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Here is another example of why the advertising is the problem. A 2-bedroom home in a respectable neighborhood (Allentown PA) priced at $135,000, but it hasn't sold in more than four months of being listed.
It's not hard to understand why. Let's review the advertisement. I found this property and this ad via random search through the Allentown Morning Call web site, which links to an outside web site for this ad for 2725 Saxon Street, now at $132,000 (as of press time).
The primary photo, always a key part of the first impression, shows a big tree in the front yard which blocks our view of part of the home. Although there is nothing wrong with a big tree in the yard for a lot of people, having it impede our initial view does not make much sense. Especially when you look further and realize that the home clearly sits on a hill.
Looking at the larger version of this photo, it is easy to see that the lawn is NOT well maintained, and that there is a path in the lawn from people walking across the grass to get to the front door. Already, it shows carelessness on the part of the seller, and that is not good either.
Before even reading the description copy, I went through the remainder of the photos. One of the additional exterior photos shows the back yard, and reveals an equally uncared for lawn. These exterior photos show a potential buyer that it will take a lot of work before walking inside. Not good.
But that's not all. The interior photos reveal that the home is empty. As a result, a potential buyer has no means to imagine what their furniture might look like inside, since they cannot grasp the size (or lack thereof) of an empty room. And it gets worse.
The photos of the basement make it difficult to determine whether the surface is a real floor or carpet. This shows a potential buyer that there could be plenty of upgrading to make the basement worthwhile, again, before learning more about the home.
Then, the photo of a bathroom reveals a two-tone room, with a light green paint job on half with white paint on the other half. By this time, I couldn't help but wonder if it was half a paint job to cover something else or what happened. However, the worst part of this photo (which, again, is supposed to help to sell this place) is that we can clearly see either a large dent or mark in the wall near the door handle that is not explained.
Next, it was on to the description. This is where the "sizzle" is supposed to be, and this home is listed through a reputable national realty firm.
So how does the copy begin? "Price reduction! Sellers are motivated! Welcome to your Home Sweet Home located at.....".
OK, I'll bite. If the sellers are "motivated", why didn't they leave at least some furniture in the photos to give a potential buyer an idea of what the house COULD look like? Why are they long gone?
Upon further reading, we learn that that the "newer" roof and water heater were both "installed in 2009". Newer?
We learn that the "refrigerator, washer, and dryer are all included". How about that? Appliances included within a home purchase!
And we learn about the "finished recreation room in the lower level", which I suppose is the basement photo I saw and couldn't even determine if it was ugly carpeting or bare floor in an empty room.
In addition, we are told that the price was recently reduced by $3,000, and the ad shows that it has been in place since April 2013, over four months ago.
Meanwhile, there were more than 20 more properties in the same general area priced within $10,000 of this one.
I simply do not see how a typical "buyer" would have any reason to pursue this property. Chances are that after four months, any local rehabber would have already looked into this home to see if it could be easily and affordably upgraded. But no takers.
How is a $3,000 price reduction going to attract anyone?
My point is that it doesn't matter how few or how many other area homes have sold in the past six months on and near Saxon Street. There is no reason for anyone to want this property (at least at this asking price) based on the way it is presented now. Again, the advertising and marketing is the problem.
Things appear to be looking up in the Denver area according to separate reports just issued. A realty firm issued a report showing that sellers are getting a larger percentage of their listing price this year compared with 2012 and that homes are spending about nine fewer days on the market compared with Summer 2012. MetroList shows an increase of available homes from April of this year to July 15, 2013.
Although neither report included comparisons to prices for these homes to prices prior to 2006, there are some positives with this information. It shows that there is reason to believe the Denver market is on the comeback trail.
However, as I continue to point out, more inventory means that each home for sale has more immediate and local competition. Thus, the need is still strong to properly advertise and promote each home for sale.
Trying this like a potential home buyer, I searched the site linked via the Denver Post (the largest local newspaper) in the $150,000 to $200,000 range for 2-bedroom single family homes in order starting with "lowest price".
I wasn't surprised with my finding, but am certainly disappointed. The very first house on the search (And how many agents would LOVE that placement?) merely served as another example of my point.
It was for a 3-bedroom home in Denver on Lowell Blvd. The primary photo not only showed a lawn in horrible condition (as much dirt as dead looking grass) but it turned out to be of the back yard. The "front view" photo also showed the terrible looking lawn and that there is (or did not appear to be) no garage, driveway, or on-property parking. The next photo showed the rear area with a mass of dirty concrete and a storage shed. Not one of these photos was flattering, to put it mildly.
Upon finally getting to the interior photos, we then see that the home is empty. In several photos, all we see is a dining room set, one chair, and the appliances. One of the photos shows what is either a basement or empty room with what is either concrete or horrible carpeting on there.
Simply put, not one of the photos (with the possible exception of a bathroom shot) adds any appeal to this property.
It took reading the description below to find out that two of the photos are to show the "new furnace", even though none of the photos reflect the "new carpeting" stated. We also then find out that there is a "rear driveway" for parking, even though this is not shown in any of the photos. We are also told that the sewer line "has been replaced".
Some of the next homes in my search had decent ads for them, but certainly not enough. If I was truly searching from out of area, I would probably have moved on after seeing that first ad, thinking if that was all $150,000 gets me I'd rather go elsewhere.
Just because the market conditions are better, it does not mean that an agent can be that careless about how a listing is advertised.
If only the listing agents and sellers would check advertisements carefully before putting them out there. It doesn't help the industry, either.
This ad is for a home up for Short Sale in a Chicago IL suburb. In this case, the "problem" is not with the incredibly short copy that tells little to nothing about the interior.
The problem is in one of the photos, and not from the angle of the picture. There is an interior photo (as of this writing) that clearly shows a date of May 2, 2010 on it. Granted, this could actually be a recent photo and the camera was not set to the proper date. Nonetheless, it gives the appearance of being an old and outdated photo. Someone could think that no one could sell this place for more than three years and be scared into looking elsewhere.
I simply can't believe that an agent would allow this to be published. For that matter, the seller is under a Short Sale and obviously wants to move on with his or her life as well. Why don't those involved double check every advertisement?
To make matters worse, this is how it appears on Realtor.com. It's not some out-of-the-way publication that only the advertisers actually read.
I have no idea how copy such as "Looks like a model" to accompany the potentially outdated photo is acceptable as a sales pitch either, but that's for another column.
Yet, many agents and those in the industry continue to go with prior home sales statistics and other factors as being the primary reason that certain homes don't sell. Look again:
Two "home sales" stories from this week coming from two different geographic and population density parts of the country bring two different stories. Or do they?
The Northeast Tennessee Association of Realtors went ahead and published statistics which show a decline in local home sales over an 11 county region for June 2013 compared with June 2012, with a sale price decline of more than $9,800. When comparing June 2013 with May 2013 the report showed a 5% decrease in sales.
A few hundred miles northeast, the Philadelphia Office of the Controller issued a report showing an 18.5% increase in area home sales for June 2013 when compared with June 2012. This report went on to list the most "popular" neighborhoods, which were South Philadelphia, Fishtown, and Fairmount.
Same time period, but with results at the opposite end of the spectrum. That tells me these are not "different" stories.
What this means is that it is only a select few neighborhoods and communities that are turning around in terms of sales and pricing.
The latest from Fairfax County (VA) over the same June-to-June period can also be interpreted any one of a number of ways. An agency report claims the number of homes "on the market" throughout the County dropped by more than 15% from June 2012 to June 2013. Yet, the same report shows that the median home price actually increased about 7.5% during that same time.
In this instance, fewer homes on the market is the most likely reason for the price increase. Thus, a possible buyer in that area now has less bargaining power by not being able to show as many lower priced "comps" available in the area. A long-term real estate investor is also less likely to find a bargain to keep until the market returns to past levels.
From a selling standpoint, if hundreds or home owners in Fairfax County now decide to list, it would mean a short-term decrease in the percentage of listings sold, and likely expand the average time that homes are on the market.
Potential buyers and potential sellers have different reasons and motiviations to enter the market. An investor likely sees a sales decrease over the course of a full year as a reason to look elsewhere. A potential "move-in" buyer sees that decline as a reason to come in with lower offers because he/she now knows that it is a tougher sale.
Put all of this together, and what these stories all combine to tell us is that the market is still very much uncertain. That's not how it is supposed to be done.