Real Estate Investing

Looking at anywhere from a supply of homes ranging from six months to four years - depending on where you are in the country - getting the curb appeal right is vitally important if you want to sell in a reasonable amount of time and for a good price.  When your curb appeal is lacking, buyers tend to think that the rest of the house isn’t cared for properly.

According to Realtor.org, exterior remodeling has the best return when selling,

On a national level, wood deck additions and all types of siding replacements – upscale fiber cement, midrange vinyl, and upscale foam-backed vinyl – returned more than 80 percent of project costs upon resale. Of these, the most profitable project was upscale fiber cement siding, which recouped 86.7 percent of costs, followed by wood decks at 81.8 percent, midrange vinyl siding at 80.7 percent, and upscale foam-backed vinyl siding at 80.4 percent.

When we sold our last home, we’d rebuilt our deck.  The ugly wood became a two-tiered design featuring octagon shapes and a wood swing.  Almost six years later, we are convinced the deck is what sold the house in the first two weeks it was listed.  That type of curb appeal truly draws buyers.

I found these active listings on my local MLS whose curb appeal is fantastic.  What do you think?

I just saw the story on MSNBC.com about how the CEO of Merrill Lynch is jonesing for a $10 million bonus after it merged with Bank of America - because he allowed the merge thereby saving the company.

Thain has said he deserves a bonus because he helped avert what could have been a much larger crisis at the firm, people familiar with his thinking told the WSJ.

O.o

This brings us to the question of whether or not real estate agents earn the commissions they receive for coordinating real estate transactions.  When listing a home, a Realtor’s job is to find a Ready, Willing and Able buyer.  That’s it.  Some agents get away with only putting the listing on the MLS, plopping a sign in the yard, and placing a lockbox on the door.  If that’s all they do, and they find a buyer quickly, the seller agrees to the price and terms, and the transaction closes, then the agent has done his/her job.

The thing is, the sell is rarely that simple.  More common are efforts to put together and implement a huge online marketing plan, taking attractive photos and putting them together in various slide shows and visual tour options, writing descriptions that attract buyers attention, giving up weekends with family to host open houses, bringing other agents in to see the home (sometimes offering snacks or meals to bring the traffic), making public your name and phone number to attract *strangers* to show the home, dealing with other agents (the majority are quite professional, but like any workplace there are a few horse’s butts thrown in for good measure who are extremely distasteful to deal with), negotiating the best price and terms for the seller, making sure all the inspections are conducted by professionals, making sure if the home says it’s on city sewer it is, making sure the septic system is functioning, sending comps to the appraiser so the appraisal will work, the list is endless.  And I haven’t even mentioned the cost of magazine and newspaper advertising, signs, brochures, flyers, and other expenses that come right out of the agent’s pocketbook.

So yes sometimes an agent does earn a quick and painless paycheck.  But don’t you sometimes have light weeks at work?  Most of the time, the commission is earned through gritted teeth, determination, and a willingness to do whatever it takes to find a ready, willing, and able buyer.

David Knox, the most excellent real estate trainer whose presentations are as funny as they are informative, riveting, and fascinating, has coined the name of a new syndrome: PDS. 

These sellers tend to resist the reality that they must lower the listing price of their home, unwilling to accept that the days of the boom market are gone, said Knox, who spoke at the REALTORS® Conference & Expo in Orlando last week.

PDS - or Price Denial Syndrome - is a common problem these days among sellers.  Knox told Realtor.com magazine that sufferers often blame the real estate agent for suggesting a lower price for the home.  In addition, they also find ways to justify a higher price. 

I recall going to a listing appointment once for an average home.  A single man had hired someone to decorate, plus he added a privacy fence in his backyard which was next to a very busy road.  The problem was that his so-called decorator put up wallpaper - very unappealing to most buyers these days.  To make the problem even worse, the wallpaper was put on wrong, the stripes were placed horizontally rather than vertically.  It looked silly, but he was so proud of it that I didn’t criticize. 

To my knowledge, he still lives there three years later because, thankfully, he wasn’t really interested in listing… he just wanted to find out what his house was worth if he decided to sell.  I think he was disappointed that the decorating and the privacy fence didn’t add $25,000 to the value. 

Unfortunately, this idea that your home is worth more than it actually is commonplace.  When you’re ready to sell, your buyer doesn’t care that you need the extra money.  With a hundred other homes to choose from, they’ll just move on to the next house.  If they see your price constantly being downgraded, they’ll think something is wrong with the house or it’s in a bad neighborhood. 

Sellers *must* get the price right the first time and it’s up to the Realtors to be truthful right at the beginning.  It’s very difficult to tell people “No, you can’t try a higher price for two weeks.”  As Knox joked,

Buyer activity is highest when it’s just listed so don’t turn off the serious buyers at the beginning. “Tell them that you can raise the price after the first two weeks.” 

Go read more of his thoughts here.