Marketing

How to turn $1000 into $5000

by John Rice

 

This bath looks pretty nice, huh?  Would you believe that just a week before this picture was taken it was probably the WORST feature of this house?  It looked like a worn out 1997 Parade of New Homes bathroom.  I can talk about this bathroom like this because this is my old house.  Thought it might be a good example of how you can often spend a little money addressing the worst features and turn it around.

So, here is where my $1000 went:

1.  The ugly and rusty builder grade light was replaced with this oil rubbed bronze one from Lowe’s for $110 and 15 minutes of my time.

2.  The very worn out white and green vinyl floor was ripped up and replaced with ceramic tile for $600.  These tiles were only 57 cents each, but laying them diagonally gave it some pizzazz.

3.  The whole room and pickled vanity were painted for about $200.

4.  The cheap gold hardware on the cabinets were replaced with oil rubbed bronze ones for about $25.

The tub, shower door, faucets, big ol’ plate glass mirrors and the rest are all original stuff.  I wanted to replace the plate glass mirrors with two individual framed mirrors, but I didn’t want to risk slicing an artery since I was doing all the work alone.

As you can see, I don’t even think I spent $1000 to turn this bathroom into one that is nicer than most in my old neighborhood.  Did you catch that?  “Nicer than most.”  That is all you need to do.  Sure, I could have dropped $15k in this bathroom and made it over the top and EVERYBODY would have loved it.  I could have, but didn’t because I wouldn’t have gotten a return on it in a neighborhood where few houses have been updated at all.  See, when a buyer or tenant is shopping, they will always pick the best one they can.  All you have to do to get them to pick your place is to study their choices and make it just a little better……one up the competition.

When you do something like this, you not only make it easier for a buyer or tenant to say yes to your place, you also increase the odds of MORE people saying yes to it.  More people saying yes is called Demand, and economics tells us that more demand means getting a better price.

Have a house that isn’t selling?  Create more demand by doing a few minor things like this.  You’ll be amazed at how the public responds.  I am renting this house out, and 3 of the 5 people who looked at it wanted it before I signed a lease.

What lobsters can teach you about real estate

by John Rice

Let’s face it.  There are basically 4 types of listings that all houses fall into:

1)  The house nobody really wants that is overpriced.

2)  The house nobody really wants that is priced right.

3)  The house everybody wants that is overpriced.

4)  The house everybody wants that is priced right.

Simply put, there are good and bad houses, with good and bad prices.

In any market and during any time of the year, the #4 houses will always sell fast.  The #1 house will not.  You can turn a #1 house into a #2 house just as easily as you can turn a #3 house into a #4 house with a price reduction.  Sorry if you feel like you’re ordering for the office at McDonald’s with all the numbers here.

A lot of sellers have a house that isn’t all that appealing and they want crazy high money for it.  I try to avoid those listings because I am not good at magic.  I am only good at being a realtor.

So, how does all this relate to the market?  Let me say this first.  The market is always changing, just like the prices of anything…..stocks, oil, lobsters.  It is all supply and demand.  Here it is August 28th.  We are on the downhill side of this year’s market.  Most of the buyers have bought and most of the good new listings have sold.  The buyers that are out there now don’t have as many terrific houses to see, so I am watching the ones that didn’t cut it in the spring/summer start to move now.  Many were either loser houses or ones that needed price reductions.   I checked the activity from the past week this morning.  I noticed that 3 of the 4 pendings sales in the $300-400k range were houses that I have either shown or looked at for myself earlier in the year.  Reason these finally sold is because there isn’t much that really screams AWESOME right now in that range.  Think of it this way.  It is 8:PM Friday night at a seafood place.  There is a 100 gallon tank with only 3 lobsters.  You pick the best of the three, knowing that if you got there at 5:30 you could have got a better one.

The only chance for that poor #1 or #2 house is to sell when that lobster tank is mostly empty.  That is from now until the grass starts to grow next year.  Once the grass starts to grow, the buyers come out.  A couple weeks later, all the listings start hitting the market and the cycle begins again.

 

No showings? Showings, but no offers? Here’s why

by John Rice

Since I’ve got a bunch of listings now, I thought it would be a good time to do a post about what you can deduce from your showings.

Sooooooo…….

IF you aren’t getting any showings:  More than likely your price is too high.  It could also be your realtor, but as much as I hate to confess this, a house that is priced well seems to sell even if the agent is lame at presenting it online.  If all the data on the listing is correct (schools, size, neighborhood, zip code, etc) more than likely you aren’t getting showings because buyers and agents can tell just from what they see online that the price is too high.  Now, if you have a gazillion dollar house or something very unusual like a 3000 square foot tree house on 10 acres in the middle of downtown, you aren’t going to get many showings anyway since the buyers for those properties are few and far between.

IF you get showings, but no offers:  This is a little more tricky.  Let’s assume that the house is presented accurately online……meaning no creative tricks like hiding the fact that the house backs up to a McDonald’s drive-thru, or that there is a toilet in the middle of the dining room.  If there are no shenanigans, that means the buyers and agents feel that the house is probably priced realistically from what they see online, but the house doesn’t meet their expectations once they get there.  It’s usually something they didn’t expect like the floor plan or the condition of the house.  This is where you have to listen to the feedback.  I know this sucks to hear for a seller, but if 7 out of 10 buyers didn’t like the house due to pink carpet in the bedrooms or the like, you are going to have to address that or wait around for a pink carpet lover to show up…..and in all my experience, I have not met that buyer yet.  You need to change what you can to make it palatable for the buyers, even if you don’t understand it nor agree with it.  Yes, carpet is easy to change for the buyer, but few will do it, and it is just as easy for you.  Yes, you don’t know what color a buyer will want, but we know it ISN’T pink, so that’s a start.  If the feedback is something you can’t change, like a steep driveway, your only option is to reduce your price to the point where a buyer gets more excited about the price than they are disappointed in the slope.

Bottom line is that you want to make adjustments to make your house one of the best ones on the market.  A buyer will always pick the best house they can get, may as well be your’s.

Stating the obvious ISN’T marketing

by John Rice

You’ve been there.  You’re looking at houses online and the picture looks good to you, so you start to read the marketing remarks about the house…..only the realtors chose to tell you that “NOW IS THE TIME TO BUY.  RATES ARE HISTORICALLY LOW”, but they don’t really tell you much about the house somebody is paying them to sell.  It’s like the message is that you should buy ANY house, not just the house you are looking at.   I’ve always thought it was pretty stupid to waste the short amount of attention you have from a consumer with that stuff.   I mean, think about it.  Anybody reading the marketing remarks about a house, either in print or online, has probably ALREADY DECIDED THEY WANT TO BUY A HOUSE!!!  They’ve come to a website or picked up a flyer to do what?  Look at houses or try to figure out IF they are going to become buyers or not?  Same thing with the old “YOU CAN OWN CHEAPER THAN YOUR RENT”.  Any renter looking at houses doesn’t need to be told this, they already know it.

It isn’t just in this industry either.  Back when I was younger, I had a lawn maintenance company.  That was before the internet and advertising in the phone book was the thing to do.  I would see ads where lawn companies were trying to convince people of all the benefits of having them mow their lawns.  I used the attention I had from consumers looking at my ad to convince them I could do a great job, that I had insurance (something most didn’t at the time) and that I had happy customers.  My thoughts were that if somebody had picked up a phone book, gone to the “L” pages and looked up either lawn care or landscaping, then they had already decided to let somebody else do the work for them.  At that point the goal became to convince them that I was a better choice than the guys who were telling them they should make a decision that had already been made.

Just my 2 cents for the day.

My Average Days On Market??

by John Rice

I HATE getting asked that question.  Not because it is longer than average, but because that info is sooooo easily manipulated by Realtors today that it has no real meaning.  Plus, it doesn’t really give a good indication of how good a job a Realtor will do at selling your house.

See, Realtors are the ones who enter the date a listing goes pending.  Realtors are also the ones who can delete a listing and put it back on with a new MLS number, making you think it is a new listing.  When it sells, the report they can print and show you DOES NOT SHOW the days on market from the previous listing!!  They can do the same thing with price changes.  I have seen several times on LBAR where the price of a listing was reduced the same day it went pending.  Then, when it closes, it shows that the house sold for 100% of the asking price.  That is a way to be able to tell prospective sellers that you get a higher that normal List-to-Sale percentage.  It is all a game, and one I don’t play.

I have no idea what my average days on market are at the moment.  To be quite upfront (as I always am), I have sold several houses very quickly and some take what seems like forever.  Last summer, I sold one before it even hit the MLS just by networking.  When I get asked about things like this, I usually tell people about the ones that I have sold fast and the ones that have taken a longer time.  Then I tell them I put the same effort in all my listings.  The difference in one that sells fast or slow has a lot to do with the house and the seller.  An over-priced listing is going to take a longer time.  One in a poor school district will take a longer time.  I then tell them that every seller who has taken my advice about price and work that needs done has sold their house quickly.

So, what is a consumer to do when a Realtor can quote manipulated statistics?  I say ask them questions that make them think.  How about asking them what they are going to do any different from the next agent.  Maybe ask how they get  their clients.  If you hear the word referral, that means that they did a good enough job that somebody promoted them to a friend/family member.  Most agents just think about marketing when they are on a listing appointment.  Ask them questions about what happens AFTER you get an offer on your house.  What is their negotiating strategy?  How do they usually handle inspection repair lists?  What do they do to make sure the buyer’s loan is getting done?  The goal is to get to the closing table with as little drama or surprises as possible. 

And if you do ask about their average days on market, be sure to ask if that includes their deleted listings.  Also ask how far back they went in history to average those numbers.  They could have had two that recently sold fast and are quoting you just the average of those two.