OK, I’ll admit it. I like to help people, sometimes to the point where it takes a lot of my time and I feel like I have to play catch up. Here’s a post I think will help the overwhelming majority of FSBO’s AND new real estate agents (or those that have yet to realize what they should be doing). I am taking the time to write it because I see so very many horrible home pictures! It’s hard to believe that some people don’t seem to know they can and should do a better job. I am in no way pretending to be a professional photographer. However, a few common sense techniques will produce above-average pictures that will get people interested in a home. As a disclaimer, some homes are hard to photograph because of their layouts and other issues. But, lets start from the beginning.

The numbers are staggering when you look at the change from 2004, just less than four years ago. In 2004, only Yahoo had more than 2 billion dollars in web advertising revenue, with Google not far behind. By 2006, the numbers were up dramatically. Google came in close to $4 billion — a 350% increase in 2 years! Yahoo increased to just less than $3 billion, which was also a very large increase in just two years. Now the projections are out for 2008, courtesy of The Wall Street Journal (see chart below), and the numbers are mind boggling in terms of growth. Google looks to be ready to scoop just under $8 billion, and Yahoo $3 billion. Even AOL (which uses Google for its text ads) and MSN (currently trying to purchase Yahoo) look to be over the $1 billion mark. All this is in just 4 short years! I guarantee you these numbers will continue to increase exponentially for the next 20 years. There is no doubt in my mind about it. The Internet is becoming the preferred way to advertise due to the ease with which marketers can track and display ads to the precise target market for the product. How or where else can a person who wants to sell a product display advertisements directed only to those people who are actively searching for that exact thing? Furthermore, people are increasingly using the Internet every day for more complex things like watching videos, heavy research prior to making a purchase, and social activities that keep them glued to the computer all day. This makes it even more opportune for advertisers to get involved with the Internet and push their products to those looking for them online. This includes homes.

WOW, YOU MADE IT TO PART 2! You actually have a chance of producing a real sale of your home.

Let’s not stop now. OK, PRICING IS THE ABSOLUTE MOST IMPORTANT PART OF EVERY SALE. You can mess up all the other stuff and still sell the property if the price is low enough. No doubt about that! But what you NEED to have is the highest price that will still allow a sale to happen. For instance, pricing a 250k house for 260k to allow some “wiggle room or negotiation room” is absolutely the dumbest way to sell anything and absolutely the best way to kill your entire “just placed on market” momentum. Yet, I would be willing to bet a lot that 95% of FSBO’s do exactly that. I could write a book on pricing alone, but here are the highlights. People, for the most part, know what is in the ballpark. If you price too high and attract no takers, it looks like desperation when you lower. Keep in mind that the first 30 days in which a home is on the market are 100 times more important than the rest of the time the home is on the market. Why? Well, because all the neighbors and their friends and relatives and all buyers looking in that area will immediately take notice of your home going up for sale. If you disappoint them with too high a price, these potential buyers will grab the flyer and promptly dismiss your home. You probably will not get a second chance with them. You missed. When pricing, EMOTION HAS TO BE LEFT AT THE FRONT DOOR! Only stats and true comps can be used! Don’t be like every other seller who thinks, “My house is worth more because of x,y,z.” It’s probably not true. If you’re using honest and true comps, you can decipher the price difference between homes with pools and those without, and homes with granite and those without. Just to make myself clear: only true comps and sales statistics should be used to establish a market price.

How do you get those? Well, you could go to Zillow.com, which is somewhat accurate. Or you could ask a real estate agent for comparables and see what price they think they can get you. Or you could even pay an appraiser to see what he predicts your home is worth. Of these strategies, I think the appraisal is the most useless and the real estate agent providing comparables is the best since they will have the most accurate and available info. Do remember one thing. Past sales are exactly that — past. You MUST consider where the marketplace is trending. If it is trending downward, you must account for this and price less then the numbers suggest. If your market is advancing and prices are in an uptrend, the opposite may be true and you could try pricing a little higher than the numbers suggest to bring you closer to the true market price of your home. There is a lot of guesswork in proper pricing, even for me, and I have hundreds of sales’ worth of experience. The best piece of advice I can give is that you will know your pricing is not correct if your advertising does not result in calls and showings. In that situation, unless your marketing is just completely off, you will need to lower the price quickly and aggressively. DO NOT WAIT! JUST RE-PRICE FAST so that you don’t lose more momentum than you have to. Lets move on to marketing of your property.

I’m going to give you the playbook. Take it and save thousands.

Now before we even get into this explanation and plan, I know 99% of people will not do this. Or if they do, it will only be a half-baked attempt, and then they will most likely hire a half-baked real estate agent and no sale will occur. That seller will say, “See, I should have never even listed with “XYZ Realty” or “Agent ABC.” They did nothing that I couldn’t or didn’t do myself. So, here is the advice you won’t listen to anyway. If you want to sell your home but you’re not going to take this approach seriously and don’t do it just as I describe, then DON’T TRY TO SELL YOURSELF. It is only going to cost you money and time and hurt your potential home sale. Just hire a top-producing real estate agent who gets results and nothing but. DO NOT hire the co-worker or relative who just got his license last month and is “trying real estate.” That will lead to even more frustration and expense. Believe me, I talk with those sellers and it’s the same story repeatedly, with both the FSBO who isn’t totally hardcore serious and the real estate agent who has no clue. It is useless. Honestly, it’s a waste.

OK HERE WE GO (I hope you have your seatbelt on)!

Let’s start from the beginning — the very beginning. Your home has to look good, and I’m not talking about just running the vacuum and doing some dusting. Here’s the deal. If it has been more then 3 years since the interior has been painted, REPAINT your entire home. Only use neutral colors and colors that work well together (creams, tans, beiges, whites, etc.). Please do not paint your home bright blue and orange saying: “I did what you said and painted it bright blue. I think it looks great, but no sale occurred. Michael, you’re an idiot for making me do that.” NO. What I am telling you to do is only use neutral colors, period. I don’t care if you don’t like them or think they are “not vibrant enough for your home.” One more thing: if you are not a skillful painter, you need to hire a professional. No halfway decent job is going to cut it here. Enough said about paint, but it is extremely important. Again, you must be serious about selling or you’re just wasting your time. It’s really up to you. I can almost guarantee a well-done neutral paint job will get you all your money back in the sale and make your home sell much faster.

You may not be aware that the real estate business structure has changed significantly over the past thirty years, and particularly over the last ten. In the past, brokerages would front the majority of the costs of marketing the properties and concentrated on selling their own listings first and foremost. Real estate agents could only sell the listings that their company offered. If you decided to employ a Re/Max agent you would only be able to purchase Re/Max listed homes, making the selection much smaller. The real estate agent just acted as a bystander and assisted in completing the brokerage’s function with no real input regarding the marketing/advertising of the property. The reputation of the real estate brokerage hinged upon the quantity of its listings, the selling price of its listings, and how quickly that particular brokerage was selling the homes they had listed.

Many home sellers hire a real estate agent either from a referral from a friend or relative or from a piece of the real estate agent’s advertising. Once the seller interviews the agent, many times he or she is hired on the spot. After hiring, how do you know if your home is getting the exposure that it deserves or know if your agent is doing a good job on your home sale? Many times this is hard to determine, especially when you have many other concerns and other items to worry about, i.e., work, imminent move, and other normal things. There’s little time to think about your real estate agent and the job he or she is doing for you.

Will it start to show soon? I have been talking with many buyers who are starting to think about purchasing but are still very concerned about what the market is doing and only want to buy “at the bottom”. Don’t we all? But, here’s the point. There are a great many potential buyers in the current marketplace. In normal market conditions, they would buy a home due to real needs: larger family size, relocation to Tucson, or care of a loved one requiring additional room or a different configuration of home. These buyers would be in the marketplace and buying homes, but due to the very unknown state of the Tucson real estate market, these buyers are trying to delay the purchase and wait for what they perceive as a bottom of the market. Now all these people cannot or will not wait that long. If you live in a 1100 sq ft home that you bought 4 years ago when you got married and now you have a couple of kids and another on the way, its difficult to wait around for the market to bottom (assuming you can afford a larger home). This is what is called “pent-up demand”. It’s essentially people who have a need or a real desire to make a purchase but are putting it off for as long as possible. These people are still going to buy but as time goes on, the pressure mounts for them to take action. What I feel will happen is that as soon as there is a hint that our real estate market has the worst behind it, this pent-up demand will show itself, and I imagine we in the industry will see a rally in the Tucson market.

Real estate marketing has changed very little in the past 50 years. Imagine this: you hire a Realtor to sell your home in Tucson and he/she comes in and says, “Great! I’ll feature your home in the newspaper’s real estate for sale section, place it in the homes magazine, and do some open houses.” Which year is it –1957 or 2007? Well, surprisingly, the overwhelming majority of real estate agents are still doing the same thing today as they did in 1957, and it does work. But every day, the traditional marketing method loses a little more of its dominance. Just look at newspaper circulation numbers over the past 20 years and it’s easy to see the newspaper isn’t nearly as important in helping you get your home sold as it used to be. What other options should you and/or the Realtor you hire consider?

“Short sales” are sales where the borrower has to sell their property and owes much more on the property then the current value of the home (otherwise known as being upside down). These sales are becoming much more “normal” and buyers and sellers alike have very little information as to why/how they work, so I thought for this post I would explain the general idea of the “Short Sale”.

When deciding to sell your home, one aspect of getting the highest price the market will bear is making it have a sparkle to it none of the other homes in the market for sale have. As a seller, you can get that sparkle through hiring a home stager to completely transform your property into a model property for sale. Think about this: just about every home builder in America uses model homes to help them sell homes. They typically upgrade the homes heavily to show every option and then some to make the home have that sparkle that gets buyers to decide this is the one for them. Getting to the emotion of buyers sells properties many times. (It goes without saying that the home must be priced within reason to get anyone to want to look inside it.) Home staging gets your home in its best possible condition and presentation. The home is “staged” to enhance positives and also “staged” to distract from negatives. For instance, if the bedrooms are a little smaller then the average home in the neighborhood, a great stager will get furniture that will “fit the room” — not the other way around — making the bedrooms feel bigger. Great stagers also will make sure there is a general theme to the home that will get to buyers’ emotions. If, for example, the neighborhood is very close to schools and parks, a great stager will incorporate these into the home staging. They might decorate with small furniture (or children’s furniture) and puzzles and games on display to get children excited about the home when they go to see it with parents. On the other side of the coin, maybe your home is situated in a world class golf resort. A smart home stager would use golf themes throughout the home, playing the percentages that a golfer may be looking in that specific area. It’s all about getting potential buyers to imagine and “take ownership” of the property when viewing it. When doing all this, the benefit to the sellers — even if they happen to not have children (as in the first example, or don’t golf in the second example) — is that when it comes to the offer and the negotiations, the buyers will be much more hesitant and less likely to “lowball the offer”. If you counter, they will much more scared of losing the home. This should all result in the home selling for a higher price and also selling more quickly. From all the research I have done, I cannot find a set average that staging a property in Tucson AZ will add to the sales price, but from experience and general research, 1-5% is a very reasonable figure to use as a guide. A lot depends how well your home shows without staging and how much work the stager has to do to the home. Rates for staging in Tucson AZ vary from $250 for just a general consultation with the stager to $10,000 or more for an entire house of furniture, painting, and other home upgrades to get your home in showcase condition. If you are in need of a stager, or would like additional information about staging and getting your home in showcase condition feel free to contact me.