Analyzing comps from 2013 are going to take more thinking this spring than your typical year. In the past 10 years, we’ve gone from a market of houses always appreciating to losing value. Until 2013. The market came back fast and furious…..until about August/September. Despite all of 2013 being the best year in a long time, the last few months of the year saw a really slow market. Thanks for sticking with me this far because I am sure you are wondering why this makes any difference for 2014.

Here is why: All agents use comps to determine the value of a house. If you have an agent that doesn’t ever mention looking at recent sales, then you need to find a new one……and the ones that talk in price per square foot scare me too because that is just too simplistic of an approach. Price per square foot is best for figuring out the average of a neighborhood, not for finding the value of one individual house. The problem for 2014 is going to be a house that sold in the first half of 2013 may have had multiple offers and sold for more than it should have. The ones that sold later might have sold for less than they would have this coming spring.

A similar thing happened last year about this time. When listing agents looked at comps in the spring of 2013, they were looking back to a much worse market. Many listings actually came on the market for less than they were worth. If your house had 14 offers the first day on the market, then your agent might have priced it too low, even though there were comps to support that price from before the market picked up. And did it pick up. They way I described the market last spring was like sitting on a swing as a kid and getting that first neck snapping push that sets you in motion.

What do you do then? Spend more time looking at the comps. Determine, based on list-to-sale percentage and days on market if a comp went for less than it should have. Make adjustments or don’t use it as a comp. If a comp is from the fall, maybe add a little since the spring market is always better due to more buyers in the market. It will almost be like needing to look at the comparable sales for the comparable sales to make sure they are good ones. It is going to take a little more thought and effort to price a listing where it needs to be this year is all. I’m ready for it!

I was reading the marketing remarks for a For Sale By Owner listings the other day. Like most FSBO marketing remarks, it was light on what matters to most buyers and heavy on the minor things the seller found fascinating about the home. This particular one went on and on about the different fruit bearing bushes. Not that I am saying that doesn’t matter. Just saying that feature might appeal greatly to 5% of the buyers and 95% will wonder how hard it is to maintain all that. You only have a buyer’s attention for so long. If you have loooooong marketing remarks, you need to keep them interesting. The moment people get bored they do what? That’s right, they move on.

While my wife and I were watching Doctor Who with one of our sons, I got to thinking about the time we were in the market for a Subaru Outback. A used one. We decided we wanted one with the 6 cylinder engine and leather seats. My wife wanted one with the big sunroof too. That meant a Limited one or the L.L. Bean Edition.

The 6 cylinder ones were hard to find. You could find a zillion 4 cylinder ones with the other features we wanted. Then one day I find a classified ad from our local paper. All it said was “2008 Subaru Outback. ‘Si Drive’. $23,000.” That was it. I often wondered how many calls this seller got on the car with that description. See, the “Si Drive” feature was ONLY available with the 6 Cylinder cars. The 6 cylinder cars only came in the Limited and L.L. Bean trim levels. So, I knew THIS was the one we were looking for.

We bought it. My wife loved it until the right rear wheel kept ripping off lug nuts even after replacing everything twice. We literally drove the wheels off that car, which shouldn’t happen with less than 65,000 miles on it. It is gone now, but it makes a good example of how not to sell your car. I am sure if that seller would have said “Leather, Sunroof, heated seats, L.L. Bean Package, 6 cylinder” rather than just “Si Drive”, he would have sold it sooner and for probably more money than I gave him.

I got a call last night from a family that has two houses they have been trying to sell for nearly 6 of the best months the market has offered a seller in years. What gives?

Real estate is all about price, location and condition. Real estate marketing is about price, online presentation and making the house look attractive to buyers when they come see it.

I am going over tonight to look at these houses, but based on the current listings…….I am embarrassed for my whole industry. I am always amazed that I am still always amazed at just how poorly some realtors do their jobs. In this case, the current agent didn’t even bother to enter the name of the neighborhood. She entered “Rural” as the neighborhood. People looking for rural properties won’t want this one and people who might want this house think it is out in the country somewhere. Boo 😦

The house is currently overpriced. Many agents are so eager to get a listing that they are afraid to tell the truth to the seller. That just ends up wasting a seller’s time. In this case, these poor sellers have had an overpriced house on the market for the best part of the year and didn’t know it.

I won’t even go into how bad the pictures are. Okay, I will. Some of the pictures are so blurry I thought maybe my contacts had fallen off my eyes. And about all of them are just a corner of the rooms. There is nothing there to work with for a buyer. WHY would they want to come see a house that the presentation offers nothing to make them want to see it?

My plan for this house is similar to what I do for all of my listings. I like to see the house and tell the seller what they need to do to sell. If a room feels small or inhibits buyers from experiencing the space, then some furniture should be taken out or rearranged. If there are heavy curtains that block a lot of natural light, they need to come down…..there are just a ton of little things that can be done to make the house more attractive to buyers. My favorite suggestion for a seller was putting mulch and a fire pit where their kids sandbox had been. We didn’t have time to grow grass, so I suggested they buy a fire pit, two plastic lawn chairs and about 4 bags of mulch. All in all, I think they told me it cost less than $100. We had multiple offers the first day on the market and the buyer who got it wrote in their contract that the fire pit/lawn chairs stayed with the house. Yeah, $100 turned an eyesore into a unique feature. I love doing stuff like that!!!!

Once ready, the professional photographer comes in. People are sitting at a computer deciding if they will come see your house or not. The presentation is what gets you showings. I don’t want to sell the house online, my goal is just to sell somebody on coming to see it. For a fishing analogy, it is the bait.

I try to use the marketing remarks I write to tell what is unique or above average about the house. If the buyers don’t think it has anything different to offer than what they have already seen, they are more likely to not schedule an appointment. There is always something unique about any house, even if it is rough or just like every other one in the neighborhood. If there really isn’t much difference, I might drive around the neighborhood and try to find something special to write. Maybe most the houses don’t have a flat driveway and my listing does? The sun sets on the front of the house so you can sit on the patio after work without roasting? A lot of natural light? There is always something to talk about.

I can’t wait to see these houses tonight!!

I’ve been wondering how long it would take for this to happen now that the market is so hot…….half baked listings popping up on the MLS.  You know, these are the ones with either no pictures or only one shot with a cell phone, no marketing remarks, or a combination of both?  The agent wants to get it on the market quickly and then will add pictures/remarks later.

I totally understand the urge to get a listing on the market ASAP these days, but putting a listing on that isn’t fully presented is a mistake.  Your best chance to sell for top dollar is when the listing is brand new.  That means you want all the buyers currently in the market to come all at once.  The colder the listing gets, the more comfortable today’s buyers feel about writing a lower offer since they are not afraid of losing it.

During the last seller’s market, the norm was to just get it online and then add pictures or marketing remarks later.  It wasn’t that great of an idea back then either.  I think it was more laziness than strategy.  Probably still is?  It is especially not a good idea today because all the big real estate sites like Trulia or Zillow are IDX feeds from the MLS.  The problem is that there is a delay in updates.  The agent who finally decides to add more pictures or marketing remarks can do so instantly on the local MLS, but it will take a couple of days before they automatically appear on other popular sites….again, this drags out the process and we want a buyer to feel like they might lose this hot new listings if they don’t pull the trigger ASAP.

So, I still like to get all my pictures ready, have my marketing remarks written, make sure the house is at it’s best before I click the submit button.   My strategy seems to work since the past several listings have sold in multiple offers as soon as they hit the market.  My clients are happy.  I am happy.  It is all good that way.

I remember my first listing back in 2005.  It was a fairly new house in an area where there were new construction houses going up all over just a few blocks away.  I was worried anybody wanting my listing would prefer to spend similar money to get a similar sized brand new house.  A few months later, the market started to tank and I haven’t had to really worry about competition from new construction since.  Until now.  Don’t know if you’ve noticed, but a heck of a lot of the sales these days are new construction.  New construction is so hot right now that the biggest builder in town has raised their prices three times this year.

New homes are cool.  Everybody likes that fresh new feel in a house.  I’ve found that about 10-15% of buyers are the type who will only pull the trigger on a brand new home.  After many years of working with buyers like this, I have learned to recognize the person who will only buy a new home.  They are the buyers you show many perfectly fine houses to and they don’t like them over very minor issues like paint, or light fixtures, or won’t consider any updating.  It doesn’t take me long any more to suggest to these buyers that we need to check out new construction……and they always find exactly what they wanted!

 

There is also a small percentage of buyers out there that will only consider an existing house.  These are the people who talk about how sterile new neighborhoods are.  I know NOT to suggest new homes to them!

So, let’s say you are a seller right now with new construction close to your house….or even worse, IN your neighborhood.  Know that there are a few people who just won’t consider your house period.  Don’t worry about them.  Your buyer may be somebody who would consider new construction though.  How are you going to compete with shiny and new?

For starters, you’ve got to price it a little less than what a similar sized house would sell for brand new.  A buyer is going to ask themselves why would they pay more for an existing house when they can get brand new?  Ok, I guess they are also asking themselves why would they buy an existing house regardless of price when they can get brand new.  That is where some marketing comes in to play.

About the only thing a brand new house doesn’t have is character.  Yep.  They just don’t feel like a home at first.  6 foot tall trees.  Sod strips that look like a bad skin graft laying in the yard.  Yeah, there is this one downside to new.

What you need to do is make sure buyers notice the things you have that they can’t get with a brand new house.  Got nice landscaping or tall trees?  Let them know in the remarks and with pictures.  Have you gone beyond builder basic with lighting?  Added crown molding?  Have special window treatments?  Screened in a patio?  Fenced the yard?  Added closet storage systems? A theater room?  Firepit?  Show anything like this off.  It will give you an edge.  Why?  Because these are the things most buyers are going to do to a brand new home anyway.  They want to make any house they buy feel like a home.  That is the Achille’s Heel of new construction.