|
« June 2008 |
Main
| August 2008 »
 For many years, open houses were looked at as a necessary part of marketing a home. But are open houses quickly becoming a thing of the past?
Maybe not quite yet — like any product or service that is on the decline, open houses will likely be around for a while, even if it is just to appease home owners. For some reason, agents believe that they must show home owners that they are trying to sell their home, and do so with perhaps the most ineffective marketing tool in the agent arsenal.
But who really benefits from the open house?
Seller’s may believe that open houses are a necessity because it is tangible to them. But what most sellers don’t realize is that the agent is the one with the most to gain, as they use open houses to find buyers to work with.
Usually, the seller will leave the house excited about the possibility of finding a buyer in the 2-3 hours that they will be gone, only to come home and find that few, if any, people came to view the home. Ultimately, disappointment sets in, and eventually frustration.
There was a time when open houses were successful. During a seller’s market, it is possible to have a number of buyers visit the home in their attempt to be the one that gets the house.
Buyers in the current market no longer have that mindset. Most of them are perfectly happy to continue to see as much available inventory as possible. Without a sense of urgency, the agent
is not likely getting much traffic to the open house, and thus, is not picking up many buyers.
Some buyers like to have a sense of control, and they will choose to visit open houses rather than finding an agent to work with on a regular basis. Many buyers have convinced themselves that this gives them the best chance to get a home for the lowest possible price. After all, they reason, if the agent is getting both sides they will be more flexible with their commission, and everybody wins.
The problem with this line of thinking is that NOT all agents will cut their commission, and even the ones that do are still obligated to get the highest possible price for the home.
In actuality, the best chance for the buyer to obtain a home for the lowest possible price is to have their own representation. A buyer’s agent has a fiduciary responsibility to buyers, and can provide information that can lead to a lower purchase price. The listing agent cannot provide any information that would give leverage to the buyer because their fiduciary responsibility is to the seller.
What do You Think?
Open houses are not as effective as they once were, and with good reason. Buyers can sit in their home and look at many homes online. They can then make appointments to see only those homes that appeal to them, without wasting time driving around to see homes that meet their criteria based on a newspaper ad.
The combination of the Internet/virtual tours and photos, and the fact that gas is more than $4 per gallon, makes it far less likely that people will spend their afternoon driving around looking for open house signs.
Even the best marketing efforts usually cannot generate the traffic to an open house that directional signs can. If people are driving less, then it stands to reason that they will not see the signs, and will not walk in to an open house. And without the driving traffic, open house attendance is not likely to be anywhere near as high as it was in the past.
If you are still doing open houses, are you doing them for the right reason (to generate business) or the wrong reason (to appease home owners)? Is there still enough traffic to justify sitting around in an empty house for hours on end? Would you rather sit around waiting for something to happen, or spend your time proactively trying to make something happen?
Adam Waldman, e-Pro, SRES, is a Long Island REALTOR® with RE/MAX Best. He’s known as “The L.I. Relo Guy,” specializing in relocation.
In this crazy market of foreclosures, investment purchasing, and economic shakiness, I have experienced that lending institutions are sometimes risking losing good, qualified buyers in their fear and sometimes downright inaction.
I have had two escrows within the last three months that have gone longer than the typical 30 days it usually takes for getting an escrow closed, based entirely on the lenders.
In one escrow, I had an extremely well-qualified buyer who was purchasing a residential full-time home, but we kept hitting snags. The lender was located in a different state — which I've learned to now insist on a buyer having an in-state local lender due to such extreme differences in markets and the difficulty in not having face-to-face interaction.
When I called to check on the status of the loan on day 18, the lender had not ordered the appraisal. So I called the buyer's agent to let him know that the lender was not staying on top of things, and I then left it in his newly licensed hands (which I didn't know until the end of escrow).
I continued to call the lender each day to make sure things were moving along and I kept getting the same answer, "Everything is moving along, we're moving forward" — which really translates to "something's come up and I'm not going to tell you about it" or "I have a tee time at 2 and will get to this file tomorrow."
A few more checkup phone calls later and the lender became upset at my frequent calls and
wouldn't talk to me anymore.
Flash forward to day 35 — which should have been COE — and the appraisal still hadn't been ordered, despite the lender assuring me it had been.
It wasn't until day 42 that the appraisal was finally ordered, but the lender then had an appraiser more than 2 hours away do it so we didn't get it back for another two weeks.
By the time three months rolled around, the seller was very upset and on the verge of canceling. Luckily, we were finally able to close before that happened, but I think I have a cell phone bill that will be three times the normal amount from the last week of the escrow alone.
As if that ordeal wasn't bad enough, now I'm onto my next transaction and running into more problems. In fact, it has been ongoing for 60 days now, due to the lender sending the file into their QC department more than two weeks ago where it seems to have fallen into a black hole of no return!
The buyers had submitted paystubs that looked very similar and had the same dates on them. This raised a huge red flag with the lender so it was sent to QC to verify the documents.
The buyer's employer had made an error when printing the paystubs, so the buyer got a letter from his employer verifying his income. But that wasn't good enough. The lender sent the original documents to the FBI for fingerprinting and complete questioning ...
The lender now has no clue when the file is going to come back approved, since the QC department doesn't tend to communicate well with others.
After these two "challenging" situations, it has become quite clear to me that there is a lot of fear among lenders that is preventing them from moving forward on transactions today. But why do well-qualified buyers have to pay the price? After all, many lenders helped create the current lending situation by providing loans that were dangerous to the common home owner/new home owner who didn't fully understand what they were getting into.
I only hope that lenders realize when they have a truly good buyer on their hands, be thankful for them, and then get the loan done in a timely fashion and stop putting up roadblocks.
Amy Steele is a full-time REALTOR® with Bibby Realty in Crestline, Calif.
REALTOR® magazine, in cooperation with Remodeling magazine, is surveying real estate practitioners for the 2008 Cost vs. Value report. Tell us about the returns that sellers in your market can expect from home remodeling projects, and you'll be entered to win one of four $500 prizes.
The annual Cost vs. Value report surveys sales agents, brokers, and appraisers each year to discover construction costs and resale values on remodeling projects in markets across the country. View the 2007 Cost vs. Value report.
Take the 2008 Cost vs. Value online survey >
 I'm 34. I'm on Facebook, LinkedIn, and ActiveRain. I have an iPhone, Playstation 3, GPS, and every other toy to my wife’s chagrin. I text while I drive, e-mail while my boss is speaking, and hate voicemail because it’s too slow.
I live in a wireless, non-linear world. Are you? Is your manager?
You may, but most likely your manager may not. As a Gen X manager, I urge (no matter the age) my agents to use the technology available to help them build their pipeline, write their business, and communicate.
It’s not enough to just use e-mail — you have to socialize. You have to meet, reconnect, and make relationships through social networking. You have to be in front of this or your competition will.
I’m always told by the veterans of many decades that this is an industry of people, “a people business!”, they say. It is, I agree. What has changed is the way we reach them.
Darrin Friedman is the branch vice president of Coldwell Banker Residential Brokerage Chevy Chase, Md.
 As many of you who read the YPN blog know, many of us are on Facebook too. Facebook, which was once a trend among college students, has wriggled its way into our lives as a resource for young professionals to use as a marketing and social connection tool.
Facebook is in our faces and it’s a great instrument to have in a business based on who you know and the connections we create.
Let me take a moment to say thank you to those of you who have accepted and sent me friend requests on Facebook. I welcome many more so please keep them coming!
I am thanking you because with your connections I have the opportunity to learn about what is taking place in many towns and states across the country, which is becoming a valuable tool when I sit with my clients here in Rhode Island and they ask about the national real estate market.
But while making connections on a social networking site is always beneficial, there is a courteous and respectful way to do so. For example: Brooke Wolford, a newer rising star agent with Edina Realty in Minneapolis, and I recently connected. Brooke and I have exchanged a few messages and she has given me insight into the market in Minneapolis.
Brooke took the correct course when Facebook friending me. She simply sent a request and on her profile noted what she does, who she works for, and then she responded to my message and introduced herself.
Here are a few Facebooking tips that I find even I need to be more proactive in following:
1. When sending a friend request there is a little box to send a personal message, send one saying who you are and why you are sending the request.
2. Once you have a new friend don’t inundate them with products or service information. A friend acceptance does not mean that their e-mail should be used without permission. This is
considered spam.
3. If you are going to send a product or service message make it a note or a post, if we are interested we will see it on the Facebook mini-feed, the front page where all updates are listed, and read it.
Now with those few little tips in mind Facebook away! I look forward to hearing from all of you and about your markets and successes.
Courtland McPherson works with The McPherson Group, Prudential Gammons Realty, in Exeter, R.I. Prior to joining real estate in 2004, he had worked as an energy auditor, home inspector, and small business owner.
 I recently attended training delivered by Negotiation Expertise, LLC to receive the CNE (Certified Negotiation Expert) designation. The training was very practical considering that negotiation skills are foundational for all phases of a real estate transaction.
Below are the top six negotiation tips I gleaned from the training:
1. “I am in charge of the process. You are in charge of the decisions.” Our job is to guide our clients with information, not make decisions for them. We need to proceed with the blessing of the boss! As professionals though, we must drive the overall process.
2. It’s not about the money! When objections arise in a negotiation, deal with issues one at a time and isolate each one. Start with the minor ones first. Buying or selling real estate can be very emotional, and often you’ll find that other issues are more important than money.
3. When a consumer does not understand the value of a product or service, they resort to cheap. Differentiate yourself and the services you provide. It is easy for consumers to
misunderstand the services we provide as REALTORS® when many of the services are transparent to our clients.
4. When you encounter resistance, think “fear”. Try to understand why the other person is concerned or fearful by asking open-ended questions. Understanding the reason for the fear will help you to overcome the resistance.
5. Don’t take it personally. It’s the buyer’s offer and the seller’s home. We’re the third party.
6. In all conversations answer the following question: “What’s in it for them?” This applies to the agent on the other side of the deal, your spouse, broker, client and three year-old.
And the best advice I received at the training … have fun at negotiations!
Julie Cain Cwynar is a full-time REALTOR® with Howard Hanna Real Estate Services in Pittsburgh, Pa.
 As a real estate professional in the current market you are bound to run into your share of expired listings. Whether it is your listing that has expired, or a competitors, here are four major areas to address with the seller to get the listing back and get it sold.
1. Strong communication. Teamwork and communication between the seller and agent is key to know how to alter a marketing plan for success. Inattention to a listing can be a factor, but rarely is it the core issue. Make sure you let your sellers know that you want any feedback they can provide and that you will offer the same to them. The seller is the key source for information regarding changes in the neighborhood and property condition that affect the property’s salability. The more you work together, the faster a sale will be closed.
2. Price is right. This is the obvious and most common culprit for the lack of a sale. An incorrectly priced home attracts the wrong buyers or worse, none at all. When working with a previously expired listing be sure to prepare an up-to-date competitive market analysis, the market conditions have probably changed since it was initially listed. Activity without offers often indicates overpricing. Remember, any home, no matter what the condition is, will sell for the right price.
3. Good condition. A home that is in like-new condition sells faster and gets the best price because it outshines the competition. Make sure your sellers fix all the little squeaks and drips, paint neutral colors where needed, and brighten up and concentrate on outside curb appeal. I
suggest having a few other agents from your office take a tour of the home with you and allow them to point out the areas that need to be addressed to make a sale happen. Make sure you relay any information that might be useful to the seller.
4. Smart marketing. The saying goes, “Advertising doesn’t sell homes, agents do.” The secret to success is a carefully crafted marketing plan that exposes the property to the widest possible pool of prospective buyers. Some elements you might like to include in your plan: direct promotion to other agents/brokers, brochures and flyers, broker open and buyer open houses if appropriate -- and any other activities designed to capture buyers.
As a rule of thumb, make sure the home is in buyer-ready condition before you re-list it. If it didn’t sell the first time around, don’t just hope for better luck this time, make sure the necessary changes are made to inhibit a fast sale. Your sellers will thank you for it at the closing!
Travis Broadwater is a real estate practitioner with Kennen & Kennen REALTORS® in West Virginia.
|
Get connected with young real estate professionals from across the country. Our YPN bloggers give you the latest buzz on technology, marketing, prospecting, YPN news, and more. Read more >
|
Subscribe to this blog's Web feed