Case Study - Inclusions and Marketing
The "Ford" Property - Wrong MLS area wasted 63 Days on Market!
After having their home listed for over 200 days on market there did not seem to be much hope of getting a sale. Unsure of what was causing the problem and convinced he could do a better job on his own, this Seller decided to give it a try on hiw own without any further assistance from his previous agent.
When I first sat down it was easy to see why Mr. Ford was so frustrated. He really did not want to be going it on his own but, he really wanted to move forward and he needed to get the property SOLD.
The home was older and dated and the property needed the help of a professional stagger but, it was located on a beautiful tree covered lot with lots of amenities. There was a pool, hot tub, huge outdoor patio, multiple car garage spaces, and outbuildings. Despite some functional obsolescence and the dated looks inside, there was a lot to like about this home. It had a huge master suite, a couple gigantic recreational rooms, and a spacious kitchen with vaulted ceilings overlooking the outdoor "Playland".
Obviously, this was a unique home with much to offer but, if this was not enough, he also owned an equally sized lot that was vacant and immediately adjacent to this home.
From the moment I began investigating the situation, I knew this property was special. It was in a very desirable location and it had "tons" of potential. Properties like this one are a rare find, so I knew there had to be some issues with how it was handled up until now.
For starters, I noticed that the previous real estate agent, who had attempted to assist them, listed the property in the wrong section of the MLS making the property virtually unseen by anyone who would have been searching the area the home was located.
In addition, he had been very poorly coached on what was necessary to make the home presentable for showings. Working with the same furnishings and fixtures that he already had we called in a professional stager. With a little effort, some rearrangement, cleaning and some limited painting, we were able to give the home a much more presentable look.
Aside from a few cans of paint, removing some older clunky furniture items, and the purchase of a few inexpensive furniture pieces, it did not take a tremendous effort to really brighten and freshen up the appeal of this home.
The next step was to put together a pricing strategy that would ensure a sale and still maximize the potential return on his investment. As I have seen so many times before, the inclusion of an additional lot in the offering that adds significant dollars to the listing price is often a "deal killing" mistake. Since the objective was to sell both properties, conventional wisdom may lead some to believe they needed to be lumped together in one offering. Usually, however, this is a BIG mistake.
Since the additional lot was of significant value and saleable as a stand-alone parcel the amount of incremental price including it in the sale would have added to the listing price of the home, made it hard to compete with other similar homes on the market for the same price range.
To be more competitive we separated and retained the extra lot (2 acres) and were able to make a significant reduction to the offering price of the home. This move made the home much more competitive and attracted a wave of new Buyers and at the same time allowed him to retain the additional parcel and sell it as a separate offering.
The result of this strategy was that both pieces could be sold at a higher collective price than if there were offered together and ... that is exactly how it worked out!
Lowering the sale price by less than the value originally being allocated for the adjacent property made this home extremely competitive in the marketplace again and we had instant results. Within a very short period of time, (less than half the time he had been on market with no offers) we received multiple offers and were able to go to closing while retaining the adjacent lot.
Then within a few weeks after the sale of the home, the lot was placed on the market and sold for more value than it had been allocated for in the original offering. This was a win-win situation that reaped this Seller greater returns on both pieces which of course meant higher returns on his investment all the way around.
What were the keys to this sale? Understanding the market, attention to details, proper preparation and stagging together with greatly improved marketing. The results speak for themselves a higher gross return and sale in half the time it took for the first poorly conceived and executed sales attempt to fail.
Case Study - Decorating
The Kothman Property - Color Choices are Critical to Sales Success!
Try to imagine what your home would look like from the street if it were painted with fluorescent multi-colors patterned with zig-zag stripes, polka-dots, and a big bright red and blue lightning bolt on each corner!
Obviously, this would be ridiculous but hopefully, it helps to illustrate my point. Can you really imagine what that would look like without seeing it? Chances are you may be having a little trouble visualizing this and it is exactly what happens when Buyers view homes that are painted all wrong.
Studies over the ages have proven that color has the power to invoke and enhance
emotions. It is well known the certain color groups may have a calming effect while other choices may tend to encourage activity or tickle your appetite.
Designers, Decorators, Home Builders, Contractors, Realtors and most of the population agrees that color choices make a HUGE difference in the EYE CATCHING APPEAL for any product, especially when it comes to where we live. Therefore, the color selections you choose when getting your home ready for market are of PARAMOUNT importance! (compare the kitchen photos shown)
As difficult as it is to imagine changing to a ridiculous scheme, it is just difficult for most people to visualize what a room would look like if it were painted in a color scheme of their own preference.
It has been PROVEN over and over again, that homes in NEUTRAL PALATES, sell faster and for more money than properties with colors outside a narrow spectrum.
The theory PROVED itself again when I helped take the Kothmann property shown here from FAILED to SOLD in less than 1/3 the time they had previously spent trying to sell!
My involvement with this property began as usual with a scan of failed listings. I knew the area and neighborhood and enough to know that there were simple changes that could be made to the previous Broker's Marketing Presentation and the Home Staging that would have a dramatic effect on the outcome.
This home was PREVIOUSLY LISTED for 207 DAYS and FAILED to SELL. I convinced the owners we needed to make some basic changes to appeal to a wider audience.
They agreed to repaint the kitchen from bright bittersweet orange to neutral colors I helped them pick out ... We re-listed the property and had it SOLD and CLOSED in 81 DAYS, less than half the time it had spent on the market previously with another Broker and failed to sell.
Case Study - Architecture and Demographics
The Hussum Property - Design Dictates Likely Buyer
The owner was frustrated. His home was a custom design that he built himself. The setting was beautiful and the views were absolutely fabulous, overall the home was in great condition.
How could you explain it? The property had been listed twice already and on the market over 250 DAYS when I arrived on the scene. One of the first things I noticed was that the 1st Broker that failed, was also the 2nd Broker to FAIL.
So here was my question for the owner? After being unsuccessful the first time, what did the previous Broker change when they re-listed? The answer came abruptly, in a simple truthful answer! "Nothing", he said. "Let's get started then I said."
Of course, we all know the definition of Insanity right? Keep doing the same things and expect a different result. I know it may sound a little facetious but, coming into this I was already certain we needed to look for a different target market.
This home was going to be tricky and I knew it may take some time, probably longer than most. There were two reasons I was concerned. The home was located in an area where Buyer demand was trending downward and Buyer demand was already very low for the region. In addition to a large supply of homes available, the property style itself was not a good fit for the profile of Buyers most likely to be looking for a home in this area.
As beautiful as the home was, the multi-level floor plan was sure to be an obstacle for "older" less mobile prospects. Unfortunately, the vast majority of the owners in the area were retirees so realistically any local traffic from "lateral" or "Move/Up - Move/Down" Buyers would probably not be likely either. This did not mean the home would not be saleable, it only meant the probability that our prospects would have to come from a base outside the local community was much greater. Also, whoever bought this home would have to be willing to travel up and down many stairs since it was a multi-level home.
Mr. Husum listened to my analysis and liked my plan, so he agreed to re-list with me. Years of experience taught me that the most probable Buyer for any home is most likely going to be very similar to the demographic profile of the owner, how-ever-many years ago, they bought the home. A very simple formula but indeed surprisingly accurate.
You see, the same features and benefits that attracted you to the home will likely be the very same benefits that attract a new Buyer. When the Husum's built this home and moved in there were much younger and more active. In fact, the stairs that never bothered them then, were the main source of their discontent as they had aged. For the same reason, we needed to look for a Buyer that would likely not be as concerned about living on multiple levels.
However, the first action we took was to mitigate the "easy to fix" negatives in the home by doing a complete Re-Staging! We tackled some of the more basic items first. We focused on cleaning and decluttering. Of course, we re-arranged some furniture to open up congested spaces and make the rooms more accessible. We also repositioned things to take full advantage of the spectacular views this home had to offer.
Next, we began an entirely new marketing campaign by "Pushing Out" to our and "Reverse-Prospecting" every one of our recent contacts who expressed interest in homes but, had no preferences or restrictions on multi-story dwellings. We searched for anyone that had profile matches for multi-level housing in our system over the last 24 months and we went to other agents too! We targeted anyone who might have a special connection to move-up Buyers fitting the profile for our most likely Buyer, especially anyone that might be coming from outside the area.
The results began to materialize almost immediately. A small price change from the previous listing and the efforts of our marketing program turned up a prospect within our own company sphere. The home was shown to the Buyer who submitted an offer and we had a deal!
Our predictions were correct. The new Buyers family had a striking resemblance to the original owner's family when they built the home several years prior. Less than 90 days after listing the home was SOLD and closed.
Case Study - Home Preparation, Marketing, and Price
The Hooker Property - Missing MLS Data, Bad Photos, and Overpricing Spell Failure
From the moment I met Mr. Hooker, we seemed to get along great. He was an agreeable man. One of many "heroes" of his time, the same the same generation as that of my father, also a Veteran of WWII. He was someone I instantly felt as though I could trust and he was someone I wanted to help.
After chatting for awhile and hearing some of the remarkable stories from his past, he asked me straight out. "What have I got to do to sell this home and what are YOU going to do for me that is any different from what I have already had"?
By now I already knew what had to be done. So I went to work. I showed him the "evidence" from the previous sales effort. It was "lacking" in many ways!
We reviewed the actual price data for the neighborhood and surrounding areas using comparable homes that actually sold and I went through a comprehensive trend rate analysis with him. Proper staging and the need to clean and re-paint were also issues we would need to address.
When Mr. Hooker made the decision to sell his home several months prior, he had made some life choices then that was still valid for him now. Unfortunately, the home was not selling and it had been on the market for 6 months! Now he was beginning to question his decision and he was losing faith in whether or not he could ever get it sold.
However, each day he stayed on, the property was becoming a burden and with all the overhead and hassle that maintaining the home as an absentee owner was beginning to cause, the desire to sell was rapidly changing from wanting to sell to NEEDING to sell.
As I have seen so many times, the previous Broker missed the mark on the original pricing. My client seemed to be aware that the original numbers were not realistic, yet indicated the Broker really thought it was a good idea, assuring him to "try it". My analysis showed that the price was an issue and it was not the only problem. Missing Data in MLS, a poorly staged home, and poorly composed photos with NO Text or Descriptions weren't helping him either! Things would have to change if we wanted to be successful.
He agreed and since the timing was an issue now, we got started right away! He wanted to re-list immediately and do the painting and other changes I was suggesting after we were back on market. I resisted. Instead, I convinced him that we needed make sure the effort he was putting into the property would be worth the wait to get completed first. So he agreed to get the home ready to SELL before I took the new photos or started my new marketing plan and listed the property in MLS. Within a couple days he had everything ready to go and we went to work!
I committed to getting Mr. Hookers home SOLD so now it was my turn. In my estimation, he had given the very best of himself during his youth for the defense of our Nation. The least that I could do was to give him my very best I could to help him sell his home! I promised I would! In less than 30 days we were successful a Buyer that was successful closing on the home! A great improvement over the 180 days he spent getting nothing.
Case Study - Two Brokers, Two Years, Two Failures
The Barrett Property - Fancy Titles don't beat market understanding and sound advice
This study begins with a Client that I had done lots of work for in the past. The Seller seemed convinced the small land lots I had been involved in selling for them for a few years prior in another county didn't compare to the task of Selling a Higher End luxury home, they selected a Broker who proclaimed themselves to be a Luxury Home Specialist when it came time to sell their high-end principal residence.
I didn't like this but respected their decision anyway and in fact continued to work for them, selling additional properties they owned, while their home was listed. At the end of the 1st year that it was listed, I noticed the home was withdrawn from the MLS and I gave them a call.
They were very polite and candidly explained that even though they had been unsuccessful, they really wanted to stay the course with finding a Broker who ONLY worked in the high-end luxury home market.
Since "Luxury Homes" were not the main focus of my personal Real Estate Business, they wanted to give yet another Broker a shot at getting it done. Of course, this was a disappointment for me and unfortunately for them after another full year on the market, their home was still NOT SOLD.
This time when I called, I assured them it would be worth their time to at least listen to my presentation and fortunately they agreed. I was diligent in my preparation and I was certain in knowing that the most basic principles of home selling apply to any property in any market no matter what the price range. I used this knowledge to my advantage and helped them to dissect the experience they had just undergone.
After doing my homework, I was certain what the changes were that we needed to make. It would include UPGRADING some of the marketing materials the previous Brokers were using. In fact, I was a little shocked to see just how well some of my programs and marketing materials were stacking up OVER and ABOVE the services the so-called "Luxury Home Brokers" had provided them with.
I met with the Sellers and reviewed my findings and showed them my plans. There were a number of issues that I felt needed to be addressed. This included some basic things like home staging, accessibility for showings, removing some clutter and getting professional quality photos taken. One of the more major issues concerned the offering itself.
They were owners of an adjacent lot that they wanted to include with the sale. Unfortunately, trying to include this in the listing price is almost always a DEAL KILLER as I have detailed in previous Case Studies (See the Ford Property Above). This is a classic mistake most often made by inexperienced agents but sadly it was a mistake that was repeated by BOTH of the previous firms. As I have indicated before adding a huge secondary lot to this sale made the home way overpriced for the other similar offerings in the market. So we separated it from the offering and lowered the listing price accordingly.
This may not seem like a big deal but the reality of the situation was evident as soon as they agreed to follow my strategy and re-list. We saw an immediate increase in activity and 73 DAYS LATER WE HAD THE HOME UNDER CONTRACT AND SOLD IT FOR over 98% of the Asking Price!
The best part was they were able to retain the additional lot for sale at a later date and the STORY gets BETTER. We Sold the lot on a separate contract and closed the deal about a few months later. Not only was this good news but because the property could be classified as an investment, we were able to apply different tax treatment to the sale of the lot and save them some money on their tax liabilities. Using the strategy we set up for them, they ended up with a net return considerably higher (more than 5%) than they would have if they had successfully sold the property with the lot at the previous listing prices with the other Brokers. So much for the fancy titles ...
Case Study - Finding your Competitive Advantage
The Benhur Property - How many 1600 Square Foot homes have a 4-car Garage?
Some homes have special features that are so unique it that there is NOTHING ELSE like it on the market.
For the Benhur property the BIG selling point here, besides the awesome interior finish out with Granite Counters, Beautiful Wood Floors and ALL Newer Appliances including a Washer and Dryer, was the EXTRA DETACHED FINISHED GARAGE.
Now of course, this can work both ways. If the home is grossly over improved or the amenity is something that would be of Negative Consequence, obviously it could work against you. I met with the Seller after he had recently FIRED his Broker. Now, he was trying to sell on his own without much luck.
The problem was obvious to me, this property had NOT been promoted for it's BEST amenity! This was indeed a very salable property and an absolute dream home for the Mechanic or Hobbyist. However, the previous agency made NO MENTION of the EXTRA GARAGE in the Previous Broker's write up or marketing materials.
Could it really be this simple you ask? I don't know if poor marketing was the only issue, but here is what I do know!
I explained to the Seller how I could help him and he agreed to Re-List with me. We Changed the Focus of the MARKETING and Promoted the Garage Space and Interior Finish and Reduced the offer price 1.5%.
We had the home Under Contract 15 DAYS after I listed it and SOLD it for 97% of Asking Price!
Case Study - Preparation and Marketing Materials Matter
The Orr Property - Market me Please!
141 Days had passed and this home was getting no action. The Seller had ENOUGH! It was time to END the relationship with their prior Broker and re-list their home.
My first impression of this home was okay when I saw it in person, so it was not immediately clear looking at the home what the problems were. However, a review of the prior marketing plan showed me what I was looking for. I found a number of omissions in the original listing report on MLS. Not surprisingly, the Seller had received very little feedback from their listing agent over the course of almost 5 months since they listed. Since there were some things about the paint and condition that would not translate well to photos, many areas of the home had even been omitted in photographs and marketing materials like flyers.
This was not good for the Seller who was losing money on a vacant home that still had a mortgage, taxes, and HOA payments due. Knowing that their funds were getting tight they were reluctant to invest too much money but, I suggested the Seller make at least a few low dollar changes including some painting, clean up, and repairs. Having spent several months on the market with no tenant covering the mortgage they didn't want to spend a lot of money but they were begging to understand the importance of making some changes. With the holding costs become an even greater concern, we had to work fast.
There are some repairs that pay for themselves and others that do not give a full return on investment. Doing the right things can make a big difference in getting a sale done so we kept it narrowed down to some things they could do quickly and inexpensively while giving the greatest returns. With the work they agreed to do complete, we were able to start the new listing with a fresh appeal. This made it possible to make some great improvements in the marketing by highlighting these changes in our photographs and producing better quality marketing materials then they had been working with.
We went to work fast, they finished up some minor repairs and we started our marketing campaign. I did a company-wide property tour, an area canvas, and syndicated the listing to a group identified in my exclusive Reverse Prospecting , as potential Buyers for the area. Our new list price and freshened appearance made the home an attractive offering and the market responded favorably.
The best part was that since we were so aggressive and lowered the listing price at the same time we did the improvement the market activity went through the roof. As is so often the case, it was good enough to actually get us an offer price ABOVE THE ASKING PRICE.
The Result - The time from RE-LIST to CONTRACT was ONLY 59 DAYS and it SOLD for $4800 more than our listed price.