December 2007 ended with an average days on market at 85 for single family homes making it the longest period for 2007. With these prolonged periods of inactivity more realtors have adopted highly complex and complicated marketing strategies to compensate. My team does have a highly personalized and intensive marketing plan for each property; however, a good marketing strategy is only a fraction of what sells a home. To oversimplify there are 3 things that sell a residence:
1) As stated a good marketing strategy is important
2) It is critical that the home is staged and shows well
3) Most importantly it must be priced competitively
A good marketing strategy is directed into several areas. These stats shows the % of buyers that first learned about a home of interest:
41%…………Agent
16%…………Yard Sign
11%…………Internet
7%…………..Friend, Relative, Neighbor
7%…………..Newspaper
7%…………..Builder
4%…………..Knew the Seller
1%…………..Homebook, Magazine
6%…………..Other
-These statistics show the priority and weight in relation to which marketing mediums should be reached.
-The graph fails to mention the importance of open houses, it is in fact close to 6% and about 50% of all potential buyers found open houses attended useful.
-The internet statistic can be misleading, since; 72% of all potential buyers use the internet to find information when purchasing a home in
Houston.
Next a home needs to be Staged, if a home does not show well it will not sell well:
5 Cs of Real Estate
- Curb Appeal—Exterior’s Presentation (i.e. clean driveway, cut grass, exterior paint, etc.)
- Challenges—Obstacles or Inconveniences (i.e. needs new roof, inconvenient access, etc)
- Comparative Value—Commonalities and Distinctions (i.e. list price, sales price, style, sq ft, # of bedroom, etc.)
- Condition—Current
Relative
State (i.e. year built, state of home compared to other comparable homes, etc.) - Charm—Distinctive Characteristics (i.e. prewar features, crown moldings, high attention to detail, etc.)
-These 5 rules of thumb are a timeless way of displaying your homes selling points while underplaying your homes greatest defects or flaws.
-Overall when staging your home just remember “no clutter”, “open spaces”, and “a welcoming atmosphere”.
Finally the most important element as to what sells a home is Competitive PRICING
Think of price in relation with time; what is more important and what combination of (X) time and (Y) price will give you the most utility.
Again below are two charts that demonstrate the importance of competitive pricing in any market:
-Simply put you will maximize your returns if you market the property at fair market value
-You will receive a lower level of interest in the property if you over price the home
-You will receive a higher level of interest in the property if you market the property at a lower price, however; these buyers will most likely be a waste of time and you could get stuck in a deal that you do not want to go through. Simply because they are tailoring to the wrong demographic.
-In short, you cannot sell a $200,000 home in a $150,000 neighborhood which is why you should price competitively not accordingly
I wrote this post for one reason only—to inform all active and potential sellers out there to beware of lazy agents. Make sure you constantly check in with your real estate agent, make sure they are holding open houses, make sure they are constantly pursuing the marketing strategy as promised, make sure they keep you informed, etc. Overall, hold your agent accountable and always place quality control barriers when hiring a new agent. Again, there is no excuse for a sub par agent so do not settle for one.