Marketing

Granite doesn’t make people buy a house full of negatives

by John Rice

Man, I sure have been talking to people about listing their houses a lot this week.  I’ve never had so many people all at once call me to come critique their house.  Gave me the idea to blog about my thoughts though…..Especially since so many sellers think it is better to add a positive rather than subtract a negative.

When somebody wants me to check out their house and make suggestions, I always wonder what is going on in their heads as I give my two cents.  I don’t go in and tell them to tear the whole thing down and rebuilt it in whatever the current style is.  I’m not one who thinks that putting granite on the counter tops is a shoe in for getting it sold.  So, what do I do?  First, I think about what a buyer would expect who is looking at other houses similar in age, condition, and price.  If you read no further than this, take this thought with you:  All you are wanting to do to your house is make it a little better than the second best one on the market.  Yep.  That is all.  Anything more than that is wasting money.  Like I always say, as long as there is a market, the best one will always sell first.

I also often get asked what improvements can be done that give the most return.  I think a lot of folks are hoping I will say new flooring, new counter tops, stuff like that.  I only say to do those if they are common for your neighborhood.  Let’s say it cost $5000 to put down granite, and you can jack your price up by $5000.  Was it worth it?  Not only have you taken the time to get the job done, you are also paying the realtors another 5-6% of that amount since the sale price is now higher.  So what is the highest return on your investment when getting your house ready to sell?  Paint.  Nobody ever gets excited when I tell them that, but it is true, especially if you can do the work yourself.  Fresh paint always make any house feel better.

Another thing to remember is that a bland house with no negatives is a whole lot better than a WOW house with a few negatives.  Why is that?  Most people freak out over negatives.  I would take a ” Builder Basic” listing with nothing to hate versus a WOW house with something wild like a crazy floor plan, backing to a busy road, only one bathroom, or anything that people don’t want.  I have had two old house listings that both had fabulous features.  One of them had a reaaaaally narrow staircase to what had been the attic.  It had a new kitchen, great deck, and 2 great bathrooms.  Another listing had the smallest living room I have ever seen, but had the whole upstairs brand new.  I mean take the roof off and rebuild new.  It had a walk-in closet and master bath like a new high end house, which was totally superior than any other house in the neighborhood.  Both of them took a while to sell.  I would call the agents that showed them for feedback and they would go on and on about how much the buyer loved such and such and what a nice job the sellers had done with this or that.  I was always tempted to interrupt them and remind them that the house was for sale.  But I let them finish and they always started their last sentence with the work “But”.  It was like this: “Buuuuuuuut that living room was too small.”  Or “Buuuuuuut they just couldn’t handle those stairs.”

What are you to do if you are getting ready to sell?  After you have decluttered and all, deal with the negatives before adding any positives.  Get rid of anything worn, stained, or so outdated that it is tacky.  Deal with everything that needs fixed.  Then, see what is common for your neighborhood.  If everybody has old cabinets, you can keep them.  If everybody has updated their faucet fixtures, you had better too.  Once you know what is typical, take a look at what you have to work with.  I mean something you have that other houses don’t.  The Friends/Clients that I talked to today have a huge covered and screened deck.  I am guessing that this feature is something that will separate their house from the others.  Whatever your unique item is, do stuff that brings attention to it.  Like for that covered deck, I would paint it, stage it, maybe put some potted plants out there.  If you really wanted to go wild, mount a flat screen out there.  Ever watched HGTV?  All those design peeps always get giddy when they see a TV on a patio/deck…..And ALWAYS start with addressing the biggest negatives first.  Most people only have a limited amount of time and money to spend.  You don’t want to run out before you are done.  FYI, just about every seller ends up so exhausted that they never get it all done.

What advice do I give my friends??

by John Rice

I had a friend contact me on Facebook about the possibility of finding a new agent to sell their house.  Seems they haven’t had a lot of showings, and obviously no offers yet.  I’ve crossed out the name of the town that the house is in (and corrected some of my spelling), but I though this would make a good blog post.   I always say that I need to be as good to those I don’t know as I am to friends and family……so here is what I said for anybody with the internet to see:

“Sorry to take so long to get back to you. I don’t know if it is just me, but this isn’t an easy one to answer so I wanted to have time to write you a book.

When you listed your house, it should have had a beginning and an ending time for the listing period. After the contract expires, either of you are free to move on. If that time hasn’t come yet, the agent may let you out of the contract.

I do have a few questions. Is there a board of realtors in XXXXXXXXXX (meaning a local “chapter” for the MLS.) In Lexington, we have the Lexington-Bluegrass Association of Realtors. That is the site that all the local agents use. If there is one specifically for XXXXXXX, you definitely want an agent that is a member of it. If it isn’t on whatever association’s website that XXXXXXX agents use, you may as well have listed it with an agent from another planet. In your case, I would imagine that (major nearby city’s) association probably covers XXXXXXX too. Also, the odds of your agent actually being the one who finds a buyer are very slim. It happens, but odds are another agent is going to see it online and bring their client to your house. That is why online presentation is the most important thing right now.

Question 2. Is your current agent presenting it well online? Go to whatever site the agents use and take a looksie at it. If the pictures and marketing remarks wouldn’t make you want to see it, odds are everybody else feels the same way. While you are there, double check that everything is accurate.

Question 3. Is it priced realistically? Now this is where you will unfriend me, but if you have had XX showings in less than 6 months, it may be priced high. I don’t know the XXXXXXX market, but to have XX people look and not make an offer could mean that the price is too high or………Question #4!

Question 4) Is the feedback you are getting from the showings that there is some fatal negative that buyer’s just can’t look past? If you keep hearing the same thing over and over again, you might have a big negative. Most big negatives can only be conquered with a price reduction. I have a teeny-tiny backyard. I know when I go to sell, that is what buyer’s will be telling me. Most people wanting a decent sized 4 bedroom house in a great school district have kids and want a bigger yard. I’ll have to price it at the low end of the comps unless we have another crazy seller’s market.

So, if you do part ways with this agent, here is what I would look for next. Ideally, an agent that works with at least as many buyers as they do sellers. Most agents just want to list. Listing houses just means you see the one house. An agent that works with a lot of buyers has probably been in a lot of the house that you will be competing against. That agent will be better able to tell you what your house offers to buyers that are out there right NOW! I’d look for somebody that deals in your price range a lot. It always kills me when I see a cheaper house listed by one agent in Lex that deals almost exclusively in high end houses. What does this agent really know about a $100k house when 98% of their work is over $500k? And how much time are they going to put into that listing that will pay $3k verses the ones that will pay $15k. It takes a really etical person to work as hard for both sellers!

I’d also look for somebody that has a plan. Don’t go for the agent that spits out their average days on market unless they can specifically tell you what they did to acheive it. Lots of agents can get lucky. You want somebody that will do a market analysis and will show you how they came up with what they think your house is worth. Even if you don’t like the number. Some agents will list a house for whatever price it takes to get the listing. Then they start hitting you up for price reductions. I kind of think it is better to deal with reality now, since you’ll have to at some point down the road.

I hope this helps. Let me know if you have any other questions…..I may turn this into a blog post. (No names of people, places, things though.)”

Fairy Dust & the “SOLD” sign

by John Rice

I was trying to think of something to blog about this morning on the way home after dropping my kids off at school.  I was just about to pull on my street when I saw a house that had sold the first day it was on the market, but is now sitting back on the market with no buyer at the moment.  It got me thinking about how all that works with finding buyers.

This is a nice house.  It has a pretty deep backyard for the neighborhood and is in a good school district.  The sign went in the yard.  It got a contract.  A “Sold in 1 day” sign went up the next day.  Then about 10 to 14 days later the sold sign was gone and I noticed that it was back on the MLS as an active listing.  Probably means something didn’t work out with the inspection or the buyer’s financing.

So, a house that would sell in less than 24 hours on the market, but hasn’t got a contract in the past couple of weeks.  What gives?  Why hasn’t it sold again so quickly?  Well, like I say, there is no fairy dust, no magic in real estate.  Realtors that would have you think selling your house is anything other than working hard and working smart are the ones that can only brag about their good luck.  And good luck is what happened here.  I have no doubts this is a very nice house, and will get another contract, but what happened to make it sell in one day is that the right buyer was right there at the exact time that the house hit the market.  How do I know?  I’ve had it happen to me before.  I had a great little house that I did a great job of presenting it online, working with the sellers to get it ready to sell, and had a professional photographer take the pictures.  It sold in a matter of hours after I put it on the MLS.  Seems the buyer was already looking in that area and then BAM, I drop a great house on the market.  That house would have sold quickly anyway since it was presented well, showed well, and priced realistically.  Those are the 3 best things to focus on when you want to sell.  While I would like to take the credit for getting it done that fast, it was really more about timing.  Most realtors won’t tell you that.  They would like you to think that they sprinkled the fairy dust and that all the events/timing that lead to a sale were due to them.   That’s why I don’t really go around bragging about my average days on market.  While my number is much lower than the average, I know that all I can do is work to attract the buyers that are out there, not make them appear out of nowhere.   I never promise a seller when their house will sell.  What I promise is to have great pictures online, to write marketing remarks that tell buyers what is unique about the property, to work with the seller to get the house ready to sell, and to dot the i’s and cross the t’s throughout the deal.  I guess that is my fairy dust.

While I’m on this topic, I’ll reiterate that the “SOLD” sign in your yard really is just there to promote the agent to your neighbors so they can get more listings.  The sign does no good for you.  Why?  Well, think about this listing.  Do you wonder if anybody else was interested in this place while the sold sign was in the yard and the status was pending on the MLS?  I sure do.  Do you think the seller is wishing the agent had been collecting names and numbers of interested parties?  You bet he is.  I have 3 listings right now that have contracts on them.  I could stick a “SOLD” sign in their yards, but I don’t even own any.  I know that until you get past inspections and appraisals, and until the buyer’s loan gets through underwriting, that the place isn’t really sold yet.  When I get a sign call, or an agent calls me, I tell them the house has a contract on it and that we will accept back-up offers.  They never go for that, but then I have names and numbers of people to call if a deal falls apart.  I have resold three listings over the past five years this way.  Two fell apart after the inspection and the most recent one happened when the buyer’s financing fell apart.  I got back in contracts with all three of them the same day.  Think my sellers would have had that happen if I had proudly stuck a “SOLD” sign in their yard?

Tree houses & The Tax Credit

by John Rice

I just didn’t know what to do.  I’m the guy that always gets everything just right before I put a new listing on LBAR.  That’s just how I am.  Buuuuut, I had a new listing that the photographer wasn’t going to be able to get to for two days.  Normally, I’d wait, but that $8000 tax credit had everybody out buying.  Even though I know nothing about basketball, I know that when the shot clock is about to run out, its time to throw the ball.

Soooo, I went a head and put the listing on without the pictures.  It was totally killing me that it was going to have one of those “No Photo Available” tags on it.  Then I got an idea.  I thought since the only real reason I was putting it on early was to get it noticed, I might as well do something that would really get it noticed.  So I cut and pasted a picture of a giant tree house to the listing.   Of course I had to then explain in the marketing remarks that wasn’t the house, but pictures were coming soon and it was worth getting on your radar now since the house was so nice.  It worked.  I had the most agent and public hits that I have ever had on a new listing in a 24 hour period.

Once we got the pictures, I deleted the listing and copied it to a new MLS number.  This way it not only came up as a new listing again, it also re-dumped it into the portals that agents set up for clients.  So, I got a little early exposure and still got to do something that didn’t violate my standards.

So far, we have had 3 showings in less than 24 hours on this house.  The seller did a whole lot of work to make it look great to a buyer.  I owed it to them to think outside of the box and try to catch a buyer before the tax credit expires next week.

Getting some attention

by John Rice

 

I hate it when my listings don’t sell fast.  Probably because I know what all I’ll have to do to try to keep them fresh online.  Most agents will dump a listing online and let it rot there until it sells.  Sometimes they’ll delete the listing and copy it to a new MLS number.  That refreshes the days on market so it doesn’t look so stale.  The problem with doing only that is that you haven’t changed the way the house is presented online.

You’ve got to present the house well online these days to get showings.  They just don’t happen without that.  The days when people would come look at a house that looked bad online disappeared when it became a buyer’s market.

I guess to me, if I’m not getting much activity, I want to rearrange things.  I mean, that is why people pay me, right?  I’m the one that is suppose to get traffic through the house!  If it ain’t happening, I gotta do something different from what I’ve been doing.  I’ll often go into the listing detail and mix up the order of the pictures or change the marketing remarks.  See, what happens is, on any given day, there are realtors all over town online searching through listings on LBAR.COM.  When they keep seeing the same house over and over and over again, eventually they won’t even entertain the idea of showing it.  That is one reason I mix up the pictures or change the marketing remarks.  I don’t want my client’s house to come up in some agent’s search and have them gloss over it like it is that jar of pickles in the back of the fridge that’s been there forever.

I’ve noticed some of the things I do to make a listing stand out online are beginning to catch on.  Which has sent me back to the drawing board.

Recently I had a client tell me they wanted to offer closing costs as a way to get some attention for their house.  The only problem with offering closing costs is that the asking price doesn’t change.  Yeah, you can be so 2007 and scroll one of those banners across the bottom of the listings, but not only did I never learn to do that, I just don’t like it.

As I was thinking about how to tackle this, I realized that everybody’s eye goes straight to the pictures.  Sometimes I wonder if you really need the words.  I guess you do, but a picture is worth a thousand of them they say.  So, I got in my head to write what I wanted the public to know about the house right on the picture.    I did it for another listing that hadn’t been shown in a week.  Guess what?  We got 3 showings in 2 days on that one and an offer tonight on the other.

I guess what really matters is zigging when everybody else is zagging.