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The Truth About Open Houses

Home sellers: why are you pinning high expectations to open houses?  Is this your idea or your agent’s?  It is a mistake to think open houses are an important marketing strategy for your home to sell.  Open houses are not so important.  They haven’t been for years, since about 2006 in my opinion.

The real function of open houses is for agents to pick-up buyers.  The majority of buyers walking through your house on Sunday afternoon are in the early stages of their home search.  This makes for an excellent way for agents to meet buyers who are often unrepresented.  The buyers usually expect this, as they are shopping around for a buyer agent, and for general neighborhood and market information.

The buyers coming to your house are shopping, but not for a home…not yet.  When they enter the stage of readiness to buy, they’ll book a private showing.

Why have open houses lost their purpose as a main showcase for your home?  First, let’s blame (or thank) the internet.  With all the media available, buyers are able to learn a lot more about houses online.  They don’t need to see fifty houses to learn what the market has to offer.  Instead, they can view videos, pictures, floor plans and neighborhood information anytime, on a handy device, from anywhere.

Second, with the slow market of the past few years, buyers are less fearful of losing a home.  If they can’t get to a home on Sunday, they’ll come see it on Monday or Thursday.  There is more inventory and homes stay on market longer.  What’s the rush?

But open houses are not a total waste of time for you.  You should have your agent (or team member) host an open house occasionally.  Open houses are a great way learn about the market.  Agents share information about about open house traffic to gauge what is going on locally.  In open houses we also hear honest feedback direct from buyers, which can be very helpful.

So don’t nix the open houses completely.  Adjust your expectations instead, and ensure that the open houses are not your listing agent’s marketing tool of choice.

7 Marketing Methods a Listing Agent Must Offer Before You Hire

When interviewing listing agents to sell your home you’ll receive books with marketing plans telling you about all the amazing things the company will do for you. Some of it is great, some of it a bunch of nonsense, and the most important stuff won’t be in there at all.

There are essential marketing strategies that must be incorporated into promoting your home when it comes on market. Ensure all of this is included before you say “Yes” to any agent:

1. Professional photographs. Agents are not photographers, usually. I don’t care what camera an agent has, a professional photographer will do better. If you think this is not important, go online and look for yourself.
If you are selling a smaller home or condo, this service is even more important, although less likely to be available to you. Smaller spaced demand excellent photography, otherwise your home will look smaller in pictures.

2. Staging your home. There is always something to be done to improve how the home looks. This doesn’t have to be expensive or elaborate, but your agent should either give you a to-do list of getting your home ready, or insist you hire a staging professional. Otherwise, the photos won’t look nice, buyers are less likely to come, and buyers will pay less for an un-staged home. You are losing thousands of dollars if you don’t invest the time and money to get the home ready to be photographed and shown.

3. Floor plans. Buyers looking online often have specifications they want and room dimensions are extremely helpful. For example, when a buyer needs a living room large enough for a grand piano, without a floor plan the listing will be skipped even if it is a perfect fit. Giving potential buyers and their agents as much information as possible helps bring the right buyers in and keep the wrong buyers from wasting your time.

4. Video. We love videos. So much information is consumed through video, and it is easier to connect with a property through a video.

5. Online Exposure. By far, the most important way to reach buyers is with online exposure to your home. Your agent must be aware of where the listing will be uploaded by MLS, or through the company through syndication, like Google Base, Zillow, Trulia, Realtor.com, etc. There are other sites, such as Craig’s list, that require a weekly update. And what about a single listing website? Those are a great way to promote a home on the market yet few agents are using this service. Ask what the agent and the company provide and how well they are versed with the online marketing strategies of listing a home. Keep away from anyone claiming technical ignorance. Failing to understand the internet’s role in marketing property unacceptable. You don’t have to know it, but your agent does.

6. Multiple Listing Service (MLS). Every agent will put your listing in to Multiple Listing Service. But how will it be done? MLS plays a huge role in the sale of your home. First, it is the means of communication with other agents. Second, it is sent directly to buyers. Third, it is syndicated to other popular websites where buyers search for homes. But put together a poor MLS listing, and you have squandered your most important marketing opportunity.

Bad MLS behavior includes posting a listing without photos, not including all information, poorly written or uninspiring description, or posting open houses late, (like Saturday night instead of Thursday morning). If your agent is not going to take MLS seriously, run.

7. Marketing to Agents. Marketing proposals from agents will say a lot about how to present homes to buyers. But the overwhelming majority of buyers will be represented by an agent. Everyone overlooks the importance of marketing direct to agents. A broker open house is just part of it. Other parts include flexibility to show the house, paying a premium commission and direct mailings to agents.

Marketing your home is the role of your listing agent. A marketing plan must include updated methods and a full spectrum of services. Think of every failure to meet one of the standards above as lost money, because it is.

Tell Your Agent These Things Now, Avoid Problems Later

It is extremely frustrating to work on something with incomplete or wrong information. All of your efforts can end-up worthless. When real estate clients do not give all information in the beginning of their buying or selling process, the advice they receive misses the mark.

Some home buyers and sellers don’t give agents all the information for several reasons. It may be a lack of trust, or fearing the agent will not want to work with them. So go find a trustworthy and dedicated agent, and tell him or her the following.

First, tell your agent your real estate needs. If you are not sure what that is, that’s OK! If you change your mind, that’s OK (and expected)! But the agent must know your general needs, and work with them. Your agent may offer all sorts of alternatives to see if you are open to other things, so don’t be annoyed or offended. Suggestions for seemingly unfitting options sometimes open the door to new markets you didn’t previously consider.

Second, tell your agent your general financial situation. In the boom market we got used to keeping all our financial information hush-hush because everyone could obtain a mortgage one way or another. Down payments and credit scores simply changed loan terms, not eligibility.

Those days are over. Your agent needs to know about your loans and equity if you sell, and your down payment and pre-approval from a reputable mortgage broker if you buy. A creative and knowledgeable agent uses such information to negotiate better, to steer you in the right direction, or to talk you out of a transaction if need be. (By the way, the bank loans on your home are all public information, so an agent should know at least that before you even meet).

Third, tell you agent about your timeline. If you are not in a rush, it’s okay, but tell your agent. Both client and agent must be very clear on a timeline and work accordingly. For example, as a seller, if you are not in a hurry to sell an agent may recommend you don’t go on market yet. Instead, maybe it is best to market your home in different season. A buyer who’s not in a hurry may be advised to wait for price reductions or for an unusual opportunity in the market that can save the buyer a lot of money.

If you are not open and honest with your agent, the advice you receive will not be optimal. You will miss out on valuable information and frustrate a well intentioned agent.

Be sure to clarify your real estate needs, be open about your financial situation as it applies to real estate, and discuss your timeline. Your agent’s goals should be your goals, so make them known.

Can I Trust My Real Estate Agent?

In many countries and cultures the salesperson is not highly regarded.  They are seen as swindlers, trying to get a commission at any cost.  This often happens where there is little history of salesmanship, or little consumer protection.

Luckily, here in the United States, we respect the sales agent.  We recognize that a sale is the first step of any transaction.  Salespeople are often top earners in any industry and real estate agents have earned a commanding place in the economy.

I believe the overwhelming majority of real estate agents are trustworthy and will do their best for their clients.  I am not saying they are great agents or skilled negotiators, I’m just saying their intention is to serve honestly and meet fiduciary obligations.  Don’t forget we have enough liability that it is just not worth being slightly less than forthcoming.

In working with people from various cultures and immigrants from several countries, I learned that hiring a real estate agent goes against the common good sense for many.  A deep distrust is hard to shake-off.  Here are a few tips to find an agent that you can trust.

Ask for References – It is perfectly acceptable to ask for references.  An agent should be happy to give references.  Feel free to read testimonials, call past clients, and ask many questions.

Ask about Challenges – Every process has a challenge, every sales person has a weakness.  We are not perfect and the most confident and trustworthy people will be open about that.

Use your own intuition – Most trust is built through simple rapport.  That is how we build friendships and business associations.  Use your own intuition about a salesperson like you would about any other person.

Be open about your reluctance – You can speak plainly about why it is difficult for you to hire an agent.  If you are met with hostility and offense, then you are speaking with the wrong person.  A trustworthy agent will be able to explain to you the different rules and regulations in real estate brokering, and be sensitive to your needs.

If you don’t understand something, say so! – A good agent will find a way to make things plain and clear, regardless of your language and cultural differences.  Ask as many times as you need to have things clarified, a trustworthy agent wants to know that you have 100% understanding of what is going on.

Whether a discomfort with real estate agents is due to a cultural difference or a bad experience in the past, you can find someone who will be completely committed to representing your best interests.

Let me know if I can help you find the right agent.  By Ruth Malkin-Lerner, Senior Associate, Dwell360

How Landlords Save the World

The title of this entry is over-the-top, I admit, but I am just here to stick up for the landlords out there who are trying to do some good.  The word “landlord” in itself has some negativity associated with it, and the use of “lord” in this context is distasteful in our American sensibility.  In media, landlords are portrayed as misers ready to make a buck on the poor and take advantage of families.

Please!

Let me tell you about the landlords, the real estate investors, I know.

First and foremost, there is a commitment to maintain the property and keeping the tenant happy and comfortable, even with the high occupancy rate and the increasing rents.  I am not suggesting any altruism here, but it is cheaper to keep than replace tenants.  It only makes sense that tenants stay for a long-run, and take care of the property, as it is their home. Fostering that environment is essential for positive tenant-landlord relations, which is the relationship you want in between any consumer and supplier.

A rental property is a huge financial commitment and a landlord idiot enough to not take care of it and ensure it’s livability is ill suited for the job.

Yes, there are many terrible landlords out there.  The worse of them are the ones who neglect their properties, fail to keep up with safety codes, and don’t treat their tenants with the respect they deserve.  Just like in any occupation, in any aspect of humanity, there are some bad apples.

For more on tenant-landlord rights in Massachusetts, go to http://www.mass.gov/ago/docs/consumer/landlordtenant073007.pdf

Three Ways to Invest in Real Estate

Investing in real estate can seem overwhelming and reserved for the very rich.  In the current economic conditions and marketplace, it may even feel a bit too risky.  But if you’ve ever thought real estate investing may be right for you, this is a great time to learn about your options and how it can be done by almost anyone.

Before we learn about our options, though, let me say that I believe real estate investing can be a long a cumbersome process if you are new to it.  That is not a bad thing, and I think of a lengthy process as a series of checkpoints that will make me very sure of my decision at the end. But it does mean that you have to have a critical eye, some good research skills and an a greater-than-average supply of patience.  If this sounds like you, then let’s review how you can get into the lucrative business of real estate investing.

Whatever your budget, real estate can be your investment vehicle.

1.  All cash deal.  If you have lots of cash, you may be able to find an investment property in your area and buy it without a mortgage.  The advantage of this is that you will be a highly qualified buyer and you can probably secure a property for a bit of savings over a buyer who has to get a mortgage.  Another advantage of a cash buyer is that her expenses are much lower, as there is no monthly mortgage payment.  This enables her to be more flexible on the rent, giving her more options in choosing tenants.

The disadvantage of an all cash deal is that it is not taking advantage of very low mortgage rates.  Borrowing is pretty cheap, and if all your cash is in one place, you can’t use it elsewhere.  Leverage is a real estate investor’s friend.

2. Part cash, part mortgage.  The down payment minimum is 20-30%, depending on various circumstances and your financial qualifications.  My rule of thumb is that you should make money, or at least break even, with this kind of down payment.  If you lose money on a monthly basis, the property is not worth the price, (at least not not for an investor). Your mortgage payments, any association fees and taxes should be covered by the rent.

The advantage here is that you’ll be taking advantage of the cheap borrowing costs, and you’ll own a property with an income without the whole cash outlay.

The disadvantage is, obviously, the cost of borrowing money and the higher cost due to your mortgage payment – same as the mortgage on your home.

3. Pool of investors with little cash.  Gather a few friends and family, and pool your money together to buy one property.  It can even be a small property at first, but at least get into the market.  If ten friends get together with $15,000 each…you do the math.  The advantage is that you are in the real estate market, getting a piece of the pie, however small.  It is a start, or a great single investment you have.  You can hire a real estate broker and an attorney to help maybe for a stake in the property instead of commission and fees.

The disadvantage is finding like-minded individuals and putting it all together in a legally binding agreement.  To me, this is just a bit of leg-work, and not so much a disadvantage, but it does add to the complexity of the transaction.

Entering the real estate market as an investor is not simple at first, but once you are in, it gets easier and easier.  If you’ve ever considered investing in real estate, this is a great time to get in.  Just choose your strategy and do it!

Top Three Reasons Why Property Investment Is King

No one wants to hear this, but I’m saying it anyway.  Real estate is the best long-term financial investment.  Phew…that’s a relief.

With the real estate market in the dumps for several years now, it is not easy to get back into the pro-property mind-set.  But, it is exactly at these times that you should be considering expanding your real estate portfolio.

One reason I know this is because while the real estate market is dragging in most of the country, it is dominated by the professional real estate investors.  Don’t you want to learn a lesson or two from them?

The professional investor loves real estate above all other investments.  There are three main reasons for this.

First, real estate investing can come in many forms, just like any other investments.  There are small condos, multi-family buildings, commercial, residential, mixed use properties, different towns, neighborhoods, etc.  For every budget, preference and style, there is an investment instrument.

Second, real estate has a certain tangible value that you just don’t see in other investments.  Property investors love that there is an asset they can visit, fix and maintain.  There is a satisfaction in knowing that you have some control and responsibility in the relative value of the property.

Third, although real estate is illiquid – meaning it takes relatively a lot of time and effort to sell it – it is a versatile investment.  You can hold it, or resell it when the market turns your way. You can do extensive renovations and have a quick resell, or you can hold it with tenants for years to come.  Whatever it is, you have options and you can make decisions based on the best scenarios for your needs and the market conditions.

All of this assumes that you have sufficient funds for a down payment and that your expenses on the property are covered.  The major drawback in investment real estate are the unavoidable expenses in maintaining it and the difficulty of selling it if you need the cash.

But this said, it may be time to consider an investment property, especially in such a critical time in the market.  Opportunities and possibilities are present, and real estate investing can be a perfect fit for long-term financial goals.

How to Sell Your Home’s Most Important Feature

A recent survey of 1,000+ homeowners and future buyers confirmed the old adage, “Location, Location, Location.”

The result of the survey showed that the top priorities for buyers are:  Ease of commuting by car: 38%, Access to health and safety services: 34%, Family-friendly neighborhood: 33%, Availability of retail stores: 32%, Access to cultural activities: 21%, Public transportation access: 19%, Nightlife and restaurant access: 18%, Golf-friendly area–access to golf courses: 6%.

This survey seems to indicate that how people spend time OUTSIDE their homes is more important than the inside.  Spending endless hours on the road and paying for the gasoline it requires are unattractive these days.

What does your home have to offer?

It is great that you’ve upgraded your home, the granite and stainless steel are adding value.  Sure, having a home in great condition and staged nicely are incredibly important to your marketability, but what about your location?

Here are tips for you to target your buyers better using your home’s location:

1. What type of home do you have?  A small condo attracts a different buyer than a large home and each of these people have different locational needs.  Think about what attracted you to this home’s location and play it up!

For example, is it ease of highway access or a short walk to the train stop?  Do you love that you can walk to get groceries or that your neighborhood is full of kids and kid friendly activities?

2. Add photos, map and video of the area, not just the home.  Many buyers coming through may not be familiar with the nearest bus station or closest grocery store.  Point those out, enthusiastically!

3. Be specific.  If something is only a five minute walk, say so.  A 10 minute drive, around the corner, etc.

4. Price accordingly!  You may have the prettiest home, in best condition, but if it is further away or less convenient for some reason, price lower than your competition.

For example, if your home is in a family friendly neighborhood where the value is the quiet streets and park, price lower if your home is on a busy corner. Don’t just compare prices based on the home, think location!

Remember, buyers are buying a lifestyle, not just a pile of bricks arranged nicely.  If they don’t get what they need from the area, the home is meaningless.  But if they love the area, they may make the home work even with a few imperfections.

Why Hasn’t Your Home Sold?

In the market of exasperated and exhausted home sellers, I hear a lot of great stories about why homes are not selling.  They usually divide into two categories: the real estate agents not doing their jobs or the sellers are uncooperative.

Either type of story leads to the same place: how are you marketing and showing the home?

There are very few reasons why your home doesn’t sell.  There is no mystery here.  There are bad agents and uncooperative sellers, and both can change when they realize that this is not brain surgery.  There are only two variables: the price and how well the house shows.

First of all, and at the top of the list, be realistic about the price.  This is a common sticking point between agents and sellers and almost always the reason for trouble.  If you insist on getting more than what the market is willing to give, you are not serious about selling, but wasting time.

You must take into consideration the issues with the location, condition and layout of the home.  Don’t ignore it and don’t dance around it.  Buyers know what they are looking at.

Also, home sellers sometimes hire the agent who gave the highest price in the presentation, as if this is a bidding war. This creates a situation where agents are often uncomfortable saying what they really think the house will sell for, and inflating the price knowing they will later ask for a price reduction.

Stupid.  Don’t do that.  Whoever brings you the highest price should be questioned about why this price is the best and how they intend to get it.

Next comes the reality about how well the home shows.  Inexperienced agents are often shy (as I was in my early days), about telling homeowners their homes look awful.  There are better ways to say it, but a good agent gives you a long to-do list or insists on a staging professional.

If you are serious about selling your home, it should be professionally cleaned, sparkling and smelling perfectly for every single showing.  Clutter and personal belongings, (anything but furniture and a few chachkies), will get in the way of the showing.

When buyers come in, they need to see themselves in this home and be excited about it.  When you leave your computer on, your mail all over the place, your clothes on door hangers, your wet towel, toothbrush and one dirty dish, buyers feel like they are invading.  It’s like walking into a hotel room to find someone else’s stuff.  Ech.

A bad agent doesn’t tell you the truth about the house, but instead sugar coats it to the point of misunderstanding.  It is not our job to fall in love with your home!  It is our job as real estate agents to tell you what you have to do to get the house sold.

Home sellers will mistake good advice for rudeness and agents make a mistake of being shy of saying what needs to be said.  Instead of making tough decisions, everyone blames the economy and the weather for a home sitting on the market forever.

If any other home in your area has sold, especially if it was in your price range, their is a market for your home.  Just don’t tell me a story about why the economy has not sold the house.

Homebuyers Make Lifestyle Options Priority

The adage when it comes to real estate has been “location, location, location.” A recent survey, though, shows that lifestyle options are a priority.  These include health and safety, access to cultural activities, and family-friendly neighborhoods.

Today’s buyers are looking for a sense of belonging in a community as well as creating a desirable lifestyle with the home they buy.

More than 1,000 homeowners and future home buyers were surveyed for the Meredith Corp report. The respondents indicated that how satisfied they’ll be with the purchase of a new home may depend

significantly on the home’s surrounding community. About 84 percent of those surveyed were homeowners and an additional 10 percent had plans to buy within three years.

Here are some of the results. The survey found the following lifestyle options are top priorities for buyers.

* Ease of commuting by car: 38%
* Access to health and safety services: 34%
* Family-friendly neighborhood: 33%
* Availability of retail stores: 32%
* Access to cultural activities: 21%
* Public transportation access: 19%
* Nightlife and restaurant access: 18%
* Golf-friendly area–access to golf courses: 6%

If you’re a seller what should all this mean to you? It’s an opportunity to target buyers based on their interest. Just like businesses need to know who their target market is so that they can

build a brand and solicit to those consumers, so too, for sellers.

If you’re selling your home and you know that the above priorities can influence buyers, it only makes sense to play up the lifestyle options that apply to your home.

Often sellers focus predominantly on their home and the upgrades and amenities. While those features are very important, remember that practically any home can be remodeled. If you’re in an

excellent location with easy freeway access, on a low traffic street in a friendly neighborhood, or surrounded by retail stores and hot dining spots, it’s time to play it up. Those features aren’t

always easy to find.

Promote your lifestyle features with not only creative writing in the Multiple Listing Service detailed section, but also in ads with photos. You should also try using video of your home and the

surrounding area. These days marketing goes beyond the MLS and glossy flyers. An archived video on the Internet doesn’t get tossed in the trash like a piece of paper often does.

Showcasing your home on social media sites and giving a taste of the neighborhood in a well-produced video can be a fantastic marketing tool. However, don’t use a poorly shot video; that may hurt

you more than help you. Hiring a videographer or even a video journalist to tell a story about the area is well worth the money you’ll spend. This style of storytelling can greatly increase

interest in your home and, ultimately, the sales price.

Another option is to use footage (link or embed the video) from local retail outlets and post it on your social sites so that you can showcase some of the fun, nearby entertainment establishments.

Create an album on your social sites so that all these photos, videos, and links to articles are housed in it and then share it with friends. Don’t make this album about you and your family in the

home. Instead, make it like a review of the area. You are showcasing, through pictures, videos and words, the great places that you enjoyed while living in your home. Putting all these items online

gives you greater exposure as people forward them to others.

Reality TV is popular for a reason; it takes people along for the journey, exposing life as it really is. Showcasing your home, neighborhood, and nearby restaurants allows potential buyers an

opportunity to imagine the things that they would do if they lived in your home. We are becoming a very visual society and because so many properties are viewed first, and sometimes only, via the

Internet, it’s worth making what buyers see online valuable and persuasive. Seeing all that your home and its surrounding area has to offer in a video is as close as they get to actually

experiencing it. The next step is literally stepping into your home for a closer look.

A little extra effort and promotion to highlight what’s important to buyers may get you the sale faster and for the price you’re hoping for.

Written by Phoebe Chongchua