Heather wrote in an email to BloodhoundBlog:
We listed our house right before Christmas. It has only been shown one time in 5 weeks. Can this be attributed to the holidays, our realtor, price? We have listed in the area listings papers and homes and land and we have signs but that has been the extent of advertising. An open house is scheduled for in 2 weeks. What would
you suggest we do? Thanks
When we look at the subject of marketing it is important to know WHO we are marketing to. Marketing isn’t done to “the public” but to “A public”. The two primary “publics” a home seller needs to reach are other Realtors and home buyers. The communication lines used to reach those two are not necessarily the same. For example, “Homes and Land” can be a good way to reach possible home buyers but would not be a reliable method to reach other agents.
Open houses have almost NOTHING to do with actually getting a home sold. I know there are people who will want to disagree with that statement – but they have not fully examined the facts. All real buyers either are or are not working with an agent. If the buyer has an agent the open house would have nothing to do with them seeing the house, even if they happened to stop by while the house was being “held open”. The buyer with an agent will usually wind up seeing the house when it is convenient for them (which is seldom Sunday afternoon). If the buyer did not have an agent the only thing it is necessary to do to get them to call is NOT put a “take one box” on the sign. The original purpose of a “take one box” was to improve the quality of sign calls. Skip the box with a flyer and if they see the house, don’t have an agent and like it – they will call.
Open houses, ads in picture magazines, web sites, Realtor.com, etc. are ALL attempts to get a buyer (who does not have an agent) to originate a contact. Based on how MOST homes in the United States are sold – buyers could be considered to be the secondary public to communicate to about a home for sale. The primary public is other agents. Understanding this very significant point is vital if one wants to ensure their home is one of the homes that sell.
In our market in the Phoenix area – seven out of eight homes DO NOT SELL. Less than 12% of the current inventory is actually selling (about one house in eight).
The THREE THINGS that can prevent a home from selling are:
1. inaccessible
2. wrong map code in MLS
3. price
Some people put homes on the market and the only way to show the house is catch the owner home and they are only home in the evening. In the market we HAD – that may not have mattered. It sure does now. In most cases now a lock box is vital. Remember, you are competing with other homes that do have a lock box and the “public” you wanting to appeal to here is other agents.
The map codes (grids and area) are what agents use to limit their searches. Having a home in the wrong “area” is usually fatal – as far as getting it shown. The numbers for the various “areas” are arbitrary numbers assigned (in the Greater Phoenix Area) over 40 years ago. But those numbers are still in use today and a simple typo can make a listing “invisible” in the MLS system.
Price is obvious but commonly overlooked. I get several calls a day to my office from sellers letting me know their home “is priced correctly and still isn’t selling”. If number one and two above have been eliminated as possible reasons – then the answer IS number three, price. Using “comps” (in this market) to establish the correct price seldom works. Two years ago we would see comps of 225k and reluctantly take a listings at 250k and wind up selling it for 325k, all cash in less than 48 hours. The market we have now is that market stood on its head. I can easily get any home appraised for more than it will sell for. Appraisers use “old” data. Works great in a flat or slowly changing market. Not so good in a rapidly increasing or decreasing market.
During the height of the feeding frenzy we had about a 35 day supply – valley wide. Right now that amount is almost eight months of inventory. But it isn’t evenly distributed – there are parts of the valley that have over a year supply (Surprise) and some even over a three year supply (Johnson Ranch in Queen Creek).
The problem isn’t “the holidays” – business was quite brisk all through December. The national average (per NAR) is one contract written for every ten showings on a properly priced listing. My own data confirms the NAR averages. Which means you would need 2 – 3 showings per week if you were going to sell your home in 30 days. Any listing not getting showings has one or more of the three possible issues above.
(answer both posted and emailed)
Brian Brady says:
That’s good information.
January 2, 2007 — 12:59 am
Kris Berg says:
Open houses, ads in picture magazines, web sites, Realtor.com, etc. are ALL attempts to get a buyer (who does not have an agent) to originate a contact.
In my market, I do not see this as the case at all. As our industry continues to evolve due to heightened transparency, I suspect this will be even more true. We are seeing a surprisingly large segment of the buyer population that falls not into the “has an agent” or “doesn’t have an agent” categories, but into a third category you don’t mention: Has a relationship with a person who has a license who will ultimate write the offer once the home has been identified. Into this category, I will lump Redfin buyers, buyers related to Cousin Eddie who works at Jamba Juice but will be rebating portion of his “commission”, and guy-who-doesn’t-need-a-stinkin’-agent-because-he-knows-more-than-we-do (the Do It Yourselfer). The latter, actually falls into a fourth category of Listing Agent Shopper. These are the folks for whom all of that print and on-line advertising is critical. Continuing the argument, these are the folks that also benefit most from the flyer box at the sign post. I consider the”don’t provide flyers; make them call” approach antiquated, and a throw back to the old school training classes where that phone call was consider the holy grail of leads. “This home only has three bedrooms, but we have others!”
Having said that, I agree with your larger message. Price and accessibility are always the main reasons an otherwise fine home will sit. And if the inaccessible home is priced attractively, it will sell eventually but will take a little longer.
January 2, 2007 — 8:10 am
John says:
Picture magazines, realtor.com and newspapers ARE however a total waste of time. With the MLS search widely available, there’s no need to do anything else to get the word out. Good price, accessible and good quality photos + MLS listing is all it takes. I’ve even seen homes sell without any photos in a hot market.
When it’s slow, no amount of fancy “marketing” will get the home sold if its overpriced. It’s what the home looks like when people visit that matters.
January 2, 2007 — 8:33 am
Joe says:
Um, has Heather read the news lately? She’s not alone in listing a house and having it not sold or even shown.
I have to agree with both John and Kris – publications like “Homes & Land” are an utter waste of time. EVERY time I picked up a copy when I was looking for a home, the house had either already sold or the information was no longer accurate.
We are seeing a surprisingly large segment of the buyer population that falls not into the “has an agent” or “doesn’t have an agent” categories, but into a third category you don’t mention: Has a relationship with a person who has a license who will ultimate write the offer once the home has been identified.
Very true. That’s in fact how I bought one of my houses three years ago. Said friend was more than willing to rebate most of sales commission – it’s how I remodeled the house.
January 2, 2007 — 10:43 am
Spencer Barron says:
I agree with this for the most part. If you don’t look good on paper to the other agents, you won’t get showings. It might be a problem with how it was entered in the MLS or it might be price. Usually, it’s price.
I highly disagree with not putting out a flyer box. All that accomplishes is getting more calls to the listing agent. Yes the flyer box improves quality of phone calls but its not the sole reason for having one. Buyers might be in a rush and not want to call now. They might not be interested for themselves. Most sellers don’t care if another agent is bringing the buyer or their agent brings him. You put the flyer box out to get the attention of ALL buyers.
The more complicated you make things the more difficult your sale will be.
The only time not to put one out would be if your agent is giving you a commission break on bringing the deal himself, which is rare. Your going to want to have something they can take with them so your still on their mind at the end of them driving around all day.
January 2, 2007 — 11:35 am
Russell Shaw says:
I have to say, I stand corrected. Thanks, Kris! Although in our area it is a fairly small market share – still it IS a market share: the person who is looking on their own, planning to use someone else to write the contract and give them part of the commission.
We do a HUGE amount of marketing to attract buyers – as we do offer our sellers a lower commission if we handle the buyer as well as the seller. We don’t hold open houses though. I consider the primary value of an open house as a great low cost way for an agent to find a stray buyer. My point on no flyer outside the house was if we skip the flyer that we don’t ever need an open house (and to disrupt the seller’s life all day). Buyers who have seen it will call us if they like it.
I will add that when one of the “I will only deal with the listing agent” types calls my office and demands to speak with me – I always take the call and give them the two choices that are really on the menu: talk to one of my Buyer Specialists or buy a different house.
January 2, 2007 — 11:43 pm
Athol Kay says:
Good post. I do see the majority of “advertising” being marketing the brokerage rather than the house. In a rising market houses sell without advertising, and in a downward market no amount of advertising will sell a house.
Increasingly at open houses I’m viewing it as more of a pre-listing presentation than an attempt to sell the house. Above a certain price point, the majority of potential “buyers” also have a house they will need to sell. They can’t do one without the other, so you gotta show you can sell a house and not just grovel like a noobie for a buyer rep signature.
January 3, 2007 — 5:53 am
Michael Daly says:
2007, The Year of The Discriminating Listing Agent.
Here in the Hamptons, it’s interesting to see the sellers with overpriced listings, who used to be like rock stars “Oooo, me, me! I want your listing”, now looking like Kramer at a NAACP Convention.
The tide has turned. Regardless of what it takes in your market to sucessfully list and sell homes, the variables have changed and it’s a thinking wo-man’s game. md
January 3, 2007 — 6:35 am
David Ridell says:
So in summary, Open Houses and all other marketing is worthless and it comes down to whether or not your home is properly on the MLS and the price?
January 3, 2007 — 1:57 pm
Terrill Fischer says:
I agree with the original post here about what sells homes. But wanted to add a few more items….
Only 4 things sell homes: Location, Price, Terms and Condition.
The two we can control are: Condition and Price.
Buyer shouldn’t see any home until it is in the best possible condition it can be in for the market. And if that isn’t the reason they aren’t buying it then it’s Price.
I rarely do open houses anymore. Only if it’s a really cool house that I think will produce a lot of traffic. I tell Sellers that open houses will very rarely sell their house. THeir house will get sold if Price and condition are in line and it’s a got good pictures and description in the MLS. Everything else is fluff.
January 7, 2007 — 3:55 pm