Four Tips for Dealing with Unrealistic Seller Pricing

By Mark Mathis, General Manager of Agent and Broker Sales at Homes.com

As a real estate expert, you offer a great deal of value to your clients. While you spend hours researching the top trends in their area, learning about the recent selling prices and creating the perfect marketing campaign, often your clients don’t realize the amount of effort that goes into carefully crafting their personalized business plan. This can be frustrating for you as a seasoned professional. However, it can be even more frustrating when a client questions the selling prices you’ve determined for their home.
Here are four strategies to help assuage the situation when dealing with this kind of an issue:

1. Establish Trust and Confidence

One of the most important things to inspire in your clients is trust. You’re probably helping them through one of the biggest transitions in their lives. While home selling can become an everyday occurrence in the life of an agent, many clients are fumbling through the process, relying on you for your expertise and guidance. During your first meeting with a new client, if you can find ways to connect with them on a personal level, they’ll be more likely to trust and depend on you throughout the selling process. Think of this process like building a friendship—start by finding the small commonalities. Are you familiar with their town? Do you share a favorite food or coffee joint? Were they recommendations from a mutual friend? Did you go through a similar moving experience in the past and have stories you can share? Don’t hesitate to talk about your qualifications, as well; they can help you stand apart from other agents they’ve worked with or are considering. Finding topics you have in common can help create the foundation for a solid relationship, which will help you as you approach the topic of the listing price.

2. See It from Their Side

Remember that your client is going through a major change in their lifestyle. They’re often unsure of the process and can have a hard time separating their personal attachment to their home from the business transaction that will take place. With the number of tools available to calculate home prices, it’s common that clients will try to fight you on the issue, especially if they found a much higher value on another listing site. Explain your side of the situation to your clients. Make it clear to them that you have their best intentions in mind, and that your main goal is to sell their house, getting them the best value possible. Remind them that overshooting the asking price can often mean they lose more value in the long run, since their home will be on the market for longer and they’ll likely need to reduce the asking price.

3. Find Out What They’re Expecting

Before you suggest your listing price, ask your clients what they believe their home is worth. Don’t hesitate to ask them why and how they arrived at this figure. Remind them to consider any work they’ve done, along with any maintenance that would need to be done by the buyers. This can help them accurately predict the value of their home, while also allowing you to point out some reasons that your suggested price may not be as much as they thought.

By getting the sellers to think about their home value, you’ll also be able to anticipate how to let them know it’s less than they thought, if needed. Once you have an idea of what you’re working with, you’ll be able to craft a response that won’t shock your clients and that can be supported with research. Keep in mind that, even when you’re well prepared with neighborhood information and pricing facts, it can be difficult for clients to hear they won’t receive as much as they had hoped. If you’ve established a good relationship with your clients and are sensitive to their side, you can begin to lead them through how you arrived at this figure.

4. Show You’ve Done Your Research

When you prepare for your meeting with your client, bring in the support to show why you’re the expert. In a recent Secrets of Top Selling Agents webinar, Garry Wise gave the advice, “Never tell a seller ‘this is what your home is worth.’  Instead say something like ‘The Market is willing to accept (this price) for your home given all of this data.’” You can then supply your clients with their customized CMA report that shows how you’ve factored the value of their home.

The key is to show the seller that you have all the data and not just an internet guess at what their home is worth. A great way to organize, adjust and present all this data is by using the Homes.com CMAzing tool. It starts by importing the raw data from your MLS, but also gives you the ability manually adjust the price to comparable properties, just like an appraiser would.

While this process can be difficult, these tips can help you work through even the most difficult situation. As you begin the year, make sure you’re positioning yourself in front of buyers and sellers who are searching in your local area. Follow these three, easy steps to connect with quality leads near you and close more deals this year.

For more information, visit connect.homes.com.

Reprinted with permission from RISMedia. ©2016. All rights reserved.

Where There Are Problems, There Is Opportunity

Selling real estate to the next generation requires constantly reevaluating oneself and embracing the consumer’s point of view.  Of course, that’s true with every customer, not just a whole generation of customers.

Different realtors and brands have distinct histories, sizes and markets, meaning there is no one-size-fits-all approach to selling. However, panelists on “Next Gen Marketing Plan – Creating a Strategy for 2016” at Inman Connect New York 2016 on Jan. 28 were united in noting the importance of looking to other industries and embracing, rather than fighting, changes in consumer behavior.

For example, the millennial’s well-documented thirst for transparency can be an opportunity for a brand to sell itself.

“Unlike generations prior, they are significantly more skeptical because of the amount of information available to them,” Ms. Oge said. “That’s a reality and not necessarily a bad thing.

“Anytime we can be taken to task to be more transparent, more consistent, to be more straight-lined and linear with respect to our points of differentiation and our value proposition, I welcome it,” she said. “I think these next generations are kind of the garden rails that will keep us more honest, and there is nothing wrong with that.”

Listening to the consumer and understanding them psychographically will give marketers the information they need to devise a detailed plan. While the prospect may seem daunting at first, the work will save time and increase sales in the long run.

“When you think about doing a plan it couldn’t be more annoying to find that time, but don’t think about it as stopping what you are doing, think about it as making next year a lot easier,” Ms. Marchetti said. “You should take a really hard look in the mirror and be very very honest about what you’re good at and what you’re not good at, and the latter is more important.”  Also, it is advisable to ask your closest relationships what they see as your strengths and weaknesses.

Studies have shown repeatedly that millennials will use technology to assist in buying homes, but they still depend on agents. That means the agents need to make themselves ideal for these new consumers.

There are countless choices for people looking to find a home, and that means if the first one does not provide the necessary resources, is too opaque or does not provide sufficient information, it is on to the next one. Agents can do themselves a favor by making email and phone number readily available, be it for text messages or good old-fashioned calls.

Additionally, the question of marketing to the next generation extends far beyond the real estate sector. Looking at what other sectors are doing to reach the generation could provide answers for the real estate world.

“The good and bad news of all of this is [that] every industry will change, every industry will get disrupted,” Ms. Marchetti said. “When I first got out of school in 1998 we were sounding the death knells of big box retail.

“Those who didn’t adapt did start to die, but the way of doing business changed,” she said. “We always look outside because I’m never going to worry about what other [real estate] brands are doing; it’s a waste of time.

“If you focus on your agents, if you have metrics, if you are open to learning, then there are industries that have gone before us to the breach and survived, so let’s learn from their mistakes, not make them, stay focused and remember who your client is. If you remember who your client is and take their perspective, you will not fail.

And indeed, rather than thinking of changes as “disruptions,” it helps to think of them as opportunities. Precedents across all industries show those who try to dispel disruptions often sink. Instead, a focus on technology presents opportunities in contact and marketing.

Stay focused
One opportunity that other industries have embraced in reaching millennials that the real estate industry has not is gamification.

These game-like challenges could include liking items on Facebook or sharing purchases on Instagram to be recognized by the brand. Thirty-one percent of retailers used gamification in 2015, a growth from 6 percent the year before.

“I don’t come from this industry, I come from gaming,” Ms. Cornia said. “If you are not figuring how to use the principles of gaming in your mobile apps or digital experience you are missing one of the fundamental aspects of millennials,” she said.

Finding new ways to reach consumers in accordance with their habits will help brokers fight against a potentially slowing market.

 

Original article: http://www.luxurydaily.com/real-estate-should-see-disruptors-as-opportunities-not-threats/

One Time Close…It’s BACK!

There hasn’t been a decent retail construction loan product since the collapse in mortgage banking back in 2008.  Consumers have been left to their own devices and local community banks to fund any home renovations or ground up construction projects.

In the North Bay, we haven’t seen substantial new construction in a decade, although there are several new projects that are online at this time.  Finally, the mortgage industry is responding with several new loan products that could help homeowners and investors to fund desperately needed new homes and rehabilitate dilapidated housing statewide.

Our One Time Close (OTC) Construction to Permanent loan product has a lot to offer potential home  owners.  At its core, it is based on either an FHA or VA loan as the permanent financing after the construction phase is complete.  Low to NO down payment and liberal credit qualifying means many families could qualify.

Here is a quick video on the product (90sec) and a flyer below:

Here is a PDF of the flyer: OTC_Flyer_NB

Remember, this product allows consumers to buy the lot, improve it, build and end up with a great fixed rate loan at the end with little to no down payment.

TRID…Closing Times on the Rise

2016-01-22_22-48-09

After it jumped up by three full days in November the average time to close a first mortgage loan stabilized in December at 49 days. The November increase had been attributed to unfamiliarity with the new Truth in Lending Disclosure Rule (TRID) which went into effect for loans for which applications were received after October 3.

Ellie Mae’s Origination Insight Report showed that purchase mortgage closings did take one day longer, 50 days, to close in December but that was offset by a drop in closing times for refinances from 49 to 47 days.  The average time to close FHA and conventional loans remained largely unchanged at 49 days, while for VA loans it increased from 50 to 52 days.

Jonathan Corr, president and CEO of Ellie Mae said that the company’s customers are certainly impacted by TRID. He commented, “While the time to close loans remained consistent from November, the 49-day cycle is still a week longer than the time to close at this same time last year.”

Now the mortgage industry is sounding a bigger alarm, claiming some investors are refusing to buy certain loans once they close because of potential compliance failures.  The bottleneck is happening when lenders immediately try to sell loans in the secondary market. The fear is that some lenders could get stuck with loans if investors refuse to buy them, causing potential liquidity problems, especially for independent mortgage banks.

The first inkling of trouble came when Moody’s Investors Service warned in early December that several third-party review firms found more than 90% of the first pipeline of loans that closed after Oct. 3, when the rules took effect, had compliance violations. The findings were based on reviews of roughly 300 loans from a dozen lenders, said Yehudah Forster, a Moody’s vice president and senior credit officer.

Mark Mason, the chairman and chief executive of $5 billion-asset HomeStreet Bank in Seattle, said some nonagency jumbo loans, custom home construction loans, and down-payment-assistance loans offered through state housing finance agencies are not being purchased by investors. However, it is unclear how widespread the issue is.

It is crucial that the lending team you’re working with be well versed in navigating TRID and work as a team, helping to guide all parties to be compliant and close as quickly as possible.  Make sure to discuss this with your existing lending partners and find out what their closing turn times are on a weekly basis as spikes in volume can alter performance quickly.

Images are KEY

staged home

When you look at this picture, what comes to mind?  I notice what is NOT there.  There are no crooked images of an empty room, with the shades drawn.  There are not a lot of dark areas inside or shadows on the floor and walls.  Instead, the highlights are more as my eyes would see them.

The fact is that real estate photography requires a lot of interior shooting.  Surveys conducted every year by NAR and others tell us that people are using the web to shop for homes to buy or rent.  An overwhelming 90%+ of them tell surveyors that photos are the first thing they check out and they’re very important to them.  If they like the pictures, they’ll check out the descriptive text and property information.  If they don’t like them, they move on..

Many agents would rather run through a house in 10 minutes, shooting each room with their smart phone.  Others have embraced HDR, High Dynamic Range.  HDR photography uses 3 to 5 photos at different exposure settings to merge and create a single image with all of the bright and dark areas adjusted for a result like the one in the photo above.

Most of the digital cameras that are available in today’s market have a feature called “exposure bracketing.”  You set the camera to take your 3 photos with one underexposed, one properly exposed, and one overexposed.  You should use a tripod as you’re going to push the shutter button once and all three exposures will be created in rapid order.

Now you just need software to do the HDR process for you. There is free software out there, such as Picturenaut. There are many good software packages under $50 too. The software merges the three photos to create the perfect blend of exposures that are more like what your eyes do for you. Some of the newer digital cameras even have in-camera HDR, and the processing is done for you automatically.

If you are serious about marketing homes for sale or rent, you should definitely embrace HDR so that you can have the highest chance of getting the attention of your online viewers.