Monday, May 14, 2012

Why Would Anyone Want To Live "There"?

No, it's not a negative slant on a specific property or location. Actually, this is a question that every real estate agent should be asking themselves when about just before talking with a potential buyer or seller about a listing.

Yet, I personally see very very very little evidence of this within the literally thousands of property advertisements and sales presentations I have worked with over the past 23 years for residential properties. Making important changes in the way that residential properties are advertised, marketed, and presented, is a more significant step toward improving the real estate market than the constant stream of negative and/or meaningless statistics.

I'm so tired of seeing advertisements (whether online, newspaper, magazine, flyer, etc.) for homes that make them seem like 20 other houses in the same neighborhood. It's no wonder that buyers often do not express what they are looking for very well.

What needs to happen is that real estate agents (who insist on creating their own advertising copy instead of letting a pro handle it) need to start thinking of each home they have listed as if it is a person and they are creating an ad for the personals.

You want to arrange several "dates" for the home in search of the perfect match, and you know what you are looking for in a buyer (just like a man or woman).

Several of my real estate advertising/marketing clients start to give me the "You can't mention specifics - it's discriminatory" lecture either just before or right after they hire me. I have to tell them how well I understand that, and how well I know how to work around that.

Potential buyers have a general idea of what the home they want needs to include. A certain number of bedrooms and baths, for example, and within a certain price range and area. Based on the large inventory of homes on the market today, the basic criteria is easy to find. What the selling agent (and/or the seller) needs to do is take the marketing of the home one step further.

If you were a single middle-aged woman and noticed that 7 out of 10 personal ads for males between 40 and 55 all said not much more than "attractive, employed, and enjoy watching pro sports", chances are you would be rather frustrated at the similarity of the selection. Keep that in mind and look at advertisements for 2-bedroom homes within a 5 mile radius of your neighborhood. If it weren't for photos, you would have a hard time telling the difference and probably be swayed more by price than anything. That's my point.

There is no specific reason to want to live "there" as opposed to a similarly priced home 3 blocks away. And that's the key. It's not only what the house "has", it's what it "does" that needs to be pointed out, and quickly.

Who should live there, and why? It's not as though you could say "Asian couple with 2 kids ideal for this 3-bedroom condo...." in your advertising. Or "For middle aged empty nest professional couple".

But the advertising could appeal to the target audience for the property, and not be the same as if it were for either of those groups.

Using that "middle aged..." scenario, here is how an ad for a home geared toward them might read:
"2 + 2 single level near 20 minute train ride downtown approx. 600 feet from Starbucks in quiet pet friendly sub division with island kitchen and upgraded appliances." You are saying it without saying it. Most people seeing this description understand this is a home for at least one professional person that can easily get to and from work and easily cook their meals. A '20-something' just starting out may not care about getting downtown or the Starbucks or the single level. But that '20-something' is not a likely candidate for this house - just as that '20-something' would very likely not respond to a personals ad for someone in their 50's.

Catchy phrases such as "Where 3 kids successfully grew up and moved out" tells a large family that there are obviously schools nearby and room for kids. That could be more of a factor than "vaulted ceilings", "move-in condition", "must see to believe" and a lot of the content currently wasting money and space in property advertising.

Of course, this line of thinking should not be limited to the outside advertising. Don't think of it as the "2-bedroom ranch on Western Ave.". Think of it as the "place where a single female would have solid security", "a family with at least 2 young children could grow up", "house that is 5 minutes away from the theatre district", and so forth.

Think of a home for sale as if it is your single brother you are trying to find the right girl for. Who "should" be interested? Why? There is how to advertise and even talk with inquiries on the phone and online about. Maybe you can find him a house where it's easy to take long walks on the beach.

Tuesday, May 1, 2012

Making Sense of Homeowner Census

The L.A. Times story from May 1st regarding "U.S. Home Ownership at 15-Year Low" certainly caught my attention as I continue to wonder why certain real estate related statistics are published during the current market crisis.,0,2726084.story 

There is certainly cause for alarm, especially the statistics about how the number of home owners younger than 35 is at "its lowest point since 1994".  This is not surprising. It is actually quite understandable.

The 21 to 35 age group no longer sees the value of owning a home over the long term. When those of us over 50 were growing up and venturing out into the real world, we were shown the value of home ownership. As long as you took reasonable care, your home would increase in value. You could live in it for as many years as you want or need, and then when it is time to move on, you could sell it and most likely make money for your effort. Even if you broke even, there was an expected financial benefit to ownership, and the feeling that in most instances (barring a financial emergency, death of a loved one, sudden job change, etc.) you would not be at risk to lose thousands of dollars when the time came.

However, this generation, especially those in their late 20's, has not seen that formula come to fruition for parents, family members, and parents and relatives of friends. Look at the "big ticket" spending habits of most people over the age of 40.

Many people I know would upgrade to a new (or newer) car every 4 years "no matter what". Now, 100,000 miles on a car means merely another maintenance checkup instead of "get rid of it". The increase of prices and the decrease of quality of many new cars have "forced" people to keep their current cars longer on average than ever before, and to avoid the "extra" transaction.

Now, after a few years (that is YEARS) of housing prices dropping, increases in foreclosures and underwater mortgages, and credit restrictions, there is no guarantee that a home buyer today can make any money by selling it years down the road.

A growing percentage of 20-somethings now are staying "home" to live with parents or family members, or teaming up with other family members or friends for a residence. They see doing so as a way to save money "now", whereas the 40+ generations used to see buying their own home as a means to financial security down the road.

The 40+ generations did not have 401K's and similar long-term investment opportunities available when they finished school and entered the job world. Saving money in a bank account was better than it is today, but was never a solution. Buying a home that could bring in $50,000 more ten years later (for example) was a viable option.

Unfortunately, today's statistics and real estate market give little to no indication that a home buyer can or would profit down the road. While a qualified and thorough buyer can get a great deal based on today's market, there are not enough indications that this is a long term investment with a reward at the end of the tunnel.

Remember the Wendy's commercial years ago, "Where's The Beef?". That could now be done with potential home buyers asking "Where's The Profit Potential?".

Never mind the "more homes sold today than 2 years ago this month" crap we keep reading. Show consumers, especially the younger ones, why they should purchase a home due to long term potential gains, and we'll have some serious movement in the marketplace. Talk about easier said than done.