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!

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