From Listed to SOLD - How to Sell Those Listings You Work So Hard to Get!

Thanks to those who are sticking thru this series with me! While I think that the process of properly pricing homes is fascinating stuff, I know it's not nearly as sexy as other topics! (Although SELLING your properly priced listing is very sexy, indeed.)

In the previous installments...

Introduction
Step One - Before you price, prepare!
Step Two - Preview, preview, preview
Step Three - Play detective

...we talked about how to effectively preview the competition to figure out where your potential listing falls into the scheme of things.  So, what about the SOLDs?

The problem with using SOLDs in your market analysis is, unless you've been a previewing mad(wo)man over the last eight months, you probably haven't seen the inside of the properties, and now it's too late. So you have to go off the MLS description - a very risky proposition!

But we'll do our best.

Print off all the SOLDs that seem to be comparable, even if they're much higher or lower than your assumption of the market value of "your" listing. Drive by all of them! Pay special attention to the outliers - the ones that seem to have sold way out of whack to the rest of the market, or whose Days on Market statistic is unusually low or high.

There's a good chance your drive-by will reveal the reason for the out-of-line price or DOM. Perhaps there's a commercial building next door, behind or across the street. Or, common in Denver, a corner lot that doesn't have a private back yard, or any back yard at all. Maybe it's a pop-top done wrong and doesn't fit in with the neighborhood. Busy street with a bus stop in the front yard?  

Or conversely, you might see that it has a stellar location with an extra-large lot, a mountain view, or around the corner (at a suitable distance) from a popular coffee shop.

If the reason for the outlying price and/or DOM isn't obvious from your drive-by, go line-by line through the MLS listing. Is it missing a garage in a market that expects garages? No basement? One bathroom? Obviously, if the interior photos show that it needs work, that's relevant. Check the showing instructions to see if there are any obvious limitations on access.

If all else fails, and you really feel a particular house is a good comparable, call the listing agent. Hopefully they'll be helpful in helping you understand why the house sold at the price it did. Or, maybe not. But give it a try.

It really is the outliers that give you the most grief when looking at the SOLDs. There probably are some sold listings that fall right in line with what you're thinking the price of your listing ought to be, but the ones that don't give you fits. The more research you do on these outliers will not only make your CMA stronger, but will give you an air of confidence when going through your CMA with a seller.

Next Time - Putting it All Together

Here's the third, well, kinda the fourth (if you count the introductory teaser) installment in my series "Pricing Historic Homes in Urban Neighborhoods." You can read the rest of the series here:

Introduction
Step One - Before you price, prepare!
Step Two - Preview, preview, preview

I've had a few comments come in to the tune of "Wow - that's a lot of work - is it really necessary to spend so much time pricing a home?" Well, I say - YES! It is necessary! After all, our product is property, and our sellers pay us darn good money to know our product and move THEIR product off the shelf... so I believe with all my heart that we owe it to our future adoring fans to do our homework and make the most knowledgeable recommendations we're capable of.

Although... we'll never be perfect. Sigh.

Back to Pricing.

In the last installment, I talked about how important it is to preview preview preview. The more competing listings you preview, the better sense you'll have of where your listing falls into the mix.

Remember, the houses you're previewing are 1) the competition for your listing and 2) houses that haven't sold.

Why is it important to check out the active listings? Some agents don't preview because they don't think the active listings are relevant. "All that matters is SOLD." Eh, I disagree. First, what's SOLD is not competing with your upcoming listing, and when you're dealing with older homes, buyers don't always have a lot of options that meet their criteria. In many cases, the buyer will only find one or two homes that even come close, so knowing what they're comparing your listing to is critical.

Second, it's important to know WHY that active competition hasn't sold. Especially if it appears to be "priced well." You'll never know for sure why a house hasn't sold by looking at the MLS, although you may have your suspicions. It's not as if the listing agent is going to tell you that the house reeks of cat urine or point out that there's no bathroom on the main floor.

So, when you're previewing, ask yourself...

• WHY hasn't this house sold?
• WHAT makes it superior (or inferior) to "my" listing?
• HOW could the listing agent do a better job marketing this home?
• WHO is the ideal buyer for this property and is it the same ideal buyer as "mine" will attract?
  (I can't think of a "when" or a "where," so I'll move on).

Training yourself to ask these questions at every house you preview makes you a better previewer, and therefore, a better pricer. It also helps you to remember each house so you can speak intelligently about the competition with your seller when discussing pricing, as well as down the road when that homes' status changes (sells, withdraws or reduces the price), you'll be able to nod and say to yourself, "Hmmmm, I thought so!"

Speaking of down the road... this is another important reason to preview. When or if the competition sells, you'll be familiar with it in case appraisal problems come up on YOUR property and the appraiser wants to use comparables that aren't appropriate. If you've been IN all the comparables, it's much easier to make a compelling case!

Okay, ‘nuff about previewing. Next time, we'll talk about how to evaluate the SOLDs in your CMA to help you price your historic home in your urban neighborhood!

Just another installment in the series: Pricing Historic Homes in Urban Markets...

Introduction
Step One

In the last installment, I recommended that you always, always, always drive by your subject property before doing anything else. If you can get inside, so much the better...

So after you have a good visual of your subject property, it's time to go check out the competition - otherwise known as "previewing." (If your market frowns on previewing, and many do, please share with the audience how on earth you properly price homes!).

When I interview to list a property, I often find myself bonding with the home, to the point where it's almost as hard for me to be objective about it as it is for the sellers. I really have to fight the temptation to be overly critical of "my" listing's competition, while excusing "my" listing's challenges and flaws. Sometimes I'll take another agent with me on my previewing tour to help keep me objective.

SELECTING THE HOMES TO PREVIEW
Which homes should you preview? In a word (okay, a phrase) - as many as you can. Even if they aren't exactly comparable. With every house you tour, you gain a little better grasp on the up-to-the-minute marketplace, which makes it much easier to pinpoint the proper price range to recommend. It just happens naturally. As you look at the competition, you'll start to get a feeling for where your listing falls in the scheme of things, and the more you look at, the more confident you'll be in that feeling.

I try to preview at least 10 houses when I'm pricing a home. Sometimes I'll get lazy and only hit five - and I always regret it. It seems that it's right around the sixth or seventh house that I start to trust my gut about pricing. And that gut feeling is further confirmed on the eighth, ninth and tenth.

Depending on my price range, I'll preview all comparable houses within $50,000 (on each side) of where I think my listing will fall. By "comparable," I mean homes that offer similar square footage for the money. I probably won't preview a 1,000 sqft Bungalow if I'm listing a 2,000 sqft Victorian; they just won't attract the same buyer, even though they may very well be priced similarly. I always preview any homes within one block of my seller's property, even if they aren't comparable at all. It's just good practice in case the seller asks you about it.

Always preview the low outliers. A "low outlier" is a house that looks good on paper, but seems to be a screaming deal. You need to know why it's priced so well... but hasn't sold. There probably is a good reason. If there isn't, then this is the listing to beat. But we'll talk about that later.

How about the high outliers? The houses that are priced way above the rest, which are probably getting your seller all excited? Look at those, too. Chances are that they're just grossly overpriced (and the more houses you look at, the more sure you'll be of this). If they aren't overpriced, there's something really fabulous about them, and you need to know what it is.

As you're setting your previews, note if any homes are difficult to show. That will definitely affect market value. And frankly, if they are, I'll skip them. Lazy? Maybe, but on the other hand, a difficult-to-show home is not going to be comparable to MY listing because I don't take difficult-to-show listings!

Effective previewing in an urban market entails a lot more than just looking at a bunch of homes. Sure, that's what you're going to do (look at a bunch of homes), but in order to really evaluate the information you're gathering, you need to go in with the heart & mind of a detective.

We'll talk about that next time.

Earlier this week (or maybe last week?) I promised to do a little series with tips on how to properly price historic homes in urban markets. Here's where I promised that - you might want to read it first.

Got distracted by conversations ‘bout Real Estate Reality Shows, but here I am again, back to the more mundane issues of our daily grind... pricing homes to sell. Yawn. (I say that a little sarcastically; I totally love this stuff).

Pricing historic homes in urban markets is a bit (a lot?) more time-consuming than pricing newer homes in planned developments. But, at least to my way of thinking, it's a whole lot more fun! Hope you think so, too...

Step One is to Drive by the Home. Never, ever, ever begin the pricing process until you've at least driven by the subject property. You need to have an accurate mental picture of the home and its general location on the planet in order to take the next step. When you drive by, be sure to look for any locational challenges such as nearby railroad tracks, overhead high-tension power lines, undesirable neighbors (either commercial or residential) or obvious parking issues. If the home has an alley, drive through it to see what the back of the house overlooks.

Very few older urban homes are in a perfect location; almost all have some locational "amenity" that buyers will object to. You need to be aware of any such objections upfront. On the other hand, if the subject property IS in a perfect location, that's something you need to know as well, because most of the comparables you'll be using won't be.

While we're on the topic, it's far better if you can get inside the house before you prepare your CMA. I usually handle this by doing a 2-step listing presentation - the first being an information-gathering/rapport-building meeting and the second focusing on the current market - i.e. pricing. (Actually, I do a three-step listing presentation, but I'll talk about that later).

That said, whether you do a one-step, two-step or even three-step listing presentation, never meet face2face with a seller without first, driving by the house, and second, perusing the relevant market data online. You need to be at least conversational about the local market, even if you haven't done your detailed research yet. Remember, the general public thinks all we do all day is drive around and look at houses, so if you stutter, stammer and hedge when the seller asks you about his neighborhood's market activity during your first meeting, he'll certainly doubt your professionalism and expertise.  Being able to casually toss out a few neighborhood statistics or hyper-local market factoids will do wonders for your confidence and credibility.

If there are any homes for sale or any that have recently sold within one block of the seller's home, know the details of the listings or sales, even if they aren't comparable. Your seller knows all about them and he'll expect you to as well.  

Homeowners in urban markets tend to be pretty enamored with their neighborhood and will expect their real estate agent to be, too. So, be as prepared as you can, as early as you can.

Next Time - Step Two - Gentlemen (and ladies), Start Your Research!

The 2009-2010 Winter of Soul Kicks off November 18th! Click here to read more  

And now a word from our sponsor...

The Winter of Soul Teleseminar Series kicks off on November 18th with a show about...ho hum...Creating Your 2010 Business Plan. Nah, it won't actually BE ho-hum, but I'll admit - it might not be the MOST exciting program in the series. But definitely worth tuning in for as our hearts and minds and bank accounts look toward the future...

The 2009-2010 Winter of Soul program is a 10-session series of teleseminars on topics of interest to the soulfully-inclined real estate community. They're scheduled throughout the winter season - from November to March - typically on Wednesday evenings or Saturday mornings. All are recorded, so if you can't make them live, you'll be able to listen in later at your leisure. The tentative schedule is below.

How much? $59. For over 800 minutes of soul!  

;-]    

Questions? Just ask!

The 2009-2010 Winter of Soul Tentative Schedule

Creating Your 2010 Business Plan - Everyone knows you're supposed to have a written plan. Have you done yours? No? Let's do it together in this kick-off to the 2009-2010 Winter of Soul. Wednesday afternoon/evening, November 18th

Alternatives to Referral-Begging - It's really not necessary to beg, bribe or even "remind" your friends to send you referrals. In fact, this behavior might actually be counterproductive to your goal of GETTING referrals from the people you know. I'll show you what to do instead. Saturday morning; January 16th

Open House Strategies - A panel discussion with four master open-housers on effective techniques to attract visitors, build rapport, get valid contact information (and permission to use it), and much more. Saturday morning, January 23rd

Why Isn't My Listing Selling? - ARGHGH! Why isn't my listing selling? I priced it right, made up a pretty brochure and I hold open houses every weekend! What else can I do? (And no, the answer isn't always "reduce the price."). Saturday morning, February 13th

Selling with Her Soul - For Ladies Only (and the men who love them) - A potentially politically INcorrect discussion on how there's nothing wrong with being feminine in today's gender-neutral world. No, you DON'T have to become a man to succeed; quite the opposite in fact! Mary Beth Bonacci joins me for what I promise will be a fascinating show. Date TBD

Social Media and Your Sphere of Influence - Don't spam your sphere! ...and other tips for effectively using social media in your sphere of influence business model. Saturday morning, February 20th

Rethinking the List(en)ing Presentation - Do you really need a formal listing presentation? Maybe... but maybe not. A panel discussion on various approaches to seller interviews. Saturday morning, January 9th

Don't Be Dorky, Be YOU! - Why is it that real estate agents, many of whom are otherwise fascinating creatures, insist on being dull as dirt in their written communications? You don't have to be a professional writer to create interesting letters, newsletters or online profiles that will make the reader smile... instead of yawn. Date TBD

B.R.A.N.D.'ing with Tom Gosche - Back by popular demand from the Summer of Soul, Tom Gosche, branding expert, joins us to share his unique perspective on personal branding that actually reflects who you are... and inspires you to become the best YOU you can be. It's good stuff. Wednesday afternoon/evening, December 2nd

Beyond Virtual Tours - Virtual Tours aren't just for listings anymore! So far, my friends at CPG Tours and I have come up with nearly 20 promotional uses for virtual tours outside of marketing your listings. Easy-as-pie to put together and a lot of fun to distribute. Saturday morning, March 6th  

Register for the Winter of Soul for $59

What's the Number One Thing "they" say that homesellers complain about?

All together now...

Communication (or lack thereof) from their agent. And, having been on the other side of the For Sale sign a time or two, I can certainly second that emotion. But "communication" isn't just about calling every week to say "Hi, how're doin'?" No, it's also about keeping the seller informed on local market activity. On providing feedback from showings. On notifying him of new competing listings and recently closed sales. And, frankly, on making sure the seller knows exactly what his agent's been up to to promote his home!

If the only time a listing agent contacts a seller is to ask for a price reduction or a listing extension, well, I can pretty much guarantee that seller is less than tickled with his agent. And that agent deserves every bit of his seller's discontent! Oh, the seller may not complain to his agent, but I'll bet he's not keeping quiet around the coffee machine!

The good news is that keeping a seller happy isn't that hard. They just wanna know what's going on and that their agent cares. Is that too much to ask?

Here are sixteen things you can do to keep your seller happy with you. And a happy-with-you seller just might be a great source of future business!

1. Notify him as soon as the listing hits the MLS and send him a copy of the listing
2. Send him links to all your online advertising (Realtor.com, Craigslist, Postlets, Active Rain, your own blog, etc.)
3. Send him a copy of the home brochure before it goes to print and ask for feedback
4. Make sure he knows when home brochures will be delivered
5. Schedule an open house right away (yes, you must do an open house)
6. Call after the first showing(s) to see if he has any questions about the process
7. Pursue and deliver feedback, especially in the first month
8. If you do any print advertising, send the seller copies (including Just Listed cards)
9. Send him a "state of the market" report showing all the competing listings. Update this report every two or three weeks
10. Call periodically to find out if he's running low on brochures (if it's impractical to keep the box full, just remove it.)
11. Be sure to provide feedback after open houses (if someone else does your open houses for you, be sure to follow up with them afterwards)
12. Schedule an appointment to review the latest market activity
13. Preview any new competition and provide feedback to your seller
14. Refresh your Craigslist ads and send the seller a link
15. Ensure that your photos are in season
16. Ask for feedback on how you're doing

How many of these items do you already do? If you do at least 50% of them, you're blowing away your competition. Sad, isn't it? The last few times I've had my own properties listed, my agents did ZERO of these activities. ZERO... Zero.

A happy seller is a cooperative seller. An unhappy seller is not, and will likely become more and more uncooperative as time goes by. You pick!

RELATED BLOG: Get Good... or Get OUT!

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If the brochure box is empty... they notice

If their brochures still show the original price after two reductions... they notice

If their agent hasn't done in an Open House in six months (or ever)... they notice

If no feedback cometh after showings... they notice

If there haven't been any showings in a month... they notice

If their Craigslist ad hasn't been refreshed... they notice

If their agent hasn't updated them on market activity... they notice

If their online photos are from two seasons ago... they notice

If the only time they hear from their agent is when he calls to ask for a price reduction... they notice

Just because a seller doesn't complain doesn't mean he's happy. And just because he's not complaining to his agent doesn't mean he's keeping quiet elsewhere. Trust me on this. If his agent doesn't seem to care about selling his home... the seller notices.

Coming soon - 16 Ways to Keep Your Seller Happy

Sellers want more for their homes than the market is likely to pay. That's a fact; it's been a fact forever, during boom times and busts, and will continue to be a fact long after the Recession of 2009 is behind us.

Nothing wrong with it; it's human nature and we're all guilty of putting a higher value on our own precious stuff than anyone else is going to. But part of our job as listing agents is to gently persuade our seller clients that we need to price properly in order to get their home sold.

But should that "proper price" take in to account what the house might appraise for?

In my opinion, no.

WHAT???? Jennifer, are you out of your mind?? What if you overprice the house and it sells at that price and the appraisal comes in low?? What then?

Indeed.

I take great care in pricing my listings - I want to get my seller the highest possible price in the shortest amount of time, assuming that's his goal, too. And I've been doing this long enough to understand that pricing it RIGHT is best way to get the highest price, as opposed to pricing it high and hoping a bigger idiot comes along and pays that price. So, before I continue, let me assure you that I know how to price a house to sell quickly, without giving away my seller's money. (Read more about that here).

If I feel a house will sell for more than the market data indicates, I'll not hesitate to price it accordingly. If a particular house shows so well and feels so good that it blows away the similar competition and recent sales... even if "on paper" it's not "worth" more, I'll put that higher price on it. My seller deserves the opportunity to see her hard work or design-sense or whatever pay off for her.

(Again, remember, I'm not stupid and I'm not inexperienced. I know what I'm doing.)

So, back to the original question. "What if it sells at full price and then doesn't appraise?"

Frankly, I'll deal with that when and if the problem arises. If I get my seller "too much money" for his house, and the appraiser or underwriter doesn't agree with me and the buyer, then we'll go to Plan B. Which, yes, may include the seller coming down on his price to meet the appraisal. Or getting a second appraisal. Or whatever other solutions we can come up with.

And yeah, it might suck and everyone might get mad. But I'll deal with that at the time!

I'd much rather take the chance of getting top dollar for my seller and then scrambling to justify it, then to pro-actively risk leaving my seller's money on the table when we could have gotten more. In other words, I don't believe in underpricing a home in order to avoid appraisal issues, and I don't believe it's a good tactic to use when discussing price with a seller prospect.

How do you feel about it?

www.SellwithSoul.com

...and fun was had by all in this week's debate over pricing versus condition versus pricing AND condition. Did you miss it? It's good stuff - check it out at: Any Idiot Can Give Their House Away...

In the 150+ comments, the question was raised - "So, how do you convince a seller to put some effort into getting his or her house ready for market?" I'd made the claim that at least 90% of my sellers hire my stager and my handyman and almost all spend at least $1000 (of their own money!) prior to going on the market.

Am I just lucky to have intelligent and motivated sellers? Maybe. But I'll give myself more credit than that, although I have to say that every single seller prospect I've spoken with in the last 18 months has brought up the topic of "What do I need to do to the house to get top dollar?" They bring it up first! I spoke with a potential seller just yesterday who doesn't want to sell til next spring, but wants to get started now on home improvement projects! Maybe I am lucky - is this NOT typical of sellers in other markets?

That said, here are a few ways to help a seller see the light, and then do something about it.

First, go in with the assumption that the seller wants to know what it's going to take to get top dollar. Don't pussy-foot around the topic, although it's best if you're polite about it, of course! Like I said, ALL my sellers ask me first, so maybe there's some vibe I send out that inspires them to do so, I don't know. But I will say that if a seller didn't seem interested in preparing his home for market, I probably wouldn't be interested in listing his home. I don't say that to be snotty or arrogant - it's just a fact. I don't want a listing I'm not proud of.

By far the best way to get your sellers to clean up, fix-up and decorate-up is to help them do it. No, you don't have to do it yourself, although I've certainly rolled up my sleeves once or twice or a dozen times. By "help" I mean that you have the human resources on call to Get the Jobs Done. Contractors you know and trust... who know, trust and love you. How anyone sells real estate without a good handyman, stager and cleaning person on board is a mystery to me. When you can walk into a seller's home and confidently say "Yes, that needs to be fixed - we'll put it on the Bob-List," or "Yep, let's get Bob over here to give us an estimate on that," or "No big deal, Bob can fix that," you're golden. Not only are you the hero, but you'll also get yourself a sellable listing.

What I see most agents doing (if they do anything at all) is to give the seller a list of things that need to be done, smile sweetly and leave them to it. Well, that's a recipe for failure. Our sellers are busy people and probably don't know a good handyman, painter, stager or cleaning crew. They'll open up the yellow pages, make a few calls and throw up their hands in despair. I'd do the same thing; in fact, I have when I was selling an out-of-state property and didn't know who to call myself. My Realtor didn't help; I didn't get the work done... and guess what? The house didn't sell. Bummer for us both.

Here's how I handle it.

Seller: "Tell me what I need to do to get ready for market."

Smarty Pants JA: "I see a lot of maintenance and repair issues that really should be dealt with before we go on the market. Let's get Bob over here to give us an estimate. Are you around this Saturday?"

I use the same approach when discussing Staging. Frankly, I suck at decorating and furniture arrangement, but I know bad décor and awkward rooms when I see them. So, I just say "I'm a terrible decorator, but my stager, Geri, is the most wonderful woman you'll ever meet. Give her a call and set up a time to meet. I think she charges $250 for a 3-hour consultation. I promise you - it'll be the best $250 you ever spent." (Here's a news clip of me & Geri in action on one of my listings)

And I believe that. With all my heart. And that's another part of the story - YOU must believe that the first impression and condition and décor matter... and you must trust your resources. If you don't, you'll never be able to sell the concept. I can "sell" staging all day long because I have a great stager and I know it works. I can whole-heartedly bring Bob into my clients' lives because I know, beyond a shadow of a doubt, that he'll make me proud.

If you don't have a Bob or a Geri, make it among your top priorities to find them. Finding contractor resources is a topic for a different day, but for this day, just know how important it is to your business. I credit Bob and Geri for at least half of my paychecks thru the years. Seriously.

Hope this helps.

Happy 4th!

www.sellwithsoul.com/sws-referral-network.html

I don't know about you, but I'm very much enjoying this debate on whether or not we listing agents can positively affect the market value of our listings. I believe we can. And frankly, I'm stunned at the amount of opposition to that notion.

Now, a disclaimer - I don't work in a distressed market, so I shall defer to those who do that they know more about selling homes in that environment. Fair enough. If you work mostly REO's and short sales, you are excused from this discussion. Although... well, I'll get to that in a sec.

For the rest of us... those of who work primarily retail markets...

If your seller gave you $2,000 and asked you to spend it for him with the goal of getting the highest price in the shortest amount of time... what would you spend it on? Obviously every home and situation is different, but give me a list of priorities you'd address.

For example, would you...

• Take out a full-color ad in the neighborhood newspaper? and/or
• Bring in a stager? and/or
• Bring in a handyman? and/or
• Replace/refinish flooring?
• Paint?
• Hold a catered broker open house? and/or
• Board the dogs?  and/or
• Landscape? and/or
• Have the house professionally cleaned? and/or.....

I have a very clear list in my head of what I'd tackle first, next and after that, depending on what the home needs, but I'd like to hear yours. But here's the big question... DO YOU THINK IT WOULD MAKE A DIFFERENCE in the market value and ultimate sellability of the home? Or would your seller be throwing his money away?

Your thoughts are very much appreciated!

RELATED BLOGS:

• Any idiot can give his house away
• Stop! Before you reduce the price...
• When your listing's not selling...
• Houses aren't pet rocks...

 p.s. As alluded to above, perhaps this is not relevant to a distressed market... but maybe it is. What if banks gave their listing agents $2k to spend on improving the property... do you think it would help move these properties faster... for more... or at all?

 Available now at www.SellwithSoul.com!