Posts Tagged ‘home’

Open House Preparation … it’s More than Signs and Flyers!

May 19, 2011

As the third installment of my open house series, I want to discuss how you prepare for your open house, and then how to actually host a highly successful open house. 

In order to have a highly successful open house you must prepare, prepare, prepare. Simply showing up at an open house with a couple of directional signs and some flyers is not enough! If you’re like many agents who tell me “Open houses don’t work”, I’m willing to bet that signs and flyers are your only open house tools. That simply is not enough!

Let’s talk about what you do need to do in order to create the kind of open house success you are looking for.

BEFORE THE OPEN HOUSE

It goes without saying that having systems in place will simplify your life – and your open houses!  Once you know exactly what you need for each and every open house you’ll find it extremely easy to get prepared ahead of time.

I recommend that all of your printed pieces – from signage to marketing materials – feature your custom brand. This is one of the best ways to stay top-of-mind with potential buyers and sellers, and stand out in the crowd of open house agents.

Some agents like to have an open house planning list to keep track of what needs to happen the week prior to the open house. Using this kind of checklist is very helpful because it keeps you on track.  You won’t forget one of the key essentials of your successful open house program if you’re managing your activities with a checklist. Regardless of whether you do or don’t create a list, below are the items that I think you must have on your open house checklist.  These can easily be customized for every open house you do.

  • Do the research. I talked about this in last week’s Zebra Report. In order to have a successful open house, you need to strategically select properties that offer the best opportunities for buyer and seller traffic. Do you remember what I said last week?  Instead of letting the property choose you, you need to choose the property. If you’re not sure how to do the research, go back and read last week’s Zebra Report, entitled Put on Your Thinking Cap”.
  • Plan your advertising. I also talked about this last week.  You must take the time to prepare a well-executed online and print advertising campaign. Simply putting an ad in your local paper will never generate the kind of traffic you want – or should expect.
  • Create an “Open House Book”. Provide additional value to attendees by offering a take-away open house booklet which includes full-color pages of information on your listing, as well a “tour of homes” sheet that has information on other comparable listings. You can also include a map showing each home’s location, and a one-page profile detailing your expertise.

  • Create custom branded display boards. A little later in this Zebra Report I’ll talk about display boards – what they are, how to use them, and why they are so important to your business. There is preparation needed for display boards – but once you have the format, it’s easy to update them for each house, or each neighborhood.
  • Plan your signage. If you’re looking for a very easy and inexpensive way to create a buzz around your open house, consider attaching an open house rider to your yardarm sign. This works well if you typically hold open houses on the same day and time … say, Saturday from 1pm-3pm. Attach your sign-rider on Thursday to alert people ahead of time about your open house. (Remember to remove the sign after your open house, however, or your sellers may be surprised the following weekend by a knock at the their door!)
  • Create invitations. If you’ve done your research, and you know who the most likely buyers are for the home you are holding open, send them a personal invitation. Postcards are a great option!  They are inexpensive to create and mail, and they offer a quick and colorful way to catch potential buyers’ attention. Don’t forget to go through your database and think about people who would also be good move-up or downsizing buyers.
  • Plan for a “neighbors only” open house. Again, use postcard invitations and explain that not only do neighbors get a private viewing of the home, you will also have valuable market and/or neighborhood information that you can share with them.
  • Plan your technology. There are a lot of options here, depending on whether you use video, social media or email invitations. Think about what will work best for you, what technology skills you have, and how savvy your market’s buyers and sellers are.
  • Shop for snacks and beverages. Depending on the home and the seller’s wishes, consider providing bottled water and some sort of snack. When you buy in bulk, you’ll save money upfront, and you’ll not be scrambling at the last minute to buy what you need.

DURING THE OPEN HOUSE

It’s what happens during your open house that will ‘wow’ attendees, elevating your open house from lackluster to amazing.

Even if you’ve done an amazing job preparing for and getting people to your open house, that’s only the beginning. Unless you provide a welcoming and professional atmosphere, visitors will likely walk in, and then walk out. Capturing their attention with eye-catching visual props (and accompanying information) is critical to building relationships – and building your business.

  • How to welcome attendees. You’ve put your open house signs on the street corners and at the curb, but have you considered how effective a ‘Welcome’ sign would be either on the front door or as a tent-sign on the front porch? What an engaging way to tell people “come on in – this is the right house – take a look around.” Most agents have never thought of doing this, but in fact it’s a very nice way to welcome your guests. And, if you use your custom branding on your ‘welcome’ sign, you’ve now set the tone for a higher-level, professional experience for your attendees.
  • Do you have a sign-in policy? Some agents have no problem putting out a sign-in sheet; other agents feel it can destroy a budding relationship in seconds. Personally, I have rarely seen this done well. If you are comfortable asking people to sign in , that’s great. If you’re using an excuse such as “my sellers are requesting you sign in for security purposes” be aware that open house visitors have been hearing this for years, and it may backfire on you.
  • Really know the best features of home and the surrounding area. People not only buy houses, they buy neighborhoods and surrounding areas. Identify at least five or ten area features and be able to talk about them comfortably.
  • Display features and benefits visually. This is a must-learn skill – not only for your open houses, but for every piece of home marketing you do. For every feature you want to highlight, there must be a corresponding benefit. Here’s a great example: if the home has a solid oak front door with heavy-duty hardware, the benefit is a heightened level of security, as well as exterior noise reduction. Once you have your list of features and benefits, create tent cards that you can place around the house to describe these to visitors.
  • Provide a personal brochure. Granted, you are selling the house.  But you are also selling yourself and your professional skills. A brochure is a terrific take-away that explains more about you, how you work, and the services you provide to both buyers and sellers.
  • Provide custom display boards. Most of us have visited a new-home subdivision and walked through model homes. These folks are experts at the display board business! They have boards that feature the neighborhood, the surrounding community and the features of the homes. You should have similar boards for the community (see below), plus boards that also showcase market data such as neighborhood appreciation rates, days-on-market statistics and recent pending and sold information. Determine what pieces you want on your boards, and then customize them for each house (and neighborhood) that you hold open.
  • Provide historical sales. People want to know what sort of investment they might be in for, especially if they fall in love emotionally with the house. Show visitors historical data going back far enough to highlight positive appreciation rates, and what they may expect going forward.
  • Display a “community board”.  Your board should include information on the community, such as population, demographics, parks, city services (police, fire stations, city hall), schools, and shopping.  You may also want to create a portable flyer version that visitors can take with them. Show where this house is in relation to other community amenities. It’s easy to overlay a street map with indicators for parks, schools, shopping and restaurants, and create a flyer that attendees can take with them. You may also want to include an aerial view of the neighborhood with the home clearly indicated.

  • Have open house book available. I talked about these booklets above. Once you have your system in place and format done, it’s simply a matter of adding your “open house tour” pages.
  • Provide extra amenities that set your open house apart. Offer shoe covers (also called “booties”) for those people who prefer not to remove their shoes. Or lay down carpet runners in high-traffic areas.  Some agents I know set out a basket of toys and coloring supplies for kids. You’d be surprised how easily this can build additional camaraderie with parents, while also providing a welcome respite for kids who were tired of having their parents drag them from open house to open house.

There is a lot of information in this Zebra Report, and many ideas for how to create a memorable open house for every attendee. It may feel overwhelming at first.  Just tackle one piece or idea at a time and start building your system and plan.  Before you know it you’ll have everything you need to really ‘wow’ your open house visitors.

Are you a real estate agent working in Washington State?

If so, we want to invite you to attend our “Unforgettable Open House” event on Tuesday, May 24th.

We’ll teach you how to design and conduct a truly unforgettable open house experience. You’ll learn the secret “props” needed for success, and how to captivate open house visitors. Discover the art of truly showing a home, rather than simply standing in the kitchen while potential clients walk in (and out!) the door. Hear the simple secret to capturing client contact information, without seeming like a pushy salesperson, “man talk” versus “woman talk”, and much, much more!

We’re offering this amazing opportunity in support of the Washington REALTORS® and National Association of REALTORS® Open House Weekend, which will be held June 4th and 5th this year. Master all of the insider secrets to a successful open house … then participate in the Open House Weekend by holding your best open house ever!  Public awareness of open houses will be high, and their expectations will be as well. You need to be ready to deliver!

There is no charge for the class; however, if you wish to participate for clock hours a fee of $35 ($40 at the door) will apply.

If you want to create an unforgettable open house experience – one that will generate income for you – you must attend this memorable class. Register Now!

Put on Your Thinking Cap … and Find the Right House to Hold Open!

May 12, 2011

This week, I want to discuss why it’s so important for you to choose the right house for your open house. It’s not just a matter holding an open house because one of your sellers wants you to. I want you to avoid doing that!  Instead of letting the house choose you, you need to choose the house!  And I’m going to tell you exactly how to do that.

First and foremost, not all houses are great candidates for an open house. If a house is in a rural area, or in a physical location that presents challenges, you’ll spend a lot of money on marketing and a lot of wasted time sitting by yourself waiting for buyers to find you. That is not the best use of your resources.

However, when you pick the right house – for the right reasons – you’ll find that your success rate in generating new prospects and clients will increase substantially.

Here are the categories for houses that are great candidates for your next open:

  1. New listings: New listings attract lots of traffic! People love to see what’s new on the market, and they love to be the first one through so they’ve got ‘insider information’ to share with their friends and family. You’ll also get a lot of neighbors who will come by … not only are they just curious about the house, they may be secretly interviewing agents prior to putting their house on the market.
  2. Well-priced listings: You will be amazed at the traffic you will generate when you hold open a well-priced listing. Buyers are amazingly savvy today, and they’re very aware of what constitutes good value. Well-priced listings can bring them out of the woodwork! Savvy buyers will not take the time to visit open houses where the listing price is out of line with the market. (Note: If you have listings that are overpriced, this is a terrific reason to have a serious ‘price-reduction’ conversation with your overly-optimistic sellers.)
  3. Easy-to find-listings: These listings offer a wonderful way to market yourself – and your name – by giving you lots of opportunities for signage. Imagine the marketing impact you’ll have when you place your personalized open house signs in numerous strategic locations. There’s a cumulative benefit to this when you hold open houses on a regular basis, and those houses are on well-traveled routes.
  4. In-demand listings: Do you know what style and price of house is the hottest seller in your market? You will if you search your MLS and track the most recent pendings. One of my coaching clients recently did this and then called me up the next day to say, “I thought I knew my market, Denise. But I clearly didn’t. What I thought was selling well now was actually selling well 6 months ago. But it’s not now! In my market – right now – one-level homes in the $279,000-$299,000 price range are hot. I had no idea!”  It’s critically important that you do your research. Find out what’s in demand right now – and take advantage of that knowledge.
  5. Well-advertised listings: It goes without saying that listings that are advertised well will attract buyers. But listings that are really advertised well — online, in print, and with targeted print mailing — are great candidates for an open house. There is already a buzz about them, so take advantage of that.
  6. Listings with great curb appeal: I call this the “irresistible factor. Who can’t help but want to go into a house that looks absolutely wonderful from the outside? Yes, we’re agents and we’re predisposed to appreciating fabulous curb appeal. But everyone else appreciates it too! When you’re doing research on the right kinds of homes to hold open, do not forget listings that are intriguing from the outside. When a house has ‘wow-factor’ curb appeal, you’ll generate significantly more traffic – which in turn can generate more potential clients.
  7. ‘Where fish are biting’ listings: These homes are the fastest-selling homes in you market. How do you determine this? Again – by doing some targeted MLS research. Find out what the days-on-market statistics are for a particular neighborhood, or within your community. Is there a correlation between a low days-on-market number and a particular price point or style of house? When you can connect these dots, you’ll have a very good idea of which homes are getting buyers to get off the fence and into the market.

Now that you know which houses are the best candidates for an open house, you need to determine how to attract potential buyers (and future sellers) to your open house.

Here are my “Top 5 Traffic Generators

  • Online marketing: The key here is consistency. To build strong traffic, your open house needs to be posted anywhere that open houses in your market are posted – including your personal website and your company website. Additionally, spread your social media net as wide as possible through Facebook and other social media sites. Remember to confirm with your sellers that they are comfortable having you advertise your open houses via social media.
  • Offline marketing: While many agents turn their noses up at print marketing these days, I do not. This can be a very effective method of building open house traffic. There are lots of options based on your market, including newspapers, magazines, trade publications, and community or neighborhood newsletters.
  • Immediate neighbors marketing: You’re missing a real opportunity if you’re not targeting the neighbors! If you normally hold your open house from 1pm-4pm, invite the neighbors over at 12:15pm for a special “neighbors-only” open house. Create an invitation that provides a reason for them to stop by. These could include getting current information on their neighborhood’s 10-year appreciation rate, or perhaps sales ratios and days-on-market statistics. For the neighbors, it’s not about the house as much as it’s about providing them with market knowledge. It’s about articulating your expertise.
  • Move-up buyer ‘radius’ marketing: This is a great way to generate traffic. Choose neighborhoods where the homeowners’ next move up (or down!) would likely be in the price range of your open house.
  • Database marketing: Never forget the value of the people who already know you and trust you – and support your career. List your open houses in your monthly newsletters. Send out an open house schedule via email, with a link to your website’s open house page. (Don’t forget to update this page each week!)

Lastly, I want you to think about open house options – those “outside the box” option that can generate additional traffic.

  1. Saturday versus Sunday open houses: For many people, Sunday is their ‘stay-at-home’ day. They have family activities, laundry, and yard work as priorities. Saturdays often will provide you with much better traffic, since people are already out and about doing errands. With ample signage you can attract a lot of traffic! Try this idea – test it for two or three months to see if that’s the case in your market.
  2. Condensed open houses:  Consider holding two homes open on the same day. It could look like this: House #1 (123 A St) is open from 9am-10am and then again from 1pm-2pm. House #2 (123 B St) is open from 11am-noon and then again from 3pm-4pm. Essentially, you’re increasing your opportunities to get a lot of people through in a short amount of time.
  3. Multi-property open house tour: Pick several houses that meet a particular niche and hold each one open for one hour. You could pick first-time buyer homes. Or waterfront homes. Or equestrian properties. Done strategically, you’ll quickly establish yourself as an expert in that particular niche.
  4. Multi-agent or entire office open house blitz: There’s power in numbers! Gather together a group of agents – or your whole office – and build an open house event.
  5. After-work weekday open house: This is a terrific idea for homes that are on commuter routes, or in neighborhoods that are close to bus stops. Hold an open house at approximately the same time as these folks are headed home. You’d be surprised at how many will stop in for a few minutes.

I’ve just given you a lot of ideas — and things to think about. What I want you to do now is toss your preconceived notions about open houses out the window and start thinking outside the box. Open houses can be an amazingly successful strategy for you — if you pick the right houses, determine how to build traffic, and schedule them to maximize your reach.

Are you a real estate agent working in Washington State?

If so, we want to invite you to attend our “Unforgettable Open House” event on Tuesday, May 24th.

We’ll teach you how to design and conduct a truly unforgettable open house experience. You’ll learn the secret “props” needed for success, and how to captivate open house visitors. Discover the art of truly showing a home, rather than simply standing in the kitchen while potential clients walk in (and out!) the door. Hear the simple secret to capturing client contact information, without seeming like a pushy salesperson, “man talk” versus “woman talk”, and much, much more!

We’re offering this amazing opportunity in support of the Washington REALTORS® and National Association of REALTORS® Open House Weekend, which will be held June 4th and 5th this year. Master all of the insider secrets to a successful open house … then participate in the Open House Weekend by holding your best open house ever!  Public awareness of open houses will be high, and their expectations will be as well. You need to be ready to deliver!

There is no charge for the class; however, if you wish to participate for clock hours a fee of $35 ($40 at the door) will apply.

If you want to create an unforgettable open house experience – one that will generate income for you – you must attend this memorable class.

Throw Open the Doors!

May 5, 2011

Think open houses aren’t effective in today’s tech-driven society? Think again!

Open houses – if done strategically – can generate more business than you would ever imagine.

Open houses have been around for a very long time. Twenty or thirty years ago, they were one of the only ways to get buyers into a home without an appointment. They were much more effective than printed ads because buyers had a chance to really look around and get a feel for the home. They were certainly the best way to do some low-cost marketing! Buyers simply showed up at as many open houses as they had time for and could quickly get a fairly good feel for their local market.

But then the internet arrived … and it wasn’t too many years later that real estate agents started marketing homes online. Beginning in early 2005 there were a number of articles discussing the fact that the open house – as a marketing tool – was a dying breed.

I disagreed with that theory then, and I still disagree with it today. I believe that open houses can be an incredible source of marketing for a home, an incredible source of business for agents, and an incredible tool for buyers to really explore what they want and need in a home.

According to the National Association of REALTORS® 2010 “Profile of Home Buyers and Sellers”, 45%* of buyers use open houses as part of their information source. That means nearly one out of every two buyers is attending at least one open house! That’s an important fact for agents – and their sellers – to understand. Open houses are not just a last resort to find buyers for an over-priced listing, or to find buyers at all. An open house can have a very positive effect on the sale of a home.

A lot of agents will say that rarely have they sold the listing where they were holding an open house. That may be true, but remember this: open houses sell other houses. Open houses cultivate buyers and engage them into making positive buying decisions by getting them into houses and off the fence. Open houses can help get a sluggish market back up and running!

If you’ve taken open houses off your list of marketing activities, you need to put them back on your list. Right now – today – you have a better chance picking up a buyer than you did 5-10 years ago. Why? Because today’s buyer has more access to home information than ever before. They’ve already done their research. They have seen homes online and reviewed the stats. When they attend an open house, they’re attending because they have some interest in, or at least some curiosity about, the home. Today open houses are very targeted toward ready, willing and able buyers, compared to open houses of the past. And today’s buyers are savvy buyers. They are very clear on what they’re looking for. When they attend an open house, that house has already gotten their initial stamp of approval.

Have I piqued your interest yet? I hope so! Here are more things for you to think about.

Open houses have a lot of pros and a few cons … based on who you are, what your market is like, and your natural personality style.

The Pros

  1. You have a chance to meet with potential buyers face-to-face and build credibility and trust.
  2. An open house is a great way to sharpen your client interaction skills.
  3. You’ll learn a lot about a neighborhood by doing the analysis necessary to have ready answers to buyer questions.
  4. An open house is a very low-cost marketing alternative.
  5. You’re creating an informational focus group to get feedback on the listing for you, and for the seller.
  6. You receive immediate results – and feedback. You’ll quickly get a sense of what buyers are looking for – and what prices are most attractive to the “right now” buyer.
  7. An open house shows that you are proactively involved in your local market.
  8. You can pick up a listing in the neighborhood. Many people attend open houses in their neighborhood, not only to see how their home stacks up, but to get to know agents that they might want to hire when they decide to sell their home.
  9. You could pick up a buyer for another home without spending a lot of money on marketing.
  10. An open house helps you familiarize yourself with the area or neighborhood inventory.

The Cons

  1. An open house can be a waste of time if no one shows up. (If you do an open house strategically, this won’t happen to you!)
  2. Prep time is needed, and can appear to be a lot of work. (It’s not a lot of work once you’re organized and you have a system!)
  3. An open house can be stressful if you don’t like to meet new people and you find building quick rapport challenging. (Role playing can help.)
  4. You have to be a great listener, and you need to know how to ask good questions. (Again, some role playing can do wonders for your interaction skills.)

I want you to take a few minutes right now and start a simple two-column list. On one side, write down all of the reasons why you like (or might like) holding open houses. On the other side, write down why you don’t do them. Compare both lists. Figure out what – If anything – is holding you back, and determine what you can do to help you see success with this potentially lucrative marketing strategy.

Believe me – open houses can be a goldmine for you! It’s time for you to throw the doors wide open and join the open house crowd!

If I’ve piqued your interest, stay tuned because this is just the first installment in a series of Zebra Reports that I’m going to write on open houses. Next week I’m going to talk about what kinds of houses get good traffic, and how you determine the right house (or houses) based on doing some highly-targeted research.

*Source: National Association of REALTORS® Profile of Home Buyers and Sellers 2010, page 46: INFORMATION SOURCES USED IN HOME SEARCH.

Are you a real estate agent working in Washington State?

If so, we want to invite you to attend our “Unforgettable Open House” event on Tuesday, May 24th  in Bellevue, Washington.

We’ll teach you how to design and conduct a truly unforgettable open house experience. You’ll learn the secret “props” needed for success, and how to captivate open house visitors. Discover the art of truly showing a home, rather than simply standing in the kitchen while potential clients walk in (and out!) the door. Hear the simple secret to capturing client contact information, without seeming like a pushy salesperson, “masculine talk” versus “feminine talk”, and much, much more!

We’re offering this amazing opportunity in support of Washington REALTORS® and the National Association of REALTORS® Open House Weekend, which will be held June 4th and 5th this year. Master all of the insider secrets to a successful open house … then participate in the Open House Weekend by holding your best open house ever!  Public awareness of open houses will be high, and their expectations will be as well. You need to be ready to deliver!

There is no charge for the class; however, if you wish to obtain clock hours, a fee of $35 ($40 at the door) will apply.

If you want to create an unforgettable open house experience – one that will generate income for you – you must attend this memorable class! Space is limited, so register today! 

Powerful Pricing Tools

March 31, 2011

In last week’s Zebra Report I talked about the importance of having a powerful listing presentation that covers five critical areas: pricing, communication, technology, marketing, and home presentation & photography. This week I’m going to look at the first of those categories – pricing – to illustrate how powerful pricing tools can enhance your listing presentation.

What pricing tools do you take to your listing presentation? Most agents take a CMA … but I actually believe that a CMA doesn’t provide the right information for your clients to get a good idea of how to price their home. Successful listing agents understand – and provide to their sellers — data far beyond the CMA, including absorption rates, appreciation rates, list-to-sales price ratios, listing-to-pending ratios, and assessed value ratios. All of this data can help you predict a home’s sales price.

Not familiar with these terms, or why they are important when pricing? Let’s take a closer look:

  • Absorption rates: The absorption rate shows how many months of listing inventory exist in the market, based on how quickly listings are being purchased, or absorbed, by buyers. This is a key concept, and I’m going to talk more about it below.
  • Appreciation rates: Even if they knew how to calculate appreciation rates, most agents don’t like to talk about appreciation with sellers – especially when looking only at the short term. However, according to the National Association of REALTORS® 2010 Profile of Buyers and Sellers, even with several years of price declines, the typical seller who purchased a home eight years ago has experienced a 24% percent equity gain. Calculate local appreciation rates, and share this information with your clients.
  • List-to-sales price ratios: You need to know this number!  What is the ratio of asking-to-selling prices in your market area? Even more importantly, know your personal list-to-sales price ratio. If it’s higher than the market average, it’s easy to explain to sellers that you are more skilled than most agents at pricing homes closer to their selling price (which often also equates to a shorter days-on-market time).
  • Listing-to-pending ratios: Think of listing-to-pending ratios as a measure of demand. The higher the number, the more demand. In order to get a feel for when buyers are buying, and what price range(s) they are buying in, use listing-to-pending ratios. Tracking this number consistently will give you a strong case when determining the right time to put a home on the market, and what price will likely attract the most potential buyers.
  • Assessed value ratios: Some clients have a hard time digesting “market” numbers and believe their home’s market value is similar to the values provided by their local assessor. If you measure assessed values of recently sold homes in any given neighborhood to their sales prices, you will discover the ratio between the two – and you can apply that ratio to your client’s home based on their assessed value.
  • “Optimistic”, “realistic” and “now” pricing: We’ve all had sellers who were overly optimistic about their home’s value, and we’ve all had challenges with the price-reduction discussion. Using a graph that plots “optimistic”, “realistic” and “now” prices helps sellers see where the market truly is, versus where they would like it to be. Have this discussion at your original listing presentation, and the seller will be prepared to lower their price when faced with the reality of few showings and no offers.
  • Price-per-square-foot: This is a very good tool if you work in an area where there are a lot of comparable listings on the market, and enough sales to give you accurate data. It’s hard to argue price when it’s clear that buyers are buying based on a lower price per-square-foot. Your chart should show the per-square-foot prices of recent sales, active and pending listings, and expired listings.

Remember I mentioned absorption rates above? Let’s talk about that a little more. This is by far one of the easiest pieces of research to do, and one of the strongest ways for you to illustrate the need for accurate pricing.

In order to calculate absorption rates, first determine how many active listings there are in a given price range. There’s no magic to the price ranges – you simply determine which ones best represent your marketplace. Next, count the number of pending sales there have been in the past month in each of those price ranges. Then simply divide the number of active listings by the number of pending listings … and you’ll have the absorption ratio! Here’s what it might look like:

You then round the ratio number up to the nearest “whole” number, to give your clients an idea of how long it will take their home to sell.  This rounded number is the absorption rate.

You can use the absorption rate to help manage sellers’ expectations for market time. It’s also a great tool to help sellers price for the ‘now’ market. If they need to sell quickly and there is an abundance of homes on the market in their price range, they need to be extremely competitive on price in order to attract a buyer. If they can wait a few months for inventory levels to reduce, they might be able to be a bit more optimistic in terms of price. However, waiting can quickly backfire!  If more listings come on the market than there are buyers who are buying, the seller may not be able to meet their timeframe of a quick sale.

When you use absorption ratios, you also need to explain to your seller that there is currently x number of month’s supply of homes on the market in their price range … and the absorption ratio assumes no new inventory coming on during the month. Additional homes coming on to the market in that price range will most definitely impact the ratio, which in turn impacts expected market times.

In order for you to provide the best possible service to your sellers, you absolutely must have a comprehensive listing presentation that includes the data that allows potential sellers a way to truly understand where the market is and how it affects their ability to sell. To provide the level of expertise sellers deserve from you, you must do your research and provide tools that will relate that information in a manner that the seller will understand. Having “props” (charts, graphs and visuals) allows you to clearly articulate what your research is telling you – and provides a way for sellers to understand what it means to them.

And of course, you know from my previous columns that all of your pricing research should be presented in an extremely professional manner. That means listing appointment materials that feature your personal brand consistently through the presentation, from agenda to research to marketing materials. You should continue to develop the sense of expertise that you’re creating through research with every document and detail of your presentation.

Regardless of whether you have the beginnings of a “pricing tool box” or you need to begin building your tools today, you’ll have a huge advantage when competing for listings when you can understand and articulate market data in a visually powerful manner.

FANNIE MAE FINALLY GETS IT RIGHT FOR REAL ESTATE AGENTS WITH SHORT SALE TRANSACTIONS

March 18, 2009

It’s about time that somebody figured out that real estate agents have been fighting an uphill battle when it comes to short sales.  After months of nightmare scenarios coming to life, Fannie Mae has finally done something about the problem.

With new rules in place effective as of March 1, real estate agents will have an easier time getting short sales closed—and getting paid for their efforts.

Any real estate agent who has ever been involved in a short sale transaction knows too well what I’m talking about.  The situation has played itself over and over again—too many times.

Here’s what happens:

The agent works overtime to put together a fast transaction to get a property sold.  Everything progresses swimmingly.

Then, right before closing, the lender calls and says, “Everything is all set.  We agree on all terms—oh, except for the real estate commission.  You’re going to have to lower that.”

Nothing infuriates me more when I hear this—and I hear it way too often from too many agents.  It’s reaching epidemic proportion.

After all your hard work—performed at triple speed to satisfy the demands of a short sale—suddenly you’re held over a barrel by an unscrupulous lender.  The demand to cut your commission lands on you like a load of bricks, burying you in its insensitivity to your efforts.

Short sales have enough emotion surrounding them.  Now, the lender takes this snake-like final step, sending you through the roof with anger.

In short sales, the real estate agent is the hero who swoops in to make the transaction a reality.  Then, somebody has the nerve to say in effect, “Thanks for everything.  You’ve done a great job.  But we’re not going to pay you.”

Talk about a slap in the face!  It makes me so angry just writing the words.

It’s not just the audacity of expecting work for very little or nothing.  It’s the fact that by taking this low road, the lender puts the real estate agent in a horrific position.

If the agent doesn’t agree to take a reduced commission, he or she looks like the bad guy.  The lender goes to the client—your client—and says, “We just couldn’t put the deal together because your real estate agent is so inflexible.”

No agent in his or her right mind wants to see their client get treated this way, especially considering all the emotion already present with a short sale.

But now—thank heaven!—somebody has recognized this problem and is taking the first step to doing something about it.  It’s not the biggest step in the world, but it’s one heading in the right direction.

According to the exact words from Fannie Mae (Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers):

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate.  Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

Great news.  Fantastic news.  I almost leapt for joy when I read it.

Because somebody out there “gets it”.  Somebody out there knows that real estate agents have been getting the short straw on this for a long time.

Yes, the rule is tiny in comparison to the wide-ranging short sale nightmares now commonplace in the industry. 

But this is a good start. 

Yes, I’d like to see this apply to more than just Fannie Mae and not just to loans in default (which is the case with this new rule).  But at least somebody—somewhere—heard our complaints.

Interest Rates Are Important for Sellers Too by Denise Lones

September 5, 2008

Why do interest rates matter for home sellers? While you may think that interest rates are important only to buyers looking for a new home, as a seller you should consider how they affect your pricing and position in the market.

Sellers today must keep a very close eye on interest rate prices. If your home is listed on the market for $500,000 and interest rates go up just a quarter of a percent, it’s going to end up costing the buyer an extra $25,000 over the lifetime of a 30-year loan.

So how does this affect you? If interest rates go up, the number of buyers able to purchase your home goes down. The pool of buyers shrinks. People who may have been on the verge of making an offer are suddenly unable to do so.

If you’ve been in your home for longer than five years, you’ve probably seen record appreciation and made oodles of money. The last five years were an unprecedented growth wave that some people thought would never end.

Now that the ceiling has been reached and prices are tumbling nationwide, sellers need to look at the “big picture”. While many are unwilling to lose even a penny of the appreciated value of their home, what they don’t realize is that it’s already gone. They would have had to sell two years ago to realize those gains.

All financial markets ebb and flow, just like the ocean. At “high tide”, your home is worth X number of dollars. As the tide recedes (which it’s doing now), so must your expectations.

But think about it. If you reduce your selling price by 5%, is that really such a big deal when you’ve appreciated by 80% or more in the last five years?

The answer is no.

The sellers who are willing to do a 5% price reduction now and get their homes sold are saving the money they would have lost by trying to hold on to the prices from two years ago. The sellers who are steadfastly clinging to a “high tide” that has long since gone will end up lingering on the market for months—and end up losing money in the process.

Be smart in the current market. Don’t wait so long that interest rates go up and you lose potential prospects for your home’s current value. And don’t forget—the seller of the home you’re about to buy must reduce their home by 5% as well.

Do “For Sale By Owner” Listings Really Save Money? By Denise Lones

September 5, 2008

I’m sure you’ve seen the signs—“For Sale By Owner”—or FSBO as it’s sometimes called. Many people think they can do better selling their home on their own, supposedly saving the commission they would pay to a real estate agent.

But the truth is that without the power of a real estate agent plugged into the MLS (Multiple Listing Service), you are hardly ever successful at getting your home sold. Even the tiny percentage (less than 1%) that do sell their homes “For Sale By Owner” are the ones in a neighborhood that’s usually very desirable and has a waiting list of buyers hoping for a listing to pop up.

This prompts the sellers in this exclusive area to proclaim to their friends, “Aha! I sold my home without a real estate agent and saved thousands of dollars!”

But did they?

Actually, they likely left thousands of dollars on the table—and never even knew it. With a waiting list of buyers for a particular neighborhood, a good real estate agent would have been able to negotiate a higher price. Agents do this every day. They know how to talk trends, rates, pricing, and the current condition of the market.

Add in the power of the MLS and there is just no competition. While you may think that a lot of people drive by your house every day and may be impressed by the sign you put in your yard, the truth is that you reach a hundred times more people when your home is listed on the MLS.

Also, the only people searching the MLS are pre-qualified. They’re already looking for a home. The vast majority of people driving by your “For Sale By Owner” sign are NOT in the market for a new home. This is why 99% of FSBO’s don’t sell.

With the MLS also comes an unbeatable sales force. You could spend all the marketing dollars in the world to publicize your FSBO home, but it wouldn’t even approach the already existing marketing machine your local real estate agent has in place.

The numbers don’t lie. When a seller decides to sell on their own, they usually end up losing thousands of dollars because:

1.The home sits on the market so long it depreciates in value.
2.The owners still must shell out the maintenance costs of the property during this waiting period.
3.Most sellers are not as adept at negotiation as a professional who negotiates every day of his or her life.

And perhaps most importantly—

4.Most buyers can’t see your property for sale because 99% of them are looking in the MLS.

When you add it all up, selling on your own will most likely end up costing you money instead of saving it.


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