Category: Real Estate Business

Do You Need MLS To Sell Your House?

There is a little controversy right now about the concept of a ‘Pocket Listing.’  There have been a number of recent news and opinion pieces, mostly from Realtor groups, condemning the practice of keeping a salable listing out of the MLS.  Before I tell you what I think, let’s examine the Realtor point-of-view.

Since the advent of the MLS, the residential real estate business has operated on a cooperative basis.  Because most MLS membership agreements require that every home listed by a member broker be offered for sale with an MLS listing (unless the seller signs an op-out waiver), every Realtor has an opportunity to sell any property listed with a competitor and earn a portion of the commission.

This is marketed as being in the best interest of the seller because it maximizes the opportunities for exposure of the home, getting it in front of more and more potential buyers through their individual agents. And after all, whether another Realtor comes in with the buyer or the listing agent finds the buyer him or herself, the cost to the seller will be the same; it won’t cost any more.

And that’s where the problem lies – real estate commissions are HIGH because each one is designed to compensate an outside broker and agent whether they are involved in the sale or not.

In general, when a seller lists with a traditional broker, he or she agrees to pay a percentage based commission.  The actual percent varies, but will often be in the 5% – 7% range.  Let’s consider something right in the middle, say, 6%.  On a $500,000 home, that’s a $30,000 commission!  Huge, right!?  But one of the reasons it is so high is the listing office has to be prepared for the likely event that an outside broker and agent will bring the buyer – and, generally, they’ll be paid half of that commission.  Of course, if there is no outside broker, if the listing broker finds the buyer his or herself, the seller still pays $30,000 because . . . well because that’s just the way it’s done!

At Help-U-Sell Honolulu Properties we don’t charge a percentage based commission, we charge a Low Set Fee.  And, we unbundle commissions.  If there is no outside broker involved, you don’t pay for one.  Now that’s a real benefit to a home seller, one you can put a dollar sign on!

My opinion? I don’t think this needs to be an either/or question. How about flexibility?  That’s why we put most listings in the MLS but only charge our sellers for an outside broker and agent if they are involved in the sale.  If we sell the house without an outside MLS broker, the seller doesn’t pay for one.

And, if your home is very marketable and priced well, we have no problem holding it out of the MLS so you can save the most on commissions.  Often, what I recommend is that we start without MLS and if we don’t have an offer or sufficient activity in 30 days, then go into the MLS and offer the home for sale through outside brokers.

At Help-U-Sell Honolulu Properties, we are about two things:

  • Getting your house sold for top dollar
  • Saving you the most money in commission expense

We will consult with you at the time of listing and continuously thereafter about how best to market the home, whether an MLS listing makes sense or not, and how to maximize your savings while selling for the greatest possible price.

When Should You Refi?

Consumer attitudes about mortgages have shifted over time.  In the early decades of the 20th Century, most considered a mortgage to be one of the worst things you could have.  The banker dressed in black with top hat who comes to foreclose on the farm became one of the archetypal villains of the Great Depression.   After World War II, Americans became comfortable with the concept of using ‘Other Peoples’ Money’ for big purchases, and mortgages became a standard for almost everyone.  Veterans, returning from the war had VA benefits, which included a no-down payment VA loan, and their home purchase activity fueled the post war economy.

The early ’80s presented a new challenge.  A shaky economy drove interest rates through the roof.  Where 7% and 8% loans had been common, now rates crept up to 12% and 14% and finally peaked at about 17%.  Can you imagine?  17% on a 30 year fixed rate mortgage!  Let’s make that real by comparing a $300,000 mortgage payment then with one at today’s good rates (we’ll use 4.25%).  Today the payment would be $1,476.  Back in 1982 at 17%, it would have been $4,277!  The interest rate crisis was not all bad, though.  It produced innovation.  Consumers moved increasingly to adjustable rate mortgages that could be had at slightly lower initial interest rates.

In those early years there was lots of trepidation about the uncertainty of ARMs.  People worried bout being locked into a mortgage that would always be going up.  Smart Realtors helped people understand that the high rates of the day were temporary, that they certainly would come down in the future.   They suggested that the uncertain Adjustable Rate Mortgage be viewed as Temporary financing that would be replaced with a better loan when rates improved.  This was the birth of the modern refinance strategy.

During the real estate bubble run-up, refinancing became a regular ritual for many consumers.  Houses were appreciating rapidly and refinancing created funds that could be used to remodel or pay down other debt.  Refinancing became a way to afford a lifestyle.  But that all came to an end when the bubble burst, real estate prices fell and foreclosures once again became common.

Today our Oahu market has rebounded.  We’ve reached a state of comfortable equilibrium in the housing market.  Houses appreciate and people are able to buy and sell them.  Interest rates remain historically low and it still might be a good time to consider refinancing if it fits with your financial goals.  Because goals are very personal there is no pat answer about whether you should refi or not.  Only you can decide that, and if you’d like help sorting out what makes the most sense, we at Help-U-Sell Honolulu Properties would be happy to help.  Our consultation will be free and you’ll leave with a plan to use your mortgage to help achieve your financial goals.

In the mean time, MSN Money created a refinance calculator that can show you how refinancing might affect your current situation.  It’s easy to use, and you can find it HERE.

Of course if moving up to a larger home or ‘right sizing’ to something a bit more cozy is what you need to do we can certainly help with that.  Call us at (808) 593-8811 and let’s get started!

Using Social Media to Sell Your Home

At Help-U-Sell Honolulu Properties, we pull out all the stops to market our listings.  Today that not only means traditional methods like ads and post cards, mailers, flyers, signs and the like; it also means heavy involvement in Internet marketing.  We broadcast our listings to dozens of real estate property portals, give every listing its own website, create a virtual tour for each one and delve deeply into Google, Facebook and Twitter as we search for buyers.  Even this blog helps by keeping relevant, search engine optimized content about the local market before consumers.

But Help-U-Sell is also about seller participation.  We want our sellers to be as involved in the process as they want to be (and some don’t want to be involved at all, and that’s fine).  If they’d like to hold their own open houses, we’ll help them do that.  If they’d like to present the home to the neighbors or talk it up at work, that’s great.  And, if they find their own buyers, they’ll save even more money than they would if an agent did.  That’s the Help-U-Sell Way.

Home sellers can also participate in the marketing process by using Social Media.  The average American has between 129 and 160 Facebook Friends depending on age bracket.  When we put a home on the market and create its individual web page, we encourage our sellers to share that page with their Friends.  It helps to add a more personal note, something like:  ‘Hello Everyone!  We recently put our home on the market with Help-U-Sell.  I’d really appreciate it if you’d share this with your Facebook Friends.  Who knows?  It might be perfect for one of them!  Thanks.’

Let’s do a little hypothetical math.  If you share with your 150 Friends, and half of them share with their 150 Friends, and 20% of them share with their 150 Friends . . . you will have put your listing before 348,900 people!!

Staggering, isn’t it!  If  you are active on Twitter or LinkedIn, you might do the same there.

So what happens if your Friend calls and says their Friend saw the house on Facebook and wants to take a look?  You have a choice.  You can have us call them and arrange a showing, or you could invite them to stop by and show them through yourself.  If they like it, we’ll take over, write the offer, negotiate and then handle the sale all the way through closing.  And all you pay is the low Help-U-Sell fee.

At Help-U-Sell Honolulu Properties, we are all about savings and effective use of our clients’ social media connections can help to maximize that!

How to Get the MOST for Your Property

Pricing is so important when selling real estate.  In fact, the marketability of your home depends largely on the price you set the day you put it on the market.  Honestly, the best advertising in the world can’t cause an overpriced listing to sell.  Neither can an army of top salespeople.  However, a properly priced listing will usually sell quickly at or near the asking price.

When you put your home on the market, you are unveiling it to a pool of buyers who are already in the market looking for the right house.  They’ve been looking for some time and just haven’t found what they are looking for yet.  Yours might be perfect for some of them.  These buyers – all buyers, really – evaluate a new listing on at least three criteria:  the location – is it in a place they’d consider living?  the floorplan – does it have enough beds and baths? and the price.  If any of the three is not in line with their wants, needs and capabilities they usually opt not to see the home.

That’s why it is so important to hit the market with a proper price, one that is in line with neighborhood values as established by recent sales and is adjusted for the trend in the market.  I think most people understand the concept of using recent sales (comparables) to establish price:  if a similar house three doors down sold for $550,000 two months ago, this house must be worth something near that.  But the trend is also important.  That house that sold two months ago? That’s the date the sale closed.  The buyer and seller agreed to terms (and price) some time before that – usually two to three months before.  If you are in a neighborhood where values are rising 1/2 % a month, that’s 5 months of appreciation that must be considered.  We should be looking at that recent sale as if it were worth $13,750 more:  $563,750!  And though it is rare in Hawaii, sometimes the trend is down instead of up.

When I work with sellers on pricing, I like to first establish the range of value for the neighborhood:  what’s the top of the market and what’s the bottom?  These are the ‘boundaries of the ballpark’ in my mind, the limits we don’t want to exceed in either direction.  Then we zero in on the specific house in question and locate it within that range.  At first, we consider the range of value for the house – say it’s $540,000 – $570,000.   It is a range because many other factors influence price.  For example, a family that needs a fast sale would probably want to price lower in the range, while one that has all the time in the world might price on the high end within the range.  $585,000 would  be way too much – and that initial unveiling period  I mentioned earlier would be lost.

As a home seller there are a few things you can do to help potential buyers see your home as being worth the price.  They are simple things, really, and I’ve covered them in the short video below.  If you are curious about your home’s value in today’s market – even if you don’t want to sell right now – we at Help-U-Sell Honolulu Properties would be happy to do the research and give an opinion.  Call (808) 593-8811 or use the easy form below.

Yes! I would like a free estimate of the value of my property!

 

Living in a Rental? GET OUT NOW!

You’re a first time home buyer. You’re not sure if owning a home is right for you.  You have questions – we’ve got answers.   Starting at the beginning, let’s consider the question of Why:  Why should you consider becoming a homeowner? We will get to the quantifiable benefits in a moment – the numbers – but let’s examine some of broader truths first.  The greatest single financial asset most Americans have is their home.  The largest portion of Net Worth is usually housed in the equity people create and build in their homes.

Building Net Worth

Building equity becomes the springboard to moving up to bigger and better housing.  Today it may seem difficult to find the $14,000 or $18,000 you may need to buy your first home.  But in five years, when you are ready to trade up, it won’t be.  You’ll have $75,000 – $125,000 in equity in your current home and that’s where your down-payment will come from. Most people trade up a time or two and then temporarily ‘settle,’  staying in  a home for an extended period of time, focused on paying down the mortgage – which creates even more equity.  Now, equity in the home becomes financial power.  It can be borrowed against to finance everything from home improvements, purchase of rental property, college tuition or even retirement. To contrast, as a tenant, you have nothing more than the certainty that your rent is going to go up. You’ll pay it, but you’ll be building nothing.  In fact you’ll be helping your landlord build wealth instead. As long as you are going to have to pay for housing (few of us have found an acceptable way to live for free), you might as well pay for housing that grows in value, creates wealth and purchasing power for you.

Sense of Place

There are financial reasons to buy, sure, but there are other reasons to buy, softer reasons. Because they are living at the will and whim of a landlord, tenants tend to move around more often than homeowners.  There is a near transient lifestyle that goes with renting that rarely exists with home ownership.  As a homeowner, your children can grow up knowing they grew up there, in that house, played in that tree, slept in that room and so on. You decide when and what color to paint the living room and how you’ll remodel the kitchen.  This sense of home – being a place in which you have set down roots – is a great emotional reason to be a homeowner.

Tax Benefits

Currently, mortgage interest on your principal residence is fully deductible on your Income Taxes as are the real estate property taxes you pay.  The best way to illustrate this is with an example. Let’s assume you are renting a nice 2 bedroom apartment, paying $2,000 a month.  You are thinking of buying $440,000 home using an FHA Mortgage with minimum down-payment.  Homeowner’s Insurance on the new home will be about $800 a year and property taxes will run about $4,000.  Here is how the numbers break down: Downpayment:  $14,000 plus any closing costs.  Most will likely be paid by the Seller, but you should still be prepared with a few  thousand dollars to set up impound accounts for taxes and insurance and any other expenses not covered by the Seller.  Estimated cash needed to close:  $17,000

  • Mortgage Amount: $386,000 + FHA Funding Fee (UFMIP) $6,755 = $392,755
  • Mortgage Payment (30 year fixed rate at 4.5%):  $1,990 principal and interest
  • Taxes: $4,000 / 12 =  $333/ month
  • Insurance: $890 / 12 = $67/ month
  • Mortgage Insurance:  $434/ month
  • Total Payment:  $2,824

It would appear that owning that home will cost $824 a month more than staying in the apartment . . . but appearances can be deceiving.  Let’s look at this example after tax savings. You’ll be paying $33,888 in mortgage payments the first year to live in the new home ($2,824 X 12).  But, believe it or not, $17,544 of that will be mortgage interest, all of which is tax deductible!  Also, your property taxes of $4,400 are deductible for a total of $21,944 in tax deductions.  Assuming your income is sufficient to make this purchase possible, you are likely in a 25% tax bracket.  So the $21,944 in deductions translates to about $5,486 less in income taxes you will pay, all because you bought a house!  $5,486 / 12 =  $457.16 a month. Now take that $457.16 in tax savings and apply it to your total housing payment of $2,824 a month and your net housing expense is $2,366.84.  So for $366.84 a month more than your rent payment, you can leave that apartment and have a nice $400,000 home. 

Investment

But that’s just the beginning.  When you buy a home, you’re investing in real estate.  I feel comfortable saying that because historically, real estate has gained value over time.  Contrast that with, say, your car, which depreciates about 15% the moment you drive it off the dealer’s lot!  Appreciation rates can vary greatly year to year, but over time have been fairly predictable.  Typical U.S. appreciation for houses has been in the 2.5% – 3.5% per year range and it has been historically higher here on Oahu.

So let’s assume you buy that $400,000 home today and keep it five years before selling it to move up.  What will it be worth?  Bear in mind, nobody knows what appreciation will be, so the best we can do is guess, conservatively.  But let’s guess home values increase an average of 3% per year over that period. Your $400,000 home will be worth about $463,700.  A $63,700 increase in value. During the same period you will have paid your mortgage balance down to $358,027, so your Equity (the amount of wealth you will have built) will be almost $105,673. You got into the house with $17,000 and five years later have $105,673.  That’s a 621% increase in your housing fund! How can that be?!  It’s simple:  you are benefiting from an increase in the house’s value, which includes the $392,755 you originally borrowed to buy it.  You’re not only getting the increase based on what you put in, your getting in on what you borrowed as well!  Now that’s how to effectively use Other People’s Money! You’re a first time home buyer. You’re ready to get serious about your financial life, to begin building something for yourself and your family rather than for your landlord, give us a call.  We’ll help you discover what you can afford and show you how we can get you started on your own real estate journey NOW.

Understanding Prorations

Estimating a seller’s net proceeds – or a buyer’s cash needed to close – is a complex process that is easy if you know all of the fees that must be paid when a piece of real estate sells.  We’ve been selling real estate on Oahu for more than a decade, so we’ve had lots of practice and are proud of our ability to be very close to dead on.  There are however a couple of ‘wild-cards’ in the real estate settlement process that can vary widely.  That does not mean they cannot be anticipated, but because they can go up or down depending on which day closing occurs, any unanticipated change in closing date can change these figures.

First of these varying fees is the Interest Adjustment.  Remember when you bought your last house?  You probably skipped a month’s payment, starting to make your payments on the first of the next full month.  That’s because mortgage interest is paid in arrears.  The interest in your June 1 payment is actually covering the month of May.  So,  a borrower who closes on the 18th of March (a 31 day month) pays 13 days of interest on the new mortgage – which covers the remaining days in March – and then makes his or her first full monthly payment May 1, seemingly skipping April.  If closing is delayed 5 days, that’s 5 days less interest the buyer must pay at closing.  On a $400,000 30 year mortgage at 3.75% we’re talking about almost $42 a day in interest.

There is a similar calculation for the seller as well.  In the same transaction,  after having made the March 1 mortgage payment, the seller still owes 18 days of interest to bring the mortgage current at closing. Since many real estate closings occur near the end of the month, the Interest Adjustment for sellers can be quite large.  We usually estimate a full month of interest for our sellers, coming up with a worse case scenario.  If we close earlier, there’s a nice bonus.

Taxes must also be prorated with the seller either bringing the taxes on the property current to the day of closing OR receiving a credit for future days that have already been paid.  In Hawaii, the property tax year begins on July 1 and property owners are billed in two equal installments,  one due August 20, one due February 20.  So, back to our hypothetical transaction, the seller who is current on property taxes for that March 18 closing is actually paid up to July 1, and therefore will receive a credit at closing.  The buyer, on the other hand, will be charged an equal amount to cover the taxes for the days after closing up to July 1.

If the seller has an impound account for accumulating taxes and insurance on the property as monthly mortgage payments, it will come into play as well.  Often (but not always) there is a refund.  Conversely, when the borrower closes on a mortgage with an impound account, he or she must make an initial deposit at closing to open that account.  That can vary by lender policy and by date of closing, which makes it one of our wild-cards.

Sellers often get a refund for pre-paid homeowner’s insurance.  Buyers on the other hand must have a policy in place covering their first year in the property when closing occurs.  By the way:  do you have to have homeowner’s insurance?  If you have a mortgage the answer is almost always yes.  If not, the choice is yours, but deciding against it might be the biggest mistake you’ll make in your life!

As you can tell, estimating your net proceeds or cash needed to close is not easy!  And it can be a moving target depending on which day of the month closing occurs.  At Help-U-Sell Honolulu Properties we complete an estimate at least three times for seller clients:  at time of listing, whenever an offer is presented, and a few days before closing.  For buyers, we estimate funds needed to close when an offer is written and negotiated and then again, a few days before closing.  Our goal is always the same: no surprises, and our track record at avoiding them is excellent!

Protect Yourself When Buying A Home!

Your home – the house you purchase and live in – is a big investment!  For most of us, it is also the best investment we will ever make, growing in value year after year.  But things can go wrong with your dream home, too.  The roof could leak, the plumbing might fail, the air conditioner could die, the property could flood.  Protecting your real estate investment begins even before you own your home.  That’s why, in a typical home purchase, there are a number of mechanisms in the process designed to protect the investment the new home owner (and the lender) are making.  In property purchases where a mortgage is obtained, some safeguards may be required by the lender.

The Survey clearly defines property lines and reveals any encroachments.  It should be completed during the due diligence period. It ensures that nothing belonging to the property being purchased is crossing the line into a neighbor’s property.  The most common example of this kind of encroachment is the fence that is actually a foot into the neighbor’s yard.  Survey issues are rare and when they do occur they are usually solved easily.  However, I did hear of a situation where a neighbor’s room addition was actually a foot and a half over the line and into the subject property.  That sale fell through and the seller and the neighbor had to negotiate a solution to the problem, but it was the Survey that protected the purchaser and the lender from making a bad decision.

The Appraisal creates a comfort level for the lender – and the purchaser – that the property is actually worth what the buyer is willing to pay.   The Appraisal should be completed before the end of the due diligence period, and if you are using lender financing, will be ordered by your lender. Appraisals can be wrong, but usually not by much.  There is an appeal process for appraisals that are too low and there have been times when we have gone back to the appraiser with our own set of comparable properties to make a case for an appraisal adjustment.  Because most purchase agreements with financing are ultimately contingent on the buyer being able to obtain a mortgage,  when the property doesn’t appraise – and the lender therefore refuses to lend – the buyer has an ‘out’ so long as the due diligence period has not expired.  Often, however, what ensues is a negotiation between the buyer and seller through their agents about how to adjust the price and salvage the sale.

The Flood Certification attests to whether the property is located within a FEMA designated flood zone.  Here, the lender is trying to do the same thing he did with the Survey and Appraisal:  minimize risk.  If the property is located within a flood zone, the lender may require a special flood insurance policy or may refuse to lend all together.

Termite reports are almost always required by the lender, once again, to ensure that there is no significant damage to the property.  When termites or significant damage are discovered, it usually becomes a seller’s responsibility to correct the issue to the satisfaction of the lender.

Lenders usually require a Title Insurance policy as well.  This insures the lender’s investment should a claim against the title be made.  Again, these situations are so rare today, but when a party comes forth with proof that they actually own the property you just purchased, Title Insurance can be the only safeguard.

Home Inspections are not required, but we always recommend them.  Even if you are knowledgeable about construction, home systems and the like, you are always wise to pay an expert to go through the home you are about to purchase and report on any defects.  It is important to understand that there has never been a perfectly clean home inspection.  Every home has a few minor issues.  It can be as simple as missing or broken switch plates, a door that doesn’t close properly or something larger like a leaky roof.  I like to go through inspection reports with my clients line-by-line, evaluating each item to determine whether  it is something easily corrected or a larger problem that must be addressed before the transaction continues.

When purchasing a condo or a home in a neighborhood with a homeowner’s association, you have the right to examine the documents of the association prior to completing purchase.  This is very important.  You want to know that the association is financially viable and able to cope with unforeseen large expenses that may arise.  The worst example might be the condo development that suddenly needs a new roof two months after your purchase.  You also want to know what kinds of issues the association has been working with in recent months.  I find that reading the association’s meeting minutes is very helpful here as controversies and areas of contention are often reported.  Finally, every association has rules and by-laws.  When you purchase in this kind of neighborhood, you are agreeing to abide by those rules.  It is important that you know what they are before you buy.

Home Warranties are an option we often recommend for purchasers of resale properties.  These policies cover major systems in the house in the event they fail during the term of coverage – usually a year or two.  Often there is a small deductible, but if the air conditioner  or water heater fail during that time, they can be replaced with little out of pocket for the new owner.  I like Warranties because things do break.  When they break a few months after purchase it can make an otherwise joyful time turn sour.  Home Warranties ensure not just systems, but also your peace of mind and happiness with your new home purchase.

When you are buying it is important to protect yourself against possible problems with the property.  Fortunately, most standard purchase agreements and lender policies offer ample protection.  At Help-U-Sell Honolulu Properties, we work with our buyer clients to help them determine what additional protections are appropriate for each home purchase.

Why Percentage Based Real Estate Commissions Are Nuts

We’ve been at it here in Hawaii for more than 10 years.  At what? you ask.  At providing real estate services that are priced fairly and reasonably; at pioneering a newer, better way of doing the real estate business; at not just selling real estate, but also changing the way real estate is sold.  We’ve gone from nothing to being one of the most substantial residential real estate companies on Oahu, which is a testament to the effectiveness of the program we offer.

We’re different.

Oh, we get the job done just like the best known companies on the island.  We offer full service that goes beyond our clients’ expectations.  We delight the people who work with us so much that most of our business comes from their referrals.  Best of all, we save our clients thousands of dollars over what they’d likely pay an old fashioned real estate broker.

We are not married to the old way of doing business.  Nor are we married to the old way of charging for our services.  Help-U-Sell Honolulu Properties is the next big thing in real estate, a new way to buy and sell and the best way to save in the process.

Sometimes the best way to explain the difference is to put a pencil to it and run the numbers.  Here is short video that does just that:

If you are ready to be delighted not just by the real estate service you receive but also by the fee you pay for it, call us.  Let us show you a newer, better way to sell and buy real estate!

The TRUTH About Real Estate Marketing

You listed with a real estate broker to sell your house, right?

Actually, that’s probably not the correct syntax. What you really did was to list with a broker to get your house sold.

It’s a subtle difference in wording, but one that points out the disconnect between thought and reality for many real estate consumers. The first phrase imbues the broker with near magical powers: he is going to take the house, wave his magical real estate wand, and cause someone to buy it. That’s really not what happens, although many brokers would like you to believe the myth that it does. Phrase two is closer to the mark: you’re going to use a broker to gain access to the natural matching of buyers and sellers that’s already going on. The broker is not magical. He is just a skilled gatekeeper.

The truth about real estate marketing is this:

A certain number of buyers are going to buy in the neighborhood today and a certain number of sellers are going to sell. The broker’s job is to get in front of, and prove valuable to as many of those people as possible.

That statement encapsulates the marketing function of a real estate broker as accurately as it can be. People can’t be made to want to buy real estate. They either do, or they don’t. A little education can help them make an informed decision, but it is a decision beyond anyone else’s control. Their decision to buy one house over any other is not a decision at all, it’s a choice, an illogical, personal, quirky choice. No amount of full page advertising is going to cause them to choose one house over another.

The broker’s job is to a orchestrate a marketing program that puts his or her office in front of as many of these potential buyers as possible. Once that is achieved, ‘selling’ real estate becomes a matching process: buyers’ wants and needs to inventory.

So how does a smart broker market to get in front of as many potential buyers as possible?

Job one is to be SEEN, to be VISIBLE. The consumer needs to see the sign, the logo, the name everywhere to have a comfort level that the broker may be able to help. This is accomplished with For Sale signs, local advertising and, increasingly, Internet marketing. But, you have to have something to market first . . . SO: the best thing your real estate broker can do to sell your house is to go out and get another listing and another listing and another listing. Each new listing is a marketing opportunity, an opportunity to generate buyer inquiries into the ofice. Of course, what’s done with those calls is another issue, one we’ll talk about in a moment.

Job two is to GENERATE LEADS: to put marketing pieces into the hands of consumers that will motivate them to make contact with the office. When a broker decides to create a marketing piece, he or she must do it dispassionately . The decision to advertise one house or another should be made based on which one will cause the largest number of potential buyers to contact the office, not on which seller is ‘owed’ advertising this week. This is an important point. Truth is: almost always, the advertised property that motivates the potential buyer to contact the office is NOT the property they eventually buy. There are dozens of kick-out factors they may encounter as they do their investigation. But that doesn’t matter. What’s important is that they contacted the office.

So, when a sharp broker decides to advertise a property, it’s not to get that particular property sold, it’s to generate buyer contact. It is this general lead generating activity that will cause your house to sell and it may not even involve advertising your house at all.

Ok: we’ve got Job One and Job Two. Here’s the third thing the real estate broker needs to do: CAPTURE LEADS. When marketing causes a potential buyer to contact the office, what will then cause them to agree – however subtly – to letting the office match them with a perfect property? It is a process that often occurs on the telephone, and at Help-U-Sell Honolulu Properties, we work on it constantly.

It’s important to understand what courage it takes for a potential buyer to pick up the phone or fill out an online inquiry form. They know they are likely going to hear from a salesperson . . . and that’s not what they want at all. What they want is the information. Period. So there is a very natural defensiveness on the other end of the line when the agent answers the phone.

How the agent handles the call, how he or she relaxes the caller, provides valuable information, builds a comfortable rapport with the caller is EVERYTHING. All of the time money and effort the broker has used to generate the lead can be lost right here if the agent is not prepared to earn the caller’s trust and then to begin the matching process. Now, think back to the last time you called a real estate office for information on a property. Uh-huh. I know. It was a painful experience. If the agent made any attempt to earn your business at all, it was probably pretty lame. And that’s IF they tried to earn your business at all (most won’t).

It’s such a shame, because that moment, when a buyer inquiry is handled in the office, is the ARENA. That’s where the process of ‘selling real estate’ begins. It is so important, I think it makes perfect sense for a home seller to call the office of the agent they are considering and see how they are handled. If the person on the other end of the line can’t comfortably communicate competence, if they can’t skillfully earn the right to help you find your next home, how are they going to capture the real caller who might be perfect for your house?

Bottom line: advertising wont sell your house. An agent or broker won’t sell your house. What will sell your house is an office with an active lead generation and capture process. And where will you find such an office? Honestly? Right here: Help-U-Sell Honolulu Properties. Here, the broker is in charge of marketing, lead generation and capture. We are completely focused on the process and we do it better than anyone on Oahu. AND: with low set fee pricing, we save sellers a lot of money, too.

What Would You Do To Sell Or Buy Your Dream Home?

I read a story the other day about a new ‘trend’ in real estate buyer behavior.  It think the word ‘trend’ is probably a little over-stated . . . seems only a few buyers in rare instances are doing this, hardly a trend.

In a few instances recently, home buyers have made their offers contingent on a sleepover.

Yep, they want to spend the night before they commit to the new home.  Sounds odd at first, doesn’t it?  But when you think about it, maybe it’s not such a bad idea.  Most people look at homes during daylight hours, occasionally in the early evening.  The entire ambiance of a neighborhood can change after dark and without some mechanism for inspecting this crucial time . . . well, you might be in for a surprise.

As a Broker, I am sometimes asked about the demographics and makeup of a neighborhood.  Fair Housing guidelines carefully define what I can and cannot say about a neighborhood and sometimes I get questions I just cannot answer.  Thanks to the Internet, there is abundant data online about crime rates, schools, neighborhood demographics and so on.  But data alone rarely gives the comfort level to some that this is the right neighborhood.

That’s why I often ask nervous home buyers to visit their prospective neighborhoods during odd times.  I suggest they go to the closest super market between 4 and 7 pm (peak shopping hours).  I tell them to drive by the closest schools about time classes end for the day to get a feel for kids and parents and that whole dynamic.  I ask them to drive from the neighborhood to their workplace during morning commute time to get a feel for traffic.  All of these activities are aimed at helping people be comfortable with their choice of neighborhood.

The lengths to which sellers will go to get a quick or a great offer is shifting as well.  Today we have professional ‘Stagers,’ who – for a fee – will do everything from rearranging furniture to re-furnishing a re-sale home so that it shows like a model home.  More than a few sellers have told me professional staging was the most important thing they did towards getting a great offer.  Some sellers have re-worked landscaping or substantially remodeled their homes to maximize their return.  In some locations, real estate companies that renovate very outdated homes prior to marketing them have sprung up.

But as a home seller, how far would you go to secure an offer?  Would you permit or encourage a sleep-over?  Would you offer your back yard for a cook-out or pool party?  Of course, in these cases, we at Help-U-Sell Honolulu Properties would be there to advise you – and clearly, in some cases it would not be a good idea – and to secure the proper agreements and deposits.

Thankfully in today’s Oahu market, sellers are in pretty good shape.  Housing is in demand and properly priced homes sell relatively quickly with few seller concessions or inconveniences.  Usually all a seller has to do to have a marketable product is to price it properly and make it easy to be seen via lockbox and continuous availability.  When you talk about selling your home with us, we will advise you about what might help get it sold quickly and for top dollar … and in most cases it will be things like a little paint here and there and a thinning-out of closets!

How to Price Your Home To Sell

When putting your home on the market, the second most important decision you will make is price.  The first?  Your Broker.  But that’s a different post.

The price you set must deliver maximum dollars to your bottom line (which also involves terms) without being so high as to scare buyers away.  At the same time, the price must be able to support a professional appraisal.  We call the right price ‘Fair Market Value.,’ and rather than a dollar and cents price, we often express it as a range of value.  Truth is, ‘Fair Market Value’ is what a ready, willing and able buyer is apt to spend on your house today, and that figure can vary a few thousand dollars in either direction depending on terms and whim.

The best clue we have as to what ‘Fair Market Value’ is for any house at any specific time are the recent sales of similar properties.  If five houses in the same neighborhood with the same floorplan and square footage have sold in the previous three months, their sale prices ought to give us a pretty clear indication of what a willing buyer would likely spend on your house.  I wish doing a Market Analysis and evaluating comparable properties was always that easy!

Unfortunately, too often there are too few comparables in the previous three months.  Sometimes we have to look at the previous six months and sometimes we have to go back a year to get sufficient data.  Often the specific neighborhood has too few sales occurring of similar properties and we have to expand the search to neighboring areas.  And sometimes, the property isn’t in a neighborhood at all or is so unique that finding similar homes is very difficult.

At Help-U-Sell Honolulu Properties, we are in the market every day and have been for years.  Often it is our knowledge of what’s going on and what’s gone on in the past that drives our recommendation on pricing.  In addition to comparable sales, we consider price trends in the marketplace and factor those in.  If you are in an area where prices are rising 1% a month, where the most recent sale was 3 months ago and where it’s apt to be 2 months before a suitable buyer can be found for your property . . . well, there’s a 5% price differential there that must be taken into account!

It is important to go into the market with an initial price that is close to Fair Market Value because the first two weeks any home is on the market present the greatest opportunity for maximum exposure.  At any moment there are dozens of potential buyers looking at homes on Oahu.  Some may be looking for a home just like yours, and may have been looking for weeks or even months.  It is this backlog of buyers we want to attract the day your home goes on the market.  In a week or two, that pool will have seen your house, will have decided it was right for them or not, and you will be left with only new buyers trickling into the market as prospects.

Overpricing with the idea that ‘I can always come down,’ is a foolish strategy for this very reason.  That backlog pool of buyers will see your house and the high price and continue looking.  A month of two down the road, when your frustration is at a peak, you may reduce your price back to where you should have started . . .but price reductions often create questions about a house.  What’s wrong with it?  Is the seller becoming desperate?  

There are online tools today that claim to help you determine Fair Market Value for your property.   Most notable is Zillow’s Zestimate of Value.  I can’t tell you how often we have met with home sellers who have an inflated idea about their home’s value because of a Zestimate or worse, believe their home is worth less than our recommendation!  Understand that with automated online tools, estimates of value are being made by a machine with no local market knowledge, no hands on inspection of property, no understanding of the nuances that can make one property worth more than another.  To really understand the value of  your home, to know what the right price today, you need the help of a true professional, like those of us who are proud to call Help-U-Sell Honolulu Properties home.

If you are thinking of selling or are just curious what your home is worth, please call us.  We’ll be happy to do the research and analysis and share a professional opinion with you.  It’s free.