I’m trying out a “Workshop Post” style, where we DO what I do, together in realtime.
I have My MLS up as I write this article and we “work” through the scenario together, online. The client will be hypothetical, but fairly consistent with an average actual scenario.
Young couple want a home for $500,000 in 98033 that is at least 2,500 sf, no more than 5 years old, with a lake view, if possible. These parameters feel “off” to me, so before we talk about looking at homes, I go with the client, to the computer and test the parameters. “Let’s put these in the mls and see if any have sold in the last 6 months using these parameters.”
Entering 98033, max price of $500,000, minimum year built 2002, with a Lake View. Zero Found. Before we take out the Lake View, let’s try shifting to 98034. Nope, still Zero Found. Before we take out the Lake View criteria, let’s try built since 1990 and 2,000 sf or better. Still nothing. OK, let’s take out the age of house restriction and see if that buys a Lake View. Nope, still none. Husband says, “Can I get a Lake View if I up the price to $600,000?” We find a couple in both 98033 and 98034.
Wife starts getting teary eyed, doesn’t like the style of those houses and is not willing to trade down to houses like that just to get a view. Husband and wife talk and agree that getting a veiw isn’t worth trading down in age and size and style.
Start over. Back to original parameters of not more than $500,000 in 98033, 2,500 sf, built since 2002, but with no Lake View. Nope, still none. We shift to 98034 and we find one, but wife doesn’t like the style of home.
Buyers are getting discouraged. I take over at this point and help them out.
I say are you looking for something like this? It has 4 bedrooms, 2.5 baths. It was built in 1995, has 2,350 sf on a 10,000 plus sf lot and sold for $540,000.
Now we have two big smiles. YES!! They say, but we really wanted Kirkland. I ask why. They say because they wanted Lake Washington School District. I say this IS Lake Washington School District, but it’s in Zip Code 98011 in the Finn Hill section of Bothell, possibly in the section Kirkland is talking about annexing. Have to check on that. They say they don’t care, as long as it is Lake Washington School District. I say, but if it is in the “likely to be annexed” portion, the value may improve if the address becomes “City of Kirkland”, which would make it an even better investment.
Now I give them “the bad news” that it likely has LP siding. They ask how I know that? We talk a bit about why it likely has this type of siding, and what that means, and not to limit to just this type and location I move on to other likely good scenarios and show them these houses:
all of which are in Kirkland, and come up with 10 to 12 other good options just outside of their original parameters. In Kirkland, but a little older, newer, but little smaller, older but remodeled, etc…
Now we are all happy and on the same page before we begin to look for property.
Agents often ask my why I don’t just tell them all of this in the first place, as I obviously don’t need to “go through the motions” to know what I already knew at the end. I do it because it doesn’t take very long and I can’t really tell someone to knock out the view consideration or switch their other parameters. I need to go through the motions because some will change to condo with a view or townhome, and some will stick with single family.
By using what HAS SOLD in the last six months, instead of what is for sale today, we can see the likelihood of whether or not the option WILL exist into the future. Very Important.
Not everyone moves in the same direction, once the original parameters need to take a shift this way or that a bit. So playing through the process is the only way I know how to have the client move the parameters, and not the agent alone. Once they determined Lake View was the one parameter that was going to be moved, and once they knew the reason they imposed those parameters, such as School District, I was able to speed through to a “better place” and ease their pain.
This experimental post is what I think people mean when they say they want “more transparency” about how real estate really functions. If you like it, I’ll do some more using other areas such as Green Lake, Redmond, etc… I can’t do places outside of my service area, so don’t ask me to do Columbus, Ohio :), but I can take specific requests for a post like this one.
Hi Ardell,
Great post, and thanks for sharing with us some of your insights into how you seasoned vetrans approach a prospective purchase transaction. 🙂
Thanks for the feedback, Joe.
I”ve never tried a post like that before. I’ve always wanted to see agent training actually train agents regarding how to REALLY provide the skills that consumers most need.
Any insight on why mandatory education is so…NOT worthwhile for the most part, as to what is taught prior to someone obtaining a real estate license.
I’d like to meet you by the way. I’ve been in a “meeting people” mode since I got back from Vegas. I’m having “Soprano’s Night” on Sunday. Shoot me an email.
Ardell- Thanks so much for this post! It is very helpful and definitely transparent. Keep ’em comin’! Especially Greenlake/Wallingford areas.
Thanks for the encouragement, Jaime. Just got word that the loan docs I was waiting on so my client could sign today, won’t be in until Monday. So I have some time, unexpectedly. I’ll put one together by end of evening on Green Lake, et al.
Hi Ardell,
I feel it’s always good to hear what works/doesn’t work from people like yourself that are actually working in the field, since you’re in the best position to know. Most people won’t share these “tricks of the trade”, for fear they’ll lose biz. However, my experience has been the opposite. By & large, people are grateful for solid, meaningful info, and sharing this type of info vastly improves others’ confidence & trust in you. Again, glad you shared this with us…maybe you should put a series of these posts together…who knows where it may take you??? 🙂
Wanna’ meet me, huh? Wow, that’s very flattering & thanks for the invite…but, can I take a raincheck on it for this weekend??? I’m making a ham dinner for my out-of-town family this weekend on Sunday night, so I’ll miss “Tony & the Boys”. I’ll shoot you an e-mail, or you can shoot me one too, if you want. 🙂
I’d be happy to shoot you one Joe. But I don’t see your email address. Mine is up there by my big smiling mug.
I just ran across the blog tonight and it’s a great resource. You provide a lot of product knowledge and sales tips that are quite helpful. I’m actually very impressed with the quality of your blog here, and I enjoy the variety of topics and different posters. Keep up the good work. Regards.
Ardell, Interesting process. We all have to help the consumer discover reality. I’ve never tried looking for the “sold” comps first. On theory that might be the best process in a rising market. In a falling market it might mean expectations have to be higher than necessary.
I like that but it may not work so well with the lower priced market.
Kristal and Seth,
I have many different methods. This one works for the scenario noted. Not all “processes” can be as quick as that one. Some take very, very long.
It depends on the client, the area they want to live in, and many other factors.
That one works for Kirkland, Washington. When I do the Seattle example, you will see it is much, much different. Every area and price range offers completely different challenges for the consumer. And each consumer needs a personalized strategy.
Had the above buyer been a young single person, the end result would likely have been much different. I will do the above one with a single guy age 30ish. There would have been a complete left turn, given the same starting point, and a completely different end result.
Kristal,
I have used SOLD comps for many years, and it always works. Given we are in April, six months hindsight is sufficient. In a more volatile market, or at the end of season, I have to tighten the timeframe and make some other adjustments.
The above example is geared around the here and now. If I wrote that same post in November, my advices would have run a completely different course.
If what someone wants is totally out in left field, I switch from SOLD property to Tax Records, to show them what they are asking for has never been built. Had to do that one with my own husband once. Once I determined exactly what he wanted and where, and then determined it was never built where he wanted it…we built it there.
Instead of talking him out of what he wanted, I was able via the tax records, to quickly determine that to get it we had to build it. Cost about the same as if it had existed in the first place, and he was very happy. I guess a husband is not the same as a client, but I treated him like my client, and he was quite pleased with the result 🙂
Seth,
That IS the lower priced market, for single family home in Kirkland. What did you mean by “lower priced market”? We don’ t have any single family homes in the Seattle Area for $200,000 give or take.
Ardell – really interesting twist – I have never started a search with solds either, but of course they are in the back of my mind since there have been so few in my immediate market. I like the strategy, especially for more difficult customers that may not really know what is more important to them – either the view, the school district, the area? It helps THEM narrow down rather than you doint it for them.
Ardell, thanks for this post. I hope you continue this as a series. As an MLS software vendor, I found it very useful.
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