Realtors & Politicians

Turf Wars (the Literal Kind)

What do Realtors and Politicians have in common?

No, it's not a willingness to tell you whatever you want to hear (Realtors who make the mistake of doing that soon regret it).

Rather, they both like to place signs with their names in 2' high letters on your lawn.

Why I Like Neighbors -- Reason #37

"Nosy Neighbor?" Try, Best Ally

At least to some Realtors, neighbors are time-wasters and tire kickers.

They come through open houses not to buy, but to see how their Kitchen compares with their neighbor's, to get interior decorating ideas, or to see what their own home is likely worth.

All (occasionally) true, but neighbors can also be the best salespeople for their block -- who better to field a question about local schools, kids on the block, nearby shopping, etc.: the next-door-neighbor . . . or the Realtor trying to collect a commission?

Neighbors at open houses know who they are -- but prospective Buyers typically don't.

All they know is that the house that they may be interested in buying is full of lots of other prospective Buyers, too.

Free Recruiting

It's also the case that neighbors recruit their friends to move nearby.

Holding an open yesterday in Golden Valley, the next-door-neighbor came over to tell me that she was hosting a party for her son's football team later that afternoon.

If I gave her a stack of marketing flyers, she was happy to set them out where her house full of guests would see them.

I did . . . and she did.

"Enhanced" vs. Real Photos

How to Tell

How do you tell if a photo on MLS has been doctored (er, "enhanced")?

Look for a room that appears to be only slightly smaller than the SuperDome.

Then, check the room dimensions.

If they're something like 12' x 10' -- you've got a culprit (the stately, 25' x 18' Bedroom pictured above is the real thing).

"The Jack-O-Lantern House"

Is it Halloween Yet?

I'm a big fan of dramatically lit homes.

And with the seasonal change, we're heading into ever-shorter Fall days.

And yet, the technique doesn't work all the time -- and can even backfire: especially for smaller homes, interior lighting at night can produce an (unhelpful) "Jack-o-Lantern effect."

The (kind of) scientific explanation?

The ratio of (orange) interior lights to (white) exterior is lopsided in a small house with lots of windows, making it seem like a back lit pumpkin.

A back lit pumpkin, of course, is the reverse combination, i.e., interior white and exterior orange (dyslexia helps with that one).

The Real Estate "Save"

Thanks, Nobu!

In contrast to the baseball save, which happens in front of a stadium full of fans (and millions more watching on TV), the "real estate save" happens quietly (in fact, the quieter, the better) -- and often late at night (like tonight).

That's when my desktop publisher (and fellow City Lakes Realtor) Nobu Hata put the finishing touches on a rush marketing piece, needed by this weekend by yours truly.

Thanks, Nobu!

(The Virtue of) "Down-Selling" in an "Up-Selling" World

"Would you like fries -- and a cherry pie, and a latte, and a DVD, and a ??? -- with that?"

I think it's fair to say that we live in an "up-selling" world.

There's never just one membership category anymore; there's "standard," "deluxe," and "premiere" (that applies to everything from credit cards to health club memberships).

If you've bought anything electronic in the last decade, you doubtless know the "extended warranty" pitch by heart (don't, they're a huge profit maker).

Even non-profits and charities have embraced this marketing principle; how many times have you been told that, "for just a few dollars more per month, you can vault from a "supporting" member (or some such) to a "sustaining" member?

Opting Out

Who wouldn't go for that?

Me, for one.

I try to resist impulse buying whenever I can, and know that a lot of these come-on's pad companies' bottom lines.

So when it comes to selling real estate, I don't do that to my clients, either.

I find that there are two benefits to that:

One. Clients like it when I save them money (who wouldn't?).

Two. When I actually do recommend that my client spend money on something -- like swapping out the orange shag carpeting for something more neutral and updated . . . they tend to listen to me.

What's that line: 'neutral carpeting, $700; client trust . . . priceless?'

The Downside of Touting Upside

The Doubled-Edged Sword Called "Potential"

Although you wouldn't necessarily believe it looking at all the MLS listings with the word "potential" in them, Realtors use the term carefully, if not reluctantly (or at least I do).

That's for two reasons:

One. Beauty is in the eye of the beholder -- at least to a point (pun intended).

Especially for a multi-family (condo) building with older demographics, a unit that some might label dated might be just perfect for someone nearing retirement, with more "vintage" tastes.

So why concede anything?

Two. Related to that is that you don't know the Buyer's budget.

If they can barely afford the home as is, trumpeting all the things that can and should be done to enhance its appeal . . . . just serves to underscore its current deficiencies.

I recall showing a home a few years ago that my Buyers liked just fine -- until the listing agent pointed out how great the home would look with $75k in new dormers.

Why I Don't Price Other Realtors' Listings

Real Estate's "Heisenberg Uncertainty Principle"

The observer influences the thing observed.

--Heisenberg uncertainty principle

It seems self-explanatory, but as a principle, I don't price other Realtors' listings.

The issue usually comes up when I do a listing presentation -- essentially, a job interview for Realtors.

In the course of interviewing Realtors, homeowners (and prospective Sellers) naturally want to know how you'll market their home; your qualifications; and what their home is worth.

While I always come to listing presentations armed with the latest, nearby market activity (and am happy to offer a ballpark range), I decline to name a specific price until the homeowner commits to using me as their Realtor.

Rationale

There are four reasons why I take that stance.

One. Time.

Carefully pricing a home (vs. haphazardly) takes a great deal of due diligence.

At least for me, the steps include: identifying and analyzing the Comp's (Comparable Sold Properties); learning the history and condition of the client's home (vs. taking the 10 minute tour after first arriving); previewing the Active listings that the client's home will be competing against; identifying any Pending homes similar to the client's home and estimating what their likely Sold price is; and pouring all the foregoing into a CMA, or Comparative Market Analysis, then crunching the related numbers.

All of the foregoing takes . . . time. Done properly and well, lots of time.

As a Realtor, the two things I ultimately have to sell are my time and expertise.

If I spent undue amounts of time working for non-clients, my actual clients will suffer.

That hardly seems fair to them.

And spending the requisite 6-8 hours carefully pricing a home that another Realtor is ultimately going to list isn't fair . . . to me!

So, I don't invest that time . . until I'm hired.

Two. My price for any given home isn't a fixed number.

Rather, it depends not a little bit on the homeowner themselves.

So, do they need/want to sell quickly, or can they be patient waiting for an offer?

Can the home benefit from staging, strategic updating, etc. , and if so, is the client willing and able to do it?

Does the client want to price aggressively -- and take the risk that goes along with that -- or do they want to price more conservatively?

And so on, and so on.

Three. My price may not be the same as another Realtor's (call this phenomenon "Real Estate's Heisenberg Uncertainly Principle").

Whereas homeowners tend to think of their home as having a fixed, objective value, Realtors (and anyone who knows marketing) understand that the actual price is a range -- a fluid range that is influenced by the skill of the professional(s) involved in the sale.

A home that is optimally staged and photographed, then aggressively and expertly marketed by an excellent Realtor at a top-flight Broker is likely to sell for one price; a home where a less-talented and motivated Realtor simply shows up, gets the requisite signatures, then puts a "For Sale" sign in the front lawn, is likely to fetch . . . another price altogether.

Four. "Buying the Listing."

The last reason I won't casually price a home is because I don't want to get caught up in what Realtors call "buying a listing."

Pretty much what it sounds like, the practice consists of appealing to a homeowner's vanity (or ignorance) by throwing out an unrealistically high price for their home, and thereby beating other Realtors' "bids."

With the listing secured, the Realtor then focuses on getting a price reduction -- or several of them -- when the home proves unsaleable at the quoted price.

Bidding wars are great for Sellers, but not so great for Buyers.

That's true for Realtors, too.

As a prospective listing agent in an already tough market, the last thing I want to do is get into a Realtor bidding war to list what is certain to be an overpriced home.

P.S.: For the record, when prospective home Sellers interview both me and another Realtor . . . they hire me the vast majority of the time.

Real Estate Myth #37: Sunday Open Houses

"Open House Available For a Terrific Listing That Always Gets Great Traffic"

One of the more durable myths out there is why Realtors do Sunday open houses: many clients (and prospective clients) seem to believe that the primary motivation isn't to sell the client's home, but for the hosting Realtor to troll for future business and ultimately sell other homes, down the road.

The reality is a bit different.

If Sunday open houses were such a great way to pick up clients, you'd see more listing agents doing them.

In fact, the majority of listing agents avoid doing them.

Instead, they try to line up replacements -- typically, newbie Realtors -- by dangling carrots like this: 'Open house available this Sunday for a terrific listing that always gets great traffic.'

Just once I'd like to see a listing agent level with would-be pinch hitters with a hook like this: 'open house available this Sunday for a not-so-appealing home in an out-of-the way location that's already been for sale for 8 months, is (still) priced above market, and may get 3-4 people through -- if you're lucky.'

Notoriously Low Yield

What the (experienced) listing agents know that the newbie's don't is the following:

--Most people coming through open houses aren't interested in buying a home at all.

They're just curious about what the home looks like inside; are interested in interior decorating ideas; want to see what prevailing home prices are so they know how much their home is worth. Etc., etc.

--The distinct minority of prospective Buyers who are serious are invariably already working with a Realtor. Which means they're strictly off-limits.

--The remainder of Sunday open house prospects -- people who maybe, kind-of are looking -- usually are characterized by one (or more) of the following: a) they can't afford the house (or any house); their timetable is next year (or century); they have no idea what they're looking for, at what price range, or where.

So, yes, a new Realtor who has time on their hands and plenty of patience is welcome to follow up with such prospects -- assuming they leave valid contact info -- in the hopes they'll eventually buy something.

Or not.

The Case for Open Houses

All of which begs the obvious question: if open houses have such a poor track record, why do them at all?

For two reasons:

One. As a convenience to serious, already-represented Buyers, who are typically off work on Sunday afternoon and can cover more ground going through open's (vs. having their agents set up private showings during the week).

Two. Because, while the odds may be low . . . you never know. (See, "The (Mythical?) Serendipitous Buyer").

In truth, the vast majority of things Realtors do to market homes -- at least individually -- have a low probability of success.

So, the odds of a private showing leading to a consummated transaction are less than 10%; the odds of exposure at a Broker Open (Tuesdays) leading to a sale perhaps only a little better.

Ditto for blast emails to neighborhood Realtors; direct mailings; high-end photography and literature; "plugging" listings at various Realtor meetings, etc.

But therein lies the rub.

Precisely because you don't know which marketing effort will ultimately sell your client's home . . . a good Realtor does all of them.

P.S.: the foregoing recalls the marketing director of a Fortune 500 company who laments that she knows she's she's wasting half her marketing budget -- she just doesn't know which half.

Making Use of "Agent Remarks"

Marketing Opportunities -- Taken & Missed

The MLS database has two places -- "Public Remarks" and "Agent Remarks" -- where listing agents (representing the Seller) can describe the property.

Good agents use the Agent Remarks field to supplement and punctuate the home's key selling points, as described in the Public Remarks. That's especially the case for larger, upper bracket homes, where there's more to say (or should be!).

Lacklustre agents leave the Agent Remarks field blank, or simply copy and paste the Public Remarks into it.

Guess which category the following falls into?

Agent Remarks: See agent or the City of Edina on pending assessments. Agents to verify all measurements.

Note: now that the road construction in Edina in winding down, the other shoe is dropping -- pending assessments that in some cases are tripping $20k. Ouch!

15' x 12,' Not 12' x 15'

Home Measurements &
Real Estate Conventions

Real estate marketing is all about "putting your best foot forward": accentuating (but not lying) about a home's strengths, while defusing any negatives (one of the best ways: tackle them head on, to get them out of the way).

That applies to a home's measurements, too.

So, Realtors will typically list a room as 15' x 12' -- not 12' x 15.'

It's the same room, either way, but leading with the bigger number has a subtle, psychological effect.

What's the exception to that?

Lot sizes.

Convention (or at least mine) is to list a lot's width first -- so it's 40' by 120', not 120' by 40'.

That's because you can see the width -- but not the depth -- from the street.

If the lot's especially deep, I emphasize that in the MLS "remarks" fields ("Agent" and "Public"), marketing supplement, etc.

Real Estate Photography

"OK" . . . "Better" . . . "Best"

Not all Realtors are created equal (or charge the same).

To give just one example of the difference between a mediocre Realtor and a stellar one, consider the following approaches to photography (I'm leaving off the rung below "OK" -- "Abysmal"):

"OK": takes their own shots with a decent digital camera, crops as needed.

"Better": hires a professional photographer to take the shots and edit them.

"Best": uses one of the best professional photographers in town; meets them at the property to point out high-priority shots; helps the photographer compose various shots by clearing Kitchen counters, re-positioning lamps, etc. as necessary; and even suggests especially flattering angles or perspectives.

Guess which category I'm in?

A Rose By Any Other Name??

Real Estate Names With -- and Without -- Cachet

Where would you rather pop for a $2 million home: a town named "Seabreeze" -- or one named "Lump?"

Or ponder this one:

Which list of city names, "A" or "B," is more suggestive of affluence and status?

List A: Sag Harbor; Huntington Beach; Boca Raton

List B: Sack; Pile; Mound

A Boy Named "Sue"

OK, so I'm exaggerating (a little).

But if you're a non-Minnesotan reading this blog, "Mound" happens to be a real Twin Cities suburb.

One that happens to have miles of shoreline on the west side of the Twin Cities' biggest and swankiest lake, Lake Minnetonka, and is home to dozens of upper bracket (as well as more modest) homes.

So here's a marketing freebie for the next Mound City Council meeting: how about "Tonka Shores?"

P.S.: my native New Yorker wife reminds me that not everyone's association with "Mound" is negative; hers is with "Mounds" candy bars.

"Out of Bounds" Showing Directions

Showing Directions as
Marketing Strategy

One of the most famous lines in sales is "always be closing" ("ABC").

Less well-known -- but equally important -- is "always be marketing."

I was reminded of that yesterday when I was showing homes to Buyers yesterday in the West suburbs.

"Out of Bounds" Showing Directions

Prior to meeting clients to tour "For Sale" homes, Realtors will typically print a map with all the homes they'll be visiting.

However, once the Realtor gets close to a particular home, it's common to consult the MLS listing info and follow the listing agent's directions.

Which I did.

About halfway through my (especially scenic) drive through Cedar Pass -- a newer, upper bracket neighborhood in Minnetonka -- I realized what the listing agent was up to.

On the west side of the "For Sale" home -- the more convenient and closer approach -- is a neighborhood of older, more modest homes.

On the east side is Cedar Pass.

Best foot forward, indeed.

P.S.: And no, I don't think such a tactic is out-of-bounds (pun intended); it's actually very good marketing!

Realtor Visual Aids

Real Estate Marketing 101

Realtors use "sign tents" in a variety of situations (it's a called a "tent" because it's in the shape of a triangle, and looks tent-like).

The standard sign, of course, is "Please Remove Shoes."

But custom signs are a great way to call attention to hidden home features.

So, I've had them made up to alert prospective Buyers to a Kitchen warming drawer that would have otherwise gone unnoticed; draw attention to an especially large entry closet that was covered with paneling (and therefore camoflauged); and helpfully label a "Butler Bell" that people at my open houses had been puzzling over.

But another great use for a sign tent is the one I saw today at 4904 Sunnyslope*, in a lower level utility room that would have otherwise fallen through the cracks.

The sign tent read:

Enjoy this Room as:

--Storage
--Arts & Crafts
--Dark Room
--File Room
--Office

Nice touch!

*Listing agents are Amy Deckas and Marybeth Goulett of Edina Realty.

"Drip" Marketing? How about "Spray?"

Synonyms for "Drip":
'Spray,' 'Drizzle,' 'Bombard'

Thanks to technology, I can now automatically send everyone whose email address I know -- and my Rolodex has 1,900 names -- a weekly (or daily, or hourly!) real estate "update."

But I don't.

That's because they're annoying and impersonal.

Speaking (only?) for myself, I like to practice what I'll call the "Golden Rule" of marketing: if I don't want to receive something myself, I won't subject others to it.

"New Roof in 1998!"

Real Estate Oxymorons

Well, yes, that "new roof in 1998" would be a selling feature -- if it were 1999 or 2000.

Twelve years later, however, what the listing agent is really telling prospective Buyers is that the roof is now middle-aged (expected life for most roofs is 20-25 years).

In the same category are phrases like "$100,000 in improvements since 2000."

Invariably, most -- if not all -- of the boasted improvements date back to . . . you guessed it . . . 2000 (as opposed to say, last year).

Blast from the Past, or, the "Hail Mary" Call

Turning Up the Heat on a (Very) Cold Trail

Once every month or so, I get a voicemail like the one I got today:

"Hi, this is Bob Smith at Smith Realty. I don't know if you remember or not, but you showed my client's home at 123 Elm Street in December(!), when it was $179,900. I don't know if your client is still looking or not, but we just dropped the price today."

While I always admire a hardworking, proactive agent, such calls -- especially at that price point -- are almost always a waste of time.

For one thing, if my client has serious, continuing interest in a listing, the other agent will know well before three-plus months have elapsed.

For another, I've probably shown or previewed several hundred homes since December. Jogging my memory on a December showing is like asking me what I had for lunch last July 17.

Sitting -- For a Reason (or Several)

But perhaps most importantly, three months of market time for a listing under $200k is an eternity -- for both Buyers and Sellers.

While the market for upper bracket homes is sluggish (to say the least), well-priced, well-marketed entry-level homes have been selling briskly, typically in less than 90 days.

That's due both to who's buying them -- first-time Buyers who by definition don't first have to sell -- but also because of the tax incentives available ($8,000 for first-time Buyers, $6,500 for move-up Buyers).

Those numbers loom much larger for homes under $200k than for $600k or $1 million homes.

So, bottom line, the only reason an entry-level home would be sitting in today's market is because of condition, price -- or both.

Which undoubtedly is what my client thought way back in December (I honestly don't recall the home; they subsequently bought something else shortly thereafter).

Oh, and the new price that the listing agent wanted me to know about?

A dramatic drop down to . . . $175,000.

Not Exactly Gilding the Lily

"Let Us Know If You Want to Buy One"

In a Buyer's market, it's hardly unusual for home sellers to practically scream their virtues -- and lots of them.

And then there's this sign outside a Delano broker's office that I drove past today (Delano is about 30 miles west of downtown Minneapolis).

"We have 5 homes around here for under $120,000."

I guess that would qualify as "cutting to the chase."

"Avatar" Meets the Housing Market

Is Virtual Staging "the Next Big Thing?"

The "next big thing" in real estate likely has nothing to do with "social media" (Facebook, LinkedIn, etc.).

Rather, my guess is that it's "virtual staging" -- using software to simulate what an empty house would look like (nicely) furnished and accessorized (wall art, area rugs, mirrors, etc.)

I'm aware of several companies that either have products on the market, or are just about to be released.

The pitch to clients?

Spend $500 on virtual staging, $5,000 on actual staging -- or list it $10,000 lower (if they're already on the market, make that a $10,000 price reduction).

I know what I'm going to recommend . . .