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The battle to solve the real estate market crisis continues with one of the few interesting ideas I have seen. This story is from the Milwaukee Journal. It’s about a builder who is building homes in the range of just 1,000 square feet, albeit with a garage, which would result in owning a home with cruise ship or dorm room style living. The builder’s idea is to price them at less than $100,000 new.
http://www.jsonline.com/business/128857588.html
Granted, the story is a newspaper story and not from a realty association or by anyone directly connected with the real estate industry. Yet, this is (or should be) a positive spin on a solution. I’d like to believe there are plenty of people out there who don’t want or need a lot of space and would welcome the chance to be a home owner within that price range. It might make the difference of a family or individual being able to afford a mortgage instead of renting.
Some of these homes would have multiple bedrooms, supposedly at 6 x 9 which could sleep 2 in each room.
However, this story wraps up with less than positive vibes. It goes on to say that the builder is only building two, which will go in one neighborhood in the Milwaukee area, and how the builder wants to see “if” there would be a positive response. (The opening already took place, and I do not have an indication as to whether or not it was successful.)
Even if the unveiling of these homes was successful, it is yet another instance of the “less than positive” marketing that continues throughout the real estate community. If I were marketing for Miracle homes, I would have been certain to point out that these “are the only the first two homes for this neighborhood”, and how “further expansion plans” are now in the works.
You have to act like you have a winner on your hands. That’s the first rule of promotion of a unique idea that fits a need. This isn’t just to pick on Miracle Homes, as this is the common problem with real estate marketing. Taking the “if anybody buys it, we will come” approach tells the public that you aren’t certain either. In a market where so much is uncertain in real estate.
The “wait and see if” attitude brought out in this story is way too typical, although it’s not the fault of the writer of the story. He was given the information and the interview. Sounds like the builder has been listening to too many realty agents or reading the negative statistics the agents and associations keep putting out there.
My point is that this is another version of the “Homes didn’t sell in this area last year after the tax credit ended, so they didn’t sell well again this year and we don’t know if they will next year” stuff the realty professionals have been dumping on us for a couple of years.
But in this case, it’s a solid idea. Builders across the country should be reading this story and feeling like they could expand upon the theory in most markets around the country and create a buzz. Realty agents should be lined up with potential buyers waiting to tour these smaller homes and asking about pre-ordering for their clients. Renters within 20 miles of these “first” homes should also be lining up to compare with their current apartment or unit and see if they could save money while being able to own. You have to start somewhere.
If you don’t use the opportunity to “build up” a buzz about a new property, there won’t be any reason to build up more new properties. And the market will be stuck the way it is.
A parking lot or homes in the neighborhood?
This is one of those arguments where both sides have some valid points. A popular restaurant and bar in a Milwaukee, WI suburb needs more room for its patrons to park. Area homeowners wants their streets and parking spaces back and don’t care about the restaurant. Local media coverage includes showing which City Council members voted which way by giving names.
http://www.wauwatosanow.com/news/63679912.html
While I can see both sides of the story, I find that from both a personal and professional standpoint I have the same opinion on this one.
I agree that this restaurant should be able to provide the additional parking and facilities to accommodate all of the customers it possibly can. If potential customers have the “but it’s hard to find parking” thought in the back of their mind, that restaurant is going to lose out on revenue. It would be one thing for someone to have to park ½ block or more away in warm weather, but Milwaukee is a cold weather city. People won’t go where they have to park further away. The area is not exactly a public transportation mecca.
The restaurant is correct in not wanting to have people who have had a few drinks walking down a neighborhood street, especially late at night. I would bet that some homeowners have been awakened by “conversation” in the night from people walking to their cars. Worse yet, I’m sure some have started a morning by noticing a section of lawn that has acted as a bathroom.
Yet, these same homeowners benefit by having the successful restaurant and bar right there in the community. It benefits the local economy and draws attention from people who might not otherwise come and spend in the area.
This vote is about razing 2 houses adjacent to the restaurant. My opinion is that given the choices a potential home buyer has in this market, living right next to a crowded restaurant and bar is not at the top of the list of preferences. Yet, living “down the block” from a thriving business but having peace and quiet and plenty of guest parking on the street would seem more appealing to a potential local buyer than the current situation.
If the real estate market were such that homes were in such demand, I might think differently on this.
One other personal comment. I’ll admit I would like to see this establishment succeed because it is willing to take on the responsibility of providing free parking and services for a large customer base. I take issue with having to pay to park to do business. I shouldn’t have to pay to be “outside” while I pay to do business inside an establishment. People are way too tolerant of paying to park, especially at downtown prices in most cities.
So, yes, knock down the 2 houses, give the restaurant the space it needs to do it right. Give the neighborhood some quiet, and let the economy flourish.
Would you do the same?
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.
3002 N. Prospect Ave., Milwaukee WI 5 + 2 $259,000
http://realestate.jsonline.com/properties/search/detail.php?qBackToSearch=qCity%3Dmilwaukee%26qState%3DWI%26propertyType%255B0%255D%3DSingle%2BFamily%26qMinPrice%3D175%252C000%26qMaxPrice%3D275%252C000%26qBedrooms%3D2-%26qBathrooms%3D1-%26qAction%3Dsearch%26qTerms%3Dsell%26qSearchTab%3Dsell%26propertySearchFormsubmit.x%3D44%26propertySearchFormsubmit.y%3D36%26pagesize%3D20%26view%3Ddetailed%26qtotal%3D117%26qSortBy%3DPrice%26qSortDirection%3DDESC&qAdid=10893060069001a6e67&propertyNumber=10
This listing advertisement review could be summed up in 3 words - Not enough information.
It appears there are several selling points for this home, yet they are either not presented or not reinforced.
The description begins by pointing out this is a "3 story classic restored to its original style - exquisite character....". Yet, all we are shown is one, count 'em, one photo. A photo which shows a tree with no leaves in front, while it is angled so that one can't easily determine if this is the front or back of the home. We don't see an entrance, where the home is relation to the street, whether or not there is a driveway, garage, or a yard. Keep in mind this is a FIVE bedroom home. The third floor looks very small from this angle, more like an add-on, guest room, or attic. There is no way to get a feel for the "exquisite character" when all we have is one poor photo.
In addition, the description copy is not geared toward who could live there, important since this is a 5 bedroom home. I understand that you cannot gear an ad toward a specific category or group of potential buyers, but this copy has nothing to make a guess about.
For example, there is zero mention of the area this home is in. Upon my checking the map link (and assuming the Google map is accurate this time around), this home is very near the University of Wisconsin Milwaukee. That would cause me to speculate that a 5 bedroom home could be shared among students and/or be used as an income property. Putting in "1 block from UWM" would make that point obvious without actually saying it. If it is intended more for a large family, then the information about the home being restored to its original character has little to no bearing for a family looking for something affordable in this area.
Furthermore, the room dimensions below only include 4 bedrooms, and this is supposed to be a FIVE bedroom home. Worse yet, all 4 bedrooms which are shown have different dimensions, so we don't know if they left out a smaller or a larger bedroom.
Much of the description copy is shown with abbreviations. Not everyone knows automatically that "HWF" means hardwood floors. There is not even a period at the end of the last sentence, so we don't know if this ad was supposed to end there, or if copy was cut off. An advertisement seeking more than one-quarter million dollars from a buyer merits full sentences and a proper description.
This appears to be the listing agent merely copying the description from the MLS form which goes to other agents and slapped in any old photo, whose job it is to know the abbreviations.
Yet there is more. This ad is among those on this site showing the "original price" and "current price", which in this instance is the same amount. This tells a potential buyer (if still around to read it) that there is no price reduction (yet) for this home. Unless there has been a price reduction, this category should not be included. The advertiser should have the say. (If it is newspaper policy to always show this, then I would advertise new listings elsewhere to not scare away potential buyers.) To top it all off, there is not even a phone number to call the listing agent. (Maybe he knows nobody is going to bother based on the rest of this ad, but still.........)
Yet, this is what appears on the web site of the dominant newspaper in the marketplace.
If I was a potential buyer, I probably would not have kept looking after seeing that photo. If I had, I would have bailed after the description copy since it gives no idea about the area or hints about who should buy it.
If I was the seller, I would be furious that there are no additional photos and nowhere near enough information to entice a potential buyer. I would be upset that the agent I am trying to pay a commission to took what appears to be about 30 seconds to prepare this ad.
Including the few selling points helped raise my original grade just a bit.
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!
One of the commercial property brokers I help out brought a very interesting point to my attention. He told me about a group that was seriously looking at the purchase of an office building with storefront opportunities that included a restaurant.After a round of serious negotiations, the investors backed out. Even their broker handling the negotiations wasn't sure what went wrong. It seems that one of the investors thought to check out the restaurant for any health violations, since they are a matter of public record in most cities.Sure enough, one of the investors found an instance where that restaurant had been found to have had (cleaning this up a bit) a problem with animal droppings. Even though the problem was immediately resolved and the restaurant has remained open again for months without incident. But with this having been an older building, the potential buyers decided not to risk their reputation over the possible repeat of an issue.Before I could bring it up, the broker knew what I was about to say and told me he had chalked this one up to experience and from now on knows to investigate for such incidents before hand.The building in question is not in the Milwaukee area, but an example of the availability of this information appeared in Tuesday's Milwaukee Journal online:http://www.jsonline.com/blogs/news/61516882.htmlSince this is a health and safety matter, I wanted to share this with everyone.There is a point to be made not only to commercial brokers, but to residential agents and brokers as well. If the corner restaurant or grocery store has health and safety issues, it probably should be brought to the attention of home owners within proximity. I am not enough of an expert to know if there would be any non-disclosure potential, but this is primarily about health and safety. If you are a home owner living within a 1/2 block of a restaurant or food establishment, it is a good idea to keep tabs on inspections in your area so that you can be prepared in the event of the want or need to sell.It is more than knowing where not to eat.
I’m going to once again pick up on the theme for industry professionals to be the messenger. More than ever, consumers need to be reminded that you are still in business with each day’s news of some other large company being in financial trouble.
If you are in Milwaukee, Chicago, Madison, or Green Bay (within 100 miles or more of Milwaukee), you have a reason to contact current and potential clients with a large family household within the next few days. ABC-TV show “Supernanny” is having a casting call in, of all places, the Milwaukee area on March 28th at an area restaurant. (Those in that part of the Midwest can contact me for the specifics. I’ll be happy to provide that for you. E-mail me at Dave at firstin.com.
True, this has nothing to do with real estate and won’t lower your mortgage for April. But it could have something to do with some easy self-promotion. Think about it. Even for those families who do not wish to attend, chances are it is news targeting them they would likely spread around to friends and other family members. Followed by the inevitable “How did you hear about this?”. The person asking that question is not expecting to hear “My mortgage broker told me” or “From my real estate agent” in response. For once, it is a chance to have your name associated with something other than a stalled homes market.
So are home owners who have been waiting to refinance getting spoiled? The 30-year fixed at 80% LTV has been hovering around 5% for weeks now. The constant lowering of the rates that started just before Thanksgiving and continued for 10 consecutive weeks seems to have leveled off. That is still a good thing.
I could certainly understand people waiting to see if and how much the rate would drop “next week” while it was dropping. But now that it has been holding steady, isn’t it time to get the ball rolling? Some lenders have been telling me they have clients who are “still waiting” to refinance. Some of these same lenders are not telling these potential borrowers that the fees associated with getting these loans are still expected to increase before year’s end. It is possible some lenders might be screwing themselves (and the potential borrowers) by playing the waiting game.
After all, if it would cost a borrower an additional $1,000 to refinance 6 months from now, and you factor in (for example) $200 “extra” per month by not refinancing, it means the borrower has really spent an additional $2,200 to wait that 6 months. And that is if the 30-year fixed rate doesn’t go up. We don’t know for certain that it won’t. If it goes down slightly, it might not be enough to recover $2,200 using this as an example.
Some of the mortgage lenders who are not explaining this to potential clients now might be out on the street themselves by the time those 6 months pass.
Same theory applies when a potential buyer decides to wait on a good deal for a home or investment property. True, the price could drop and the loan rate be lower in 3 months. But the property might not be available at that time either. The creative people are the ones who are succeeding in this market.
Let's start out 2009 on some positive notes, in addition to mortgage rates dropping at least once for the 9th consecutive week.This article, buried in a community newspaper near Milwaukee, is actually inspiring:
http://www.menomoneefallsnow.com/story/index.aspx?id=827860After I read this, I got a vision of this group making a go of this coffee shop and how 10 years from now they would own and operate a series of these in the region.
This sort of story is how partnerships often start. And in today's market, I'm disappointed this story, and others like it, are not getting any play. If I were a realty agent or lender in that area, I'd be all over this group offering to help them with planning.
And for those in other areas, I'd be looking for a few people with money toward a common cause. Even if not enough money to purchase, the recent availability of rehab loans in most states (such as the program linked on the right of this blog page) could be a viable alternative to get a group started. It could make the difference if a small group can't afford to buy the real estate which houses the business.
Such a positive story, yet such little play. This should be on the front page instead of the current week's "the real estate market is tanking...." statistics. Something to think about over your next cup of coffee.........
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