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Posts from the ‘AgentThink’ Category

25
Sep

Truth in Advertising

office meetingHi Everyone. I have another great meeting for you to try out. It was a lot of fun and a great learning experience and really, isn’t that the point? The idea came from my daily peek at the new listings. For a few weeks now the same property kept showing up. I found it strange that it was always appearing in my “new” feed. Upon closer look I saw that over the past 4 months it was listed in one way or another about 6 separate times. The price was up on one listing, down on another and then back up again. I started to wonder what the problem was. Could badly worded descriptions, lack of room sizes or poor quality pictures be to blame?

A thought was born. I looked through MLS and picked out the 4 listings (and pictures) with the longest days on market. Boom. At our meeting I divided everyone into four groups and gave them one listing each. The first part of the task was simple; circle every mistake or missed opportunity on the actual listing. Next they were asked to come up with 5 marketing strategies that the current listing agent didn’t appear to do. The problem with not knowing the motivation of the sellers, the condition of the property or special circumstances is that it is easy to blame the longevity of the listing simply on the property being overpriced. To make it a bit more interesting I created some made up back stories on the owners. One owner was an absentee landlord who lived in Dubai, one lived in the home but rented out rooms, one was tenanted with difficult tenants, and one home was owned by an elderly couple that didn’t speak English. I threw in a couple of zingers to…just to make it interesting. Days on market ranged from 91 to 442.

Each group had a leader who presented their findings. All MLS listings were missing information in one way or another. Of course there was enough information to write an offer but things like room sizes and descriptions were missing, two didn’t have inclusions mentioned, one had very limited showing ability, and all had terrible spelling and grammatical errors. Listings had between 8 and 12 glaring errors. As for new marketing techniques well every group came up with something unique however there were a bunch that were similar. They included professional photos, floor plans, staging, and utilizing every inch of the very limited space in the client and broker fields to mention some of the positive selling features of the home…like location, walk out basement and income potential. Surprisingly two groups thought the offering price on their homes wasn’t all that bad and were willing to market the home at the existing price for a couple of weeks if everything could be put into place.

At the end, the meeting outlined a couple of key points. The first was the value of well written remarks. Check your spelling and don’t leave any field blank if you can help it. The second point was that you can’t underestimate the power of the first impression. As they say, you never get a second chance to make a good first impression. If you are going to list a home you have to come out of the gate strong. A lengthy conversation outlining your strategies for maximizing exposure to the market and ultimately receiving the most money for a home may include making some difficult decisions like evicting tenants, painting, staging or cleaning. That’s when your team comes into play. Clients have to know that you have to spend money to make money. What’s the alternative? How about honesty? Years ago I remember seeing something like this in the client remarks; This house is a dump. A little elbow grease, a broom and a coat of paint will add thousands of dollars in value. This could be the deal you have been waiting for. If I had the money I would by it myself.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President of the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

18
Sep

Coming Soon. Really?

coming soonI would be the first to admit that the latest real estate craze, the “Coming Soon” sign, is a bad idea. Okay, I get it. It’s a marketing ploy. It tells potential buyers out there that you are going to be listing a home soon BUT if you call me directly maybe you can beat the rush. That’s called double-ending. It means the listing agent represents the seller and the buyer in the transaction. While, in theory that sounds good, and there may be some commission savings, the process is fraught with legal dangers and should be avoided unless you have some process in place to create a fair and level playing field.

Now, there are agents out there who can use the sign effectively and they will tell you that when they hang out the “coming Soon” sign they are sending a message to potential buyers that the home is under contract, commonly known as an exclusive listing, and that after getting it all painted, staged and looking it’s best, it will move to MLS. Hey, if that’s what you are doing then call it what it is…an exclusive listing. Unfortunately, the concept of “Coming Soon” sign is entering the minds of sellers out there that they think this is part of a strong marketing campaign and I have heard from agents who said they didn’t want to have a “coming Soon” sign BUT the seller insisted.

But here is why I don’t like it. It can be easily abused and be confusing to potential buyers. Last week a coming soon sign showed up at a house across the street from me. I remembered that house being on the market 6 or 8 months ago, and selling in multiple offers, and thought it was weird to see it back up for sale. The “Coming Soon” sign was up for about a week and although I have no proof on the number of sign calls the agent received, I can only imagine, given how hot my neighbourhood is and the incredible demand for detached homes on my street, that he was a busy boy. Yesterday I noticed the sign had changed, but it didn’t change to a for sale sign, it now read “For Lease”. wait a minute. They used a “Coming Soon” sign to announce a lease? I have to say that I had an unpleasant taste in my mouth which got worse when I looked it up to see that it was not even the whole house for lease but a single suite.

So imagine the call that agent would receive…”Hi, I’m calling about 123 Main St. I saw your sign. I’ve been looking for a detached home in the neighbourhood. How much are the sellers asking?”. “Oh that home ISN’T for sale. It will be available for lease next week but perhaps I can show you some other homes in the area”. Honestly, I feel like I need a shower after that exchange.

The fact is that there is no law that says you can’t use a “Coming Soon” sign to advertise a lease. And while I find this tactic unsettling it is probably not technically misleading. Is it unethical? Again, probably not. So why does it rub me the wrong way? I think it is because the intent of a coming soon sign is to announce that the property will be coming up for sale. Was the agent just using the “Coming Soon” sign to capture more leads? And if he was, do you find anything wrong with that? The reality is that agents are all looking for an advantage. Competition for buyers and sellers is fierce. If the tried and true techniques aren’t getting you business then agents are pushing the envelope to the detriment of an unsuspecting public.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President of the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

12
Aug

15 Days On The Market….Time For A Lowball Offer

lowballMany years ago I wasn’t afraid to submit a lowball on behalf of my client. Actually, if the research showed that the property wasn’t worth the purchase price, I was happy to go in with guns blaring and make my stand no matter how grumpy the seller was. In most cases I would look at a couple of facts; first there were the comparable properties. Easy enough to do when they were condos, but houses were a bit more difficult. sometimes you had to really massage the numbers to prove a point. Of course the second fact was “days on market”. We as agents look at this closely, but buyers today have been used to one simple truth…if it didn’t sell in a few days then it was overpriced. Why wouldn’t they? The news is inundated with stories of houses selling in multiple or bully offers.

So a few days ago an agent in my office tells me that he got a lowball offer on one of his listings. At $599k the agent would admit that the price was a little aggressive. If he had his way he would have listed it at $549k, held back offers and hoped for $560k but the owner was adamant that he wanted to list higher and given the market, there was always a chance. After a solid turnout at the agent open house, plenty of traffic during the weekend open houses and consistent showings during the first week. The agent, working on the direction of his client, had a holdback date, 6 days after the listing hit the street. But despite the early flurry of activity, foot traffic quickly declined and the offer date passed without as much as a nibble.

The agent did what he was supposed to do. Changed the listing to reflect that offers would be reviewed at any time, and then got on the phone. The first batch of calls went to a few agents who expressed some interest early on, followed by everyone else just to let them know that no offers were received. Unable to drum up any offers, he got back to work. Flyers, open houses, door knocking, etc.

After the second weekend of public open houses, he finally got an offer. $515K. Nearly 16% under the list price. He knew right away that this one is going to be a hard one to sell to the owner who was probably expecting something over $600k. Having been on the other end of this equation several times I know exactly what the conversation was like between the buyer and the buyer agent. After being told the house didn’t sell on offer night and seeing that the house has been on the market for over 15 days, the buyer had only one conclusion…. Overpriced. Lets throw in a stinker bid and see how low the seller will go.

Experience has taught me that this is not the right tactic. Low ball offers put the seller on the defensive right off the bat. They are likely to likely to sign back at full price or not at all. The buyer agent sits across the table from the seller with an immediate disadvantage not likely to be smoothed over very easily. So what are you options as the buyer agent? Simple. Do your homework. Conduct your own CMA and sell the price using pure hard facts because facts don’t lie. Let the buyer know that success is derived by coming to the table with a strong position backed up by hard numbers.

The seller agent has a tougher job. They do not have any influence with the buyer so must communicate to the buyer agent that they will have a better chance if they bring a reasonable offer. As you know, the seller agent can’t disclose motivation or any other pertinent facts like “I told the seller the house was only worth X” or “my seller is greedy”. Instead talk to the buyer agent about comparable homes in the neighbourhood and nudge them in the direction you need to be at.

Remember to consult local data to get a sense of what the average days on market are for the district or neighbourhood. Chances are you will be surprised how high that number is. Consider that in March 2015, one of the hottest months of the year, in Toronto’s C01 district (where my office is located) average days on market for freehold homes is 27 days yet if you asked anyone, agent or not, they would say houses sell much, much faster. There is perception and then there is the reality.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President of the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

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