Agents Should Be Careful What They Say

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.

Keeping The Statistics Straight

Another bothersome day in the struggle to gauge the real estate market. This morning's real estate "headlines" contained 2 separate stories. One about "home sales up" and another about "mortgage applications down". And both covering some of the same time period.

There are a couple of problems here. Home sales being "up" is only if compared to one year ago. Mortgage applications being "down" means that fewer people are applying for financing. That is not a reflection of how many (or how few) were turned down for a mortgage. The statistic is based on the number of applications and not the results. Hence, some will be turned down and the number of closings will be even lower.

This constant comparison of real estate sales statistics compared with one year ago or five years ago is not doing anyone any good. Well, except for those few who get paid to research these comparisons, since it keeps them employed. I have yet to learn of anyone who has attempted to purchase a home or a property based on what the market was like a year ago.

Now it appears that mortgage rates are headed back up, even though these are still rates much lower than they were a couple of years ago. Some people will panic over this, as if it spells doom. However, it reflects times of years ago when mortgage rates were at least 2% higher, yet more proerties were selling.

Meanwhile, I have been hearing the "It's becoming a sellers' market" crap coming from more and more realty agents within the past month. This is hard to swallow. If homeowners start to believe that, we'll have a flood of people looking to list their homes at much higher prices than they should be. And some agents who will go along with them in order to get the listing. If it doesn't sell, they (listing agent) don't lose out. Practically every home owner would sell if they got an outrageous enough offer.

What that does is harm the truly motivated sellers out there, already competing against the foreclosures and distressed properties dominating the market.

And what that does is keep things as stagnant as they have been for the past two years.

So help me, I had an agent in the Phoenix area tell me that the current inventory of available homes there "has dropped to 15,000" and how it signals a "sellers market" their. I have no idea how this could be, considering that if I were looking to buy in that area, there would likely be hundreds of homes to choose from in the price range I'd be looking at. Before the rest of the neighborhood decides to list their homes too. Frankly, there would need to be at least one less zero in that amount for me to even think of that being a "sellers market". I wonder how many different states one would have to research before finding 15,000 serious and qualified buyers for a home.

After all, if there were that many potential buyers in Phoenix, there wouldn't be time, or the need, for all of the meaningless statistics about home sales. Unfortunately, this isn't anybody's market at the moment.

Does Houston Have A Problem?

It's the next round of home sales and pricing releases around the country. The newest chance to see if the various realty associations have cut down on adding to the negative publicity about the current real estate market.

This one from the Houston Association of Realtors is attempting to show a positive spin:


http://www.har.com/mls/dispPressRelease_print.cfm?month=02&year=12


However, they have a few too many statistics included. Serious real estate market observers will see right through this, and that's not good.

This story builds up the so-called rise in home sales and relative steadyness of home prices for January and the months prior.

But it also shoots itself right back down. The real reason for this is right there in the story. As in the part about the increase in foreclosures, and how they now account for a much bigger percentage of home sales.

Why is the home sales market "up"? Because more and more former home owners have been foreclosed upon. Take away those statistics, and, well, it sheds a different light on the current marketplace.

This is where Houston has a problem. As well as other cities. The current market isn't really "up". If fewer people were losing their homes due to financial reasons beyond their control, it would not appear as if home sales are up.

It is really foreign investors, flippers, and a few speculators who are buying the homes out there, and doing so because in many cases they get a below market deal by acquiring a foreclosure.

That even more people are being foreclosed on in the Houston area, while many other parts of the country are "reporting" that the number of foreclosures has dipped, certainly should not be treated as the "positive" news the HAR is doing in this story.

Shuffled Off By Buffalo

I started off this new year with some hope that just maybe the real estate market would show signs of life. Yet, by January 10th, I'm already discouraged by what I'm reading. Even worse, those who are doing the discouraging are those who have the power to change the situation - but still are not.

First, the government. The literally millions of current homeowners who owe more on their current mortgages than their home is considered to be worth at the moment COULD be helped by the HARP (Home Affordable Refinance Program) which was supposed to have started in December. It is designed to enable many faithful homeowners who have made their mortgage payments on time and in full despite the decreased value of the property to be able to refinance at a lower rate. However, the word is that this program may not be ready to go until March while the technicalities continue to be reviewed.

Of course, I can understand that a thorough review is needed given the potential billions of dollars riding on this Program. However, I cannot understand why this review wasn't done prior to the HARP program being approved. If there are literally more than two months of worth of technicalities to be reviewed, why weren't they clarified by the government and banking officials prior to this? Design it first and THEN review it?

Perhaps government officials should read news stories such as this one:

http://www.delmarvanow.com/apps/pbcs.dll/article?AID=/20120108/NEWS01/201080303


(The above story is about how the reduction in property values is resulting in lower property
taxes in many areas and how it translates to lower tax revenues for local governments.)

Since the various levels of government supposedly need money almost as much as we as consumers do these days, you would think that government officials would be on top of something that figures to bring in millions of dollars and also stimulate this economy.

Second, there is the "news" that the realty agents keep talking about.

Once again, consumers are being bombarded with negative statistics about the real estate market. Home sales are down compared with prior months and years. This story with more of the same from Buffalo brings my point home:


http://www.buffalonews.com/business/article699629.ece


Frankly, this story is infuriating. "It's the bad economy" is one message. Home sales in 2011 were even worse than from 2010. If this news story was the result of an investigation of the marketplace by a reporter, at least we would know that it is a story with a local angle. Yet, this dose of negativity comes from the Realty Association, which is wholly supported by the area's real estate agents and offices. The same people who are supposed to be paid to SELL those houses.

Even worse, the Realty Association story further reflects the National Association of Realtors' comment that the housing market could be this "bad" for another two years. How does this help to sell homes?

Putting these stories all together, it means that government officials can't get their act together to enact a program that could stimulate the economy. If millions of homeowners can refinance at a lower rate, it significantly lowers the chances of foreclosure down the road. More importantly, many of those "saved" dollars each month would be put back into the economy in the form of retail sales, financial products, and possibly other investments. That could keep some retailers and businesses alive.

Instead, the government needs extra weeks to put their already approved mortgage plan into action? How does this happen?

On top of that, the realty agents who are supposed to be creating home sales are spending their finding negative statistics. Did someone apply force for these Associations to keep putting out the negative and discouraging statistics?

If the people in our government and within the real estate industry who could be making the difference aren't making a 100% effort, those of us who are stalled in our efforts and hampered financially by the current state of real estate need to put the pressure on.

More Negative Publicity For The Home Sales Market

The National Association of Realtors needs to "revise" its home sales figures going back to 2007. Before you get any hope up, remember this is the same organization that seems to constantly flood the media with negative stats about home sales.

Yet, according to today's news, they have revisions. Now the NAR is showing everybody that home sales statistics are actually WORSE going back over 4 years:


http://www.dailyherald.com/article/20111212/business/111219962/


This story indicates that some sales "were counted twice" and adds that it has something to do with the reporting of the Census Bureau.

Sorry, but this story raises more questions than it answers. What on earth does the Census Bureau "reporting" have to do with actual home sales? How did it take four years for this to come out?

Those questions, of course, are in addition to the ones I have been raising for more than two years. I'd still like to know why the NAR continues to release negative home sales statistics at all. My understanding is that this organization represents thousands of realty agents who are in turn representing millions of people who have been looking to sell their home(s) during this market downturn.

Putting out information such as "worse than a year ago" has no bearing on someone's decision whether or not to purchase a home today. That has been bad enough. Now, we're supposed to look the other way when it is revealed that these statistics were not correct, and in fact should have been even worse.

Ouch.

How A Hospital Can Help Chicago Home Sales

This "business" story about a hospital expansion and the jobs it will create is the type of news story which should attract the attention of savvy residential real estate agents as well as potential home sellers.


http://www.chicagotribune.com/business/breaking/chi-northwestern-memorial-hospital-to-create-jobs-20111201,0,3102625.story


Agents in the Chicago area should have their database to the point of being able to identify current and potential clients who could be interested in knowing about these potentially available jobs, and letting them know. For that matter, their entire database could be notified. People certainly remember where a solid employment lead comes from.

If I were considering or already trying to sell a home near that hospital that could fit the price range of construction workers and the other positions about to be created, I would get my agent working on making it known to the H.R. Department of that hospital within 24 hours.

Here's hoping that these ideas will be used for better marketing of real estate, instead of merely pumping out negative home price and sale statistics every couple of weeks.

Let's Appraise The Real Estate Market

Just within the past two weeks I have had some mortgage lenders from different parts of the country tell me that they are not able to close loans or refinances because of low appraisals, even after miles of paperwork had been executed. Yet, none of them could explain it in detail.

Certainly, I’m not here to attack real estate appraisers. They have a job to do, and I don’t know the first thing about how to do the hard work they do. However, it looks like they (appraisers) are just as caught up in this mess of a real estate market as the realty agents, hopeful sellers, and frustrated buyers.

My displeasure with how the realty associations and many agents continue to toss out negative statistics by comparing home sales figures is well documented over the past two years. Many of the banks contributed to the fallout on the mortgage side. And so it goes.

Sure, the appraisers have to go buy comps and other local market information. But wait a minute. A home sold via foreclosure is, or maybe I make that “should be”, considered a special circumstance and not a determining factor.

Suppose there is a development of 10 homes which sold more than two years ago for an average of $300,000. Then suppose two of those homes went into foreclosure and sold for an average of $200,000 within the past six months. I would prefer to think that since the only two homes in that development which sold were due to foreclosure, that it would NOT mean that the other eight homes are no longer valued at $300,000. Yet, that’s what’s happening.

Yet, it’s not only the appraisers taking this path, although it appears that this is what is causing purchases and refinances to be blocked. The realty agents and associations are going along with this trend. And many potential buyers and sellers, along with mortgage lenders and those related to a transaction, are being, well, screwed, because of it.

Here is my solution. Stop the madness. Why can’t the National Assn. of Realtors create a separate category for “Non-foreclosed homes”?

Using the ten home development as an example, comps would show that the eight “Non-foreclosed homes” are valued at an average of $300,000. The fact that two homes sold for a lot less due to special circumstances should not impact the value of the others.

Even if the “special circumstance” properties were factored in for “weighted” statistics, the impact would not be as draining for all concerned. If the $300,000 homes development was only reduced to a value of $280,000 due to “special circumstances”, it would most likely open up for more loans than appraisers coming in closer to $200,000 (based on current comps) and the realty professionals going along with that.

Let me put this another way. Suppose another national electronics retailer is about to go under and has a “Going Out of Business” sale including laptops. Let’s say they have an inventory of 5,000 laptops which retail for $800 each. And, due to court order, they sell them all for $450 as a final sale.

Would that mean that every comparable laptop for sale via other retailers still in business would now be priced at $450 permanently? After all, 5,000 people bought that brand and model for $450!!

A foreclosure is a court order. The property owner(s) could not or did not pay their money, and lost the property, and it was sold in this manner.

How are these situations different?

Instead of coming up with more negative statistics to show why people aren’t buying and selling homes in most cities, it would be nice to have the people who shape the industry working on some serious and immediate solutions to this crisis. Before it's too late and thousands more hard working people lose their homes, too.

One Sale Does Not Change The Market

I'd like to think it was a reporter's attempt to make a story look like an important news story. No matter how large the amount of the transaction, this multi-million dollar mansion purchase is not a "market changer":


http://www.santafenewmexican.com/Local%20News/HIGH-END-Real-estate--10-5M-sale-could-signal-recovery


This story won't put a halt to other sales. But it also does not signal any trend. It is one transaction. In any real estate market, there are a limited number of multi-million dollar residential real estate transactions.

However, the story does cast a slightly negative light on the local market, and that is not good when it comes to the marketing of real estate. This story goes as far as to point out that this single transaction has a lot to do with the reported 18% increase in home sale prices for the quarter. Even though the property actually sold for less than it could have in better markets.

In other words, another potentially positive local real estate statistic shot down in flames. In this instance, it was by a reporter and not by a realty association, which seems to be the case in so many other cities.

As I have been saying for all these months, we need to change the "reporting" in order to change the mindset for marketing available properties.

I would like to think the reporter meant to say "Someone out there is willing to invest big bucks in the local real estate market" in a positive slant. Yet, adding in that this transaction was the reason for a home price increase and making it appear to be starting a trend took away any intended positive message.

Finding The Best Candidate To Buy Your House

Looking to sell a home? Know your audience!

http://community.nasdaq.com/News/2011-04/allcash-home-sales-set-record.aspx?storyid=71985

This article from NASDAQ sums up the current real estate market as well as any other I have seen over the past 2 years. Yet, I’m not showing the link because I think this is a well done article. It is shown to make an important point.

The number of first-time home buyers has declined significantly, even compared with just one year ago when the market was already in decline. As this story relates, the trend for “investors” to pay cash for lower priced properties is still on the rise. While the tighter mortgage restrictions continue to make it a challenge for more and more people to get a mortgage, the number of first-time home buyers likely won’t be rising for some time.

Those who are currently home owners and would like to upgrade or downsize to a different home are often stuck with a mortgage they can’t get out of. If they take a loss to sell, they may not be able to afford what they want instead. And on it goes.

There is an important message in the NASDAQ story. Know your audience. If you are trying to sell your home, chances are you are doing everything you can to make it “family friendly” upon showings, and probably within your agent’s outside advertising. The above referenced article should make it clear that “family friendly” is not your audience.

Now, this doesn’t mean that you don’t need the new curtains or to keep the place looking good as new. But it does mean that you need to focus on the value of your home to an investor. That is who is buying, and, as statistics show, without the agony of waiting on getting a mortgage.

The priority should be on showing your potential buyer the ways your property for sale could make he/she/them money within the next 5 years. Although I have seen only a few examples of this of late, they are too few and far between.

One 3-bedroom home that I know of for sale has a lower level “family room”. It is not a basement, has window decorations and is a separate wing on that level. It so happens that the other homes in the development are all either 2 or 3 bedrooms. A few of the other units (both 2 and 3 beds) are also for sale, and now at well below the original new construction prices. Yet, only the advertising for this home points out that it is ready as a 4-bedroom home. At most, the current or new owner could put up a partition “door” and add more privacy, giving them a 4-bedroom home for under $100 (for the partition).

An investor with cash is more likely to see the value of getting a 4-bedroom house at 3-bedroom home pricing, knowing that he/she/they will eventually have a higher profit capability.

Again, based on current trends, being ready to show a cash investor how to get a 4^th bedroom in this home is a more likely “sale” than a first-time buyer with a big family knocking on your door to see it and then trying to get a mortgage.

Before I hear from realty agents out there, I am well aware there is a way this needs to be done. This property needs to be listed as a 3-bedroom home. Understood. But within the description and the “sales pitch” it should be clear that the easy opportunity exists to create a 4^th bedroom which would be larger than one of the upstairs bedrooms, without any room additions needed. That is targeting cash investors, and that is, at the moment, targeting who is buying.

Many homes for sale have at least one capability to increase in value with certain additions or improvements that cash investors would be interested in. A cash investor may not care about new curtains and new carpeting, which they could get for a few hundred dollars down the road when they are ready to sell. That same investor may instead notice if the property is zoned for an additional level, a pool, more parking, or whatever it may be.

Sellers should also monitor local business news. Watch for stories such as major retailers looking to open in specific cities or communities, new train or bus stations or routes, and new schools to be planned. A family, married couple, or individual probably doesn’t care about what will be built by 2016 nearby, but a savvy cash investor does. They can buy a property, hold on to it (without a mortgage to bog them down), maintain it, and be ready to put it on the market in time to be convenient to the new train station or whatever is being constructed.

Advertise the home without the “move in condition”, “near schools”, “breakfast nook”, and other sales points which target home buyers looking at 30 days from now. They either aren’t buying right now, can’t get a mortgage, or both. Advertise with any and every sales point that would cause a cash investor to see something that will be of value in 3 to 7 years. Know your audience.

Were Home Sales Statistics Truthful?

It's bad enough how many realty associations and industry organizations are adding fuel to the fire with the barrage of negative home sales statistics in this marketplace.

Now comes word that this might become a credibility issue as well. A Southern California based real estate data firm, CoreLogic, has issued a report claiming that the National Association of Realtors appears to have overstated sales of existing homes by as much as 20% over the past five years.

This puts a double whammy on the recent statistics. Many realty associations have been releasing data showing the drops in home sales with comparative statistics. These, of course, put the various local markets in a bad light. So if it indeed turns out that the earlier statistics (1 year ago, 2 years ago, etc.) were actually inflated, it means that home sales have been sluggish for even longer than these associations would have the public believe.

Now this is close to becoming a credibility issue totally separate from such a struggling market. The NAR shouldn't have to utilize its resources for crisis management while the very market it serves is in a crisis.

It has been too soon since the tragedy in Japan hit for us to realize how that is also another blow to the U.S. real estate market as well. Estimates are already coming that it will take upwards of five years to rebuild Japan. With the technology and innovations which have come from that country, I have to believe that international investors will be ready with funding to make sure it happens. That is funding which might otherwise be put into commercial properties and real estate related investing here in the U.S.

On the other side, think back to the early 90's and the California real estate boom. That "boom" was brought on in part due to overseas investors paying above and beyond the asking prices for upscale and high end homes in both Northern and Southern California. For many Japanese investors, high end homes in California were then a bargain compared with home prices in Japan at that time, even at inflated prices here in the States.

Now, especially with the incredible disaster facing Japan and the world, any such international activity in the United States is out of the question. Another blow to the U.S. market.

As much as I dislike using negative statistics in this marketplace (although I'm not representing a realty association in doing so), this is already showing up.

This past weekend, the Orange County Register (So. California) reported on the total sales for February 2011 as well as the first half of March for "luxury homes" (millions of dollars) in Newport Beach and Laguna Beach totaled: zero. After there were sales during January.

If only the focus could turn to how to get properties sold, instead of what the statistics should show.

Those Negative Home Sale Statistics

You would think that Realtors would know not to make things any more embarassing when it comes to their take on the current state of home sales.

Now comes word from Minneapolis that home sales in the Minneapolis area declined more than 30% when compared with one year ago for the last week in February. This "report" points out how that week's drop was more than double the 12% decline of the previous week. Put that "report" together and it spells an alarming and disturbing trend for anyone trying to or thinking of trying to sell a house or condo in that area.

This "report" tries to make the excuse that sales were higher a year ago because of the real estate tax credit which was available to first-time buyers and sellers under certain conditions at the time. That tax credit is no longer available. Therefore, by making this excuse, this "report" is really pointing out how the market conditions are really less favorable compared with one year ago since that tax credit is no longer available to anyone. Such a "reminder" to the concerned consumers reading that certainly doesn't help the situation either.

Yet, I am sorry to report that there is one more disturbing element to this "report", as if the negative news to current and potential sellers isn't already enough.

It seems that this "report" that contains all this discouraging information didn't even need to be released to the media to spread the word about how miserable the market is.

Let me put it another way. It SHOULD NOT have ever been released. It could have been prevented.

The source of this information is the Minneapolis Area Association of Realtors. You read that right. The dues money that agents and realty offices throughout the Twin Cities area is going, in part, to have information such as this released to the public.

Why there is this need for realty associations around the country to continue to pump out even one negative statistic is beyond me. I would understand if this information was coming from outside public companies, investment bankers, commercial property brokers, or banks which do not handle mortgages by way of news releases. Entities such as those are looking for large investor monies and would take the chance to bash something competing for investment dollars.

"People aren't buying real estate to make money, but if you invest with us, you could earn x% within 10 years", could be used to entice wealthy consumers to invest in long term bonds or certificates which assure a payoff at some point.

Instead, the industry continues to shoot itself in the foot. Worse yet, they are helping to take down thousands of current and potential home sellers in the process.

Having said that, I have other news to report specific to the Minneapolis area. During the last week of February 2011, just 2 weeks ago, 608 initial purchase agreements for houses or condos were signed. That means that, while some people are questioning the real estate market at the moment, about 600 properties were sold within one week's time in and around that major city! And that's without a tax credit or any other significant incentive.

In fact, I was able to verify that statistic with the Minneapolis Association of Realtors. It again shows that if you dig hard enough, you can find some good news for consumers.

More reasons not to buy?

Oh sure. People aren't buying in a stagnant real estate market. So let's take a quick break from real estate associations and offices pumping out the negative statistics to consumers.

Now let's look at cities which have decided to increase the property taxes by as much as 9%:


http://www.mainlinemedianews.com/articles/2010/12/06/main_line_suburban_life/news/doc4cf69ed785ba5886372746.txt


http://www.mainlinemedianews.com/articles/2010/12/06/main_line_suburban_life/news/doc4ce4206fb4c61428550764.txt


OK, you get the idea. It's called "Let's tax those homeowners who haven't been foreclosed upon and/or can't leave the neighborhood even more."

And now back to regular programming. The Memphis TN real estate market has been among the more depressed ones over the last couple of years.

How does the Memphis Association of Realtors, which consists of local agents paying their dues, react?

They want us all to know that home sales in that area for October were down 29% compared with one year ago. Now there's a reason to stop whatever we are doing and look into buying property there. If fewer and fewer people are looking there, why should we?


http://www.memphisdailynews.com/editorial/Article.aspx?id=54662


Heck, it's only the local governments and realty associations pumping out the reasons to keep the real estate market at a standstill.

Listing of the Day - Chicago IL

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.


8156 S. Luella Ave. 3 + 2 $275,000

http://homes.searchchicago.suntimes.com/properties/search/detail.php?qBackToSearch=qTerms%3Dsell%26qSearchTab%3Dsell%26qAction%3Dsearch%26qRegion%3DChicago%252C%2BSouth%260%26qMinPrice%3D200%252C000%26qMaxPrice%3D300%252C000%26qBedrooms%3D2-%26qBathrooms%3D1-%26propertyType%255B0%255D%3DHouses%26pagesize%3D20%26view%3Ddetailed%26qtotal%3D42%26qSortBy%3DPrice%26qSortDirection%3DDESC&qAdid=mls-07480039&propertyNumber=8


A classic example of a property that could be marketed much better than it is in this advertisement.

In this instance, the choice of the primary photo is not a good one. Just because it is the only exterior photo in the spread should not make it an automatic choice. The big tree takes away from the exterior view while the wide shot serves to diminish the big size of this home, as touted within the description. In addition, the first line of the description copy indicates "Double Corner Lot", even though one cannot tell that due to the angle of this photo.

Ideally, the exterior photo should have been taken from a closer angle without the tree in the way and showing the scope of the corner lot. Furthermore, at least 2 of the interior photos in this spread would have better served to have been the primary photo and demonstrate the size and luxury of this home. For that matter, it appears that the leaves are falling off the trees, meaning this photo could well have been taken last fall (or earlier), and this ad appears at the end of March. Not exactly a "fresh" looking property based on the one exterior photo.

Most of the interior photos are the strongest selling points for this home, showing the size and lavish potential.

Not only is the description copy far too brief, but it fails to prioritize the selling points. Starting with "5 Minutes To Lake" is not an important consideration for the majority of potential buyers considering this community. Especially with a custom built home on a "double corner lot" located in Chicago. Listing an approximately 2,600 square foot home within a large city for under $300,000 is a significant headline, yet there is such little emphasis on this fact.

The picky potential buyer will also notice that the "Details" under the photo show "3 bedroom 2 bath" before the brief description copy shows "3 br, 1.5 ba", and that is a negative to, in effect, 'take away' 1/2 of a bath from a potential buyer.

In addition, the onslaught of abbreviations makes it appear that the advertiser was more concerned about saving money on the ad than presenting the selling points of the home. Even with my experience, I had to stop and think of what a "custom designed wbfp" is. I'm sure that will be another potential selling point that will go untouched by any potential buyers who stick around beyond the primary photo.

Yes, what might have been. A primary photo of one of the wide interior shots and a description about the large size and custom features for under $300,000 would make a huge difference for this seller, who should be very disappointed in the agent's efforts.

GRADE: C+


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!

Listing of the Day - Evansville IN

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.



734 Greengate Ct. Evansville IN 4 + 3 1/2 $249,900


http://realestate.courierpress.com/for-sale/listing/344-172834/Evansville-IN-USA/2-beds/1-baths/SINGLE-FAMILY-type/150000-250000-price/364-167557--344-172834--7821-172313--7821-170382--307-171616--24-5501655--7821-172750--323-170106--323-168044--1993-171681-ls/218-t


This advertisement is a mixed bag of good and bad. The primary exterior photo is a positve, showing off a well landscaped larger home with a unique entrance way that should attract potential buyers to click in for more.

However, as much as I like multiple interior photos within an advertisement, the use of photos of empty rooms takes away more than it adds. The left column clearly states that this is a newly listed property (showing as 6 days at press time). Showing us that the home is empty when this home does not appear to be new construction (and it doesn't appear to be, but that is a guess) is a negative. It raises questions. If this is new construction or just rehabbed to be sold, there is no indication. If the seller has just moved out, it seems odd that the photos and the actual listing would have been so recently done.

With other choices in this area and same price range, a percentage of potential buyers won't stick around past the photo spread to find out.

On to the description. It starts with a line of "Realtor fluff". The "You'll be proud to give out this address...." line is laughable. In this day and age, people are not into "giving out" an address. At least not a family that would seriously consider a 4-bedroom neighborhood home. For an investor it could be a different story, but use of this line to start narrows the focus toward investors only. That is not fair to the seller to narrow down the possibilities with the first sentence.

Some of the description copy does a good job at hitting interior selling points, such as the "full bath and a whirlpool bath", "walk-in closet", "large kitchen has a nook area", and how "one of the garages has been converted to an office". Yet, we don't see anything of the supposed 2 large garages on this property in any of the photos, not even the primary exterior shot. Same with the "beautiful fenced back yard".

Furthermore, the lack of any details whatsoever about the neighborhood, schools (and this is a 4-bedroom home), or the community, fails to support the first line about "You'll be proud....". We are not given one reason why a buyer would be proud of that address, whether that copy works or not.

The creator of this advertisement failed to coordinate between the photo spread, the description copy, and the adjacent information. If the listing agent had someone create this ad, he should have made certain it flowed a lot better before letting it go public. The seller has reason for concern, especially about people so easily able to find out the home is empty. Potential buyers are not given any reasons to possibly pursue this property until well after they have been shown reasons not to. If presented right, this property could be justified at over a quarter-million dollars. Presented the way it is now, it doesn't come close.

GRADE: C


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!

Pumping the negatives about home sales again

You probably saw the statistics released today (Dec. 23) that "new home" sales are down for the month of November. From the first moment I learned of this and read the wire service announcement, I was already expecting and starting to read the negative references.

The first national story quotes the Chief Economist of the National Assn. of Home Builders about these "awful" numbers. The story infers that it is a reflection of the federal home buyer tax credit having been extended into April and how it means buyers don't have to "rush".

I'm feeling that by the time you are reading this, you have probably been bombarded with still more gloom and doom stories from the media about this. Hardly anybody will take the time and effort to point out these are "new home" figures. Not everybody is looking for new construction in this day and age. Yet, because of these figures, potentially millions of people will think that the real estate market is going back into the dumps.

Hours earlier, we had all kinds of positive indications. Home sales (or as we now have to say, resales) were acutally UP about 7% for that same month of November. That is a far more important statistic.

But a lot of people who are potential home buyers won't understand the difference. They will either go back to thinking that the real estate market doesn't favor them, or that they can wait until March or April to explore possibily taking advantage of the federal tax credit.

To me, this calls for crisis management. Realty agents can't have their client base thinking that right now is not a good time to buy or sell. If I were a licensed agent, I wouldn't care that this is Xmas week. I'd be calling, sending e-mail alerts, texts, or whatever I do to reach my client base, hopefully by the end of the day today. I'd be letting my database know that statistics released by the Home Builders Association are only for new construction and repeat the National Assn. of Realtors statistics about the increase in home sales for November. Followed by a reminder about the "limited time" left for the federal tax credit. The problem is that very very few of the agents will actually do this.

The key to buying or selling a property and getting the best possible deal is really based on how well (or poorly) you use statistics and information that is available. It's your call.

Listing of the Day - Columbia SC

For more than 20 years, I have worked with realty agents and mortgage lenders regarding a variety of marketing and advertising matters, including writing literally thousands of individual property descriptions. 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.

http://www.cbcarolinascolumbia.com/property/property.asp?PRM_MLSNumber=248101&PRM_MlsName=ColumbiaSC&VAR_AgentCode=FELICIJ&VAR_OfficeCode=cbjg03


226 Philmont Dr, Columbia SC 2 bed 2 bath $106,000


This one is not the least or most expensive listing the agent currently has.

As much as I preach making interior photos a part of advertisements and online profiles, this listing shows why it depends on the property. The exterior shot is an excellent one. It showcases an attractive well painted home with nice landscaping, the driveway, and the attached garage.

However, the interior photos which are used feature noticeably little or no furniture, making it impossible to tell if the house is really empty or if someone lives there that can't afford furniture. A couple of the photos could use an explanation and don't have them. My impression started out quite high based on the exterior photo but dropped significantly while viewing the interior ones. Since I knew this was not even the listing agent's lowest priced current listing, it is not as though this is a "fixer" or the lowest priced property in town.

The all-too-brief description tells us about the "open floor plan", but frankly that seems a stretch after seeing photos of an entire room with no furniture. Does this mean you should only have one or two pieces per room?

All we are told about the surrounding area is that this home is "convenient to interstate", but there is nothing about proximity to schools, shopping, services, or other forms of civilization. Otherwise, there really is not any appealing description. I don't see where this home is a bargain or has a desirable location.

I'm pretty sure that the listing agent (and other agents) would counter my last point by reminding me that there are places on the page to click for "Local Services", "school" and map information. Had I only been shown the primary exterior photo and an enticing description, I might have looked longer. This is a big part of the reason for doing this "Listing of the Day" feature. This agent spent time and effort to secure this listing. This property has some good selling points including curb appeal, especially for a home in this price range. It is not up to a potential buyer to look hard enough to find them.

Grade: D


Note: This commentary is uncompensated and for marketing purposes only and is no reflection on the featured property and is 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!

Please check back often for more "Listing of the Day" critiques.

Home buyers and sellers are customers, too......

Whether real estate related or not I regularly follow various marketing related sources and columns as much as possible. I found the recent story about the Yelp consumer review web site finally beginning to allow business owners to respond to bad reviews most interesting.

In this age of road rage, high unemployment, and consumers who carry a grudge no matter what the circumstances that a business which receives a complaint or critical review had not been able to present its side of the story until now. Speaking as a consumer, this move could “save” Yelp. From time to time I see consumer reviews of products and services, and reviews of matters such as hotel room stays and the like. As a consumer, I find it helpful if I see a possible negative from a customer of a product or service I am considering. But I can’t help but wonder about the other side to the story. The consumer that wrote a negative commentary about a business could have stiffed that same business previously, but we don’t know that without the business having equal time.

What does this have to do with real estate? Little to nothing at this time. The column I read about Yelp got me to thinking. I don’t know of any “review” source specific to real estate transactions. Yet, for the vast majority of us, real estate is the biggest transaction(s) we make in our lifetime.

As a consumer, I have a choice of hundreds of realty firms I could list or buy a property through. I also have the choice of using a “discount” brokerage, an “assisted sale” service, or selling it myself. This is a very important decision. Yet, I don’t have a web site or source to go to for reviews about real estate transactions. Does this make sense? I can read what others in my community think about the local hardware store or about last weekend’s new movies, but I don’t know if they had a good or bad experience with a local realty company when they bought their home?

Personally, I have heard stories from all sides. Over the past 20 years, I have worked with realty companies on radio, TV, newspaper, phone, and internet advertising and marketing. I have presented to entire offices, realty agent expos, and at seminars. But I have also represented FSBO companies and publications, including interaction with the public (buyers and sellers), even though I am not a licensed agent and had no direct involvement in the transaction. So I know there are 2 sides to every story, just as I know there a ton of stories out there that it would benefit all sides to be aware of.

These days, consumers don’t know who to trust when it comes to a real estate transaction. I see where there has been another set of state court rulings about realty companies tacking on an additional “administrative fee” at closing that mysteriously was in addition to the promised commission to that realty office. Not every realty office has been doing this, but I have no way of finding out which ones are. It is enough work for buyers to deal with additional fees and costs associated with getting a mortgage done, let alone having to deal with it still again on the property side. I’m not saying that all realty companies are ripping off sellers, but I am seeing instances of this going to court, and there is a percentage of people who won’t take the time and effort to bring it to court over a few hundred dollars.

My point is that there should be at least one source for consumer reviews of real estate transactions, but the realty offices involved should also have the opportunity to respond.

Almost 3 years ago I was one of the sellers of a multi-unit investment property and was not able to choose the realty agent I would have preferred. This agent did well at a couple of things, but also, in my opinion, screwed up on another which delayed the transaction and cost me an additional legal fee. Even knowing people on the inside, I realized that taking the time to complain to the brokerage or realty association may or may not have accomplished anything. I am 99% sure I wouldn’t have benefitted financially from doing so, and these matters remain internal. Yet, if I had a “public” place to show the documentation I had about the mess-up, I would put my side of the story against anything that agent could show in defense, and let the public make their own intelligent decision about whether or not to use her services.

For the thousands of properties which have sold within the past month, there are thousands of good and bad stories about the services rendered to make them happen, with thousands of dollars at stake. I’ll admit it took me seeing the story about a consumer web site not related to or specific to real estate to make me realize the need.

My “to do” list now has another entry. To work on getting a “real estate transaction review” source in place and to do it soon. I’m sure almost every current and past home owner has a story (whether especially good or bad) about a realty agent or company to share. Meanwhile, thousands of realty agents and companies also have a response or defense ready, if only they had the opportunity to defend themselves. I’d like to get “future” home buyers and sellers to that information.

Please share yours at ideas@firstin.com .

How the toddlin' town can do better

The Illinois Association of Realtors released some first quarter 2009 statistics late last week. Like many other local and state realty associations, they released too many. It certainly is not the fault of the realty associations that the real estate market is so challenged, but I again stand by my opinion that their "half empty" approach is not helping matters any.

Borrowing from their just released statistics for the Chicago area, they announced that first quarter home sales dropped more than 26% when compared with a year ago. The median sales price just for the city also dropped more than 26% from last year to this. This information was prominent in the major newspapers and news sources throughout the Chicago area within hours of its being released.

How does this information stimulate activity in the market?

Frankly, it doesn't. Thousands of potential sellers in one of the most important local economies in the USA have just been told the large percentage of a sales reduction compared with a year ago, and could think that those that did manage to sell did so because they sold for a lot less than they had hoped. In most cases, potential sellers also become potential buyers. At least they could be if their motivation wasn't stripped by statistics.

If a news organization or an entity representing another form of large consumer investments (competing for dollars with the real estate market) were to discover and announce this, it would be understandable they would want to discourage people from investing in real estate. But this information, once again, comes from within the industry.

The Illinois Association of Realtors could and should have used their information more strategically than they did. That is their job, rather than pointing out negative statistics just as prominently.

Here is what the Association should have reported, since they have the official statistics to back this up:


"The latest Illinois Association of Realtors statistics, released on Friday, show that 10,306 single family homes and condos were sold in the immediate Chicago area during just the first quarter of 2009. With sales averaging more than 100 homes and condos per day during the January through March period, the median price within the city limits finished the quarter at $216,000. Yet, with suburban homes and condo sales factored in, the area's median price is now at $187,500. The median price is the price at which half of the homes sold for more and half sold for less."


Let me try this again. What the Association actually put out included their statistics about sales and prices dropping more than 26% compared with last year. Not only are those negative and not necessary statistics, but they compare with just over 1 year ago before the economy took its still current turn for the worse.

People looking to buy or sell a home or property don't always care about what happened over a year ago in terms of making decisions today.

Let me add that I am not picking on the Illinois Association of Realtors. Most if not all of the associations have been doing this month after month. Because of the size of the Chicago area, I am merely using this as still another prominent example.

If I were a realty agent, I would be screaming bloody murder to the association(s) I was a member of, demanding to know why negative information keeps getting put out there to a confused public.

Remember the saying - "Good news travels fast". If only the people leading the real estate industry would.

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.

What about "Rent To Buy"?

I’m looking for innovation in today’s real estate market, and all I keep getting are statistics. I call it the high cost of procrastination.

Maybe it only seems this way, but it is as though everybody is now waiting when it comes to real estate and especially home sales. Therein lies the problem. Everybody is waiting. That means nobody is acting.

Whatever happened to the saying “It takes money to make money”? People used to invest in real estate, but obviously not right now. Many who normally would are waiting to see what happens. People would invest in the stock market, but based on the amount of decline over the past few months, not anymore. Market investors are waiting to see what happens. Others would invest in CD and Money Market accounts, but those no longer pay out enough to make it worthwhile. Potential investors in CD’s are waiting to see what happens.

So while everyone keeps waiting, what happens?

Real estate will always be there. A company might not, a bank or investment company might not, but real estate will always be there. And it provides a chance to deal in the now.
Want to sell your home or a property you own? You think you can’t or won’t because of the market. That is playing the same waiting game everybody else is.

I continue to have mortgage lenders around the country tell me that they are not able to qualify a large percentage of potential buyers because of credit or down payment issues. Many of these lenders tell me they don’t want to advertise their own services because of the marketplace. And some of those same lenders have a disconnected phone number when I try them back a few weeks later to see how they are doing.

Some lenders and realty agents overlook opportunity. In the circumstance described above, it seems to me that the “turned down” potential buyer has credit and/or down payment challenges. That is understandable in today’s economy. Yet, there did not seem to be an issue with them making a monthly mortgage payment if they had better credit and/or enough for a down payment.

To me, that “turn down” could well be turning down business. That same lender and realty agent could have been helping that potential buyer find a house to rent in the range they could afford.

True, I’m making that sound easy. Wait a minute. With thousands of homes listed for month after month in just about every area, it probably is.

That potential buyer should be presented with three simple words. Rent to buy. While that potential buyer is looking to restore or improve their credit rating and/or saving for a down payment, that potential buyer could actually be living in their “new” home. If they are renting to buy, they will surely take better care and do better maintenance when they have a future stake in the home. From the seller’s standpoint, even if they don’t quite get all of their monthly mortgage back, they can move on to a different location. Maybe even downgrade to remain steady with monthly obligations. Perhaps renting elsewhere while maintaining equity in a home costing them little to nothing.

Such a “rent to buy” arrangement could include the lender and realty agent and eventually provide them with commissions. Could be on the rental or for if and when the rental turns into a purchase. This could avert foreclosures and would help the revenue for lenders and realty agents. Significantly, it would not leave potential buyers “waiting” like the rest of the people in the industry.