Showing Feedback. Or Not.

Deafening Silence

"If you don't have anything nice to say, don't say anything at all."

It drives (some) Sellers nuts, but the cold reality is that not all Buyer's agents respond to requests for showing feedback.

Many requests.

My standard practice as a listing agent (representing a Seller) is to make 2-3 attempts to find out how a showing went, especially the first 7-10 days a home is on the market.

However, there's really no point in persisting beyond that.

Realtors rank pretty high on the 24/7 "accessibility scale" (see, "Getting a Realtor's Attention"); if they have a Buyer with continuing interest . . . you'll know about it.

"Always be . . . Selling"

Lockbox Combo as Marketing Tool

After doing a couple thousand showings (and opening that many lockboxes), it's rare that I run into something unusual -- at least that doesn't involve a foreclosure.

But up until today, I can't say that I've ever opened a lockbox where the three letter combination was part of the listing agent's marketing: "Wow!" (no punctuation or exclamation marks).

Fortunately, it was -- "wow," that is (otherwise, it would have begged the unfortunate alternative, "Bow-wow." Sorry).

Realtor Haiku

This could be a trend with legs.

Other suitable lockbox adjectives, depending on the property: "Big," "Hot," and "Hip."

P.S.: Probably the worst last name I can think of for a Realtor these days is "Short" -- because every home they list would, by definition, be a "possible Short sale" (sorry, again).

"The Lights On - Lights Off" Indicator

Gauging Buyer, Seller Seriousness

The eyes are the window to the soul.

--New Testament

Want to know if a home seller is serious about selling?

They turn on all the lights before a showing.

Want to know if the showing went well?

The Buyer's agent turns them all off afterwards (yes, they should anyways -- but they don't always, especially if they're in a hurry and know they're not coming back).

"Nurse! I Need a Price Reduction, Stat!!"

How Big a Price Reduction?

If an otherwise well-staged, well-marketed home isn't selling after a reasonable interval on the market, a price reduction is invariably indicated.

How big?

It all depends on how overpriced the home appears to be.

Toss Out the CMA

Once a home is actually on the market, interest from prospective Buyers -- or lack thereof, if there are few or no showings -- trumps pre-market research.

So, even if the listing agent's Comparative Market Analysis ("CMA") suggests that a given home is a good value, if there are dozens of showings and no offers (or even second showings!) . . . cold, hard empirical reality would strongly suggest otherwise.

How much to cut is very much a subjective call, and based on experience. Practically, it also depends on the Seller, who may not be willing to reduce the price at all.

However, in my experience, just like every deal negotiation has its own rhythm and feel, so does every listing.

How Strong a "Pulse?"

At one end of the continuum are listings that just feel primed to sell.

Interest is strong and immediate, first showings quickly progress to second showings, and second showings progress to . . . offers.

At the other extreme are homes that, for lack of a better term, lack any perceptible pulse (that's never happened to me personally, mind you, but so I hear from other Realtors).

Showings are few and far between, and follow-up interest is zip.

In between are listings that are attracting good attention, but just can't seem to elicit an offer.

Cold Splash of Water -- or Defibrillator Paddles?

For a truly lifeless listing, a dramatic price concession ("paddles") is usually in order.

Depending on the aforementioned factors, that can be anywhere from 5% to 15% or more.

For a listing that just seems to need a reviving nudge, a less extreme price reduction is obviously appropriate -- call it a "cold splash of water" (it certainly feels that way to the Seller!)

That can be as little as 2%, or, if the Seller wants to "bite the bullet" and significantly raise their chances of selling quickly, as much as 5%.

Realtor Sales Secrets

Best Way to Jump Start Sales? Keep Reading

Want Realtors' most closely guarded sales secret?

No, it's not baking chocolate chip cookies in the oven (to save time, buy store-made, then heat at 350 for 10 minutes).

Nor is it to hire a mascot in a 6' bear suit to hold up "Open House" signs at a nearby, busy intersection (tried it -- unfortunately, bad weather depressed traffic).

Rather, as every experienced Realtor knows, the single best way to jump start sales is . . . to go on vacation!

Especially effective: doing a showing just before you need to head to the airport to catch your plane.

If there's any truth to the foregoing-- and there's actually some anecdotal evidence supporting it -- it likely has to do with reverse psychology (and perhaps overaggressive sales tactics).

In other words, people are most apt to buy when they're not feeling pressured to do so.

4%!!

Realtor Pay-Out's Rise with Inventory

No, mortgage rates didn't hit 4% over the weekend.

Rather, that was the pay-out being offered on not one but two of the homes I showed over the weekend.

In fact, out of 8 homes I showed, fully half offered above the standard 2.7%.

Commission Primer

For those who don't know, "pay-out" refers to the commission offered to the Buyer's Realtor. By contrast, the listing commission is what the agent representing the seller gets.

In both cases, the Realtor further splits their half of the commission with their broker.

In fact, the convention -- at least in the Twin Cities -- is to split the commission 55-45 between the Listing Agent and Buyer's agent.

On a "full service" 6% commission, that works out to 2.7% for the "buy" side.

Fatter Carrots

So offering 4% instead of 2.7% is certainly attention-getting.

Why do that?

Most frequently, it is Sellers whose homes have lots of competition.

If your home is one of dozens that prospective Buyers are considering seeing, offering a fatter carrot to the Buyer's agent is one way to ensure that the Realtor shows your home instead of a competing home.

Does it work?

It can't hurt.

However, a scrupulous Realtor takes care to show the homes that offer the most to their clients -- not the ones they stand to make the most selling.

Just so my clients know that I'm "putting my money where my mouth is," my policy is to always provide them with what's called the MLS "Property/Agent Full" report.

Unlike the more abridged reports, the "Property/Agent Full" version shows everything that the agents see -- including the payout commission being offered to Buyers' Agents.

Selling Your Own Listings

Buyer's Market Phenomenon:
More "Dual Agency" Deals?

I don't have any hard data, but at least anecdotally, it seems like the number of homes being sold by the listing agent -- that is, they represent the Buyer as well as the Seller -- is on the rise.

(One of the quirks of real estate is that the agent representing the Buyer is called the "selling agent"; when one agent represents both parties, it's called "single agent dual agency").

It further seems like that phenomenon is happening more in the upper brackets.

Assuming I'm right about that, what's the explanation?

"Forlorn Listings"

Here's my shot:

When a home first comes on the market -- especially if it's a a "hot property" that's in great condition, priced well, etc. -- Buyers' agents practically line up to get their clients in the door.

Six months or twelve months later . . . not so much.

Showings drop to a trickle, if that. (Showings are when Buyer's agents take their clients through a home privately.)

Often times, the only agent driving any traffic to the home is the listing agent, via open houses.

As a result, the odds of the listing agent also finding the Buyer (or vice versa) go up significantly.

Upper Bracket Phenomenon?

So, which homes are sitting on the market the longest?

Not the entry-level homes, roughly defined as under $200k; those have been selling briskly all year.

Rather, the homes with the longest projected market time now are the most expensive homes. According to MLS recently, there is now a three year supply of $1-million plus homes on the market in the Twin Cities.

With all that competition and scarce Buyers, a Realtor who wants to sell such a home had better be prepared to do it themselves.

What's a "Preview"?

Casing a Home in 10 Minutes Flat
(In a Good Way)

One of the many, behind-the-scenes things that good Realtors do for their clients is preview.

Whereas a showing is when a Realtor views a for-sale home with their client, a preview is when they look without the client along.

Schedule permitting, I preview as much as I can, for two reasons:

One. It saves me time.

Within 5 minutes of stepping foot in a home, I can tell whether the home is more or less than billed on MLS; whether the floor plan is coherent; and how updated the home is (memo to Realtors: the homes that exceed expectations sell).

I can also note any obvious deal breakers not disclosed on MLS -- like, the half-acre lot is actually a steep hill that stops at the home's back door.

If the home is still in the running, I then note how well it meets my clients' criteria.

Four bedrooms up? Check.

Bigger, updated Kitchen? Check.

Relatively modern, open floor plan? Check.

And so on.

In an age of instant, ubiquitous information, one of the big surprises is how much is not apparent online.

Best of Class

Two. It saves my clients time.

One of the most helpful things a Realtor can do for their busy clients is to synthesize and summarize what could otherwise be an overwhelming number of choices.

So, instead of showing clients 20 (or 50) homes in Minnetonka and Plymouth selling for $500k- $550k with around 3,500 FSF, I can show them the 4-6 standouts (and there always are).

The result of strategically previewing -- at least if the Realtor's good, and knows their clients -- is a faster, better housing decision.

Showing "Short Sales"

Phew! And That's Just to Take a Look . . .

With a "traditional sale" (no bank involved), here's how Realtors set up a showing:

You call the listing agent's front desk, request the showing, and wait for a confirmation with showing instructions, i.e., lockbox code, alarm location (if any), etc. (Realtors can now submit showing requests online, as well).

In a "short sale," the bank is owed more than the home is worth, so has to give its approval before a sale can be consummated.

Given the long time lag involved, it's not unusual to have multiple prospective Buyers submit offers that may or may not have already been accepted, subject to the bank's approval.

Most Realtors don't want to waste their or their clients' time showing such a home.

To find out the "short sale" home's status prior to requesting a showing, here's the recommended protocol (courtesy of the MN Assn. of Realtors):

When offers have been received and submitted to the seller for consideration, but the seller has not accepted any of the offers, that is not a mandated disclosure. However,when setting up a showing appointment, if the buyer agent or the facilitator working with a buyer is concerned whether there are outstanding offers on the property, the agent should inquire of such from the listing agent. Or, when presenting an offer to the listing agent, the buyer agent or facilitator should inquire if there are any outstanding offers on the property. When asked, REALTORS®, with the authorization from the seller, shall disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether such offers were obtained by the listing agent, another licensee in the listing firm, or by a cooperating agent. The listing agent cannot lie, and if the seller has instructed the agent not to disclose the existence of multiple offers, the agent should respond by saying the seller has not authorized him/her to disclose that information. It is important to remember that a multiple offer situation is not a mandatory disclosure; rather it is up to the buyer agent or the facilitator to make such an inquiry.

Got all that?

Phew! (or as the natives say, "Uff-dah!")

You can navigate all that . . . or you could show another home (I hear that there are plenty for sale these days).

Buyer's Market Conundrum

"I Can't Find Anything I Like"

"Water, water everywhere [but] nary a drop to drink."

--Samuel Taylor Coleridge, "The Rime of the Ancient Mariner"

One of the conundrums of a housing market supposedly flooded with inventory is Buyers who lament that they can't find anything they like.

What's going on? Is it just their imagination?

Actually, I think it's a combination of a couple things.

While Twin Cities inventory is actually coming down now, it's still at a high level.

However, it's not at a high level everywhere.

If you're looking for a foreclosure in Minneapolis' Phillips or Camden neighborhoods, you can literally pick from hundreds of houses.

However, I can think of several neighborhoods where there appears to be a shortage of homes for sale right now. To pick just one example, the inventory in Linden Hills seems surprisingly thin at the moment, especially between $500k and $800k.

Clearly, some would-be home sellers are waiting for a stronger market. So Buyers who can't find what they're looking for aren't necessarily hallucinating.

But another factor is that the homes that are on the market can be underwhelming.

One aspect of that is real, the other more psychological.

In a softening market, it's not unusual for Sellers to overprice. When that happens -- surprise! -- their homes don't sell. As time passes, the owner becomes a little less vigilant about prepping the home for showings. Instead of all the lights on, it's dark; the once spotless Kitchen now has dirty dishes in the sink; the beds aren't necessarily made. And Buyers notice.

But it's also true that Buyer scrutiny increases as a direct function of time on the market.

The reason why the first week or so on the market is so critical is because that's when interest is highest. On a first date, little imperfections like a nasal laugh or big ears (Seinfeld fans could add significantly to this list) are endearing.

Six months later, every flaw, however minor, is put under a microscope.

So, too, with homes.

Finally, in a recession, people have less money to spend (not exactly a shock).

So owners who a few years ago might have spent a few thousand dollars on dressing up their home with new paint and carpet may not be able to do that now. Or, not see the merit in doing that. Ditto for perceived "extra's" like staging.

As a result, to my subjective eye, fewer of the homes debuting on the market now seem to have the same sharpness and appeal that they did when it was a Seller's market.