Though I’m 59 years old, in just a few weeks I’ll have been licensed for 41 years. Markets have come and gone, economic cycles have lived up to their name. People have cussed and discussed why one property sells quickly while another languishes for months on end. Like anything else, if we run the film backwards, the truth emerges — OR — pet theories are unceremoniously deflowered.
Just returning to my own local market after an almost seven year hiatus, I’m eager to begin listing and selling local real estate investment properties. Just last spring I was afforded the chance to sell a client’s rental home as part of his overall Purposeful Plan. Many of my home agent friends watched closely as I told them about my first listing in years. They knew about what I did to sell property, but had never really paid first hand attention.
We listed that home on the MLS on a Friday afternoon, and opened escrow the following Tuesday after lunch. The delay was caused by some extended negotiating. 🙂
Here is our M.O. for selling San Diego real estate for our clients.
First, we have a policy regarding our clients’ compliance with our program — they must comply. If they don’t, we gently refer them to one of our very competent local agents. We’ve never lost a client over this, but there have been some who have, in hindsight, not been happy with their decision to resist our ‘rules’.
1. Price will be correctly aligned with the market as it is.
My son and I will do an appraisal on the subject property separately. We then compare notes. We argue our cases. We then settle on a price. Our practice is to then list it for a tad less. We won’t budge on this with clients. We don’t make a big thing out of it, but if we reach an impasse — we pass. Almost always, the client accepts our choice of a referred agent.
For the record, though our referrals sell the properties, our average market time is shorter, while our sales prices are equal.
2. We have an inspector, and sometimes, if merited, add a general contractor, who generate an extensive report. This uncovers any pre-existing conditions, and exposes hidden problems to be addressed. A no-brainer.
3. Since 100% of our single family listings are rentals, we insist on the property being vacant before we commence marketing actively. This is non-negotiable. Either you’re serious or you’re not. Setting aside the pain-in-the-ass nature of tenants in a home that’s for sale, buyers, and more importantly, their agents don’t like (hate) it, and we can’t turn it into the best house on the block with them in it. Also, isn’t the fact that most neighborhoods have multiple short-sales and REOs as competition? And yours has a tenant? Really?
The bulk of our local listings will be 2-4 unit properties. Generally speaking, we lean on our clients strongly to vacate one of them. Though the custom is for the buyer to see the interiors only after an accepted offer, if they can see one beforehand, we sometimes get put in front of the line. Also, since it’s vacant, we’ll have the seller/client do many of the things we do for homes. It works like a charm.
4. We bring in a very experienced interior designer to make suggestions about pretty much everything under the sun, both inside and outside the property. This has proved hand down to be the best money spent in terms of impacting both the ultimate price received and days on market. Here’s an example, using a rental we sold last spring for a local client.
- She ordered the garage completely drywalled and painted.
- Had the patio cover raised from the eaves to the roof.
- Mini-remodels for both bathrooms.
- Re-floored or re-carpeted every room except kitchen.
- Removed 18″ of wall separating living room from kitchen.
- Installed new storage in master bathroom.
- Install new forced air heater
- Total cost: $15,000 +/-
* This was the above mentioned home we sold last spring.
Note: It’s long been my contention, that if flippers/rehabbers brought in a credible, experienced interior designer, they’d not only sell properties faster, but in many cases for more.
5. All repairs and deferred maintenance are addressed. Any red flags in the inspection report are, if possible, re-inspected by a specialist. An example would be the roof. If the roof seems iffy, it’s either certified by the roofer in writing, repaired within an inch of its life, or replace completely. We want no questions left unanswered in the most positive manner — and through the buyer’s eyes.
6. We think (we is the interior designer and the mouse in her pocket) staging is somewhat overemphasized, but we employ it when she thinks the particular property benefits from it. Often, she’ll opt to partially stage a home. In any case, all costs for staging AND the interior designer are borne by the client. They know this well in advance.
7. We use a very experienced and nationally known commercial photographer. His living is made primarily photographing for major wine growers. However, after his first foray on our behalf, over a dozen agents pleaded with us to share him with them. We’re strongly considering it. 🙂
8. Our for sale signs will have either an interior shot of one of the rooms, or one of the backyard. It also shows the price via a ‘rider’ in at least 6″ tall letters. These signs tend to stop passersby, which is the point. The sign will also sport the url of the home’s website.
9. We have a stand alone website built. The first thing they’ll see is a high definition video with our designer leading them through the home, showing what’s been done, and why. This is a new addition for us, as we’ve not done this before. We were gonna do it with the aforementioned listing, but it sold too damn quickly. 🙂
10. Open houses — we don’t do them. Why? Simply because we’re not tryin’ to get other listings in the neighborhood by impressing the neighbors with how hard we’re working. We think puttin’ a ‘for sale’ sign up on Friday, and a ‘sold’ sign up the following Wednesday is impressive enough.
11. We put the listing on the MLS. It will include the maximum number of photos allowed, which I think is now 12. We also price listings using the range approach. We’ve found that works better. This is especially true when the low end is obviously less than neighborhood competition, yet the home appears to be just as obviously superior in just about every way.
12. We create flyers and print them on relatively expensive stock. They have our best photos, the home’s website address, and text that’s epic in nature. These are put into flyer boxes which passersby can easily see from either direction. Frankly, I’m dubious about this one’s impact, but we do it cuz we can.
13. We will then post about it on our company site. This will contain a link to the property’s own site, of course. Because of our site’s reputation for accurate info and trust, this boosts the home’s site more quickly than if it merely stood without links. Duh, right?
14. We have our flyers distributed to the local employers surrounding the neighborhood. We also have a smallish list of agents/brokers we trust, and who’ve told us to give them a head start on anything we list. Since they know we’re gonna do crazy cool things to the place, they want first dibs. Works for us.
15. If the listing hasn’t sold in a week, we select a local agent we know well and trust implicitly to hold an open house. It’s no skin off our nose, and every now and then (roughly 5% of the time, a figure I completely made up from experience) it’ll result in a sale. It will not do any harm. Meanwhile we’ve generated some goodwill with one of our colleagues.
16. We’ll put an ad in Craig’s List. It’ll link to where we think will generate the most good. I know it sounds crazy, but we’ll sometimes call a friendly agent in the area, asking them if they’d like to advertise it. Why on earth would we do that? Simple — We refuse to represent traditional homebuyers. It’s not our thing. Furthermore, if the buyer is an investor, we wouldn’t sell anything in San Diego to them anyway, as it wouldn’t be congruent with our stance of the last seven years. 🙂 Any agent who does advertise our listing, agrees to forward any investors our way.
17. 3-5 times weekly, if it’s vacant, somebody from our firm checks out the house physically. We have it ‘cleaned’ as needed, sometimes when it’s not. Our client is held responsible for keeping the front/back yards in immaculate condition. We don’t take any prisoners on this one — especially the front yard. Curb appeal is analogous to the pretty girl who dresses to accent her figure’s strong points. Short skirts aren’t popular for nothin’.
Much of the time, the property sells itself so well, and is priced so effectively, that we don’t have time get a sign up, a website, flyers, a blog post, or an ad in Craig’s List.