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10 Steps To Sell
More Quickly In Stalled Markets
by Peter G.
Miller
We're well
into the prime real estate selling season for much of the country, a
marketplace less certain in many areas than in the past few years.
We don't fully
know what will happen in 2008, but to date many markets have stalled if not
declined. For most long-term owners selling in such a marketplace,
appreciation from past years assures profitable sales, but perhaps not as
profitable would have been the case in 2006.
But still,
owners in all cases would like to maximize their profits. What to do? If
you're a seller, there are 10 negotiating steps you can take to make
sure your home has the best chance for a top price and a quick sale.
Step 1:
Get a local broker. In a slow market there are relatively fewer buyers. It
follows that to generate the most demand you want your property exposed to
as many purchasers as possible. Who do buyers contact when they want a
house? Brokers. Figures from the
National Association of Realtors show
that 85 percent off all buyers rely on real estate brokers when buying a
home while 80 percent rely on the Internet. Who posts real estate
information on the Internet?
Local brokers.
Step 2:
Read the sale agreement. Virtually all jurisdictions have a standardized
real estate contract which over the years have become lengthy and complex.
If you use one then you're automatically agreeing to all unmodified terms
and conditions, so read the entire agreement so you know what is being said.
But is there
something in the proposed agreement that should be changed, removed or
added? Brokers should provide a copy of the sale agreement they expect to
use at listing presentations and this document should be read to avoid
surprises and misunderstandings. Since these are form agreements, anything
not required by law can be changed with a suitable cross-out or addenda. For
details, speak with your broker or attorney.
Step 3:
Know the marketplace. In terms of negotiation it's not good enough to know
recorded sale prices because they frequently don't tell the whole story. For
instance, two homes may both have recorded sale prices of $500,000. One may
actually have sold for $500,000 while the other sold for $500,000 but the
owner gave a 3 percent seller credit to the buyer for a new roof and
appliances -- that's $15,000 off the top. Local brokers who actually make
sales know the innards of recent transactions are thus are in the best
position to provide negotiating advice.
Step 4:
Know your terms. You know your property will sell at some price point, but
rather than a given price it's best to think of a home as a package of price
and terms. For instance, in a slow market it may be better to pay a "seller
contribution" to help buyers off-set closing costs than to lower the sale
price. In many cases, the seller contribution may be smaller than a price
reduction and much more attractive to buyers who need cash to close.
Step 5:
Reduce deposit requirements. To make a contract work there's a need for a
buyer deposit, the "consideration" necessary to bind a deal. If you're a
seller you want the largest possible deposit, but in a slow market you may
have to settle for less. Buyers, for their part, want to make the smallest
possible deposit if only because a big deposit represents a huge
psychological commitment -- and a financial one.
Less
consideration may be appropriate if the buyer is pre-approved for a loan,
the purchasers have a strong interest in the property and no better offer is
in the picture.
Step 6:
Throw in stuff. Do you really want to move a swing set or a washer/dryer? In
some cases it may be best to "reluctantly" part with such items if only a
buyer will make an offer.
Step 7:
Update MLS photos. If it's August and your MLS photo shows a home with four
feet of snow in the front yard then buyers can guess that the home has been
for sale for a long, long time -- meaning the price and terms are, um,
flexible. Perhaps more "flexible" than you would like. Have your broker post
newer photos.
Step 8:
Review the marketing plan. The marketing plan developed by your broker
should be reviewed as often as necessary to assure that; one, it is being
followed and; two, it is changed as necessary.
Step 9:
Visit open houses. It's always good to visit open houses or, as they're
otherwise called, the competition. It's not easy to be objective, but is
there something other owners are offering which might work for your
property? Something you can make into a bargaining point? Maybe an offer to
re-paint the living room in a color of the buyer's choice is not a bad idea.
Step 10:
Have context. It's silly to worry about small costs and concessions when
your core goal is to sell the home.
In one
situation, a buyer demanded an extra $500 to resolve some alleged concern
just before closing. We thought this was simply an example of buyer's
remorse and said yes, got an otherwise terrific price, and closed. Soon
thereafter the local market slowed and prices softened. It was far cheaper
to "lose" $500 then to locate another buyer a few weeks or months later when
the market was harsher and our final sale price might have been many
thousands of dollars less.
Would we have
rather not paid the $500? Sure. But $500 was a small cost in the context of
a rapidly changing market, one where delay could have meant a serious price
reduction.
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As you know
in our current market there is a lot of inventory available, and we have had a
real slowdown in the home sales. In the old market, people could just put a sign
up, list on the MLS, and in no time, everything was selling. In order to sell
houses in our town these days, real estate companies must go to another level.
Check for yourself, some of our area’s homes have been on the market for going
on a year or more. We do things differently. We produce top-quality media, the
absolute best web presence, and have a three man team. We do much more than that
to sell homes, and we have listed that later on this page.
We invite you
to look at some of the individual websites we have created for each home, and
the media we generate to get your message out. We employ the best old methods,
and continue to find innovative new methods such as Craig’s List, YouTube, full
videos, pictorial tours with wide-angle shots and panoramic pics, Art Open House
events involving local artist and wine flight tastings, and much more. Whether
or not the market is down, nowadays, it takes special energy and expense on the
part of the Realtor to bring homes to the attention of buyers. This means that
we use all traditional means locally, and take it to the next level and
advertise in areas such as Seattle, Las Vegas, Los Angeles, and San Francisco.
We also tell it to you straight about what you can really expect to sell your
house for. You can’t just do a CMA and expect a home to sell in days or months
if it isn’t priced right. The savvy buyer just walks down the street and buys
the next one. But if you are marketing your home strictly to a local market,
your wait could be a very long one.
The State of the Real Estate
Market in Sandpoint
The Real Estate market has certainly taken a beating in the press lately. It is
true, there are areas of the country that are definitely hurting, but Idaho is
NOT one of them. In fact, in the study just released from the National
Association of Realtors, they found that neighboring Washington State has
experienced a 30% REDUCTION in the number of foreclosures occurring in the
state. Spokane was 64th out of the 100 regional metro areas, even
better than Seattle’s ranking of 58. In fact, Seattle went up, then began to
decline, whereas Spokane(which includes Coeur d’Alene) simply declined. Our area
of North Idaho is even better, and sales are actually ahead of last year, while
foreclosures have not yet affected our market, and are virtually only marginally
more than in 2004.
So
what is really going on? With all of the risky lending that has been happening
in the last few years, it has brought buyers into the market that probably were
not really in a position to purchase. They often used adjustable rate mortgages
to qualify at lower rates and then when the rate increased there had been enough
market appreciation that they could refinance into a new loan and start the
cycle all over again. Now that market appreciation has slowed and these loans
are resetting to higher rates, many of these homeowners do not have enough
equity in their homes to refinance again. This means some of them are facing
foreclosure because they cannot afford the new, higher mortgage payment.
Also, in many areas of the country there has been a glut of building which has
flooded the market with properties. In the Phoenix area alone, they went from
4,400 properties on the market last year to 44,000 properties on the market this
year! Consider our areas. The front page of the Sunday Spokesman Review just a
couple weeks ago headlined this regional issue. With a metro population of
600,000, Spokane has roughly 3,000 homes listed for sale. Coeur d’Alene, with
only 100,000 people has 7,600! Our two county population of 70,000 has under
1,200, and many of those are in the CdA area. Another consideration is that a
large portion of the homes and condos we have for sale are vacation or will be
purchased as second homes, and since January 1st, we have sold 757
homes. Not bad.
So
what about the Greater Sandpoint/North Idaho area? Our economy remains
incredibly strong with a diversified economic base and strong business growth.
We have an incredible base of companies selling nationally and globally, and
with the new University of Idaho breaking ground and our tourist business adding
to the mix, our possibilities are boundless. This corporate base has companies
like Coldwater Creek growing in leaps and bounds, and others such as Quest
Aircraft manufacturing have so many orders that they are in the process of
hiring 200 new workers over the next several months. This combined with our
geography (mountain ranges surrounding us, with Schweitzer Ski Resort having
just come off a record year, and just named as one of the top 25 ski resorts in
the nation, and the West’s second largest lake in the middle), and marginal
traffic means that there is only so much room to grow here and that has kept
things under control. In the last few years we have experienced staggering
appreciation rates and that may slow down, but it will remain stable and steady.
In fact there has become an increasingly large gap between growths in home
prices versus growth in incomes. Huge appreciation is nice when you are a
homeowner for sure, but it is also necessary for things to slow down a bit so
that incomes can catch up.
According to the Office of Federal Housing Enterprise and Oversight which lists
appreciation rates for the last five years, our rate of appreciation is 8.42%
over last year, and our five year appreciation is 64.43%.
While our region is not a large enough metro area to register on the radar of
the Office of Federal Housing Enterprise and Oversight, the Selkirk Association
of Realtors shows that homes in the Sandpoint/North Idaho MLS area are still
doing well.
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Average / Median Selling Price |
Average Days on Market |
Number of Properties Sold |
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Area |
1/1/2007-10/01/07 |
1/1/2006-10/01/06 |
1/1/2005-10/01/05 |
1/1/2002-10/01/02 |
1/1-10/01
20007 |
1/1-10/01
2006 |
1/1-10/01
2005 |
1/1-10/01
2002 |
1/1-10/01
2007 |
1/1-10/01
2006 |
1/1-10/01
2005 |
1/1-10/01
2002 |
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Homes-Sandpoint |
$316,716
/ $250,000 |
$374,313
/ $259,500 |
$247,499
/ $215,000 |
$146,987
/ $123,750 |
105 |
90 |
51 |
154 |
142 |
151 |
165 |
108 |
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Homes-Bonner Cty |
$345,222 / $257,825 |
$339,283
/ $255,500 |
$266,349
/ $215,000 |
$170,758
/ $145,000 |
97 |
90 |
70 |
154 |
510 |
505 |
611 |
386 |
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Homes-Boundary Cty |
$230,376 / $173,500 |
$205,120
/ $182,000 |
$173,858
/ $155,000 |
$170,758
/ $145,000 |
93 |
88 |
104 |
104 |
114 |
122 |
179 |
62 |
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Land-Sandpoint |
$226,691 / $130,000 |
$192,276
/ $152,750 |
$137,238
/ $110,500 |
$248,800
/
$61,000
|
115 |
128 |
79 |
79 |
23 |
30 |
52 |
22 |
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Land-Bonner Cty |
$202,318 / $125,000 |
$180,806
/ $122,500 |
$151,460
/ $102,750 |
$102,249
/
$50,000
|
114 |
98 |
330 |
330 |
254 |
535 |
173 |
165 |
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Land-Boundary Cty |
$104,680 / 86,250 |
$82,956
/ $43,000
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$71,111
/ $35,000
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$67,210
/ $35,000
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125 |
110 |
190 |
190 |
77 |
105 |
158 |
43 |
Looking at this data, while the average sales price from 2005 to 2006 went up
astronomically, we have drawn back considerably in 2007. Still, homes bought in
2005 have appreciated nicely through October of 2007. The median sales price is
in a dead heat with last year’s, and is considerably more than 2005. Add to that
that, overall, the numbers of homes sold in 2007 is only down only 16% from our
best year ever, and virtually equal to last year. Certainly our most recent
numbers are way ahead of 2002. All in all, sales are good, Idaho is one of the
top appreciating states, and if homes are priced in keeping with our current
market, days on market are also very good.
So
where do we go from here? FHA loans will make a comeback for borrowers with low
and / or gifted funds for down payments, rents will rise as more renters come
back into the market, there may be a short term slow down in home sales,
however, there will be a long term gain will be fewer defaults.
If
you are a seller? Now more than ever a full service agent is what you need. The
days of slapping a price on something and having it sell instantly are gone.
Make sure that you have done your home work. That means pre-inspecting your home
so that there are not any surprises, staging it to capture buyers the moment
they walk in the door, use professional pictures to entice buyers on the
internet and most importantly —PRICE IT RIGHT!
If
you are a buyer? Now, more than ever, is the time to buy. There are more choices
on the market which means that you may actually be able to negotiate something
and you will be gaining on long term market appreciation.
No
matter what, know that I am here for you as your market resource and advocate.
If you have questions about the local market and how to accomplish your Real
Estate goals, give me a call today to schedule a consultation.
Read on to
see what we are doing. We have included an example of our E-mail Blitz we send
out to all area Realtors, web page examples, and would be happy to send you
examples of the media we produce for each and
every property. I am still hoping
other local real estate people won’t learn about these new methods for a while.
Still, they would have to be working dawn to dusk to do what we are doing, even
if they knew how. Let me lay out some of the methods we would use to market your
property:
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In Sandpoint & North Idaho near Lake Pend Oreille, and
Schweitzer Mountain
The Right Ideas to Market Your Home to the minds of the
buying consumer as the right property to buy now!
First,
we don’t want to reinvent the wheel, we just want to supercharge the
vehicle. We will continue to use the tried and true methods available to
us such as the MLS, fliers, and handouts that are
part-and-parcel to real estate in Bonner County. Not everyone reacts well
to new media and methods, so it is very important to continue using these
avenues to reach a complete target buying populace.
Second,
we take extra care with the photos and presentation of your property on
every venue. If a buyer is surfing the traditional sites or looking at
print material, and your house doesn’t shine, then they simply pass over
it and go to the next one. The house has to look outstanding from a
very small, distended pixel image. We have the expertise to make your
house look good even in this limited presentation. Just view how we
present our featured properties in any of our materials or websites and
you will see that this important factor is not overlooked.
Third,
we choose which homes we solicit very carefully. While it may be
politically incorrect to be this selective with our fellow man, it makes
perfect sense with marketing homes. We believe if we only have higher
quality, exclusive styled homes to market, when a potential customer
calls, they are more interested in the home we are selling than having us
show them even more homes in the hope we will sell them something. Our
goal is not to land the client by having a teaser home on the MLS. Our
goal is to sell the house we have in our portfolio. Having top homes means
that happens more often than not.
Web Site
Specifically Designed for Your Property –
As a Flash Animator, Gary has put together dozens of websites
for various businesses, organizations, and enterprises. Marketing property
is much the same, with the exception that the average consumer still does
not use the MLS as actively as the region’s real estate professionals. We
propose putting together animated, colorful websites for your unique and
one-of-a-kind property:
www.123YourAddress.com This attracts the attention of
the qualified buyer, as well as getting the pros’ attention also. In your
site, we will have very large and more detailed pictures of the
properties. A distinct drawback to the web is that people really do not
get the image the seller wants to portray. Therefore, larger pics,
brochure style layout, and marketing wording take the site to the next
level. Once the site is finished, all advertising will point to visiting
these sites, further reinforcing the ad being utilized. We will also
create a video tour, and the whole thing operates as a virtual tour. After
we create the video tour, we automatically upload the video to
www.YouTube.com
More importantly, while
web sites devoted to individual offerings are clever and polished, we
intend on making larger web pages that are truly unique and spectacular.
While many web sites exist for a multitude of enterprises in North Idaho,
most are forgotten as quickly as the viewer can surf away. By using music,
action, and animation, we will create a site that once seen, will not be
forgotten. A prime example of our first fully Flash Animated web site is
www.SandpointCentral.com
We take extra care for advertising utilizing keyword
advertising on Google. So if you are trying to learn more about the area
in Denver or San Diego, and you put the keywords Sandpoint Information or
North Idaho Properties, our ad is one of the first ones that appears on
the right side of the screen. We will then hang laminated Flyers as well
as posting paper flyers strategically with
www.456YourStreet.com on telephone posts and in areas
of public congregation. This all combines to create the best coverage for
your home.
Please feel free to check out any of the following web direct
Web Sites for the following properties:
www.301Highland.com,
www.11TalonDrive.com, or
www.7993Highway2.com
Feature Properties
on several Internet Sources including our own site:
SandpointCentral.com
– SandpointCentral.com is one of the area’s new outstanding web resources.
Though new, it is getting sixty hits a day. We will feature your property
as one of our featured homes on the front page until sold. Your property
will also get National Exposure on several websites including
www.Realtor.com,
www.HomeGain.com,
eNeighborhood.com, RealtyTrac.com,
and finally one of the most viewed nationally:
www.HarmonHomes.com. We will also feature the properties on our
other website covering our key areas of Washington and Idaho:
www.Windermere.com Finally, we will have your property able to be
searched for in three area databases: the Flex MLS covering
Kootenai and Spokane, the Selkirk MLS for Bonner and Boundary, and
the Windermere Search Engine which is updated from every MLS every
hour.
We take this to the
next level by advertising in the Real Estate Book which places your
property on several other real estate web sites such as
Yahoo! Real Estate,
BobVila.com, and ten others. We absolutely believe in utilizing
the web and creating the best web environment to market and search for
homes. Apparently the rest of the country feels so also. In a recent
article by MSNBC, this trend is growing.
Click here to see the article.
Specific Market
Directed Advertising –
As funding permits, advertise in areas that are specific to our buying
segment. This of course means our local real estate magazines, as well as
regularly advertising in the Daily Bee. In addition to creating
local marketing material, have directional advertising. These ads could
take the form of splash pages in regional versions of MySpace.com
and Craig’s List. There are virtually no other real estate companies currently using these resources. Craig’s List
and MySpace allows us to target every market demographic, as well as
directly market in Seattle, San Francisco, Chicago, L.A., Spokane,
Montana, and many other areas. This alone will give us approximately
100,000 views a month. We are also using YouTube.com, recently purchased
by Google for 1.6 billion dollars. The same video tour that we will
advertise on YouTube will be featured prominently as one of our ‘Featured
Properties’ on our own websites – www.Windermere.com
and
www.SandpointCentral.com
Direct Mail –
While our population is low
enough that Direct Mail may be the least of all good ideas, it is still
viable for special events. While we can disseminate to the companies about
you properties, we plan on mailing special brochures out to the top
producers in each real estate company. This will target only those that
sell. As they say, five percent of the salespeople make ninety-five
percent of the sales.
Direct E-Mail –
There are several sources
available to reach out to target markets. We will tap our personal and
corporate e-mail lists and mail out info to each contact. This will allow
us to immediately use an E-mail Blitz to get the word out to
Realtors about the property. Included is a copy of one of the splash
e-mails we recently sent out to every Realtor in Bonner, Boundary,
Shoshone, and Kootenai Counties.
Wine and Cheese
Private Showing –
Immediately correspond to these efforts with a Private Showing for
Realtors using
 a
Wine & Cheese Party as incentive. Then follow the next day with an Open
House for the general public. This needs to be advertised the week before.
When the Realtors see the property in the right light with the right glass
of wine, then the next day they will be more compelled to bring their
clients to show the house.
We are currently working on a Monthly Wine and Cheese event
to showcase our premier clients and properties. We will hopefully be
having these at the Beach House and the invitees will be real estate pros
one month, the Downtown Business Association the next, BBB Members the
next, etc., etc.
Follow Themes –
All advertising components –
print, internet, and other media – would follow a general look or theme.
This would give prospective buyers the same feel, no matter the format.
Therefore the internet site would, in general, have the look of the
brochure(s), and the logo of the video following the same. The internet
site would have on demand print capability, using PDF and/or Word Document
forms to enable prospective buyers the option of printing our brochures,
regardless of their location.
Radio –
Gary hosts three
radio shows on KSPT and KBFI. As part of his trade, he is allowed to
market through his shows. His shows are North Idaho Business,
North Idaho Arts and Adventure, and Gourmet
to Go. From his shows, he interviews several business and community
leaders every month. This can be a great resource in selling your
properties.
Newspaper Advertising
– Advertise in the local newspapers such as the Daily Bee, the
Spokesman Review, and the Coeur d’Alene Press. This
tried-and-true method has worked so often for us, yet few use it. We
market homes to sell quickly. In the boom market we had, many did not take
the extra effort or expense. We always did and continue to find this is a
great way to sell house in our market. We also will advertise in the
Seattle Times and the Post-Intelligencer and the San
Francisco Chronicle at different stages of the campaign. When the time
is right, we will advertise in the print Wall Street Journal, as
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