It’s Saturday as I write this. There were 15 new listings in my little farm yesterday. Only two have wise prices, with the rest being either stupid or sleazy.
What’s worse is that these homes were listed on Friday, AFTER Saturday’s showing tours were already planned. The email from ARMLS or Zillow or wherever that celebrates these brand new listings will go unread, as buyers and agents rush around getting ready for the work they already have planned.
Sun City is special in that more buyers might be looking at homes on weekdays, but most buyers do not live here already, and they and their buyer’s agents do their real estate shopping on the weekends, just like everyone else.
Listing – or doing price reductions, if you must – on days when buyers are not shopping listings is an unforced error that abets the process of selling slow and low.
We live in a modified Rainier. Our Del Webb floorplan is already-here news, meaningless to people moving to Sun City, yet you see models name-checked in listing after listing.
Even so, if you know you know, and the Rainier is a very livable three-bedroom footprint: The kitchen is up front, looking out to the street; if you blow out its interior walls, together with the living room it blooms into a greatroom, so the family is always together.
I’ve been taking my wife around to look at vacant Rainiers. It’s like a date, but during the day and with an MLS key. There are a lot near us, in Unit 11, but few-to-none in other parts of Phase Two. But there is a nearly-identical floorplan in Phase One called the Ranchero – 1,679sf versus the Rainier’s 1,699sf, and you’d need a tape rule to find the differences.
We went to look at one today. Very much unmodified, and largely unadapted from 1968, when it was built. But it’s turnkey livable as-is and priced aggressively for its size. Upgraded before move-in or a room at a time afterward, it’s a smokin’ deal – especially if you make the wise-price offer. 😉
I like to say ‘better money sooner’, but that’s just a recapitulation of the core idea of my listing praxis: Highest, safest, soonest. We’re looking for the highest attainable return in a reasonable span of time.
‘Attainable’ means two things: We want the highest price a real buyer is willing to pay, rather than what we might wish we could get, instead. And we want for that buyer to actually be able to pay that promised sum on time – ideally without the seller’s help.
So an FHA offer at 105% of list, with 3% coming back to the buyer in seller-paid concessions, is sub-optimal, even though the top-line number is bigger. The house still has to appraise – and it won’t, not above market value – and you already know your buyers have no cash to spare to make up the difference. Not only won’t you be getting the bigger number, there’s a good chance the buyer will be unable to perform at COE – putting you back on the market, wiser but shop-worn.
On the other hand, all cash at 98% of list can be worth considering. ‘Cash is King’, so it expects a discount. That lousy FHA offer can be useful to get the buyer to 100% or above, but with no or few contingencies and a quick closing, cash is typically better money: Not higher, necessarily, but much safer and much sooner.
The hierarchy of real estate funding looks like this:
• Cash • Conventional • FHA/VA, etc. • Other
Cash is King – very safe, very soon – but a strong conventional borrower who is desperate to possess the house is likely to be both higher and safer (less likely to cancel) than a cash buyer.
VA borrowers can be very strong, financially, but VA loans can take a while to close and they require the seller to pay a significant portion of the buyer’s transaction costs. FHA borrowers are very often weak on credit, cash-on-hand and cash reserves. The offer that seeks a seller concession on the way in may need even more seller-paid funding to make it to the finish line. VA is less soon, FHA less safe.
As for the ‘other’ category – seller carrybacks, hard-money loans, etc. – if we are even talking about them for a Sun City home, something has gone terribly wrong with the property’s marketing.
How do I know that’s so? Because if a house is listed properly – priced to market and promoted irresistibly – it should attract cash and strong conventional offers immediately. It it doesn’t, the price is wrong. If the offers that come in eventually are all crazy government loans – over list but with countervailing concessions – the buyers want the seller to cover their shortfalls. And if the seller waits for months and then finally gets an offer with ‘creative’ financing…
Art elicits a response. A brand new real estate listing succeeds when that home’s eventual buyer says, “Hot dang! Must lock down immediately, before anyone else gets it.” The safest buyer, by far, is the one who wants it more. But if the listing doesn’t surface that buyer, plus others less frenzied – right away, in the first few Days on Market – then it has failed.
But, listed right, your house should attract one or more cash or strong conventional offers at or near full price. Play your cards right, and you could Close above list in ten days – so get packin’! And that is better money sooner.
At last! Relief from your lifelong yearning to live full-time at the dentist’s office…
That’s funny. Here’s what isn’t: This icy, monochromatic style of interior decor is everywhere. The rule of the MLS is this: If the homeowners spent money on their home on the way out, they made it grayer and less homey – by a lot. Flippers? So much the worse.
Women’s magazines don’t give advice on exterior decor, so from the outside homes are done in creams and browns, meat and potatoes. Iceberg interiors are a fad driven by people who abhor human beings and their actual emotional needs. Literally no one wants to live at the dentist’s office, they just can’t stop heeding bad advice.
Workplace decor is sterile so that you never get too comfortable. This style of interior design is inflicted upon home-buyers by people who hate homey colors – creams and browns – and the warmth and comfort they induce.
It’s worth noting that this home design fad took root just about the same time the government outlawed warm, homey incandescent light bulbs. Our light is cold and blue, and so are the surfaces reflecting it.
I’m showing you the kitchen, the homiest room in a home. It’s not there to make a design statement, but rather to make stew – ideally in the colors of stew. Plus which, a homey kitchen cannot seem to abhor drips and splashes – which is what medical countertops are meant to reveal.
I’m mocking cheesy flippers mimicking cheesy women’s magazines, but more deeply I’m objecting to this whole design esthetic for homes: Home is literally meat and potatoes. Almost always looks like that from the outside. Only lately have we fled from that look for interiors, opting for this sterile monochromatic office look.
Clearly, I’m against it, but I’ll add a couple of caveats: First, I’m only interested in marketing to the middle of the bell curve – the Buick Regal buyer. Second, the stoutest heart of that market is here, in Sun City. I don’t think anyone feels at ease in an iceberg interior, not without overlaying everything in browns and creams, but I’m pretty sure my demographic – 55+, very middle class – wants nothing like what they get from flipper after flipper.
The sacred Latin motto of the National Association of Realtors, composed for them by the late great Mike Royko, is “Ubi est mea?” – “Where’s mine?”
That’s a joke, but it’s only funny because it’s true. The actual original objective and the ongoing mission of the NAR is to cling to the commissions by making competition with its members illegal, unprofitable or onerous – ideally all three.
That’s it, the secret sauce unbottled: The state real estate licenses the NAR created and bought, legislature by legislature, forbid non-licensees from listing, leasing or selling real property for compensation.
It’s only the last two words that matter. This is still an allegedly free country, so no one has yet tried to stop you from doing my job for free. For Sale By Owner sellers do it, as do some investors. The chains the NAR hired the states to forge were imposed only upon people marketing real estate professionally – who typically bear those chains lightly, seeing them as golden handcuffs, if they see them at all.
But it should come as no surprise at all that the newly revised forms being promulgated by the Arizona Association of Realtors are about nothing but compensation. The NAR got sued for putting the brokers’ interests ahead of their clients’, and its response is to disclose, ratify and formalize that self-seeking behavior.
So how will listers compensate buyer’s agents – while pretending they’re not? And how can we more elaborately disclose the inevitable twinned-betrayals resulting from dual representation? And whatever shall we do about hypothetical unrepresented buyers?
My answers to those questions are easy: Bloodhound Realty always pays the whole pizza – don’t bind the mouths. I represent sellers only, never buyers, because there can be no doubt about my loyalty. And sellers should counter unrepresented buyers by making the earnest deposit huge and non-refundable; if the buyers make it to the finish line that’s great, but the seller’s risk is indemnified if not.
But consider this choice bit, from the proposed listing contact:
I read that to say that, by listing your Sun City home for sale with me, you will be waiving your right to join any class action lawsuits, now or ever. As with the “release, indemnify and hold harmless” tap-dancing in our contracts, this mumbo-jumbo will mean doodly-squat as soon as it hits a courtroom. But it is bald-faced goniphery even to propose this, given what the NAR has put the country through.
I am a member of the NAR under protest: To gain access to the MLS, the blue Supra lockboxes and the AAR forms library – held by state courts to be the de facto standard of care – I am required to belong to the national, state and local branches of the NAR. As soon as those three products are unbundled from compulsory membership, as they will be, I will no longer be a part of this evil anti-competitive, anti-consumer criminal cartel.
For now, I’m all hat and no cattle, but my plan is to be listing a house a week in Sun City a year from now. I want to list in Sun City only, so I know I will be throwing off listing referrals, particularly in Sun City West.
But: I don’t represent buyers, and I don’t double-dip. That means I need to meet some buyer’s agents: Every Open House – every unrepresented buyer – is now a landmine for listers, but potentially a goldmine for every other agent.
And: Bloodhound always delivers the whole pizza: A buyer you meet through my marketing efforts is yours to Close. I’ll want a piece of any house you sell other than my listing – but I’d rather you just sell my house, representing your buyer with all appropriate zeal in any case.
If we work together, I’ll teach you how to price my way – how to price a new listing to get FMV+ now – and I will show you how to price into weak listers for your buyers: How to make just the right low-ball offer.
My goal is to show up in my own daily Sun City Hot Sheet three times a week: One listed, one Pended, one Closed. But I max out at 50 Closings a year, and I’m betting I can throw off five times that many. If you want to be a part of this, text me, and we’ll figure out a way to meet.
Dogs sell homes, which is good, since they’re going to photobomb the pix, anyway. But that dog is keeping an eye on the photographer because “things is changin’.”
There is a perfect order to everything and no one knows that like your dog. If you move a familiar vase from one countertop to another, your dog will be sure to let you know that you have offended the cosmos.
Listing your home for sale, showing it, selling it, moving on – these are all traumatic events for your pets. They may or may not show it overtly, but when “things is changin'” – they’re not right.
We’ll talk about all of this, when we sit down for a listing appointment – balancing all of your family’s interests, each in its own currency.
The list price is the most important field in an MLS listing. Everything counts, but if the price is wrong, every other effort will have been wasted. If the price overshoots the market, you risk losing potential buyers to better-priced homes. But, just as important, if the format of your price is wrong, you will at a minimum introduce confusion – and delay – that you cannot afford.
Ignoring the comps and just looking at numbers, home prices can be wise, stupid or sleazy. Listings are almost always stupidly or sleazily priced, but closed prices are typically wise.
A wise number ends like this: x0,000 – where x is an even number. In other words, wise numbers are round numbers in $20k increments. Higher prices move the ‘x0’ leftward – and I won’t quarrel with x being odd there, nor at $250k and under. But: Wise numbers look right to buyers – offered and closed – and they close fine with sellers. The last sentence is the entire argument against ever using stupid prices.
Sleazy prices are even worse: $449,999. Can you hear South Park’s Eric Cartman parroting that number? Sleazy prices are transparent and facile attempts to fool people – which are predictably met with contempt by buyers:
Cheaters never prosper? Then why won’t they stop trying?
Caveat venditor: Wise prices sell fast and close cleanly. The other two, not so much.
But buyers take heart: You see a price like $279,900 and you think: “They’re not sure it’s worth $280k.” In fact, they are certain it’s worth $260k – or less – so you should lowball ruthlessly as Days-on-Market hits double digits.
I use the term ‘Last Call’ to refer to sellers who cave catastrophically at the end of a listing because they started too high at the outset – literally dancing The Desperation Waltz with the only remaining partner. But buyers can be that Last Call opportunist.
I like Tuesday mornings at 10:30 am for Last Call offers. The seller’s last hopes for the weekend will have evaporated; they are at their weakest. Declined or no response? Come back next Tuesday morning – but lower.
Whether sleazy or stupid, inept numbers denote inept agents and misled sellers. Take account of those facts and discount for deceit. Cheaters never do prosper, but you can profit from their delusions.
Two more quick-hit post-mortems from Bloodhound’s Facebook page, to which you are commended. A full post-mortem exhumes every buried secret, but those two little boxes are the box-score for every Closed (or Cancelled or Expired) MLS listing.
Keep an eye on Facebook for more of these – and on this weblog for full-on autopsies of listings sent in to me. Meanwhile, I’m going to build a slide show of these tiny cautionary tales to show to sellers when they get stars in their eyes.
The value of a thing is what that thing will bring – and not a penny more. You would not overpay for a production home. Why would anyone else? You cannot ‘beat the market’ – but, as witness, the market can beat you out of all of your equity in your home.
I’ve been watching this house for months. There is after-market stuff in there, but the kitchen and baths are original insouciant MCM – Rob and Laura Petrie in a 1963 state of optimism. It would be wonderful if someone adopted this as a project home, an historic renovation as it were, to put Rob and Laura where they belong by now – in Sun City.
Sun City’s youngest were born in 1969 – spawned at Woodstock? – which has amazing demographic implications. Like this: There is a market for MCM historic renovations here – houses like this built in the early ’60s. The sign rider? “Barbie and Ken slept here!”
Yes, that’s a real MLS photo. We’ll let the guilty parties writhe in anonymous ignominy. But: What do you see? I see a sloppy seller with a lazy lister – plus one ugly red flag – catastrophic for the listing and potentially for the house itself. Do you see it? Buyer’s agents will.
If you follow me on Facebook, you will see me briefly post-mortem Closed listings, as in the image above. Everything matters – on Day Zero – but those two little boxes tell the final tale on everything: As a house is marketed, so does it sell, which is from Proverbs, sort of.
But I can do so much more. Working from the full listing, I can show people what helped, what hurt and why those strategies and tactics produced the ultimate result.
So let’s play a game. You send me the MLS number or street address of your Closed, Expired or Cancelled residential listing in Sun City, and I will post-mortem the entire marketing strategy in detail here.
All secrets kept, yours and the agents’. We’re talking about ideas, not individual people or specific homes.
But I know a lot about why houses do and do not sell quickly, for top-dollar, so when you play Post-Mortem My Listing with me, everybody wins.
Yesterday, FannieMae and FreddieMac did what I had sworn they wouldn’t: They relented to accounting for the buyer’s-agent’s commission as a seller-paid concession:
This is almost no change from the bad-old-days that have been subject to so much litigation. Instead of splitting commissions by way of the listing agent’s commission instructions, the split will now be declared to be among the seller’s concessions to the buyer.
That’s good, even if comically pointless, and, very probably, of temporary duration. The jackals feeding on the National Association of Realtors seem unlikely to be sated by old wine in new bottles.
But: My advice to sellers remains the same. The buyer is getting advice at the seller’s expense, but the seller is getting the buyer – without whom nothing would be happening. You’re not paying for the advice – even though it is a liability shield for you. You’re paying for the introduction, for the contract, for the opportunity to successfully close the sale.
The seller’s motivation is the same for both agents, the lister and the buyer’s agent: You’re paying the people who are getting you paid. It’s just that simple.
Meanwhile, my plan to broadcast our buyer’s agent’s commission seems to be holding up. Because sellers can be pound-foolish, and because the ‘co-broke’ will be undisclosed in the MLS, Bloodhound being known for paying the whole pizza will work to my sellers’ advantage. Buyer’s agents are not supposed to care how much they are getting paid – in much the same way that paramecia are not supposed to move toward the food and away from the poison…
We’ll have to wait for FHA and VA to catch up to the brand-new same-old way of doing business, but this is the upshot: Status quo ante with less disclosure and more paperwork.
There are two ways to list a house for sale. Typically, a seller will elect to ‘start high’ – price the home above the value justified by the recent sales. Often a lot higher, usually at a creepily deceptive price like $349,900. It won’t sell early, it may not even show early in the listing. What will happen is that it will languish on the market through successive price reductions. Eventually the seller will relent for a price far lower than the listing started with, possibly lower than the home’s fair-market-value on the day of listing, often with seller-paid cash concessions to the buyer.
In other words, the listing strategy from the outset was to sell low and slow to the least qualified buyer out there.
Yes, that’s funny, but that is literally how most Sun City homes are marketed on the MLS.
We work very differently. The elements of a real estate listing that matter most are: 1. Price, 2. Photos, 3. Copy, 4. Directions. Our goal is to make everything perfect – irresistible! – on Day Zero. That way, we can be under contract and on our way to close-of-escrow in just a few days – instead of languishing for months and months.
The value proposition is in the headline: Better money sooner. We will get the best net return that can be had for your home – with the fewest hassles and in the shortest time.
We should talk. No cost. No obligation. No BS. Just better money sooner.
