Tag Archives: seller

Realtor APB: How to lose clients

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In the Aug. 13th blog missive at Bloodhound Blog, Greg Swann discusses his recent experience with a client who he successfully helped with finding a new home. The twist was that the buyers he was working with had been working with another agent. As you can imagine, the other agent was frustrated and angry that they lost out on a sale. Find out how the other agent reacted by reading the story.

A few months ago I came across an excellent article in USA Today called “The waiter rule.” I shared it with all the professionals we work with. Several CEO’s of Fortune 500 companies were profiled in the article. The CEO’s would take a potential new hire (for an executive or management position) to lunch or dinner. The CEO’s would see how the recruit treated wait staff. The results were interesting and revealing. How you treat others (co-workers, support staff, allied professionals) in business relationships, however difficult or stressful, speaks volumes about your character and leadership in business.

One recent example played out in front of my wife who was signing a client. The client had questions regarding the transaction and called their loan officer. Everyone knows that if a cell phone is turned up loud enough you can hear the conversation loud and clear.

Unfortunately, for the loan officer, my wife heard every word: “…escrow does not know what the #%! they are talking about.” Not only did the comment embarrass the client, but it made us evaluate the working relationships we have with everyone we work with. Ouch.

Situational Values: How do you stack up?

Bill Swanson, CEO of Raytheon Corp. has this to say:

“Watch out for people who have situational value system, who can turn the charm on and off depending upon the status of the person they are interacting with. Be especially wary of those who are rude to people perceived to be in subordinate roles.”

Why isn’t my house SOLD yet?

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You have to be in the top three of your “price tier”. Being at the high end of your “price tier” is better than being at the bottom of your “price tier”.

Photos must all be good photos and must be ordered in “hook order”.

Stop looking at what is for sale and stop looking at the comps once your property is listed for sale. If you have a lot of showings and no offers, then it is something AT the property that is causing it not to sell and you are a “bounce point”. If you don’t have enough showings it is something in the mls that is causing it not to sell, unless you HAD a lot of showings at first and dwindled down to not enough.

That’s pretty much it, pretty simple to me, but let me explain some of the lingo up there.

A “price tier” is the increment of value pre-supposed by the public websites. Go to Redfin or Windermere or John L. Scott or CBBain sites, and look at property in your area similar to yours. The site forces you to put a range of value that the site itself predetermines. The lower the price, the more important this is. Let’s look at the $250,000 to $300,000 crowd. If you are $259,000 or $276,000 or $309,000, you are “off”. The site forces people to look at $250,000 to $275,000 and $275,000 to $300,000.

If you are priced at $259,000 you are missing the people stretching up. Let’s face it, almost every single buyer in this price range “stretches up!” as in “I want to spend $250,000, but will go as high as $275,000, but NOT a PENNY MORE! By pricing your property at $254,000, you miss the boat on the $225,000 to $250,000 crowd and don’t compare well enough for the $250,000 to $275,000 crowd. $254,000 is just past the point where someone stretching up will see you at all and your property is not comparing well to those in the group at higher prices. $309,000 is just a KILLER price…the first number being the ALL IMPORTANT one. The difference between $240,000 and $249,000 is nothing, but the difference between $299,000 and $301,000 is a KILLER!! (An aside to agents here. If you are at a listing appointment and the seller insists on pricing at $301,000 instead of $299,999 or $300,000 straight up, LEAVE, RUN! It means “I don’t really want to sell this place, I’m just appeasing my ___ and pretending to be selling it.”

I could write a chapter of a book on “price tiers” alone, so let’s move on to photo “hook order”. Photo #1 is all important as many sites (like Realtor.com last I looked) require the user to click another button to get past photo #1. If photo #1 doesn’t grab them, you are dead in the water, and they are scrolling down past you.

Unfortunately mls rules hinder the seller when it comes to photo #1. There are a few rules written with agents in mind that I do not agree with, and this is one of them. Why should the mls REQUIRE that this all important key photo be…??? Seller should have more freedom in that regard. According to mls rules, photo number one must be an “exterior” shot, preferably the front door area, so agents can more easily find the property. Lame rule in my opinion if the curb appeal is NOT the seller’s claim to fame. All mls services should change that rule yesterday, giving the seller the opportunity to put his best foot forward, regardless of what constitutes each seller’s best foot. In condo complexes it is a KILLER rule. Who the heck needs to see another shot of the outside of a big condo building. Ever wonder why you see 25 shots of the same photo on a new construction project? Looks pretty dumb from the user’s perspective…but….it’s a rule. If the interior is a slab granite knockout and the exterior is 1977…this rule KILLS a seller and the mls is wrong, wrong, and wrong again for making the seller put the 1977 exterior as photo #1 vs. the knockout new kitchen. Let’s all fight for that change…or Robbie, can you reconfigure the photo order on an mls feed???

Hook Order – think attention span. Once you get past photo #1 issues, the second photo must be your absolute best of the rest. Forget about the “virtual tour” concept where you have the buyer “walking in from the front door”. If your claim to fame is your fireplace and kitchen, get those into the #2 and #3 spots. Make a list of your selling points in order or priority. If #1 is new kitchen, #2 is fireplace, #3 is double sinks in master bath…show the photos in the order of the priority of your selling features. If your #1 claim to fame is a jacuzzi in a cheap condo, don’t be afraid to put that jacuzzi as photo #2. Every picture in sequence, is a hook, as buyers often say “no I don’t want to see that one” after seeing photo #1 and #2. Having your best selling features at photo #11 and photo #12??…think about it…common sense rules.

A small note about the number of total photos. Max allowed is 15. Always use max if possible. That DOES NOT mean I want to see the open toilet and the toilet paper. It means take your best features from varied angles. Don’t be afraid to be redundant with regard to your very best selling points, but mix them up. Put it at photo #2 and #3 and bring it back to emphasize the strong selling features at photo #11 and #12, but from a different perspective as in #2 is kitchen from kitchen and #11 is kitchen from dining area.

This is getting way too long and I have things to do, so let’s just brush over the last point. If I could crack open every agent’s brain and slide in a little microchip, it would say STOP LOOKING AT THE COMPS AFTER THE PROPERTY IS LISTED FOR SALE! You look at the comps to determine your opening price out the gate, that’s all, DONE, finito!! No showings…wrong price. Plenty of showings but everything is selling but yours…condition problems. DO NOT even MENTION the sold comps once you are out the gate…irrelevant data.

And if I had nickel for everytime I heard an agent say, “I don’t know what’s wrong? We’re the ‘best game in town’ given what is for sale.” Face it…they are going to the next town, because you are an overpriced dog, regardless of the fact you have no competition in YOUR complex. What else can they buy for THEIR MONEY is the order of the day! Of utmost importance with one level condos. Buyers come in waves. “Surfing the net” is not just a catch phrase.

In the low price range the buyers are currently renting and have nothing to sell. If they don’t like what they are seeing in their price range, because the cream has been skimmed off the top, they wait for the next wave of new inventory. Your wave has crashed and your board is floating out to sea.

Buyers pay attention to these rules, and go grab all of the stale ones who aren’t following the rules, by offering them eighty cents on the dollar. Go for the $309,000s, on market for over 60 days, with only two photos, photo #1 being the sign with the name of the condo complex on it 🙂 and search for the “pick of the litter”.

ASBESTOS – Buyer Beware!!

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[photopress:inspectors.jpg,thumb,alignright]I am just beside myself on the topic of home inspectors and asbestos. I don’t care how many inspectors want to tell me why inspectors aren’t “obligated” to call asbestos in the inspection, I will still keep saying: “You have GOT to be KIDDING me!!

I’ve seen more asbestos in homes in the Seattle area than in my entire career to date around the Country.

“Well Ardell, I know we both “think” that’s asbestos were looking at there, but we really can’t say it’s asbestos unless we send it out to a lab and have it tested. So we just have this disclaimer in our contract saying we are not responsible for calling asbestos in the inspection…and that is sufficient for US” US being the home inspectors!!

Yesterday I literally took a razor tool from the inspector and cut open some paneling held together by duct tape in a basement and forced an inspector to look behind it before he wrote “inaccessible area” on the report! I said if you don’t lend me something to do this with, I’m going to use my bare hands!

How come I can get 10 average Joe’s to stand around the asbestos wrapped pipes, who will all say “Yep, dats asbestis alright”, but I can’t get one inspector to note asbestos in a home inspection report?

Oh, and here’s the agent’s lovely comment (I represent the seller and she represents the buyer) “Not my problem. The buyer chose their inspector and if the inspector doesn’t tell him what he needs to know…that’s not my problem, is it?”

In PA inspectors included “testing for radon” by setting canisters in the house and sending them to the lab. They couldn’t see radon or taste it or smell it, but they didn’t put a disclaimer in their contract saying “Duh, Don’t Know”.

Here’s a clue, Risk Reduction equals every buyer KNOWING WHAT the heck they are buying!!, not 25 disclaimer and disclosure forms covering everyone’s butts in the industry! And they have the nerve to tell me that they don’t want me at the inspection because I make them look bad…Oh WELL!!

And if you stick that pointy metal thing and chunk away at the mortar between the bricks of my seller’s house one more time in some silly act of macho bravado, I’m going to take it out of your and and stick it where you don’t want it stuck.

Some days I want to be a waitress…

To Stephane, this entire post should be in bold AND all caps! I am heeding your advice. But if you tell me to stop using !!exclamation points!!, we’ll have to agree to disagree 🙂

Trying to Force the Seller’s Hand

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[photopress:hand.jpg,thumb,alignright] If you are playing the game of “trying to force the seller’s hand”, you have to know how to play it right. It is not easy to force a seller to…anything. Regardless of who is right and who is wrong, if you can say there is a right and wrong to the situation, reality is what it is. If you want the house, and you are not the only one who wants the house, you have to stay “in PLAY”.

Two buyers have been “circling the wagon” for weeks. Offers have been presented to the seller, counters have gone back to the buyers. Back and forth, back and forth. Buyer Agent saying, “Did the seller look at the comps I gave you showing why the seller should?” “Well of course the seller has to fix this and fix that, remove this and add that”. Meanwhile the seller is just going about their business, day in and day out, waiting for the buyers to agree to their price and conditions.

Then along comes buyer number three. Buyer number one and buyer number two, who have had offers back and forth, know what the seller wants. So it seems only fair to tell buyer number three what the seller wants. Meanwhile buyer number two wants to submit an offer again, third time, for something less than they know the seller wants. I say, well you have two choices. You can bring an offer meeting the seller’s counter to you of a couple of weeks ago and beat buyer number three to the punch, OR you can hang back and wait to see what buyer number three does.

Buyer number two’s agent doesn’t want to bring an offer matching what the seller wants NOR wait until buyer number three makes their move on Saturday, so she brings an offer that she knows is LESS than what the seller wants and Tries To Force the Seller’s Hand”, by giving a very short response time. Bad move. You bring the seller an unacceptable offer and put a response time that is hours before buyer number three is scheduled to see the house. What happens. By trying to force the seller’s hand and make him respond before buyer number three sees the house, you are left out in the cold. Your offer is expired before the seller is going to respond. Buyer number three’s offer is accepted and your offer is a non-offer, because it expired before the seller was willing to look at it.

If you tell the seller they only have x amount of time to respond, and that timeframe does not match the seller’s schedule for some reason, your offer becomes invalid. Agent says “You COULD HAVE countered and just changed the date…” But why? Why would the seller risk countering an expired offer, when they have an acceptable and valid offer on the table? (agent’s answer is because she has worked long and hard and deserves…anytime the agent’s answer includes the agent in the picture…wrong answer – wrong thinking.)

If you are trying to force the seller’s hand by giving him a short wick, and putting a response time that is less than acceptable, you have to revise your offer and extend that date the second your response time passes. You have to keep your offer “in play”. By trying to force the seller’s hand…you can put yourself out of the game altogether, if you do not keep your dates running forward by submitting a new response time.

Buyers often think that the seller MUST respond, MUST counter. Not the case. No answer IS an answer. If you have no answer by the time your offer time expires…you have your answer. The answer is NO…try again.

When I was a teenager, my parents often didn’t want me to go to parties. So when I asked to go to a party, I didn’t demand an answer on the spot. I made my case for why I thought they should say yes, and then I left the room to give them time to talk it over and think about it. The fast answer was often no…I went to lots of parties 🙂

When you give the seller what he wants, you can try to demand a quick response. When you want the house for less than acceptable terms, you have to be willing to hang back, and you have to be willing to lose it, if the seller doesn’t meet your terms. You can’t bang your fist on the table and demand that you get the house for less. Presenting an unacceptable offer, and demanding a quick response, is like a kid throwing a tantrum…rarely works out for the best. And almost never works out for the best, when you know there are other interested buyers.

Time to get into 1st backup position.

Is it a Buyer’s Market or a Seller’s Market?

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We are, for the most part, in a “normal market”, meaning that in some segments, it is a Seller’s Market, while in another segment, in the same city and price range, it is a balanced to Buyer’s Market. I used this sample to show how, in a small geographic area and price range, you can have two types of markets going on simultaneously.

What does that mean to you as a buyer? If you find one in the charted area that shows 0 available and 24 sold in six months, you need to act quickly and be less picky about condition and location. If you find one in the area that has 15 available and 149 sold in the last six months (same City and same Price Range, different Zip Code) then you can take your time, be more picky and even wait for a better one.

What does that mean to you as a seller? If you are putting your property on market in the first graph area and price, you can likely push the price based on supply and demand and still sell quickly at full price. If you are a seller in the second market segment noted by the second graph, you will have more competition and should price competitively and put the property in the best showing condition possible.

I have not highlighted the true “Buyer’s Market” segment, which is one where only 3-5 of every 10 homes for sale, will sell at all, meaning the ratio is 10 sellers for every 3-5 buyers. That is occuring in higher price ranges (over $1,500,000) and harder to define market segments, and not necessarily as relevant to the average RCG reader.

Perhaps other agents who work further out, like Sultan, Monroe, Des Moines, etc… can do some stats in those areas for us. Anyone seeing the ratio of buyers to sellers such that there are not enough buyers in the marketplace to absorb current inventory in a reasonable timeframe?

The Mind of a Seller

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So we’re moving…

This seems like a very appropriate place to discuss some of the things that are going through our minds as we prepare to sell our current home and buy a new home in a new city… Interestingly, my knowledge of “good” improvements to make is very limited and probably much closer to the typical home owner than an experienced real estate agent. With that in mind, I’m going to throw a bunch of ideas against the wall and see what sticks.

So where to start?

[photopress:tree_house.jpg,thumb,alignright]We have a wonderful Tudor in North Seattle that we’re going to be selling. The home is not perfect, but it has some features that make is pretty darn desirable (Good size, big backyard, a good school district, great access to Downtown, great neighbors, etc). However, it is an old home, so I’m thinking that we could add some value and make the house more “marketable” if we made a few improvements.

Here are some of the potential improvements that come to mind.

Electrical:

  • Elimination of old wiring. There are some remnants of the original knob-and-tube wiring in the house. As far as our inspector could tell when we moved into the house (two-and-a-half years ago), the old wiring only supplied power to one light in the attic. I have no idea what it would cost to simply eliminate this wiring, but I have a feeling it wouldn’t be much if combined with some additional electrical work. My guesstimate for the cost: $1000.
  • Ground the computer room. At some point, someone went through and grounded the outlets in the kitchen. I think it would be good to do something similar in the computer room (which is very close to the kitchen and directly above the electrical panel which is located in the basement). My guesstimate for the cost: $1000.

New Appliances:

  • [photopress:dishwasher.JPG,thumb,alignright]Dish Washer. There is a small dishwasher in the kitchen which as never worked. It definitely get electricity and water, so I’m thinking we simply would need to find another (small) dishwasher that fits in this space. I see this as an improvement that makes the house more “acceptable” rather than one that really adds value. My guesstimate for the cost: $500 to buy and install.

Windows:

  • New Windows. We’ve got single pane windows throughout the house. They’re really old, more than half of them are painted shut, and cold air leaks in through cracks on many of them. Would we be best off fixing these before we sell? My guesstimate for the cost: $10,000.

Floors:

  • Refinish Wooden Floors. The wooden floors through the living room and hallways have potential to really shine should we refinish them. My guesstimate of the cost: $2000.

Basement:

  • Finish Basement. Our basement (which includes a separate bathroom, kitchen, bedroom, game room and utility room) has been 95% finished. However there is one wall that needs to be finished (i.e. add drywall) and I think a few other small projects (like adding a door to the closet in the bedroom) could make a big difference in making it feel “finished”. My guesstimate for this cost: $2000

Of course there are some other things on our mind as we get ready to sell:

  • Contractors? Would it be better to hire specialists for each of these jobs (i.e. contract with a window replacement firm, an electrician, etc) or just hire one contractor?
  • List in the MLS. Of course, Anna would list the house under her name, so we will really only be paying 3% of the typical 6% fee if we listed the home in the MLS. But do we really need to even go there? I’m telling Anna that we need to put the home on the auction site I installed on the back-end of Rain City Guide, but she’s not ready to be that “innovative”. 🙂
  • Time. We’d obviously like to get everything done relatively soon. My hope is that we can complete the improvements we decide to make relatively soon, but that is probably asking too much…

Also, if you are, or know of, a contractor interested in this high visibility project, definitely feel free to contact me.

I think my next post will be “The Mind of a Buyer” where I talk about some of the things that is going through our minds as we look to buy a home in a new city. Either way, look for frequent updates on our move.

Appraisal Question

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While the buyer is paying for the appraisal, they are paying for it as part of their loan costs. The appraiser is hired by the lender and works for the lender and his/her purpose is to inform the lender. I just saw an appraisal of a property I know would sell at about $950,000, come in at $750,000. The appraisal was for divorce purposes and it was a unique, difficult to value property. Appraising is an artform, not a science. There is no one absolute number pointing to what a home is “worth”.

The reason there is an appraisal is in case you do not make your payments and the bank has to foreclose. If you are buying a house for $500,000 and you are putting $200,000 down, frankly, the appraiser doesn’t have to agonize over the process. The bank is clearly going to be able to sell it for the $300,000 they lent you to buy it. Now if you are putting zero down, the appraiser is on the line in the event you foreclose and the bank can only sell it for $450,000.

You need to determine what the home is worth. It’s great when it appraises and everyone loves those few times when it appraises for more than the sale price (except the seller). But if it appraises “right on”, don’t take that as some great feat. Different appraisers will get different answers. Appraising for different purposes, like to value for an estate or divorce when the house is not being SOLD, will often produce different results than when the appraisal is for a home purchase.