This is my column for this week from the Arizona Republic (permanent link):

 
Dress up that custom weblog you’ve built to help sell your home

Last week we built a custom weblog to help you sell your home. This week, let’s dress it up a little.

Some of the things I’ll be talking about are free, but others cost money. Your Realtor may have a marketing budget, so that could be a source of funding. But even if not, with only a few buyers chasing a very large number of homes, stinting on marketing costs may not be your best strategy.

Here’s something you can do for free: Go to Google Maps and build a map to your home. At a minimum, you should also provide driving directions from the nearest freeway exit. But, if you sign up for a free Google account, you can link to an elaborate custom map for your home.

Highlight parks, playgrounds, schools and shopping. Saying anything at all about churches might invite Fair Housing complaints, but you can draw attention to other nearby amenities. Even better, you can attach pictures and internet links to your map markers, so that buyers can really get a feel for the neighborhood.

Online real estate sites like Zillow.com and Trulia.com want to know that your home is for sale. You can add photos to those sites and link back to your custom weblog, which will bring you more traffic. On Zillow.com, you can “claim” your home, updating details on any upgrades you have made to it.

We like to use floorplans. You might be able to get one to scan (or better yet, an Adobe PDF file) from your home’s builder. We use a company called FloorPlansFirst.com because they make interactive web-based floorplans. Buyers can move their furniture into the home to see how it will fit. This costs money, but it sells houses.

For virtual tours, we’re switching to Obeo.com. Their tours cost more, but they offer a category-killer feature: Virtual redecorating. Your buyers can discover how much they’re going to love your house after they’ve remodeled the kitchen and repainted the exterior.

And the only stronger commitment a buyer can make is a purchase contract and a fat check.

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This is my column for this week from the Arizona Republic (permanent link):

 
A custom weblog can be your home’s 24-hour real estate salesperson on the world-wide web

I have an unshakable faith in the three P’s of home marketing — Price, Preparation and Presentation.

If the home is priced above its value to the buyer it will not sell in this market — it probably won’t even show.

If it is not well-prepared — repaired, staged, cleaned — to the condition implied by the price, it will not sell even if it does show.

Presentation is your Realtor’s job — or yours if you’re trying to sell without representation. I don’t have space to go into a full-blown marketing plan, but here’s an idea that can make a big difference for very little cost:

Give your home a blog.

Every home for sale should have its own web site. What makes a weblog useful and practical is that weblogging software is so easy to use. And the price to get started? Nothing.

Sites like WordPress.com or Blogger.com will let you set up a blog on a subdomain — an address like 123MulberrySt.WordPress.com — for free. Or you can buy your own domain — 123MulberrySt.com — for less than ten bucks a year. You can host your own domain for a few dollars a month, but using your weblog provider’s hosted option will work just as well.

What do you want for content? Photos — and lots of them. Good pictures of clean, well-lit rooms sell houses. Your text should be just-the-facts, nothing overtly promotional. Not only can people see through hype, it turns them off.

With a weblog, you can document your house room by room — or by the benefits to be realized from the home’s features and amenities.

Best of all, you’ll have a 24-hour salesperson working for you on the internet. Put your blog’s address on your flyers, in any advertising you do, in your Craigslist open house notices, on Zillow.com and Trulia.com. The more you can promote your blog, the more traffic it will draw.

You still have to be priced right. You still have to be prepared right. But a custom weblog for your home could be a key element in your home’s presentation to the marketplace.

Technorati Tags: arizona, arizona real estate, blogging, phoenix, phoenix real estate, real estate, real estate marketing, technology, Zillow.com

This is my column for this week from the Arizona Republic (permanent link):

 
Choosing second-best could get you the best possible home

Last week we talked about how, even with so many unsold properties, multiple buyers can somehow land simultaneously on the one property on the market that approaches perfection.

This is perfectly natural human behavior, if you think about it. Who hasn’t thumped a melon? Who hasn’t reached into the back of the cooler for the fresher milk? Who buys the brown ground beef when there’s redder meat available. We were not just born to shop, we will perish if we don’t learn to shop wisely and well.

It’s no different for houses. You have a certain amount of money available, and a certain selection available to you for that money. It’s completely natural that you would shop until you find the home that is far and away better than your other choices.

And it’s perfectly natural that other buyers would come to the same evaluation of the available inventory. They wold have bought the same melon as you, except you got there first.

But there’s still an important difference. A good melon is as good as it’s going to get, and a bad melon cannot get better. But a house can almost always be improved.

Here’s a melon-improvement strategy for financially-savvy home shoppers.

That home you fell in love with is unique — but it’s not irreplaceable. Yes, it’s in great shape, and it’s staged to perfection. But guess what? There are three more almost exactly like it for sale on the same street. They’re not as clean, not as nicely-decorated, not as well-marketed — but that works to your advantage.

The difference between your dream home and what looks to you like a bad melon is really just a matter of money. If you put that money into the bad melon, it will be as good or better than your dream home.

So, rather than competing for the best house and paying top dollar, you can use it as leverage to get a lower price and seller concessions on a home that could be even more ideal for you — after you do a little work.

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This is my column for this week from the Arizona Republic (permanent link):

 
If you’ve finally found your dream home — don’t dawdle

Here’s a paradox for the ages: It’s been a strong buyers market for more than two years — and yet buyers still can’t afford to be lax about the houses they love.

How’s that? In our recent seller’s market, sellers were completely indifferent to home-buyers — as a matter of studied strategy. “We might consider your offer,” they seemed to say, “but not today. We’re letting the offers pile up until Monday or Tuesday, then we’ll take a look at them all at the same time.”

Why can’t buyers in this market approach sellers with the same bland indifference?

They can — provided they’re willing to buy just any home.

In a seller’s market, qualified buyers are essentially a fungible quantity. Each one is simply a pile of money in the seller’s eyes — some larger, some smaller, some sooner, some later. Allowing for risks and opportunities, one is as good as another.

Not so for buyers. Houses are inherently non-fungible — each one is unique in location, appearance, construction, condition, amenities and lifestyle factors. Even with so many homes for sale right now, it can be a challenge for buyers to find even one house they are completely committed to buying.

My take: If you want to get the best possible deal, pick three homes, not one, and pit the sellers against each other.

But buyers don’t do this. Instead, they look at dozens of sub-standard offerings, and then focus all of their attention on the one house they can find that is priced right, repaired and staged right, marketed right.

And guess what? Of all the houses these buyers will have seen, this is the one for which there is competition. The factors that appeal to them also appeal to the other folks out there looking for homes right now. The dirty or neglected or over-priced houses attract no offers, where the few that are truly market-ready can draw multiple contracts within a few days of being listed.

The lesson to take away: If you really love the home, don’t dawdle. Chances are, someone else loves it, too.

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This is my column for this week from the Arizona Republic (permanent link):

 
Selling your home in a declining market? The race is to the swift

If you’re chasing the market down, chances are you’ll never catch it. The trick to pricing a home for sale is to race the market down.

How’s that again? We’re in a declining market, that’s understood. It won’t be this way forever, but prices could continue their slow leak for quite a while longer.

What that means is that, whatever price you might get for your home today, you will probably get still less a month from now or three months from now.

Hence, you need to make a difficult decision.

If you don’t actually need to sell right now, you might do better putting your move off for two or three years.

But suppose instead that you do need to sell your house right now. You have a job offer out of town. You have a big deposit on a new home. You’re expecting triplets. What now?

Even in the best of markets, sellers can have an inflated idea of the value of their homes. This has certainly been the case in the two years since the market turned. We’ve had a glut of inventory, but much of that has been overpriced inventory.

Typically, the seller starts out with the price too high, then tries to chase the market down with a series of price reductions — usually too little and too late.

If your house is not showing, it cannot sell. But if it isn’t showing, this almost always means it is overpriced. The trick to getting it sold now is to price it under the competitive listings.

The natural impetus, in the face of advice like this, is to say, “I don’t want to give my house away!”

Who can blame you for feeling that way? But the important question is, “Would you rather hang onto it for a few more months, and then sell it for even less — if you are able to sell it at all?”

Racing the market down can be a painful decision. But the pain is likely to be a lot worse if you continue to try to chase the market down instead.

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This is my column for this week from the Arizona Republic (permanent link):

 
Net-borne buyers create new burdens for listing agents

“Eighty percent of buyers start their home search on the internet.”

You don’t have to dig too deeply in the real estate world to unearth that statistic. There are two problems that I can see with the claim.

First, it’s based on an outrageously unreliable mail survey of recent home-buyers. Fewer than five percent of recipients returned the survey. How did the other 95% manage their home search? We don’t know.

Moreover, while the long-term trend, surely, is that more people are using the internet to shop for homes, what matters is not how they started their search, but, rather, how did they finish?

There’s more to think about, though, because it seems reasonable to me that people who are starting their home search without professional representation — without a Realtor — are continuing their search unrepresented as well.

What’s the implication? Like it or not, the listing Realtor’s responsibilities are increasing.

Realtors like to say — to each other — “If you list, you last.” What that means is that a listing, at least in a normal market, is a pretty secure paycheck, where working with buyers can be a lot riskier. This is the reason that the buyer’s Realtor often gets 60% or even 75% of the gross commission. The listing Realtor presumes that the buyer’s Realtor is going to be doing most of the heavy lifting.

But this is not as much the case in the age of the internet. If an unrepresented buyer clicks through to the listing Realtor from an on-line Realty.bot — or if that buyer simply makes a sign call — the listing Realtor is obliged to show the home, even if the original intent was to have buyer’s Realtors doing all the work. Moreover, the open house, long derided by Realtors, is suddenly much more important.

All of this creates new opportunities for dual agency, whereby the listing Realtor gets paid more — and incurs huge risks — while giving the buyer almost nothing in the way of representation. It’s hard to argue that this is an improvement, but it seems to be the way things are trending.

Technorati Tags: arizona, arizona real estate, disintermediation, phoenix, phoenix real estate, real estate, real estate marketing, technology

This is my column for this week from the Arizona Republic (permanent link):

 
Seller financing can give you an edge over your competition in the Phoenix real estate market

If you have significant equity in your home, you have a potent weapon at your disposal on resale.

The big news this year is likely to be more and more stories of people with little or no equity trying to get their homes sold. Values for an average suburban Phoenix home were down 14.66% year-over-year. That doesn’t sound too bad, but prices were down almost six percent just in December. We’re down 24% from the peak in December of 2005, on average.

But here’s the silver lining: If you bought that average home in December of 2003, and if you resisted the impulse to refinance your loan, you’re still up over 40% from your purchase price.

That equity gives you a source of leverage on resale that you might not have considered.

First, as always, for your home to sell it must be priced right, prepared right and presented right to the marketplace. You can’t do any kind of elaborate negotiations if buyers don’t even see your house.

But because you have equity in the home, you have the ability to help a willing buyer navigate the suddenly-more-perilous shoals of the lending process.

Suppose your buyer has five percent for a down payment, but the lender is willing to make a much more attractive deal for ten percent down. If the lender is willing to accept the arrangement, you can offer to carry back a note for the extra five percent, using part of your equity as seller financing.

You’ll be taking a second or third position in the line of creditors, should the buyer default — and it’s always possible that you will lose every cent you are lending. But given the direction of the market, you could be a lot better off risking five percent now, rather than accepting ten percent less a few months from now.

As with everything, read the fine print, ideally in the company of your accountant. But seller financing is one more weapon you can deploy to set your home apart from the competition in this very competitive market.

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This is my column for this week from the Arizona Republic (permanent link):

 
Your real estate improvement goals for 2008 will be more financial than physical

Do you want to set some workable real estate goals for 2008? If so, sharpen your pencil.

Does the house need a new roof? Does the kitchen need an update? Should the pool be resurfaced? Doing regular maintenance is usually not profitable on resale, but deferring those repairs and upgrades can be very costly.

But the most important real estate work you will do this year will be financial, not physical.

If you’ve been prudent enough to buy a home — and 70% of Americans have — you’ve done well for yourself. You have a roof over your head and an asset to fall back on if times get tough. But refinancing your home or getting a home equity line of credit is not as easy as it used to be.

If you’re a first-time buyer, you have an even steeper hill to climb. Most homeowners have at least some equity to borrow against, but many first-timers have little more to bank on than a willing heart and an eager smile. Two years ago, that was enough. Lately, not so much.

The problem is that loan underwriting guidelines are a lot tougher than they have been in the past few years. Verifiable income matters. Debt-to-income ratios matter. For most home loans, a down payment is no longer optional.

What’s changed? For one thing, lenders have lost a ton of money on nothing-down and limited-documentation loans. For now, at least, they would rather write fewer but more promising mortgages. But the real estate market has changed, too. Lenders were free and easy until lately because they assumed the appreciation of the home would make up for lax underwriting procedures.

So what should you be doing to prepare for these changed circumstances? Boost your income if you can. Cut your debt ratios any way you can. If you will be buying a home for the first time, start saving for that down payment. If you plan to sell and move-up or downsize, maintain your equity in your current home — and watch your credit rating like a hawk.

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This is my column for this week from the Arizona Republic (permanent link). It’s important to understand that the long-run prognosis for the Phoenix area is good. We’re the fastest-growing major metropolitan market in the United States, adding 200,000 new residents a year. The short-run is not great, however, and the help the Federal government is proposing to provide will probably do more harm than good. Next week, I’ll be talking about some financial goals you can adopt to put yourself on a sound footing for the current real estate market.

 
For real estate in Metropolitan Phoenix, the pain of currency inflation may be enduring

The universal punch-line, the killer finish to an infinite number of jokes, might just be, “Sure, but it feels so good when you stop!”

If you had been banging your head against the wall, it might be true. For most things in life, though, no matter how painful they might be, the real pain doesn’t even start until you stop.

Want proof? Quit smoking. Smoking is a dirty, costly habit, we all know this. If you don’t quit, there’s a good chance it will kill you. But if you do, you’re looking at three truly agonizing days, followed by three pretty awful weeks, followed by three grim months. It might be three years before you’re complete rid of cigarettes.

The same goes for other physical addictions. The addiction can have painful consequences, but the sharpest pain comes when you go cold turkey.

This is exactly what happens to the economy when the Federal Reserve Bank stops inflating the currency. Practically speaking, we’ve spent much of the last ten years “high” on funny money. In consequence, we made “investments” that had nothing to do with anticipated returns, first with dot.com stocks and then with residential real estate.

Here’s the worst part, though: We’re not going cold turkey. A recession occurs when we wake up and stop despoiling the currency. The immediate effect is that the bad investments we made while we were drunk on free money lose their artificially-inflated value. This is very painful, but it only lasts about three years — eighteen months peak to trough, eighteen months trough to peak.

But instead, the Fed is attempting to keep the economy going with maintenance doses of funny money — sort of like the methadone treatment for heroin addiction.

Will it work? Maybe. The economy is out-performing currency inflation in many market categories. But real estate is not one of them. We’re already two years into our market correction, with no signs of a reversal in direction. So will the whole thing be over by this time next year? I wish I could say yes, but I don’t believe it.

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This is my column for last week from the Arizona Republic (permanent link). Since I wrote this, Cathleen found a solar-powered flood light solution, which we’re testing now. At some point — ideally when there is more sunlight and when electrons aren’t quite as sluggish outdoors — I’ll let you know how it’s working out.

 
Time of the signs: Let there be light

We’ve been playing with sign lights.

Signs matter. If you’re trying to sell your home, the yard sign just might swing the balance. A whopping 63% of home buyers discover homes they’re interested in seeing from yard signs, and the sign can be the first “salesman” for the home in one out of every six home sales.

Our signs are custom-made for each home we list, with big photos of the interior of the home. The idea is to swing the balance toward our sellers by whatever means we can think of.

But I cannot imagine a more profound enemy of custom real estate signs than darkness. During the day, you can spot the signs, see the photos, read the copy. At night, our signs, like all real estate signs, are silhouettes against the void.

So we’ve been looking for lighting systems that will extend the hours our signs are visible — from twilight to 9 pm at least, although all night would be ideal.

Our first swing at the ball is a device called the Listing Light. It uses six C-cell batteries to set two light-emitting diodes ablaze. It actually works in the sense that the signs seem to be aglow from a distance, and they are completely readable up close. But the effect is a lot like reading by flash-light — doable, but not to be preferred.

(That’s a flash photo. We wish out lights were this bright!)

My friend Teri Lussier, a Realtor in Dayton, Ohio, has set her husband loose on the problem of lighting signs. His first invention builds the lights into the underside of the crossbar of the sign post. By now, he’s playing with the idea of building a box composed of two translucent signs with fluorescent tubes inside, much like a commercial sign.

I like what ground-mounted flood lights do for a home, so I’d like to make a deal with a seller to get an electrician to illuminate the home, building in two additional flood lights for our signs. This would not be cheap — but as our massive unsold inventory makes plain — cheap efforts don’t get the job done.

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This is my column for this week from the Arizona Republic (permanent link):

 
Government interference will prolong housing woes

Want to make an economic problem worse? Interfere with it.

As I write this, the Federal Reserve Bank just cut the Federal Funds Rate by another quarter-point. Why? To try to stimulate the housing market.

Last week President Bush put together an attestedly voluntary agreement among lenders to freeze interest rates on certain adjustable rate mortgages for five years. The plan is voluntary in the same way that your rowdy Uncle Sid volunteered for the Marines instead of serving 90 days in the clink. Even so, Congress is still rumbling about involuntary solutions to the housing crisis.

So what’s the beef? Everybody’s just tying to help, right?

The problem is that all investment is based on planning. Before I risk my capital, I need a reasonable assurance that it will be returned to me — ideally with a healthy profit. There is always some risk in investing, but if the government can change the rules of the game at any moment, then the risk of investing soars. Doing anything else becomes much more attractive.

Consider: If I plant the right seeds and cultivate them properly, I can expect a bountiful harvest. But if the government were able to control the weather, and if it announced that it might or might not schedule a hard freeze for mid-July, I would be better off doing almost anything other than farming.

If I have capital available to lend, should I lend it where I know for sure I’ll get five percent interest, or should I lend it to a borrower who will promise to pay me eight percent — until Big Mother cuts that back to four percent as an act of mercy. If it were your money — and in many cases it is, in the form of insurance and pension funds — what would you do?

It’s plausible that we’ll go through the same amount of economic pain, with or without government involvement. But free markets self-correct quickly, liquidating bad investments and getting back to business. Government interference will almost certainly prolong our agony — to no good end, and therefore probably to our net detriment.

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The trouble with trade shows is the shopportunities. I can restrain myself, by Cathy can be suggestible. Jeff Brown had been talking to me about after-dark lights for our yard signs, but it wasn’t until StarPower, when Cathy saw the product offered by ListingLight.com, that we bought into the idea:

That’s flash photography. The light emitted by the ListingLight is adequate for reading at night, but taking a useful picture would require a tri-pod. Even so, they do the job. Where every other sign on the street is an unreadable silhouette, ours pop out at a distance.

Is it enough to sell the house? Perhaps not, but every little thing helps. There’s no telling when the buyer is coming by, and, even in Arizona, evenings are dark in Winter.

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This is me in the Arizona Republic (permanent link):

 
How to take away the objections to drawbacks in a home

I was looking at the web site for a For Sale By Owner home the other day. In the site menu was a heading called, “Drawbacks.” I thought this was an excellent idea at first blush, the kind of inspired salesmanship I almost never see.

The fact is, everything is a trade-off. Everything has advantages and disadvantages. This is not a secret. Buyers already know that every home they look at will have drawbacks.

What is inspired — what could have been inspired — is calling the drawbacks to the buyer’s attention. Why? Because then you can take away the objections.

Like this: “We know this room is small for a bedroom, so we pre-wired it for digital cable and two phone lines. That way, you can use it as a home-office and also as a guest bedroom.”

The buyers will see that the room is small, but by acknowledging and addressing the defect in advance, you can help them see around the problem.

I said the idea of a “Drawbacks” page could have been inspired. Instead, when I clicked through to the page, I saw this:

“There are no drawbacks! Come and buy this house right away!”

This is far beyond being uninspired marketing. This is the kind of ham-handed ignorance and arrogance we associate with Hollywood’s idea of a venal Realtor.

Since you know exactly what objections buyers are going to raise with your home, your best strategy is to acknowledge and address them in advance. This communicates that you are honest, that you are not trying to pull one over on your buyer, and it also gives you a chance to reframe objections in a way that can help to sell the home.

If you don’t want to admit that your home has drawbacks, say nothing. Every buyer’s biggest objection is the fear of being hustled into a bad decision. If you go out of your way to look like a hustler, you will scare buyers away even if your home really is close to perfection.

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This is me from my column in the Arizona Republic (permanent link):

 
Why didn’t your house sell? Price, preparation, presentation — and availability

So your house didn’t sell. Now what?

Six months ago — or was it a year ago? — the world was young and ripe for the picking. You listed your home for sale, confident that you’d have a buyer in no time. Full price and then some. Why not? The neighbors got it. Sure, that was two years ago, but you have better carpets and new countertops.

So you talked to three Realtors and hired the one who said he could get your price. His marketing plan was long on networking and short on practical details, but — what the heck? — houses sell themselves, don’t they?

You read an article a while back about staging, but you don’t need that. You’ve got great furniture. And even though your Rotweiller is hardly ever a problem, it seemed prudent to make the listing by-appointment-only.

This is the way it is: In most neighborhoods in the Valley right now, there are at least five homes for sale that might work for each buyer in the marketplace. The only homes that will sell are the ones that are priced, prepared, and presented right and are available for buyers to see.

Why did your listing expire? You missed the market in one or more of those criteria. If you priced your home above the market, you sabotaged your sale from the outset. Prices are declining in most areas, so even if you made successive price reductions, you were probably still always above market value.

If the house wasn’t repaired and staged to perfection, buyers bought the homes that were. If it wasn’t available to be shown, there is no possibility it could have sold. And, alas, if you fell for happy babble about your Realtor’s vast network of relationships, then all you were missing was a marketing plan.

What now? If you need to sell now, relist at the market price — with a Realtor who has a real marketing plan and detailed instructions for you. If you can afford to wait, the market will turn around eventually, but it might be a long while.

Technorati Tags: arizona, arizona real estate, phoenix, phoenix real estate, real estate, real estate marketing

A national website that discusses real estate trends wrote over the weekend about “Pet Friendly Real Estate Agents Thriving In Marketplace.” I’m honored that the author, Tom Royce, mentioned Greg and BloodhoundRealty.com in that article:

“And you want further proof that being pet friendly is the way to go, look no further than our good friend Greg at Bloodhound Realty. Now that is pet friendly.”

I’m grateful, too, that Tom recognizes that our care of pets is sincere, not just a gimmick. Last week, Greg and I spent several days at a national conference of top Realtors. I met a lot of the country’s best real estate agents there, and gave out plenty of my business cards!

I am always tickled when people comment on Odysseus, our Bloodhound. But started becoming annoyed when I heard more times than I would have wished the mistaken notion that Odysseus is our brokerage’s representative as some sort of stunt… as though the only purpose is to tug at people’s heartstrings.

Greg has explained this on two different BloodhoundBlog posts: We selected our name and logo, because it’s iconic. It portrays traits we admire and strive always to live up to… traits such as loyalty, diligence, tenacity. Dedicated, Devoted, Determined™. Yes, dogs are cute. But they are so much more!

And so are cats… And birds… And all God’s creatures. And as a Realtor, someone who helps families move from one home to another, it’s about making that move as easy as possible on all the members of the family. including the ones with fur, feathers or scales.

Before we acquired so many pets in our own household, we fostered cats and dogs for no-kill shelters, like Noah’s Ark. Too often, I saw family pets who were given up because the family was moving, and for some reason they couldn’t take their pets with them. I always hope that people are able to come up with better choices to keep their furry families intact. So now, as a Realtor, I can help my clients explore their different options.

When you are buying or selling your home, and you have pets in your home, there are so many issues for you to consider. If you are buying, what are the HOA restrictions? Are there dog parks nearby? How about coyotes? If you’re selling, how do you keep your house presentable to show it in its best light? How do you keep your pets secure with a lock box on it? What about open houses?

And what do you do with your pets when you’re between homes? When one of our sellers thought she would have to give up her cat, Bob, because I had sold her house faster than she expected it would sell last fall, and the only apartment she could find to take her in on her terms wouldn’t budge on its no-pet policy, we worked out a much happier solution…

… One that kept them together. Because real estate isn’t just about houses — it’s about the people, and so often their pets, who live there.

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