square feet reinforces the size we can see on the photo.
However, the description copy kills the momentum and the positive vibes for a potential buyer. The agent (or whomever wrote the description) overlooks that he is asking the buyer to invest 1/4 million dollars by giving us one sentence split apart by dashes.
The opening phrase of "Great buy in the cane ridge area" is supposed to read "Cane Ridge" (as it does further down the page). This is not a good reflection on the agent. Next it says "showings by owner". Red flag!
Do you mean to tell me that a home that photographs this well won't be shown to a potential buyer by the listing agent? As if the owner is going to be able to answer potential buyer questions about the community?
Next, the "description" copy tells us that the "mailbox is at 501 appleseed ct.". For one, it should read "Appleseed Ct." with proper use of capital letters. For another, that information has no place at the point where the copy is supposed to entice the buyer to want more information. Does this mean that the eventual buyer will have to walk to the corner every day just to get the mail?
Then, the end of the description copy, which reads "landscape lighting & irrigation- " Say what? Does that mean the ditch is lit up?
There is more. This is a large 3 bedroom home, and parking is always an important factor. Yet, further down in the facts column for Parking, all it says is "Concrete Driveway, Electric Door Opener". Besides the fact that NOW capital letters are used when not necessary (as opposed to street names), the writer of this ad has overlooked something very important.
What does the "Electric Door Opener" open? You see, I read over this entire page several times, and never did find any mention of a garage. And there is none in the photo. If there is a garage, does it hold 1 car? 2 cars? We are not given the slightest hint.
Based on this ad, if this property ever sells, the listing agent should give the "owner" the commission.
GRADE: D+
Note: This commentary is uncompensated and for marketing purposes only and is no reflection on the featured property. Its accuracy is not guaranteed. Neither Dave Kohl nor First In Promotions shall be held responsible for any representations.
At this time, I have openings for more realty agent/office clients to critique current and brand new listings on an hourly basis. No current or past client listings are featured on this blog.Random listings are chosen around the country.
Your comments are most welcome!
Tuesday, May 19, 2009
What high end home sales could mean for you......
The near future of the real estate market is a significant, if not the most important, concern for the majority of us. Yet, there doesn’t seem to be enough being done about it which could have a more immediate impact.
As a sports fan involved with real estate related marketing and advertising every working day, I continue to see how statistics can be used to make practically any point or argument seem valid. A baseball player could be leading the league in hitting, but if he only gets 2 hits in his last 20 at-bats, reporters will write about how much better other players on the team have done in that same stretch. It is another version of the “half empty – half full” concept which now seems to dominate real estate news.
I saw a story with information from The Warren Group stating that in the Greater Boston area, a total 174 luxury homes (priced $1,000,000 and up) were sold during the 1st quarter of 2009 alone. This should have been a much bigger story. I found this amazing and quite a positive. If more than one “million dollar mansion” per day has been closed, loaned upon, and sold, over a 3 month period in this economy, this shows me that some banks are willing to make significant real estate loans, buyers can qualify for them, and that motivated sellers can move a property at ANY price. After all, these are the toughest properties to find buyers for. To me, this information should be splashed across the front page, used in advertising and marketing materials from the leading real estate companies, and anyone within earshot of the local realty associations should be aware of this.
But, as things go in this “half full half empty” era, the Boston Herald story goes on about how this total is about half of what it was compared with a year ago. Boom. The air goes out of the balloon faster than a speeding bullet and more powerful than a locomotive. Here is the story:
http://www.bostonherald.com/business/real_estate/view.bg?articleid=1172800&srvc=rss
I’m not here to attack the reporter. He is not the only one. But the negative publicity and the lack of fighting against it by people in the industry has got to stop for the sake of the economy. Seeing the number of high end homes that have sold in one part of the country this year should be an “OMG” story. Instead, it is shot down before you finish reading it.
This represents at least $175,000,000 into a regional economy. Realty agents, lenders, title company employees, appraisers, attorneys, and others, have been or are about to receive commissions or payments as a result of this business. The municipalities, counties, and state have generated significant tax dollars. It’s the feel good story of the year.
Instead, this story comes off as if it is another example of a terrible real estate market. Say what??
My home is not on the market right now. If it were, unfortunately for me, it would not be anywhere the million dollar range. Probably less than half of that. And if my home was sitting on the market right now at less than half that, I would be doing some research today. I would be finding out how many million dollar homes have sold in my area this year. If I find out it is averaging better than 1 a day (such as in the Boston area), I would actually be upset. Heck, even if it is 1 sold for every 2 days, that is pretty darn impressive.
Who would I be upset with? My realty agent, that’s who. I would ask her how there could be X number of qualified million dollar home sales during the time she hasn’t sold mine for less than half of that.
If your home is on the market, especially if it has been on the market for some time, a little bit of research could provide you with a lot of ammunition.
As a sports fan involved with real estate related marketing and advertising every working day, I continue to see how statistics can be used to make practically any point or argument seem valid. A baseball player could be leading the league in hitting, but if he only gets 2 hits in his last 20 at-bats, reporters will write about how much better other players on the team have done in that same stretch. It is another version of the “half empty – half full” concept which now seems to dominate real estate news.
I saw a story with information from The Warren Group stating that in the Greater Boston area, a total 174 luxury homes (priced $1,000,000 and up) were sold during the 1st quarter of 2009 alone. This should have been a much bigger story. I found this amazing and quite a positive. If more than one “million dollar mansion” per day has been closed, loaned upon, and sold, over a 3 month period in this economy, this shows me that some banks are willing to make significant real estate loans, buyers can qualify for them, and that motivated sellers can move a property at ANY price. After all, these are the toughest properties to find buyers for. To me, this information should be splashed across the front page, used in advertising and marketing materials from the leading real estate companies, and anyone within earshot of the local realty associations should be aware of this.
But, as things go in this “half full half empty” era, the Boston Herald story goes on about how this total is about half of what it was compared with a year ago. Boom. The air goes out of the balloon faster than a speeding bullet and more powerful than a locomotive. Here is the story:
http://www.bostonherald.com/business/real_estate/view.bg?articleid=1172800&srvc=rss
I’m not here to attack the reporter. He is not the only one. But the negative publicity and the lack of fighting against it by people in the industry has got to stop for the sake of the economy. Seeing the number of high end homes that have sold in one part of the country this year should be an “OMG” story. Instead, it is shot down before you finish reading it.
This represents at least $175,000,000 into a regional economy. Realty agents, lenders, title company employees, appraisers, attorneys, and others, have been or are about to receive commissions or payments as a result of this business. The municipalities, counties, and state have generated significant tax dollars. It’s the feel good story of the year.
Instead, this story comes off as if it is another example of a terrible real estate market. Say what??
My home is not on the market right now. If it were, unfortunately for me, it would not be anywhere the million dollar range. Probably less than half of that. And if my home was sitting on the market right now at less than half that, I would be doing some research today. I would be finding out how many million dollar homes have sold in my area this year. If I find out it is averaging better than 1 a day (such as in the Boston area), I would actually be upset. Heck, even if it is 1 sold for every 2 days, that is pretty darn impressive.
Who would I be upset with? My realty agent, that’s who. I would ask her how there could be X number of qualified million dollar home sales during the time she hasn’t sold mine for less than half of that.
If your home is on the market, especially if it has been on the market for some time, a little bit of research could provide you with a lot of ammunition.
Wednesday, April 22, 2009
A true test of local real estate markets
It is a part of just about every day for me to read up about some local real estate markets and get the good, the bad, and the ugly. Mostly, as you can tell by several of my comments over the past few months, I get frustrated at the realty associations pushing out negative statistics while they are supposed to be promoting activity in the market.
Finally, I have found an article that is indicative of what we SHOULD be seeing when it comes to local news real estate reports. It shows me that the reports about how sales have dropped in whatever city compared with last year are spreading negativity, and to a point that the market isn't pie-in-the-sky either.
http://www.coloradoan.com/article/20090421/UPDATES03/90421021/1002/rss
That is the link to an article by a reporter in Ft. Collins, Colorado. It discusses realty agents, buyers, and sellers seeing differences in supply and demand within a few miles of each other. Ft. Collins is not exactly a 'major league' city in terms of size. Yet, a town of this comparably small size is experiencing fluctuation on the local market.
This story represents solid reporting. Even in the era of homes selling before they hit the local MLS, it was location, location, location that made the difference. A few red hot zip codes could reflect desirability and activity over an entire big city.
My point is that if a community the size of Ft. Collins has this much variation in terms of hot and cold buyers and sellers, there are probably thousands of stories along the same lines in the top 50 largest cities around the country.
I wish every realty agent and especially realty association board members and staffers would take note of the above linked story and do some serious digging into the "pockets" in their territory and farm areas.
Let's be able to compare the supply and demand against what is going on right now in other parts of the community - and not making it sound negative by comparing against last year's statistics.
Serious potential buyers, for whatever reason, were likely not looking to buy a year earlier. They probably don't care about home sales statistics from 12 months ago when they are looking now. What they do or would care about is which nearby neighborhood has the best value for them right now.
Local housing information can be used to spur the local real estate market.
Finally, I have found an article that is indicative of what we SHOULD be seeing when it comes to local news real estate reports. It shows me that the reports about how sales have dropped in whatever city compared with last year are spreading negativity, and to a point that the market isn't pie-in-the-sky either.
http://www.coloradoan.com/article/20090421/UPDATES03/90421021/1002/rss
That is the link to an article by a reporter in Ft. Collins, Colorado. It discusses realty agents, buyers, and sellers seeing differences in supply and demand within a few miles of each other. Ft. Collins is not exactly a 'major league' city in terms of size. Yet, a town of this comparably small size is experiencing fluctuation on the local market.
This story represents solid reporting. Even in the era of homes selling before they hit the local MLS, it was location, location, location that made the difference. A few red hot zip codes could reflect desirability and activity over an entire big city.
My point is that if a community the size of Ft. Collins has this much variation in terms of hot and cold buyers and sellers, there are probably thousands of stories along the same lines in the top 50 largest cities around the country.
I wish every realty agent and especially realty association board members and staffers would take note of the above linked story and do some serious digging into the "pockets" in their territory and farm areas.
Let's be able to compare the supply and demand against what is going on right now in other parts of the community - and not making it sound negative by comparing against last year's statistics.
Serious potential buyers, for whatever reason, were likely not looking to buy a year earlier. They probably don't care about home sales statistics from 12 months ago when they are looking now. What they do or would care about is which nearby neighborhood has the best value for them right now.
Local housing information can be used to spur the local real estate market.
Friday, March 13, 2009
Flood Safety Awareness Week is coming..........
Flood Safety Awareness Week is March 16 through 20. Based on the heavy rain and snow that hit much of the northern part of the country last weekend, this is especially important. I didn’t realize until this week that FEMA reports that 90% of all natural disasters in the country involve flooding. I’ll admit I would have guessed fires and hurricane winds before flooding.
To that point, the National Weather Service has contributed more data and additional resources to increase knowledge of what to do before, during, and after a flood. Especially before. The government web site, www.FloodSmart.gov, has beefed up the information it now provides.
It is worth knowing about, even for those who do not live in a flood threatened area. And once again, if you are a realty agent or a lender, you should let your current and potential clients know about this. If I were an agent or lender and there is a river, lake, or creek in my farm area with any flooding history, I would be alerting nearby homeowners to this site, whether my clients or not. Again, it not only helps the community, but it presents a positive publicity spin.
To that point, the National Weather Service has contributed more data and additional resources to increase knowledge of what to do before, during, and after a flood. Especially before. The government web site, www.FloodSmart.gov, has beefed up the information it now provides.
It is worth knowing about, even for those who do not live in a flood threatened area. And once again, if you are a realty agent or a lender, you should let your current and potential clients know about this. If I were an agent or lender and there is a river, lake, or creek in my farm area with any flooding history, I would be alerting nearby homeowners to this site, whether my clients or not. Again, it not only helps the community, but it presents a positive publicity spin.
Wednesday, December 3, 2008
Rent To Buy - and How It Can Create Business !
It is always good to see a positive slant on the real estate market, and the San Antonio Board of Realtors has finally done just that. They have issued a report about the increase in local homes being rented and the positive impact on the market. The report claims that “the number of sales of rented homes jumped 8.6 percent in August and September from the same two-month period last year.”. It goes on to say that the number of sales of rented homes jumped more than 8% in August AND September compared with the same two-month period in 2007.
First of all, this is what a realty board SHOULD have been doing all along over the past year or two. Finding the positive statistics and putting them out there. I have already voiced my opinion about member dues going toward stories being published about the comparative drops in home sales and how much that has contributed to the public’s negative perception about the marketplace.
Second, this proves that what I call “true creative financing” is starting to take hold. This report (at least what I saw of it) does not have details about the number of people who executed a “rent to buy” situation went on to purchase, but I have to believe it is a major factor toward this new trend. An empty home is a tougher sell, especially when there is so much inventory out there. Sellers need to see the value of renting or simply doing what they can to have their home for sale occupied if and when they need to vacate.
By the way, that same report shows that the average rental rate for single family homes in the San Antonio region was up nearly 5% for the month of September when compared with one year ago. Some seller/landlords (to coin what should be an often used title!!) realize that many who are renting houses are doing so because they may have enough for a down payment to purchase a home, but do not have the credit.
Even with mortgage rates dropping to their lowest in 4 years this past week, I am seeing the initial crunch of responses from consumers geared more toward refinance rather than purchase. This is certainly good news for mortgage lenders. And my real estate agent clients are going to be reminded about touching base with some of their lender contacts. A candidate to refinance might be ripe to listen to a pitch about a comparable home available at a bargain price. The agent and lender work with the client to rent or sell their current property to, while finding a bargain on an even better comparable property. This is what will kick start the industry back toward where it should and will be. That scenario results in anywhere from one to three commissionable transactions. Compared with zero if the client has no idea they could do this and benefit.
However, I still hear lenders complaining that they can’t refinance some of their clients because the value of the home has dropped to the point that a refi doesn’t make sense. They feel as though the “short sales” going on are knocking them out of the box on refi’s. Taking into account the scenarios such as I have just described opens up additional possibilities of making them happen. Granted, not every possible refinance will be willing to pursue another property and move, but if one out of twenty such possibilities comes to fruition, that is one more commission than would otherwise have been. This is a time of great opportunity.
This reminded me of a story I saw in the early 90’s when I was in the Los Angeles area during the California real estate boom of that period. I was attending an agent and broker meeting as an affiliate member of the (then) San Fernando Valley Board of Realtors when it was already among the top 5 largest membership bases in the entire country. While the market was hot, this was during the period when home prices were inflating in excess of 20% over the course of a single year.
A broker/owner went up before a group of agents to pitch a property and explained that he has the most motivated seller in the area. To the point that he offered an ADDITIONAL $10,000 commission (above and beyond the contracted percentage) to the buyer’s agent who brings him a qualified and eventual purchaser by the end of that day. I remember that to this day because he is the only agent I have seen or heard do that in my 20 years of advertising and marketing for agents and lenders. And I remember the buzz going around the room for the rest of that meeting as agents were making note of that.
Later that month, I asked him if he had been able to make good on that bonus offer. He told me that he wasn’t, but did manage to sell that property just a couple of weeks later. Then he went on to tell me that a couple of the other agents in attendance that day had brought buyers to a couple of his other (lower priced) listings who had not come his way before.
My point here is that agents and lenders do have a choice this minute. I would rather hear about creativity toward making deals than hear complaints about today’s market. You do have a choice.
For consumers participating in this blog, you can heed that advice on your own. If you already know that your home isn't worth what it was a couple of years back and thus would have a challenge to refinance, do your homework about bargains in your area of comparable or better houses. You just might be able to get yourself into a home originally valued at $50,000 to $100,000 more than yours was for the same or perhaps less money each month. If you can find a sharp enough realty agent and lender to work with you on this, you could go for a "rent to buy" as a form of seller financing and try and get a steal on a "better" property in your same area. One that will be worth even more when the market bounces back.
First of all, this is what a realty board SHOULD have been doing all along over the past year or two. Finding the positive statistics and putting them out there. I have already voiced my opinion about member dues going toward stories being published about the comparative drops in home sales and how much that has contributed to the public’s negative perception about the marketplace.
Second, this proves that what I call “true creative financing” is starting to take hold. This report (at least what I saw of it) does not have details about the number of people who executed a “rent to buy” situation went on to purchase, but I have to believe it is a major factor toward this new trend. An empty home is a tougher sell, especially when there is so much inventory out there. Sellers need to see the value of renting or simply doing what they can to have their home for sale occupied if and when they need to vacate.
By the way, that same report shows that the average rental rate for single family homes in the San Antonio region was up nearly 5% for the month of September when compared with one year ago. Some seller/landlords (to coin what should be an often used title!!) realize that many who are renting houses are doing so because they may have enough for a down payment to purchase a home, but do not have the credit.
Even with mortgage rates dropping to their lowest in 4 years this past week, I am seeing the initial crunch of responses from consumers geared more toward refinance rather than purchase. This is certainly good news for mortgage lenders. And my real estate agent clients are going to be reminded about touching base with some of their lender contacts. A candidate to refinance might be ripe to listen to a pitch about a comparable home available at a bargain price. The agent and lender work with the client to rent or sell their current property to, while finding a bargain on an even better comparable property. This is what will kick start the industry back toward where it should and will be. That scenario results in anywhere from one to three commissionable transactions. Compared with zero if the client has no idea they could do this and benefit.
However, I still hear lenders complaining that they can’t refinance some of their clients because the value of the home has dropped to the point that a refi doesn’t make sense. They feel as though the “short sales” going on are knocking them out of the box on refi’s. Taking into account the scenarios such as I have just described opens up additional possibilities of making them happen. Granted, not every possible refinance will be willing to pursue another property and move, but if one out of twenty such possibilities comes to fruition, that is one more commission than would otherwise have been. This is a time of great opportunity.
This reminded me of a story I saw in the early 90’s when I was in the Los Angeles area during the California real estate boom of that period. I was attending an agent and broker meeting as an affiliate member of the (then) San Fernando Valley Board of Realtors when it was already among the top 5 largest membership bases in the entire country. While the market was hot, this was during the period when home prices were inflating in excess of 20% over the course of a single year.
A broker/owner went up before a group of agents to pitch a property and explained that he has the most motivated seller in the area. To the point that he offered an ADDITIONAL $10,000 commission (above and beyond the contracted percentage) to the buyer’s agent who brings him a qualified and eventual purchaser by the end of that day. I remember that to this day because he is the only agent I have seen or heard do that in my 20 years of advertising and marketing for agents and lenders. And I remember the buzz going around the room for the rest of that meeting as agents were making note of that.
Later that month, I asked him if he had been able to make good on that bonus offer. He told me that he wasn’t, but did manage to sell that property just a couple of weeks later. Then he went on to tell me that a couple of the other agents in attendance that day had brought buyers to a couple of his other (lower priced) listings who had not come his way before.
My point here is that agents and lenders do have a choice this minute. I would rather hear about creativity toward making deals than hear complaints about today’s market. You do have a choice.
For consumers participating in this blog, you can heed that advice on your own. If you already know that your home isn't worth what it was a couple of years back and thus would have a challenge to refinance, do your homework about bargains in your area of comparable or better houses. You just might be able to get yourself into a home originally valued at $50,000 to $100,000 more than yours was for the same or perhaps less money each month. If you can find a sharp enough realty agent and lender to work with you on this, you could go for a "rent to buy" as a form of seller financing and try and get a steal on a "better" property in your same area. One that will be worth even more when the market bounces back.
Friday, November 7, 2008
The marketing of a commerical investment property in today's market
My clients don't always like to hear it, even if they appreciate it. More than ever in today's economy, it takes an extra and a different type of effort to sell a high end or investment property, whether residential or commercial. The days of "here it is, come and buy it" are long gone.
One of the networking sites I frequent had a post from a realty agent I do not know and had never contacted before to the best of my knowledge. He basically announced that the property is for sale and linked to its web site as well as to another version of the listing on a commercial property listing service.
This is for a waterfront restaurant and property in Rhode Island, with the web site he gave being WaterfireDining.com.
My curiousity got the best of me. In better times (as in a few years ago) I did extensive market research to prepare brochures and presentations on a waterfront restaurant in Indiana, and a family owned restaurant in Wisconsin, among others. And this Rhode Island property is priced higher than those I have worked on. I decided to visit the site as if I were a potential investor.
I don't often quote myself in an article, but in this case, it gets my point across. This agent asked for comments, so after visiting the links he gave, here is what I replied with:
"Don - the site and the listing impressed me but didn't "sell" me on why it would be a good investment. (OK - I'm not an investor and don't play one on TV, but I do point these things out to realty agents who are already my marketing clients.) So far I want to eat there rather than buy the place, and that isn't your intention. There is nothing to show a potential buyer why he/she/they should spend over $2,000,000 on this property. Why is it a "former" restaurant? That would potentially scare me off before I would contact you about it. I could go away thinking it has been closed for years and you are still another agent trying to unload an overblown listing. Or, I could come away thinking that it just closed due to insufficient financing in a challenging economic time and that someone could get a good deal if they open it again by the end of the year. And if I had over $2,000,000 for an investment, I'll think the worst of an opportunity. And all the photos in the world don't answer that important question for me. Also, it is located near a major college campus. But is it a place that students go and hang out? Unless I know it is, the proximity to campus doesn't necessarily sell me on this as a good investment. If the students do not frequent the place, the location could be more of a negative than a positive. But I don't know either way. This looks to be another instance where "reasons and benefits" should come before the pictures, bells, and whistles. The site and the listing do not tell me why I should invest in the property."
In other words, I only got part of the overall picture. That part I can understand, but my entire point is that I got the "wrong" part.
This, like thousands of others, is an investment property. Potential buyers are not going to compare it to other restaurants or buildings. They are going to compare it with other potential investments. The potential buyer for this property may not care if it is waterfront, in a college town, or in the middle of a swamp near New Orelans. That potential buyer wants to know, first and foremost, how he/she/they can serve their purpose by purchasing the property.
That purpose could be specific to wanting to own a restaurant, expanding a college town or coastal restaurant concept, starting a family run business, a plan to establish and then re-sell in five years for a hefty profit, or as a tax shelter to pour some money into "improvements" for.
Yet, the majority of the points raised in the previous paragraph were not addressed. I'm sure that those of you who are realty agents are saying to yourself "Of course not, that's why you need to contact me!".
And that's where I come back with my explanation that times have changed. If I am considering an investment of more than $2 million, I am just as likely to say "next!" and look for another possibility as I am to contact the agent and have to give out information before I can get answers to what really are qualifying questions.
If I really was a potential investor in this property, a visual presentation (and I consider a dedicated web site to be one of them) needs to start me up with more important information.
The presentation needs to answer the questions that an investor or investment group of this magnitude needs answered. Like the questions I raised in my response to Don the agent.
Then, if I am still interested, I'm sure I'd be impressed by the pictures.
Now, I'm sure that Don and many other agents I talk to want to tell me that this disappoints them because by doing it the way I suggest they will not be contacted by as many potential buyers.
I disagree. This is not just another condo in a 20 year old development. This is a serious investment property. As an investor of this magnitude, I would be well versed enough to take note that a realty agent has started off by targeting the most important factors. Even if he/she did not target my specific needs, I might still be tempted to contact him or her. Why? Because it would come across that this person understands the marketplace and likely could address my specific need. Or know enough to refer me to someone who does.
Sell the sizzle, and not the steak. At this level of investment needed, market the property and not the agent.
Let me assure you that I am not here to attack agent Don or the property one bit. This is what I would tell him if he were my client. But I will also tell you that in the first 6 days of Don's post about this property, mine remains the only response, and I haven't heard from Don about it either. And the property is still for sale.
One of the networking sites I frequent had a post from a realty agent I do not know and had never contacted before to the best of my knowledge. He basically announced that the property is for sale and linked to its web site as well as to another version of the listing on a commercial property listing service.
This is for a waterfront restaurant and property in Rhode Island, with the web site he gave being WaterfireDining.com.
My curiousity got the best of me. In better times (as in a few years ago) I did extensive market research to prepare brochures and presentations on a waterfront restaurant in Indiana, and a family owned restaurant in Wisconsin, among others. And this Rhode Island property is priced higher than those I have worked on. I decided to visit the site as if I were a potential investor.
I don't often quote myself in an article, but in this case, it gets my point across. This agent asked for comments, so after visiting the links he gave, here is what I replied with:
"Don - the site and the listing impressed me but didn't "sell" me on why it would be a good investment. (OK - I'm not an investor and don't play one on TV, but I do point these things out to realty agents who are already my marketing clients.) So far I want to eat there rather than buy the place, and that isn't your intention. There is nothing to show a potential buyer why he/she/they should spend over $2,000,000 on this property. Why is it a "former" restaurant? That would potentially scare me off before I would contact you about it. I could go away thinking it has been closed for years and you are still another agent trying to unload an overblown listing. Or, I could come away thinking that it just closed due to insufficient financing in a challenging economic time and that someone could get a good deal if they open it again by the end of the year. And if I had over $2,000,000 for an investment, I'll think the worst of an opportunity. And all the photos in the world don't answer that important question for me. Also, it is located near a major college campus. But is it a place that students go and hang out? Unless I know it is, the proximity to campus doesn't necessarily sell me on this as a good investment. If the students do not frequent the place, the location could be more of a negative than a positive. But I don't know either way. This looks to be another instance where "reasons and benefits" should come before the pictures, bells, and whistles. The site and the listing do not tell me why I should invest in the property."
In other words, I only got part of the overall picture. That part I can understand, but my entire point is that I got the "wrong" part.
This, like thousands of others, is an investment property. Potential buyers are not going to compare it to other restaurants or buildings. They are going to compare it with other potential investments. The potential buyer for this property may not care if it is waterfront, in a college town, or in the middle of a swamp near New Orelans. That potential buyer wants to know, first and foremost, how he/she/they can serve their purpose by purchasing the property.
That purpose could be specific to wanting to own a restaurant, expanding a college town or coastal restaurant concept, starting a family run business, a plan to establish and then re-sell in five years for a hefty profit, or as a tax shelter to pour some money into "improvements" for.
Yet, the majority of the points raised in the previous paragraph were not addressed. I'm sure that those of you who are realty agents are saying to yourself "Of course not, that's why you need to contact me!".
And that's where I come back with my explanation that times have changed. If I am considering an investment of more than $2 million, I am just as likely to say "next!" and look for another possibility as I am to contact the agent and have to give out information before I can get answers to what really are qualifying questions.
If I really was a potential investor in this property, a visual presentation (and I consider a dedicated web site to be one of them) needs to start me up with more important information.
The presentation needs to answer the questions that an investor or investment group of this magnitude needs answered. Like the questions I raised in my response to Don the agent.
Then, if I am still interested, I'm sure I'd be impressed by the pictures.
Now, I'm sure that Don and many other agents I talk to want to tell me that this disappoints them because by doing it the way I suggest they will not be contacted by as many potential buyers.
I disagree. This is not just another condo in a 20 year old development. This is a serious investment property. As an investor of this magnitude, I would be well versed enough to take note that a realty agent has started off by targeting the most important factors. Even if he/she did not target my specific needs, I might still be tempted to contact him or her. Why? Because it would come across that this person understands the marketplace and likely could address my specific need. Or know enough to refer me to someone who does.
Sell the sizzle, and not the steak. At this level of investment needed, market the property and not the agent.
Let me assure you that I am not here to attack agent Don or the property one bit. This is what I would tell him if he were my client. But I will also tell you that in the first 6 days of Don's post about this property, mine remains the only response, and I haven't heard from Don about it either. And the property is still for sale.
Thursday, September 25, 2008
How to prepare to sell your home.........
This is most definitely a buyers' market. Not to sound like a continuous loop recording, but I keep seeing the negative instead of the positives about the current real estate market. And the negative "news" continues to come from within the industry. I can't figure it out.
http://www.chron.com/disp/story.mpl/business/6017926.html
http://wbztv.com/local/home.sales.condo.2.823598.html
http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080923/BUSINESS/80923011 http://www.news-daily.com/Main.asp?
SectionID=2&SubSectionID=2&ArticleID=25227
http://www.jsonline.com/story/index.aspx?id=798582
http://www.buffalonews.com/cityregion/northernsuburbs/story/446045.html
Home owners and potential home buyers don't care about the statistics compared with a month ago, a year ago, or a decade ago.
Of course, I get asked by my clients about ways to combat this. I thought I'd pass some along here. Please let me know what you think, and pass along some ideas. But I am going to present them for home buyers.
If I had a true motivation to sell my home today, I would do my homework before calling my realty agent. First, I would look in the local paper and online for similar local homes for sale based on the features I will be offering. That is so important. I would read every description carefully, and compare it with what I will have to offer. Then I would consider what "buzz words" I could add.
For example, my home right now is within walking distance of 2 bus lines and a commuter train line. With gas prices being what they are, my pitch might just start with "close to train and bus" ahead of "3 bedrooms....." and the rest. My home also just had zero water come in following an 8 inch deluge of rain during the mid-September storms that drenched much of the nation. Yet, some streets were closed within a mile of where I live due to standing water. You had better believe I want that highlighted. Pets are allowed where I live and that was also a consideration in purchasing the home years ago. Yet, other than some of my clients, I very rarely see "Pets OK" in an advertisement or description of an available home.
Frankly, not enough realty agents consider these points when marketing a specific property. I could let it slip years ago, but not in this market. And in my role as a motivated seller (for the purpose of this example), I am taking charge.
Once I list my "weapons", such as proximity to schools and transportation, pets, less likely to flood, near shopping and expressway, pets, and the like, THEN I find and compare descriptions and prices on homes with similar features in my area.
Let's say that 3 bedroom homes within 5 miles of mine are all listed between $300,000 and $375,000. Then I know my range. Next, I compare my "weapons". This is where marketing comes into play. I might not know that 3 other homes nearby are pet friendly, didn't flood, and are also near the train and bus lines, because it isn't in the advertised description of the property. My mission is to make that the fault of the listing agent for not pointing out every strength possible.
But that factors into my price strategy. A potential buyer looking in that price range (or higher) knows to look at more than one price vs. another. To put it another way, I can appeal to a potential buyer by getting them to see that my home will enable them to house their pets and walk to the train or bus. In the long run, that should be worth $2,000 more than a similar house that doesn't offer those benefits. That is just an example, but my point is to use every weapon about your house and show potential buyers the added value.
Think about when you go into a convenience store to get a soft drink. You can get a 12 oz. drink for 89 cents. But you can get a 20 oz. drink for 99 cents. You are getting over one-third more for merely an extra dime. You see the value and think the 89 cents drink isn't worth it. But in fact, you really are spending 10% more than you need to in order to get your drink. Keep that in mind when you are setting an asking price for your house.
Keep in mind that the other homes in the area are already priced to include the agent commission. So you don't need to add any more than necessary.
Now that I have an idea of what I would sell for and have done my own local research, THEN I would contact my agent. But I would not just ask him/her/them to come over and list the home. I would ask them to show me some of the other properties in the area as if I am a buyer. And I would spend a couple of hours going to see those homes. Then I would see how the other potential sellers are staging and presenting their home, and hear the listing agent point out the major weapons for that home.
After that, I present my 'weapons' to my agent, review what was learned and observed during my tour of other available homes, and get down to business. I then request the selling weapons that I want pointed out and why I should get $360,000 (example) for the home.
If my agent does the "let's list it for $390,000 and go down to $360,000" routine, I would refuse. Just as an agent should walk away from a listing from an unreasonable seller, I think a seller should only work with a reasonable agent. It goes both ways. At least it should.
The idea is to show that my home is worth $4,000 more than a similar home down the block and show the reasons why. If my agent can't do that, I'll find somebody who will.
Granted, I have 20 years of experience working with agents and lenders on advertising and marketing over the years, but I really did personally use this 2 years ago for some relatives with a property to sell. I found a similar property a block away that was listed for more money and then found two features "my" property had that were better. Sure enough, my relatives got an offer higher than the other home nearby was listed for at the time. Frankly, too many agents out there would react by pricing my relatives' home for a few thousand LESS than the other home. Therein lies the problem.
If you are seriously ready to sell your home, find your weapons, then find your agent.
http://www.chron.com/disp/story.mpl/business/6017926.html
http://wbztv.com/local/home.sales.condo.2.823598.html
http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080923/BUSINESS/80923011 http://www.news-daily.com/Main.asp?
SectionID=2&SubSectionID=2&ArticleID=25227
http://www.jsonline.com/story/index.aspx?id=798582
http://www.buffalonews.com/cityregion/northernsuburbs/story/446045.html
Home owners and potential home buyers don't care about the statistics compared with a month ago, a year ago, or a decade ago.
Of course, I get asked by my clients about ways to combat this. I thought I'd pass some along here. Please let me know what you think, and pass along some ideas. But I am going to present them for home buyers.
If I had a true motivation to sell my home today, I would do my homework before calling my realty agent. First, I would look in the local paper and online for similar local homes for sale based on the features I will be offering. That is so important. I would read every description carefully, and compare it with what I will have to offer. Then I would consider what "buzz words" I could add.
For example, my home right now is within walking distance of 2 bus lines and a commuter train line. With gas prices being what they are, my pitch might just start with "close to train and bus" ahead of "3 bedrooms....." and the rest. My home also just had zero water come in following an 8 inch deluge of rain during the mid-September storms that drenched much of the nation. Yet, some streets were closed within a mile of where I live due to standing water. You had better believe I want that highlighted. Pets are allowed where I live and that was also a consideration in purchasing the home years ago. Yet, other than some of my clients, I very rarely see "Pets OK" in an advertisement or description of an available home.
Frankly, not enough realty agents consider these points when marketing a specific property. I could let it slip years ago, but not in this market. And in my role as a motivated seller (for the purpose of this example), I am taking charge.
Once I list my "weapons", such as proximity to schools and transportation, pets, less likely to flood, near shopping and expressway, pets, and the like, THEN I find and compare descriptions and prices on homes with similar features in my area.
Let's say that 3 bedroom homes within 5 miles of mine are all listed between $300,000 and $375,000. Then I know my range. Next, I compare my "weapons". This is where marketing comes into play. I might not know that 3 other homes nearby are pet friendly, didn't flood, and are also near the train and bus lines, because it isn't in the advertised description of the property. My mission is to make that the fault of the listing agent for not pointing out every strength possible.
But that factors into my price strategy. A potential buyer looking in that price range (or higher) knows to look at more than one price vs. another. To put it another way, I can appeal to a potential buyer by getting them to see that my home will enable them to house their pets and walk to the train or bus. In the long run, that should be worth $2,000 more than a similar house that doesn't offer those benefits. That is just an example, but my point is to use every weapon about your house and show potential buyers the added value.
Think about when you go into a convenience store to get a soft drink. You can get a 12 oz. drink for 89 cents. But you can get a 20 oz. drink for 99 cents. You are getting over one-third more for merely an extra dime. You see the value and think the 89 cents drink isn't worth it. But in fact, you really are spending 10% more than you need to in order to get your drink. Keep that in mind when you are setting an asking price for your house.
Keep in mind that the other homes in the area are already priced to include the agent commission. So you don't need to add any more than necessary.
Now that I have an idea of what I would sell for and have done my own local research, THEN I would contact my agent. But I would not just ask him/her/them to come over and list the home. I would ask them to show me some of the other properties in the area as if I am a buyer. And I would spend a couple of hours going to see those homes. Then I would see how the other potential sellers are staging and presenting their home, and hear the listing agent point out the major weapons for that home.
After that, I present my 'weapons' to my agent, review what was learned and observed during my tour of other available homes, and get down to business. I then request the selling weapons that I want pointed out and why I should get $360,000 (example) for the home.
If my agent does the "let's list it for $390,000 and go down to $360,000" routine, I would refuse. Just as an agent should walk away from a listing from an unreasonable seller, I think a seller should only work with a reasonable agent. It goes both ways. At least it should.
The idea is to show that my home is worth $4,000 more than a similar home down the block and show the reasons why. If my agent can't do that, I'll find somebody who will.
Granted, I have 20 years of experience working with agents and lenders on advertising and marketing over the years, but I really did personally use this 2 years ago for some relatives with a property to sell. I found a similar property a block away that was listed for more money and then found two features "my" property had that were better. Sure enough, my relatives got an offer higher than the other home nearby was listed for at the time. Frankly, too many agents out there would react by pricing my relatives' home for a few thousand LESS than the other home. Therein lies the problem.
If you are seriously ready to sell your home, find your weapons, then find your agent.
Wednesday, August 27, 2008
How I would save residential real estate
This week I had a mortgage lender that has been a client for more than a year decide to cancel an advertising campaign I helped him to secure. He told me that he wasn't drawing enough business from it. Some people just don't get it.
Lately, consumers are bombarded day after day with negative news about the real estate industry, ranging from mortgage loan problems, foreclosures, fewer sales, and the illegal actions by people trusted within the industry.
As I have done in recent weeks, here are a few stories about people in the industry I have found as part of my daily reading.........
http://www.law.com/jsp/article.jsp?id=1202424077252&rss=newswire
http://www.dailyherald.com/story/?id=229999&src=109
http://www.canada.com/theprovince/story.html?id=1fb3c5da-cc5f-4f00-ab45-492b77621a9c
http://www.latimes.com/business/la-fi-harney24-2008aug24,0,4322966.story?track=rss
But that's not important now.
I told my client that this is the worst possible time for him to stop his campaign. Consumers used to seeing his campaign every week in the same place will "figure" this lender has also closed its doors. He will lose the "recognition by repetition" factor he built up over the past year. Those consumers who are looking at options today for what they want to do when conditions get better will see his competition instead.
No, I'm not complaining because I lost a sale. Truth is I am complaining because I could lose a quality client forever because he wasn't getting enough instant gratification.
Consumers know it is a buyers' market at the moment. When they are poised to jump on an opportunity, they will jump with whoever is there at the moment to jump with them.
This morning I was talking with a Realtor in the business for over 25 years. She told me about a colleague who showed a first-time buyer more than 50 different houses. Her client made several "low ball" offers, but none of them were accepted. The potential buyer was upset with the Realtor for taking him to all of those houses and not being able to buy. The lady I talked to expressed her frustration with the potential client.
From my corner, I'm going to side with the potential buyer that his time was basically wasted. That realty agent should have stopped after no later than the second "low ball" offer. If the offer was for $200,000 on a home listed at $230,000 and it was rejected, it is up to the agent to step it up. Find that potential buyer a similar home that he could get right away for $200,000. Don't keep taking him to homes he isn't going to get.
Instead, the sellers are still sitting there upset that veteran realty agents aren't bringing them a good enough offer to sell. These "low ball" buyers get upset that their agents aren't finding them these good deals in a "buyers' market".
It is up to people in the industry to make a possible transaction work for all concerned. No agent should be showing a buyer 50 houses and not have an offer accepted - in any market.
Meanwhile, a thumbs up for Forbes for their recent story about using real estate investing to put off tax bills. That is what I call creative financing. I regular contact some mortgage lenders who are also CPA's or also have a tax service in order to diversify. Yet, I wind up reading about this years old concept in Forbes.
(If you didn't see that story, please contact me and I'll send it to you.)
And then.....
I read that the NAR admitted to spending more than $3,000,000 in just the 2nd quarter of this year to lobby for measures related to the housing market. And I'm upset about that.
Give me the chance. I'm not the brightest bulb on the planet, but I would have done things way differently than the Association has. For next quarter, give my company the $3,000,000 to work with.
Let me work with a P R expert on changing the negative reporting. No more of the "sales are down 22% from a year ago" stories. Those should be billed as "more than 26,000 homes sold during July....." and forget the negative comparisons. A $100,000 public relations campaign blitzing the media with only positive facts and happy homeowners would be a solid start.
Next, I would implement an Association promotion. As of a pre-determined date, the first 10 homes sold in each of the 50 states will receive a $1,000 closing rebate from a fund started in conjunction with the Association. That would total $500,000 in rebates. I'll allot $400,000 in legal and administrative costs to make that happen. No advertising or P R costs because I would expect aggressive agents to get their buyer clients in gear.
This promotion would be a major score. Buyers and sellers not going through an agent would not be able to partake. It creates much needed urgency in a starving marketplace.
And, I just showed how it could be done and benefit people in all 50 states on a budget.
Of course, doing all of the above with a budget as large as $1,000,000 will pay off for the industry.
My next step after that? Take the $2,000,000 profit I would have made and buy a $2,000,000 mansion and live happily ever after.
Meanwhile......
Let's watch the Kolter Group, based in West Palm Beach, FL. Commercial Property News reports that they have become the second large commercial real estate company to announce a financial commitment into residential. To the tune of a $1 billion joint venture including residential developments within Florida.
Later that same day, I read the story from Hawaii about how the number of inactive licensed agents in that state has increased to 6,254 (as of July 30) from 4,702 last year, according to the Department of Commerce and Consumer Affairs' professional licensing division. Try that on for size. More than 1,400 licensed agents not even paying dues to remain active in local real estate.
Shows what can happen if you, as an industry professional, stop advertising.
Lately, consumers are bombarded day after day with negative news about the real estate industry, ranging from mortgage loan problems, foreclosures, fewer sales, and the illegal actions by people trusted within the industry.
As I have done in recent weeks, here are a few stories about people in the industry I have found as part of my daily reading.........
http://www.law.com/jsp/article.jsp?id=1202424077252&rss=newswire
http://www.dailyherald.com/story/?id=229999&src=109
http://www.canada.com/theprovince/story.html?id=1fb3c5da-cc5f-4f00-ab45-492b77621a9c
http://www.latimes.com/business/la-fi-harney24-2008aug24,0,4322966.story?track=rss
But that's not important now.
I told my client that this is the worst possible time for him to stop his campaign. Consumers used to seeing his campaign every week in the same place will "figure" this lender has also closed its doors. He will lose the "recognition by repetition" factor he built up over the past year. Those consumers who are looking at options today for what they want to do when conditions get better will see his competition instead.
No, I'm not complaining because I lost a sale. Truth is I am complaining because I could lose a quality client forever because he wasn't getting enough instant gratification.
Consumers know it is a buyers' market at the moment. When they are poised to jump on an opportunity, they will jump with whoever is there at the moment to jump with them.
This morning I was talking with a Realtor in the business for over 25 years. She told me about a colleague who showed a first-time buyer more than 50 different houses. Her client made several "low ball" offers, but none of them were accepted. The potential buyer was upset with the Realtor for taking him to all of those houses and not being able to buy. The lady I talked to expressed her frustration with the potential client.
From my corner, I'm going to side with the potential buyer that his time was basically wasted. That realty agent should have stopped after no later than the second "low ball" offer. If the offer was for $200,000 on a home listed at $230,000 and it was rejected, it is up to the agent to step it up. Find that potential buyer a similar home that he could get right away for $200,000. Don't keep taking him to homes he isn't going to get.
Instead, the sellers are still sitting there upset that veteran realty agents aren't bringing them a good enough offer to sell. These "low ball" buyers get upset that their agents aren't finding them these good deals in a "buyers' market".
It is up to people in the industry to make a possible transaction work for all concerned. No agent should be showing a buyer 50 houses and not have an offer accepted - in any market.
Meanwhile, a thumbs up for Forbes for their recent story about using real estate investing to put off tax bills. That is what I call creative financing. I regular contact some mortgage lenders who are also CPA's or also have a tax service in order to diversify. Yet, I wind up reading about this years old concept in Forbes.
(If you didn't see that story, please contact me and I'll send it to you.)
And then.....
I read that the NAR admitted to spending more than $3,000,000 in just the 2nd quarter of this year to lobby for measures related to the housing market. And I'm upset about that.
Give me the chance. I'm not the brightest bulb on the planet, but I would have done things way differently than the Association has. For next quarter, give my company the $3,000,000 to work with.
Let me work with a P R expert on changing the negative reporting. No more of the "sales are down 22% from a year ago" stories. Those should be billed as "more than 26,000 homes sold during July....." and forget the negative comparisons. A $100,000 public relations campaign blitzing the media with only positive facts and happy homeowners would be a solid start.
Next, I would implement an Association promotion. As of a pre-determined date, the first 10 homes sold in each of the 50 states will receive a $1,000 closing rebate from a fund started in conjunction with the Association. That would total $500,000 in rebates. I'll allot $400,000 in legal and administrative costs to make that happen. No advertising or P R costs because I would expect aggressive agents to get their buyer clients in gear.
This promotion would be a major score. Buyers and sellers not going through an agent would not be able to partake. It creates much needed urgency in a starving marketplace.
And, I just showed how it could be done and benefit people in all 50 states on a budget.
Of course, doing all of the above with a budget as large as $1,000,000 will pay off for the industry.
My next step after that? Take the $2,000,000 profit I would have made and buy a $2,000,000 mansion and live happily ever after.
Meanwhile......
Let's watch the Kolter Group, based in West Palm Beach, FL. Commercial Property News reports that they have become the second large commercial real estate company to announce a financial commitment into residential. To the tune of a $1 billion joint venture including residential developments within Florida.
Later that same day, I read the story from Hawaii about how the number of inactive licensed agents in that state has increased to 6,254 (as of July 30) from 4,702 last year, according to the Department of Commerce and Consumer Affairs' professional licensing division. Try that on for size. More than 1,400 licensed agents not even paying dues to remain active in local real estate.
Shows what can happen if you, as an industry professional, stop advertising.
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