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For Sellers Category

How to detach in 3 easy steps!

No, this isn’t a post about your personal relationships (there have been too many written already!). What I’m referring to, is your home.

In the world of economics, it is called by several names:

  • The “Endowment Effect”
  • The “Willingness to Pay / Willingness to Accept Gap”
  • The “Attachment Bias”

As William Shakespeare wrote in Romeo and Juliet, ‘…a rose by any other name…,’ what matters is what something is, not what it is called.

So, what is it you ask?

In economic terms, it means that when we own something of financial value (stocks, jewels, or some other asset), we ascribe a greater value to it than if we did not own it. In other words, we let our emotions dictate our actions.

Think of the TV shows Pawn Stars or Antiques Roadshow. Grown men and women getting emotional over some old piece of junk they happened to find in their attic. The owners of these pieces always seem disappointed to discover that other people aren’t willing to pay them what they feel it is worth.

Why You Must Detach If You Want To Sell That Home

Another example is your home.  When potential buyers look at a home, they always believe that it is over-priced.  Sellers on the other hand, always feel their home is worth more than what buyers are willing to pay (e.g. the Willingness to Pay/Willingness to accept gap). The primary reason is that buyers have no emotional attachment to the asset, so it is worth less to them.  How many times have you been inside a home and thought to yourself “I can’t believe they are asking this much”?

Hence the big disconnect and cause of long market times for homes currently for sale.  We are currently in one of the worst market downturns in recent history, yet some sellers hold steadfast to the belief that their home is still worth much more.

So how do we fix this problem? How do we detach? Read the rest of this entry »

Is a picture is worth a few Thousand Dollars?

How about a few months on the market?

Back in 2008, I posted a 3 part series titled “Is it your agent’s fault“. In the articles, I spoke about many things that contribute to the successes and/or failures in the sale of a client’s home. There is no better time to look back and review these posts, especially since we are right in the middle of the worst housing market we will likely ever see. Read the rest of this entry »

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Fresh Cookies – Limited time only…

I’m sitting here at my Open House in Woodinville (see previous post below). I’ll be here until 4pm today.

It’s a sunny day here and the mountain views from my clients’ back deck is gorgeous. Too bad it is 40 degrees outside, or I’d be kicking back on their lounge chairs. Instead, I’m inside the warm confines of their home writing this post…

When I sit Open Houses for my clients, I always try to bake something in the oven. I’ve heard that it evokes the senses of visitors, but to be honest, it’s purely selfish on my part. I just like to eat! What are your thoughts? If you went into an Open House, would you think that the cookies were some evil ploy on the part of their Realtor, or would you just grab one (or two) and enjoy the offer? Would it help you to remember the home later?

The value of an Open House?

So, I’m sitting here at my new listing (see previous post) on Sunday July 6th waiting for the right buyer to drop in and make an offer on this great home. Yesterday, I knocked on doors within the neighborhood letting folks know that I just listed a home in their neighborhood. I handed out flyers and let everyone know that I would be holding the home open today from 1-4pm.

I’ve spoken to many other agents in the area who think door knocking and Open Houses are a waste of their time. They would rather stay home and complain about how bad the market is. In this slower market, I think a good agent has to think outside of the box and do things that may be outside of their comfort zone. Knocking on doors and sitting an Open House isn’t the most exciting way to market a home, but I did get to meet several of the neighbors, and one of them even recognized my name from some of the other homes I’ve sold in the neighborhood.

Market Dynamics from a different perspective

I saw a question posted on Trulia.com recently from a user wanting to know when the market would return to normal. My first thought was: What is a normal market?

Is “normal” what we experienced in the last several years, or do we go back further in time to gain a proper perspective? How far do we travel back in time to get to that “normal” market? 10 years? 20 years? In order to define normal, we first need to determine a baseline as to what constitutes that definition.

American Heritage Dictionary defines normal as:
Conforming with, adhering to, or constituting a norm, standard, pattern, level, or type; typical: normal room temperature; one’s normal weight; normal diplomatic relations.

hmm… Seems like a circular reference to me… Read the rest of this entry »

Is it my agent’s fault? (Part III)

So the house looks great, the information in the MLS and online is correct and attractive, the advertising is going strong, yet still only a handful of buyers have visited?

One myth that many sellers seem to believe is that real estate agents sell houses. We don’t. Okay, I’ve let the cat out of the bag. The wizard has come out from behind the curtain.

When I describe what I do to folks, I tell them that I help people buy and sell houses. The key word is “people”. Without “people”, I would just be looking at homes, and living on welfare (which may be soon if buyers don’t start buying). Sometimes, you can do everything right, and still have nobody come and look at your home. If there is nobody in your price range looking for a home with features that your offers, there is nothing that I nor any other real estate agent can do. I can’t wave a magic wand and have a buyer appear. Some agents might promote that they could do this, but they’d be lying.

How do you gain visibility for your home if there are no buyers? I can’t make buyers appear, but you as the seller can. How you ask?

You could lower the price (you’ve heard that before, haven’t you?).
You could offer different terms (carry back a 2nd mortgage on the property or pay closing costs).
You could offer buyer incentives (appliances, etc.)

Lastly (and this is the hardest option for sellers),
You can be patient. A buyer will materialize sooner or later. They always do. Just don’t kill the messenger. If your agent is doing what he/she should be doing to expose your home to the market, don’t blame him/her for there not being any buyers around.

Is it my agent’s fault? (Part II)

So, you’ve prepared your home, and it looks great! It’s priced appropriately for the market and the photos are perfect. What? you’re still not getting any showings?

The first step is to look at the MLS printout. Is there something that is missing in the marketing comments that might entice a buyer to see the home? Check to make sure that all the included information is correct too! I’ve seen many listings with the wrong number of beds and baths advertised. I’ve also seen listings where the price is incorrect ($250,000 home listed for $2,500,000), or the address is input incorrectly (hard to see a home if you can’t find it).

Next, review the marketing plan with your listing agent. What advertising has been done? Print advertising is not as dominant as it once was. According to a 2007 survey done by the National Association of Realtors, 84% of home buyers used the internet when looking for a home. Can you find your home online? Put your buyer hat on, and look at the major websites for your home. In the Pacific Northwest, all of the large real estate companies have a major web presence. In addition to Windermere’s, John L. Scott’s, Coldwell Banker’s websites, there are also Trulia, Craigslist and others. If you can’t find your home, its possible that nobody else can either. Make sure that your agent remedies this immediately.

Public and Broker Open Houses? Yes, these add to the exposure of your home, although they have diminished in importance with the advent of the internet. I hold Open Houses for all of my clients, because I don’t like to leave any stones unturned. The probability of obtaining a buyer for your home is low with Open Houses, but in this type of market, all facets need to be explored. I just held a Sunday Open House for a client and had nobody stop by. I sent out postcard mailers to the neighbors and potential move-up buyers, advertised the open house online and in the local newspaper with no success. I’m not deterred however, and plan to try it again next weekend.

(Read part III of this article here…)

Is it my agent’s fault? (Part I)

A question was asked on Trulia.com recently from a seller wondering about the lack of showings on his home. Was it the fault of the agent that only 6 people in 6 weeks had viewed his home? Isn’t the job of the real estate agent to get eyeballs on the property?

My answer was a qualified “YES”. I qualified my answer because when a seller signs an agreement with a real estate agent to list and eventually sell their home, they are entering into a partnership with that listing agent. What do I mean by partnership?
As a Listing Agent, I have the responsibility to represent my clients’ best interests by marketing, advertising, and eventually selling their home. However, I don’t have the authority to make certain decisions, and that’s where the partnership comes into play. For instance, I have the responsibility to take photos of the home and put them on the MLS (Multiple Listing Service), and many other sites on the Internet where they will gain visibility by the general public. But, what if the photo looks like this?
This is where the partnership comes in. As a Listing Agent, I have no authority over the seller with regard to the property condition. The seller is responsible for making the home presentable. If this photo was on the Internet, would you want to go and see the home in person or would you immediately eliminate the property from your list? Sometimes, sellers view their homes differently than agents (and buyers). I always explain to my seller clients that how a person lives in their home is not how they market it to sell.
The photo to the left is what buyers want to see. This photo was taken from a client’s home just prior to putting it on the market for sale. This is a dream come true for many agents – a client who understands what is needed and takes appropriate action.
Now of course, not all sellers are at the extreme ends of the spectrum as noted here. Most are somewhere in-between. This is where my role as Listing Agent is to educate and advise the client on what should be done to make the home as marketable as possible. However, as noted above, the final responsibility (and authority) rests with the client.
Now, what if the client does what is asked, but the agent takes a photo that looks like this? Here is what appears to be a clean home, ready for showing, and yet the photo is poor, not only in exposure, but in drawing the buyer’s interest. This is clearly the fault of the Listing Agent (btw, I didn’t take this photo). If this photo were on the Internet, would it spark your interest? Maybe, maybe not. It could certainly be better though. As a seller, I would ask my agent to re-take the photo.
I had to do this recently when I listed a home. At the time I took the listing, the weather was overcast and had been all winter and spring. Here is what I had to initially use:

I didn’t really like the photo, but our MLS requires a photo of the front of a property when listing a home. At the very next opportunity I had, I replaced it with this:

A much more enticing photo, don’t you think?

Bottom Line: If you think your agent isn’t doing his/her job in marketing your home, first take a look at yourself. Are you following the advice that has been given (assuming you have a competent agent who is providing you with advice)? Marketing and selling a home is a partnership, and both partners need to carry their weight.

(Update) – Read part II of this article here

A new way to look at homes?

Trulia just launched a new site called Trulia Snapshots that enables consumers to graphically view homes in any given area, sorted by price range, or market time. I’ve tried it out, and it looks pretty snazzy. At a quick glance, you can see all the homes within a price range (slider bar at the bottom of the screen), and just by moving the slider, the graphical representation of homes changes instantly!

I think this new tool will put pressure on sellers because now buyers have a quick way of seeing how long a home has been on the market, thus spotting over-priced homes. What do you think?

3Ms continued

So what if you’re looking at a home, and you’re not sure whether it is a Mobile, Manufactured, or Modular home? What’s the next step if you’re interested in it, but need to know which one it is?

There are several things you can do to further investigate:

1. Take a walk around the entire home, looking for any tags that may be affixed on the exterior (usually near a corner of the home). If there is a VIN (Vehicle Identification Number), it probably is a mobile or Manufactured home (note: See my previous blog entry for links to definitions).
2. Look inside the home. You may find a VIN tag inside a utility closet or someplace near where the utilities are located.
3. Call the Department of Licensing in Olympia. They can look in their records and tell you if there is a registered mobile home under the current owner’s name.
4. Visit the county’s Department of Development and Environmental Services (DDES). In order to place a home on the property, the owner must have gotten a permit from the county. In the permit records, you may find information that specifies whether the home is a Mobile, Manufactured, or Modular. (note: don’t rely soley on the county records, as they can be wrong! I listed a home that was specified as a Mobile in the permit, but it was a Modular home).

If after all of the above steps you still don’t know, call the title company. They can send out a title inspector to the property who can make the determination. In fact, the title company is a critical factor in this process because if they state in the title report that it is a mobile home, your lender’s interest rates may be higher!

*It may seem redundant to state, but the above information applies mostly if you’re looking at a home on owned property, not in a “mobile home park”. By its very definition, a mobile home park will likely have mobile and manufactured homes located there.

**Another thing to be aware of, is that not all appraisers can spot the difference either! I’ve had a appraiser tell me that a home was a mobile (even though he couldn’t find a VIN), when it was a modular home.

Happy house hunting!

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