Marketing

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.

Saw the listing online….think I’ll pass

by John Rice

I had something happen the other day that TOTALLY supports everything I’ve ever said about marketing a house these days.  I was talking to a client who said they saw a house online, but weren’t sure if they wanted to see or not.  See, the pictures weren’t that good and it was kind of hard to figure out much about the house from the marketing remarks.  This house is only a 20 minute drive from my client’s house.  Back in the day, a buyer would give the house the benefit of the doubt and go check it out.  That just doesn’t happen now.  (My client isn’t alone, buyers just don’t want to risk it being a waste of time these days 🙂

So, let’s flip this around and take a look at it from the seller’s perspective.  The seller of this house has hired a realtor to sell the house.  There is a buyer 20 minutes away who doesn’t know if it is worth it to come see it in person……all because the agent did a poor job of marketing the house in an appealing way.

After working with so many buyers, I’ve learned an important lesson about how they approach houses online:  Buyers are sitting at their computer asking the house “Why should I come see you?”  Since houses can’t talk, it’s up to the realtor to answer that question.   A listing that doesn’t answer that question through pictures and marketing remarks misses out on a lot of showings……even ones in the most desirable school district in town.

Before & After Shots of my house…..See what paint & carpet can do?

by John Rice

I’ve been pretty darn pumped up to do this post for quite some time now.  It gives me a chance to show off the work I did on this house and gives me a great platform to yell some more about what a difference carpet, paint and presentation can make.  Plus talk about investment property.

See, this is my house.  I bought it to rent it out…..gotta pay for college for my boys and keep my supply of cool cars fresh you know.  I paid $78k for it.  The foreclosures in this area go for in the mid $60’s.  In fact, an identical house to mine on the same street sold for $65k this summer…..So why am I bragging about paying $78k?  Well, I have been in the other one before and after its renovation.  That one needed a new kitchen and bath.  Mine didn’t.  That one didn’t have the wood trim wrapped in vinyl.  Mine did.  That one had a 27 year heat pump.  Mine has a 4 year old heat pump.  Once you get down to the nitty-gritty and compare apples to apples, I paid about $4k more for mine, but didn’t have to spend as much time to get mine ready nor did I have the risk of unearthing expensive issues during a major reno.   In the end, about the only visible difference between the two houses are color choices and I didn’t put in a dishwasher.  That house was flipped and just sold for $95k.  I think I did pretty good since that house was the same floor plan just about 5 houses down the same road….doesn’t get better than that for comparison sake!

These two pictures are of the same master bedroom.  Can you tell which one is the after?  All I did here was paint, carpet, an $80 ceiling fan, and new outlet covers…..and had a professional photographer snap the picture.

These next two are of the kitchen.  The cabinets and counter top were new just a few years ago.  Literally all I did was paint, a new range and a new ceiling fan….well, I did have an electrician add GFCI outlets just to make sure everything would be safe for my tenants.

These last two are of the bathroom.  All it got was a new toilet to conserve water and fresh paint.  The previous owner had recently redone the bathroom and made great selections!

So, there you have it……if this isn’t a testament to what paint, carpet and presentation can do, I don’t know what is.  I dropped about $3500 in paint, carpet, 5 light fixtures, 2 ceiling fans, a range and a toilet, but added at least $15,000 in value.  This is why I always tell sellers to do these little things because they can get such a big return not only in the sale price but also shorten their days on market.  (The other one just like mine was only on the market for a short time while being surrounded by others that have been on the market forever!)

How long will it take for my house to sell??

by John Rice

I get asked this question on every listing appointment I’ve ever been on.  I normally don’t reply with an amount of time, but with a sequence of events that needs to happen to attract a buyer.  The honest to goodness truth is that any house should sell pretty quickly if the seller will do everything on the list I give them and price it correctly.  Granted, there are exceptions…..million dollar house?  Will take time since there aren’t many buyers in that price range.  A unique house?  May need a unique buyer.  An overpriced house?  Will usually only sell to an idiot with a careless/stupid Realtor.  A normal house in any neighborhood in Lexington Ky?  If done right, it won’t take long.

I’ve been doing this long enough that I know how it usually goes with a seller.  I see the house.  I ask the sellers if they are willing to do any work that needs done to attract the buyers that are out there right now.  Sometimes they don’t/can’t/won’t do anything.  If they don’t/can’t/won’t, I tell them the price I think their house will sell for just like it is.  Usually though, the seller picks a few items from the list.  We put it on the market.  They get positive feedback for the things they have done.  They get negative feedback for the remaining items on the list.   After awhile, the seller starts to realize that they are going to have to do more items on that list.  They do one more item.  Still doesn’t sell or offers are way below where they should be since the buyer has subtracted about 5 times the cost for the remaining items on the list.  I’ve been on the buyer side of this.  They almost always say something like “If I have to paint this whole house I’m not paying a penny more than $XXX,XXX!!”  or “I would need to replace all the carpet and I like hardwood, so let’s just subtract the cost of hardwood from the asking price and go from there.”  Can’t blame them, after all, it is their market these days.

Eventually, the seller plugs away at my list until it sells (And sometimes being realistic about the asking price has been on the top of that list since day one).  See, there is the sequence of events I mentioned at the beginning of this post.  Now that the house is ready, it is going to sell because it is competitive and will almost always fall on the short list of a buyer.

But what happens to the people who do everything on the list from the beginning and price it correctly?  Their house usually sells in a matter of weeks.  Why?  Because buyers want the best house for their money.  Make your house THAT house, and start packing.

If real estate were gym class, would your house be picked last?

by John Rice

I was that kid in middle school that was always picked last in gym class.  You know the drill.  Two team Captains (Buyers) pick their team (Houses) until there is only one left and that person gets picked by default.  Don’t feel bad for me though…….I’m sure the past 30 years has been better for me than for most of those picked before me 😉

The real estate market is very similar to what we’ve all experienced in gym class.  Buyers organize the houses in order of preference.  Naturally, they are most interested in move-in ready houses that are priced right.  Then they move down the list to those that are less desirable.  Sellers want to be picked sooner rather than later……think “Days on Market.”

Once the Captains are chosen, that is like the beginning of the house hunting season.  The Captains pick those they think will be the best.  Once those kids are on a team, they are “Sold” and not available anymore.  All a Captain can do is pick the most desirable kid from what is left.  Once the best one has been picked, the second best one becomes the new best choice.  That is until it was just me standing there and the Captain says my name…….with the enthusiasm as if he had just heard the cafeteria was serving goulash for lunch.

Right now, we are in the time of year where not many new listings are hitting the market.  It’s kind of like when there are only about 6 kids left from the whole class.  These are the ones that maybe nobody really wants, but the next kid that gets picked is going to be the best of those that are left.  There are many sellers right now with average to below average houses that will get contracts simply because there are no better choices for a buyer right now.  I always say that fall is the best time to get rid of  house that nobody has wanted all spring and summer…….which I guess is my whole point.

  On a side note, the only time I ever got picked any higher than dead last was when it was for volleyball.  See, I am left-handed.  When I serve, the ball always goes on the opposite side of the court from where it lands when most people serve.  Everybody on the other team was always caught off gaurd……and nobody ever noticed the pattern of where the ball would go when I served.  Come to think of it, that is one of the first times I ever realized the benefit of zigging when most people zag and zagging when most people zig.