Category: Selling Your Home (page 1 of 5)

Looking for a question that answers itself? Try this one: Does staging work to sell homes? Does freshness move the goods down at the green-grocer’s? Is there really anything to the idea of a ‘new-car smell’?

Delivering a house that is ready in every respect for its new residents definitely works, but it fell to Steve Jobs to show us why staging works: It expresses extreme respect for the buyer’s sagacity – and funding – by delivering a ‘new-in-box’ experience.

As with the iPhone App Store, the unboxing video is an emergent phenomenon, engendered not by Apple but by its customers. But the solemn unboxing of a new toy, very-carefully-boxed, has become a key part of the marketing strategy of new toys.

And new homes, too – big duh. There are no dirty clothes or toast crumbs cluttering up model homes – and they are serviced continuously and cleaned daily. If you’re looking for perfect staging, the ideal ‘new-in-box’ residence, they keep regular hours down at the new home subdivision.

But our job is to deliver that ‘new-in-box’ experience with resale homes in Sun City, many of which are themselves already of retirement age. For the right sum of cash, you can swap in a whole lot of ‘wow-factor’, all without turning your home into a born-yesterday dentist’s office. But with the right kind of staging you can put your best foot forward from wherever you start.

Like this:

1. Declutter. You cannot do this enough, and you will only have finished when you are busily cluttering up your new home. Put away, give away, throw away, rinse and repeat. If you already live in Sun City, good for you: Parks and Sons will haul away almost anything, as much as you can drag out, two days a week. Clutter makes the house hard to see, and it declares that the home is yours, not the buyer’s, where you need for them to see things the opposite way.

2. Deflair. The idea of flair comes from the movie ‘Office Space.’ Flair is the stuff in your home that makes it uniquely your own: Family photos, sports memorabilia, religious symbols, etc. It’s all moving with you, so pack it all up now. White Sox fans are expected to hate the Cubs, but we don’t want them hating you or your house. Nota bene: It is not a denial of your identity to take this stuff down. When you list your home for sale, it becomes an investment, a retail product, and your job as the seller is to remove as many impediments to the sale as you can. The sooner you pack up the flair, the sooner you can move.

3. Deep clean. Nothing sells houses like clean. If you have no budget for the listing, pay for deep cleaning in the kitchen and bathrooms, anyway. But, as you will have noted, we have substantially empty house to work from, by now. Skilled deep cleaners will unearth dirt you didn’t know you had – but which the buyer can always seem to find. When they are done, the house will seem to pop – the essence of that ‘new-in-box’ feeling.

4. Stage. Occupied? Make it work with what’s there. Vacant? Make something work. Everything’s a trade-off, and budgetary considerations loom, but recall that your model of perfection is the brand new model home. Given virtual staging, you can make do with ‘decorator staging’ – candles, towels, tchotchkes – on the property. When buyers have fallen in love with the ideal in the listing photos, a sparser reality on-site will not prove dismaying.

5. Photography. Yes, the fifth stage of staging happens after the staging is done. You can’t do anything in the way of retouching or virtual staging without photographs. But more importantly, perfect staging doesn’t last. People move things. They track in mud or bougainvillea petals. They reclutter – incessantly. The MLS listing is where the house will sell, if it is to sell high and fast. The objective of all this staging effort is to get the prefect listing photos that will sell the house as soon as it hits the market.

Don’t want to go to all that trouble? I do. We have people who can do everything that needs to be done – but it does need to be done. If you follow me on Facebook, you’ll see me highlighting badly-sold homes, but the tragic part of the story comes when they sell – badly.

Does staging work? Only if you want your house to sell quickly and for top dollar…

My apologies for being late with the latest excoriations. The bad news is always bad, as above, 2167sf with three bathrooms thrown away as the inevitable consequence of starting sleazy and high.

See for yourself, by chart and by way of this 30-day live link into the listings:

The good news? The Snowbirds are back and buying. The other end of the chart has some impressive performances, and – huge surprise – homes that are priced wisely and to market are selling well. The cloud around that silver lining is that new listings are being added in Sun City much faster than closed listings are depleting the available inventory. That argues for profound pain when the Snowbirds go back home again. Plan accordingly…

Do you know what is most interesting about real estate commissions?

It’s entirely the wrong number to focus on. The metric I use – net-Sold Price / Original List Price – is far better.

After all, what good does it do you to save 1.5% on commissions only to lose 10% or more of your equity by working with the wrong agent?

Here are the 30 most-wrong marketing efforts for Sun City real estate in September:

This link to the listings is live for 30 days.

I can demonstrate every claim I make in these consistently dismal results. If you want to do better with your home, I can show you how to get at, near or above Fair Market Value in very few Days On Market.

The emails go out Thursday morning, early, to catch your early-morning eyes. A search portal from your agent? An auto-search you set up yourself on a real estate website? However you arranged things, that email is there to help you plan your weekend home search. And, of utmost importance, the newer listings are flagged with some form of eye-catching text like “NEW!”

And the emails go out again Friday morning, and you pay special attention to the “NEW!” listings because you’re not enthralled with the list you made Thursday.

And the emails go out again on Saturday morning – to go unread or to be set aside for later consideration. Come Saturday morning, you’re looking at houses, not listings.

And if a home was newly listed after Friday’s emails went out? It has, just by that one false move, lost two-thirds or more of the selling power of the word “NEW!” If you jumped on the grenade while the general was golfing, you didn’t get the medal. And if you moved heaven and earth to list a property for sale on the wrong day, this error alone is likely to have enduring consequences.

I’m belaboring this for two reasons:

Second, there were ten brand new listings in Sun City from 1:22 am Friday to 2:52 am Saturday. That’s a lot for any day, and it’s very likely that most or all of them missed out on Friday’s emails. They will not be showing today, Saturday, because the buyers didn’t see them when they were looking for homes to visit today.

But first, this mistake (there will be new listings tomorrow, Sunday, the worst day to be “NEW!”) goes to everything I talk about. EVERYTHING counts in a new listing. The list price matters most, but absolutely everything matters.

The reason is in the headline: You will never have more attention, more excitement, more follow-up interest in your MLS listing than you will have over the first weekend. It is your magic moment to shine, with everything in the listing as close to perfect as you can make it – the wishbook page of your buyer’s idealized future, a breathtaking rhapsody to be heard only within the confines of this one perfect space…

If the price is right – if the value is right – you will excite all the interest you need to sell the home from Thursday to Tuesday – at, near or above list price. The first weekend is your best and perhaps your only chance to ‘beat’ the Fair Market Value of your home. Not by much – everyone is doing the same math – but an irresistible listing can beguile more than one buyer, resulting in a bidding war, which is unlikely to happen later.

Everyone makes mistakes, and you fix what you can when you realize your errors – or when very generous buyer’s agents point them out in showing feedback. But: You never get a second chance to make a first impression. By the time the “NEW!” is off your rose, you may already be doomed to sell below market – no matter where you started.

Everything matters – price first – because you never get a second chance at the first weekend.

Ahem. It’s easy to look at a long list of failed, fractured listings and think, “Well, the agents are really dumb, after all.” That surely is true, but it doesn’t mean that they are not also cynical, craven, mercenary, deceptive and predatory: You can’t slash the list price on a listing you don’t have…

So here we have The Dirty 30 for August 2024 in a 30-day live look into the MLS, the worst closings in Sun City this month:

When you’re giving away anywhere from 11% to 27% off the Original List Price, it’s not hard to figure out what the problem is. And whether or not agents are too dumb to learn better, I have every confidence that YOU are not.

Pricing to market in wise numbers produces better, faster results. If, on the other hand, you would rather wait for months for your money, you can pocket a whole lot less of it for your trouble…

What’s a home-buyer? Someone who wants to move up or to stop paying rent or to relocate from another city. Someone with stuff to be housed and who desires, periodically, to bathe and sleep in private. They want a specific, carefully-chosen home, and they don’t want to lose out on it.

But then there are buy-and-hold and fix-and-flip investors. They want the home to invest in, but not quite as urgently: They keep their stuff in their own homes, and, at a certain point, other opportunities can seem more promising.

And then there are wholesalers. They want the home, but only at an insanely low price, and they don’t particularly care which home they happen to be lily-padding on, provided the price is insanely low.

So first, as a warning to Sun City homeowners: Zillow your address. I am Zillow.com’s first and harshest critic, but your home’s Zestimate is a much better reflection of its Fair Market Value than the number some fast-talker is quoting you over the phone. Unless you are beset by an insuperable emergency that brooks no possible delay, you have no interest in talking to pawn-brokers.

But true pawn-brokers at least bear the risk of owning the merchandise. The self-idealized perfect wholesaler owns nothing except the temporary right to palm a property-under-contract off on a greater fool, who in his turn hopes to flip it to an even-greater fool, each taking a fee for the assignment of the contract.

Eventually the contract lands with a lesser wholesaler, whose job it is to effect the second scam: Renegotiating the already-discounted purchase price even lower – much, much lower. The theory is that you will be so desperate for whatever money you can get that you will cave. Does this work? I can show you MLS listings that suggest that it does, at least sometimes.

But it’s scummy, scummy, scummy, every bit of it. The assignment game is pure rent-seeking – demanding compensation for no added-value. And cancellation blackmail is white-shoe extortion.

How can this be? Don’t free markets protect us from this kind of predation? They should, but markets work by equilibrium – balancing costs and benefits on both sides. Where one side has an unfair advantage, fair outcomes are unlikely.

The problem is Section 6j of the Arizona Association of Realtors Residential Purchase Contract:

The specific villain is line 266 – the right to cancel. Owner-occupants only cancel on inspections if they have deeply misjudged the house – foundation issues, rampant infestations, sewer/septic-tank failure. Normal investors will cancel if turns out there is less juice or more squeeze than was expected. But wholesalers cancel deals with abandon, because there is zero cost – to them – to turning every crank on every candy machine until they find the one that’s broken – the homeowner who didn’t Zillow his address.

The assignment problem is actually trivial, it’s the blackmail-by-threat-of-cancellation that makes wholesalers toxic: The game is to get a property under contract, ideally at a deep discount but at full price if necessary, then torque the seller with demands for a much deeper discount on pain of cancellation. The buyer has nothing at risk; the earnest money comes back, if it was ever even deposited. But the seller will have gone through escrow’s nine circles of hell, will have made plans and, at a minimum, will have suffered market-bruising from the experience.

How to slay this dragon? It’s actually pretty easy for an MLS-listed home: “By mutual agreement of the parties, Section 6 of this contract is stricken in its entirety.” That does what I want done, but judges might not love language that comprehensive. Instead, my plan for wholesalers is simply to insist on a signed BINSR – the buyer’s inspection form – along with the contract, accepting the house as-is.

That would be the literal intent of entertaining an as-is offer: The seller agrees to accept a discounted price, and the buyer agrees to underwrite his own risks in operating from an information deficit. Second, if you imagine that you can evaluate the property financially without seeing it, then presumably you can also physically inspect it in the dark. But first, if you actually do want to perform the due diligence appropriate to a true investor, and not a scam-running rent-seeker, do it now, before you write the contract.

Do you see the benefit? I don’t want to deprive genuine investors of the opportunity to inspect the property and to demonstrate its value to their own standards. But I do want to chase away all of the fleas who will never do what I am asking – which takes care of the assignment problem, too. And I want to make sure that I am negotiating price only once.

The purchase contract is broken in the same way the marriage contract is broken, rewarding defection and penalizing cooperation. The fix is to take away the reward for defection: If you insist you must buy from the discount rack, the terms are cash-and-carry – a contract with no contingencies.

My apologies for not writing here more. I wanted to reflect on the second quarter, and I have interesting things to say about 2-bedroom/1-bath floorplans generally. All still undone.

But: As ever, we are graced with very bad closings in Sun City – 81 Days-on-Market on average for July, with and average of 6.51% clipped off of the Original List Price. (Attention sales-commission shoppers: You’re focusing on the wrong metric.)

This is a 30-day live link to the Dirty 30 listings for July 2024. And here they are summarized – concentrated catastrophes:

Thirteen of the 126 Closed listings for July finished at or above Original List Price with no concessions. Guess what they have in common…?

June has shuffled away, taking the second quarter with it. I’ll have more to say about both shortly, but for now I want to harp on a familiar theme: The unrelenting ineptitude besetting Sun City home sellers.

Summarized above and linked for 30 days are The Dirty 30, June’s worst performers in terms of net results – (Sold Price minus Concessions) / Original List Price – giving up 9% or more.

Yes, that’s awful, but 64% of June’s 111 closings gave up 3% or more off of the Original List Price – typically taking forever to fail with a whimper. Of those 111 closings only lucky number 13 finished at or above Original List Price – and, of course, some of those are inflated FHA/VA transactions.

There is a right way to sell real estate – at or above Fair Market Value in minimal Days on Market. Sadly, almost no one in Sun City works that way.

Every detail in an MLS listing carries marketing weight – everything counts – but nothing matters more than the price. If a house is priced wisely and well – if it is priced to market using a number that makes sense to the buyer – it should sell at, near or above list price in single-digit Days-on-Market.

I favor numbers that break evenly on $20k boundaries, because that’s the way six-figure homes tend to close in ARMLS – the Arizona Regional Multiple Listing Service, the Phoenix-area MLS. I call them wise numbers, because all other numbers – stupid or sleazy prices – induce delay, at a minimum, and are therefore inherently UNwise.

But there is another piece to this puzzle: Lender pre-qualification tiers. How much is the buyer qualified for? Is it $344,850? Or is it more like $350k? Lenders like round numbers, too, but they often work in $25k increments.

This matters why? If you’re priced at $305k, you might be missing some or all of the buyers who are qualified only to $300k – which you would gleefully take – since they are only searching to their pre-qualification number. If you then reduce the price to $279k, you’re still fishing with your bait out of the water with respect to the buyers qualified to $275k.

That’s a sad but true story, as seen here:

These are yesterday’s price changes from my Sun City hotsheet. None of the prices, before or after, is wise – which is typical, alas. But note how many of them are or were fishing just above the nearest $25k boundary.

The Imputed Value is just an expression of the Sun City Over-Pricing Effect: If a price is not at least $15k over the nearest $20k boundary, it is not that number that is being defended but the next lower value. In other words, $279,900 and $275,000 are both defending $260k, but $269,900 is defending $240k. There’s no substitute for CLOSED comps, but peering through the SCOPE lets you read the listing agent’s mind.

There’s more, of course: You have to price wisely and well with respect to the closed listings while keeping your price lender-friendly – all while undercutting your Active competition, such that yours is the house that closes next.

Everything counts – but nothing counts more than price.

Tell me if you’ve heard this story before…

As always, the price of delay is FHA. 194 DOM, 91.34 net-SP/OLP.

Started at a wise price, just much too high. The Sold Price looks like a counter to me: Buyer offered $220k, but the seller had had enough of this dagnabit discounting. 116 DOM, 88.42% SP/OLP.

FHA again, and another counter offer for the Sold Price: Buyer offered $300k, seller countered at list? Or are there undisclosed seller-paid concessions? 126 DOM, 95.38% SP/OLP.

The Original List Price hinted at $340k, as did the reduced List Price. But cash is a rapacious king: $330k again is likely a countered number, with the original offer coming in at $320k. The $35k concession is going to be in lieu of repairs, and taken all together this reads like an iBuyer-style flipper offer: Gouge ’em on price, then nick ’em again on repairs. Why did the seller go along with it? They ran themselves out of time playing stupid pricing games. 71 DOM, 80.82% net-SP/OLP.

From sleazy to sleazy to sleazy. I like the buyer’s offer at $380k, with the difference split by counter-offer. Regardless: 239(!) DOM, 86.46% SP/OLP.

In the mood to draw conclusions? These are all of yesterday’s Closings in Sun City – and every one of them pursued the same faulty strategy: List high at a stupid or sleazy number, languish pointlessly for weeks or months, periodically making price reductions to other stupid or sleazy numbers, ultimately approaching market value only to cave to an offer that discounts on price, concessions, repairs – or all three.

And that’s how we get here, with virtually every listing agent in Sun City making the same boneheaded mistakes in the same ways over and over again and learning nothing from the experience:

If you want better results – (ahem) better money sooner – you have to work from a different strategy, one focused on selling high and fast rather than low and slow – and to the least-prepared buyers.

I am proud to say that I have had a salutary influence on real estate agents who live and work nowhere near me. Locally, no one has learned anything, but that’s their problem – and their clients’.

This is me DM-ing in Facebook with an a team leader in Florida whom I’ve known for – could it be? – 17 years or so:

We’re talking about pricing, of course. Nothing in residential real estate matters more. And specifically, we’re talking about my ideas about wise, stupid and sleazy prices.

I’m telling my friend to look at thousands of prices, but we’re not going to do that. But there were nine Closed listings in my Hotsheet this Sunday morning – why? it’s a mystery – so we’ll use those to demonstrate my logic:

But wait! Only four of the nine Closed prices are wise. Perhaps. Let’s post-mortem them one-by-one and count again at the end.

Not adorable – collapse for cash at ~60 DOM – but wise.

Another big drop for cash at high DOM, but wise.

This is why appraisers hate Closed sales with low DOM: They conclude that the property was thrown away. I expect the original offer was $240k – 80% – with $255k – 85% – being the counter-offer. Listed at a wise number – which, as I’ve noted on Facebook, is often a tell for throwaway homes. Is 9 DOM, 85% SP/OLP a full, free and fair test of the market? Regardless, unwise.

This is a double-dip – same agent ‘represented’ both seller and buyer – and that looks like a $300k offer with a $5k face-saving counter. I call it a wise offer.

Concession-bait. Born to be unwise. You can see that the intent is to simulate a $300k offer, though.

Wise. It actually sold in 7 DOM. No idea why it took ~40 days to close cash.

Virtually the same story – with both serving as nice illustration of the dilatory power of sleazy pricing. But: Wise.

Cash taking a concession is probably repairs. My bet: Offered $320k, countered at the then-reduced list price, then the investor split the difference post hoc with a repair concession. I like this as a wise offer.

Offered $400k, countered at $405k? I like this as a wise offer.

You have to look at a lot more listings to know for sure where Closed prices cluster in your market. Is it on $20k, $10k or $5k boundaries? But I know for sure where it isn’t – at $xxx,999, $xxx,995, $xxx,990, $xxx,900, $xxx,500, etc.

But: We went from mostly unwise to mostly wise offers, and we dissected the logic behind the unwise numbers.

This is the most painfully obvious truth in real estate, and the one that is seemingly hardest for agents to learn: If you price your listing using a number that seems both fair and honest to buyers, you will sell faster and for more money.

Who knew…?

Me, on Facebook:

Wisdom clearly eludes us: I did the same analysis yesterday:

I won’t promise to do this daily, but clearly I don’t need to: For whatever reason, Sun City listing agents are committed to pricing tactics that incite either rancor or confusion – resulting in costly delays, either way.

Here’s why this matters: While listers goof around playing theory-free, strategy-free pricing games, their sellers’ equity goes up in smoke.

Witness: The buyers got the golf-course lot-premium for free:

Justice is a piece-rate and a toll road: You get what you pay for and pay for what you get. Straight-commission compensation is the best possible incentive for successful sales results. But for every dollar your home falls short of its Fair Market Value at Close of Escrow, your listing agent feels only a few pennies of your pain – and you will pay those pennies even on dollars you concede to the buyer.

Your home is not a mudpie – pointlessly filigreed even as it loses its luster with every wasted Day on Market. You will never draw more attention to the property than on the first weekend. If you repel buyers with stupid or sleazy pricing, your house may do something no real mudpie can do: Lose value.