First, let me begin this with saying I am not “anti-FSBO” (For Sale By Owner) or anti-limited service brokerage. Yeah, I’m a real estate broker and of course I’d prefer you enlist me to help you sell your home. But if you really know what you are doing, and you have the time, and you want to sell your home yourself, go for it. Knock yourself out. There is clearly no shortage of homes for me to help sell.

But, if you are going to go FSBO, or go with a limited service agency (basically a real estate brokerage that you pay to put your home in the Multiple Listing Service while you do all the remainder of the work) then at least make sure you are spending your time, money and effort wisely. Let’s face it. Some marketing methods work, some may work, and some just flat-out don’t work — or the probability of them procuring a buyer are so remote that they aren’t worth the effort.

Here’s an example in the latter category received yesterday via email (names and MLS# obscured to protect the ignorant):

What you see above is the email in its entirety. That’s it, no attachments, no phone number, no nothing. Let me explain why this is a complete waste of time, and is not “marketing” your home effectively:

1. If I had a buyer interested in your home, I would know it’s available the second it went into the MLS. Therein lies the power of the MLS. I don’t really need an email asking me if I have a buyer. I know my buyers, and what they are looking for. Heck, my buyer had your listing before you sent this email if it was of interest to them.
2. But let’s say I am one of the lazy agents that doesn’t know how to set up good searches in the MLS to meet my clients needs. Then maybe an email asking me if I have a buyer for your home could be effective. However, consider this: If I am too lazy to set up a search, won’t I be too lazy to open up the MLS, log in, copy and paste the MLS number you provided into the system, and pull up the particulars on your home?

You see, your email that cluttered up my inbox (along with several others that day from actual agents who email flyers to hundreds if not thousands of agents in one fell spamming swoop) tells me nothing. Absolutely nothing. Do I have a buyer for your home? I don’t know. Where is it? How big is it? How much are you asking for it? Yes, I understand all that info is in the MLS, but if you are going to butt into my inbox, at least make it so I don’t have to stop what I’m doing, log into a system, and look it all up.

Normally, I would have clicked DELETE as swiftly as possible. But for the purposes of this post, I went into the MLS just to see what the deal was with this particular listing.

So now you’re going to get Jay’s bonus tips on ways not to sell your home!

Photos:  Photos are important. Really important.  These photos do nothing to help sell your home. Let’s face it, orange trees and cactus grow like weeds around here. If your landscaping is compelling, by all means showcase it. A photo of part of a tree (that needs pruning BTW) and a cactus are not compelling.

And then there is . . .

Pricing: Listing a home for $270,000 that comps at $200,000 (on a good day) is not conducive to selling your home. That foreclosure across the street? You may not like it, but it is your competition.

Again, there is nothing wrong with selling your own home. If you’re willing to take the time, understand marketing and want to take on the legal liability, go for it. But keep in mind, the Phoenix real estate market (and many other markets across the country) are not in the best of shape right now. If you really have no clue how to sell a home (and clearly some don’t) then you may want to leave it to someone that does this for a living. Will it cost you? Sure. But what is it costing you if you can’t sell your home?

UPDATE: Here is the link to vote for the winner of the debate.

The debate over at the US News & World Reports Housing Front blog has ended.

Here are links to all the posts:

Day 1 (Thompson)
Day 2 (Healy)
Day 3 (Thompson)
Day 4 (Healy)
Day 5 (Thompson)
Day 6 (Healy)

Sometime later today of the Home Front Blog, there will be a voting poll set up. Read the posts, and vote for who you feel “won” the debate.

I know who I’ll be voting for, you should vote for who you felt presented the best argument.

I enjoyed debating with Greg Healy. Seems like a nice guy. He has a vested interest in the success of his FSBO site, and I of course, have a vested interest in the success of my real estate brokerage.

FSBO works for some. A very small some. More power to you if you can pull it off. Personally, I think it’s a mistake to go FSBO, but there is no denying some can do it, but most can not.

Day 3 of the U.S. News & World Report “Housing Rumble” debate has been posted.

On Day 2 my opponent in the debate, Greg Healy, Vice President of Operations at ForSalebyOwner.com, posted his first “volley”.

Greg’s post was primarily (and not surprisingly) focused on the “6% Commission”, which is an erroneous assumption. First, all commissions are negotiable. Factually, the national average commission is around 5.1%. That’s an average, so of course in some places real estate commissions are typically higher, and in some places they are lower than 5.1%.

Then of course there is the common misconception that of the mystical 6%, all of it goes to the listing agent/broker. Try half that, at best.

My debate posts are limited to 400 words, which is probably a good thing as I could have written a War and Peace length tome in rebuttal to Greg’s post. There are several other points I wanted to make, but there wasn’t enough space available.

A response from Greg is due tomorrow, and I’ll have one more shot to fire on Friday.

Thanks to all who have expressed support here, elsewhere, and on the U.S.News & World Report blog!

Debate Posts:

Day 1 – Thompson
Day 2 – Healy
Day 3 – Thompson

I’ve been invited to an online debate on U.S. News & World Report’s blog, The Home Front.

The subject is, “Do you need a real estate agent to sell your home?”

I’ll be debating with Greg Healy, Vice President of Operations at ForSaleByOwner.com.

My initial volley is up, look for Greg’s first response tomorrow.

Readers will be able to vote at the end of the debate for the “winner”.

Should be interesting, hopefully educational, and maybe even entertaining.

I could use a little support people. It’ll be interesting to see if an “anti-Realtor” crowd gathers. Them I can deal with. Greg on the other hand, will be a strong opponent!

Oy, can’t believe I just used a Latin word in the title…

But that’s really neither here nor there.

In an article posted Sunday I discussed “silly counter offers”. The esteemed John Wake left this comment:

“It also sounds like you have a great client… and the seller and/or listing agent will be a PITA the whole way.”

For those not familiar with the term “PITA”, it’s “net lingo” for “Pain In The Ass”.

And as is the norm, John was spot-on in his assessment (on both parts).

Here’s a recap….

Our very qualified buyers make an offer on a very nice home.

The specifics of the offer aren’t all that important. It was a strong offer, by a strong buyer (as evidenced by the amount down, earnest money, closing time line, their loan parameters, and the fact they don’t need to sell an existing home).

Some things the buyers asked for:

* They wanted a closing date of July 31.
* They needed a 15 day inspection period as they will be out of town for several days (the “typical” inspection period is 10 days).
* They used electronic signatures (which as discussed Sunday, are perfectly legal).

The sellers countered:

* They wanted a closing date of July 30. Yes, one day sooner. The reason, as quoted by the listing agent? “I don’t like closing on Thursdays or Fridays”. (wonder if the seller really cares?)
* They nixed the 15 day inspection period, insisting on 10 days — this despite knowing the buyers would be out of town for a portion of those 10 days.
* They did apparently relent on the electronic signatures. A concession!

There were other items countered. We were a little apart on price, but close enough we felt we could work it out.

So our buyers re-countered on price, and again asked for a 15 day inspection period.

Next the seller re-re-countered. They were now OK with the purchase price — and let’s face it, that is (or should be) 99% of the battle.

But here’s where it went beyond ridiculous.

They countered the closing date again (after we’d agreed on their silly “no Thursday closings” rule). They, in a seemingly random act, pulled the close of escrow date in by two weeks.

WTF? Can you say PITA? The Buyers did. They said “Adiós”.

I so want to ask the sellers:

Dear Sellers,

Why, pray tell, does the COE date now need to be 2 weeks earlier, when a mere 24 hours ago you’d already dictated what date you wanted???

And for whatever reason, you again refused to allow a 15 day inspection period. Hmmmm…. you know that 10 days doesn’t work for the buyer. All they need is a few more days. And you say, “Nope”. Are you just being difficult, or are you afraid a little extra time might uncover a problem?

And now you want additional earnest money, with some of it made non-refundable after the inspection period (you know, the one you won’t allow five extra days for).

You were this close to going under contract. And you blew it. There are 43,158 single-family homes listed for sale in the Phoenix MLS. We’ll find another one.

Sellers, you don’t have to concede to every buyer demand. But think about at least cooperating. Look at what the impact to your bottom line is. Work with the people that are telling you they want to buy your home.

Don’t be silly.

.

What is probably my favorite “paper”, The Wall Street Journal, published an article on Sunday titled, “Get Real With Your House Price”.

It’s relatively brief, but contains some good info. The article points out five signs that indicate your home may be overpriced:

1) Not enough showings
This is a prime indicator. But it’s a little “diluted” in the Phoenix real estate market because of the shear number of homes available for sale.

Let’s say you tell your agent, “I’m looking for a 3 bedroom, 2 bath home between $200 – $250K in Gilbert.

*poof!* You’ve got 495 homes to go see. Throw in Chandler (337 homes) and Mesa (659 homes) and you’ve got almost 1,500 homes to chose from in that fairly narrow band of pricing.

And that means if you’re selling a home in the East Valley, you’ve got 1,500 other homes you are directly competing with for buyer’s eyes and money.

Sometimes homes don’t show because there is a ton of competition.

2) Some showings, but no contract
Getting people to look at your home is step one. Getting people to make an offer on it is a whole ‘nuther story. An oft-quoted rule of thumb (including in the WSJ article) is ten showings should equal an offer. But I’ve seen that range from one showing to dozens. There is no hard and fast rule, but clearly if your are getting traffic (qualified traffic, not just “looky-loos”) and no offers, then something is amiss. 

3) Similar homes are now selling for less
In the Phoenix market, prices are generally declining. That means that what you priced your home at last month likely isn’t what the market considers your home worth today. Your price reductions may just be keeping up with declining market value, not positioning your home to sell.

4) Repeated negative feedback
Getting feedback from showing agents ranges from relatively simple to excruciating. Getting honest feedback is even worse. Ask 100 agents for feedback, and 95 of them will tell you, “My clients liked the home, but they want to look at more before they make a decision.” (In fairness, that is pretty much typical these days.) Rare is the agent who will give you brutally honest feedback. And let’s face it, even if you get something like, “It’s horribly overpriced”, “what were your clients thinking when they painted that wall” or “the home reeks of B.O.”, none of that should come as a surprise to the seller. A good listing agent will give you plenty of feedback before the home is even listed. There shouldn’t be any startling revelations on home feedback.

5) You’ve cut the price, but not enough
Here lies a tricky question. When a price cut becomes necessary, how much do you cut? I have seen, and you can’t make this up folks, price cuts of $1 a day, every day. Why would someone do something so ludicrous? To game the system. Agents can set up MLS notices for changes in property. Repeated miniscule price reductions serve no purpose other than to artificially get a listing on the “freshly revised” hot sheet.

The amount to cut is a fine balance between the needs of the sellers to net an amount, the speed at which they need to sell, and the perception of the market as to the value of the home.

And remember, it is the market that determines your home value. It’s not what your neighbor sold his home for, it’s not what you wish it was worth, it’s not even what an appraiser says it is worth. It’s what buyers in the market say it’s worth. Period.

There is no question; pricing in this market is key. It’s true though that any home can be sold if the price is “right”. Don’t believe that? List your home at 25% under what recent and true comparables are selling for. Your home will sell in days. Granted, no one wants to leave 25% of their homes value on the table, but it will sell.

The trick is determining a price point that is attractive to the buyers in the market that will net the seller as much as the current market will bear.

.

I just don’t get it.

Agents talk about “How to Sell Your Home” all the time.

Pricing, curb appeal, condition, staging, marketing, declutter, blah blah blah. You can read real estate blogs for days and get great tips on how to sell your home.

But there seems to be a disturbing trend developing. Oh, it’s been going on since time immemorial, but recently it seems to be getting worse.

Dru Bloomfield up in Scottsdale mentioned it on Twitter yesterday.

I’ve written about it in the past

Yesterday Kris Berg, in typical Kris Berg brilliance, wrote about it. 

What is it?

It’s the simple fact that unless a home buyer can SEE your home, it’s highly unlikely they will try to purchase it.

This isn’t rocket science. It’s fundamental human nature. People tend to want to look at something they are going to spend hundreds of thousands of dollars on and take a significant portion of their lifetime to pay off.

Yesterday, in a scene reminiscent of The Exorcist, I watched my lovely bride’s head spin around backwards while she was trying to set up showings for a wonderful couple visiting from Canada.

Unanswered phone calls.
“No, tomorrow is not good, how about next week?”
“The house is a disaster.”
Unanswered phone calls
“I want to sleep in.”
“Only between 4:30 and 5:00.”
Unanswered phone calls
“We’re having a party, need to prepare for that.”

And on and on and on.

It’s insane. It makes no sense. We have a ready willing and able buyer who wants to see YOUR home that is for sale.

And either the seller and/or their agent makes viewing the home impossible.

I just don’t get it.

.

U.S. News & World Report writer Luke Mullins let me know he’d written an article titled 5 Tips for Selling a House in a Slow Market. It’s a good read, especially for home sellers in Phoenix (and other “slow” markets — of which there are many).

Mullins’ five tips are (basically):

1. Make repairs
2. Price appropriately
3. Use an experienced agent
4. Make your home available for showing (a pet peeve)
5. Counter “low ball” offers

Nothing earth-shattering here, but it is all sound advice (read the article for more details).

My only real disagreement with what Mullins writes is in his “Know you agent’s stats” tip. While experience in the market certainly helps, there are specific time frames listed in the article that may or may not be appropriate for every situation. A blanket statement such as “It’s best to choose an agent whose properties sell in an average of three or four months, a time frame that indicates the agent understands how to price the market” isn’t always going to be correct.

If you are trying to do a short sale for example, picking an agent that has a low days on market stat but no experience in short sales is a big mistake.

If you are selling a luxury home in Phoenix, where time on market is typically many, many months, finding someone whose properties sell in 3 or 4 months likely won’t help. Reality is, it will probably hurt.

Agents tend to specialize — in location, price range, style, niche market or some combination. It’s an over-generalization to say, “An agent whose average is X months is too long”. To regurgitate an oft-overused (but accurate) term, all real estate is local. Sometimes down to the subdivision.

I’ve said it before, but homes are still being bought and sold every day. Sure, the numbers are lower, but if you need to sell, applying these general tips can clearly help. Yes, Phoenix is in a “buyer’s market”, but that doesn’t mean a home can’t be sold. After all, for every home bought, by definition one is sold….

.

Scenario:

Buyer is in Canada. He’s an airline pilot so he pops into town occasionally for brief periods of time. He is interested in gated golf course condo communities.

Last week he let us know that he and his wife would be in town on Tuesday and wanted to look at a specific unit.

Alas, the showing instructions are “By appointment only, Monday – Friday only at 5:00pm”.

Okay fine. We call the listing agent last Wednesday. He actually picked up the phone which, as sad as it seems, was a surprise. We tried to set up an appointment for this Tuesday. He needed to talk to the owner and would “get right back to us”.

Friday rolls around, looking like someone has a different idea than we do of “getting right back”.

We call him. He didn’t have an answer. We reiterate our client will only be here on Tuesday.

Saturday morning, we get an email from the agent. It says we are good to go for showing. On Wednesday.

The lesson here for home sellers is two-fold:

1) If you want to sell your home, you need to make it readily available for showing. It doesn’t take a rocket scientist to calculate that if no one can see your home, it is difficult to sell it. Restricting showings to specific days and times is not conducive to getting potential buyers into your home.

If you have to make it by appointment only, don’t take three days to confirm the appointment.

2) Make sure your agent is calendar savvy enough to know the difference between Tuesday and Wednesday.

.
[tags]home selling tips, rocket science[/tags]

Sometimes I have to wonder…

Here are the particulars:

• Gated condo in a golf course community. Lovely home. Grossly overpriced at $245K.
• Languishing on the market for 201 days.
• Last unit sold in the development was in August 2007 for $228K. Same model. A perfect comp, other than it sold six months ago.

Our buyers are from Canada. Down for a few days to view homes and they like this development. We figure OK, the last sale was $228K, prices have dropped since then roughly 7%. That’d put it at $212K. So let’s offer $200K and see where we go from there. Cash offer, with proof of funds available. We expect a counter.

(And before anyone jumps in, please keep in mind the offer price was derived from much more in-depth analysis. I’m summarizing here for brevity — something I don’t usually excel in…)

Lo and behold we get a counter:

• Price to be $230K (higher than the last sale six months ago, in a generally declining market mind you).
• Doubling of the buyer’s earnest money amount (in an all cash deal with closing just 11 days post inspection period???)
• Adding conditions that make the buyer’s earnest money non-refundable. (WTF?)
• Notice that the HOA fees were 14% higher than what was in the listing (uhm, try updating the MLS. It takes 15 seconds).
• Changing the choice of the buyer’s title company (let’s make it as inconvenient as possible for our out-of-country buyers).

Huh? 

Are you just playing a game, listing your home hoping the combination of ignorant buyer and lousy agent stumble across it?

Buyers have a bazillion other homes to chose from. Well, maybe half a bazillion because it’s likely there are a bunch of other listings in the mix that the owners really have no intention of selling.

If you really want to sell your home here are a few simple tips.

Price it properly. Wanting 20% more than it’s worth is understandable, but it’s not realistic.

Make sure the info in your listing is updated. Things like getting notice of increased HOA fees tend to annoy people. Annoying a prospective buyer in this market is generally a bad idea.

If the buyer presents solid loan qualifications or is a bona fide cash buyer, don’t get greedy with earnest money demands.

You don’t have to suck up to buyers, but really in the grand scheme of things, does the title company really matter? (see “do not annoy buyer” above)

It’s a buyers market in Phoenix (and many other locations across the country). Like it or not, buyers are pretty much in the driver’s seat. If you get an offer, it’s a proclamation that “Hey! Someone is interested in purchasing your home!” To squelch that right out of the gate is just silly.

And it is proof positive you don’t really want to sell your home.

.
[tags]Home selling tips[/tags]