Selling Soulfully with Jennifer Allan

...and fun was had by all in this week's debate over pricing versus condition versus pricing AND condition. Did you miss it? It's good stuff - check it out at: Any Idiot Can Give Their House Away...

In the 150+ comments, the question was raised - "So, how do you convince a seller to put some effort into getting his or her house ready for market?" I'd made the claim that at least 90% of my sellers hire my stager and my handyman and almost all spend at least $1000 (of their own money!) prior to going on the market.

Am I just lucky to have intelligent and motivated sellers? Maybe. But I'll give myself more credit than that, although I have to say that every single seller prospect I've spoken with in the last 18 months has brought up the topic of "What do I need to do to the house to get top dollar?" They bring it up first! I spoke with a potential seller just yesterday who doesn't want to sell til next spring, but wants to get started now on home improvement projects! Maybe I am lucky - is this NOT typical of sellers in other markets?

That said, here are a few ways to help a seller see the light, and then do something about it.

First, go in with the assumption that the seller wants to know what it's going to take to get top dollar. Don't pussy-foot around the topic, although it's best if you're polite about it, of course! Like I said, ALL my sellers ask me first, so maybe there's some vibe I send out that inspires them to do so, I don't know. But I will say that if a seller didn't seem interested in preparing his home for market, I probably wouldn't be interested in listing his home. I don't say that to be snotty or arrogant - it's just a fact. I don't want a listing I'm not proud of.

By far the best way to get your sellers to clean up, fix-up and decorate-up is to help them do it. No, you don't have to do it yourself, although I've certainly rolled up my sleeves once or twice or a dozen times. By "help" I mean that you have the human resources on call to Get the Jobs Done. Contractors you know and trust... who know, trust and love you. How anyone sells real estate without a good handyman, stager and cleaning person on board is a mystery to me. When you can walk into a seller's home and confidently say "Yes, that needs to be fixed - we'll put it on the Bob-List," or "Yep, let's get Bob over here to give us an estimate on that," or "No big deal, Bob can fix that," you're golden. Not only are you the hero, but you'll also get yourself a sellable listing.

What I see most agents doing (if they do anything at all) is to give the seller a list of things that need to be done, smile sweetly and leave them to it. Well, that's a recipe for failure. Our sellers are busy people and probably don't know a good handyman, painter, stager or cleaning crew. They'll open up the yellow pages, make a few calls and throw up their hands in despair. I'd do the same thing; in fact, I have when I was selling an out-of-state property and didn't know who to call myself. My Realtor didn't help; I didn't get the work done... and guess what? The house didn't sell. Bummer for us both.

Here's how I handle it.

Seller: "Tell me what I need to do to get ready for market."

Smarty Pants JA: "I see a lot of maintenance and repair issues that really should be dealt with before we go on the market. Let's get Bob over here to give us an estimate. Are you around this Saturday?"

I use the same approach when discussing Staging. Frankly, I suck at decorating and furniture arrangement, but I know bad décor and awkward rooms when I see them. So, I just say "I'm a terrible decorator, but my stager, Geri, is the most wonderful woman you'll ever meet. Give her a call and set up a time to meet. I think she charges $250 for a 3-hour consultation. I promise you - it'll be the best $250 you ever spent." (Here's a news clip of me & Geri in action on one of my listings)

And I believe that. With all my heart. And that's another part of the story - YOU must believe that the first impression and condition and décor matter... and you must trust your resources. If you don't, you'll never be able to sell the concept. I can "sell" staging all day long because I have a great stager and I know it works. I can whole-heartedly bring Bob into my clients' lives because I know, beyond a shadow of a doubt, that he'll make me proud.

If you don't have a Bob or a Geri, make it among your top priorities to find them. Finding contractor resources is a topic for a different day, but for this day, just know how important it is to your business. I credit Bob and Geri for at least half of my paychecks thru the years. Seriously.

Hope this helps.

I don't know about you, but I'm very much enjoying this debate on whether or not we listing agents can positively affect the market value of our listings. I believe we can. And frankly, I'm stunned at the amount of opposition to that notion.

Now, a disclaimer - I don't work in a distressed market, so I shall defer to those who do that they know more about selling homes in that environment. Fair enough. If you work mostly REO's and short sales, you are excused from this discussion. Although... well, I'll get to that in a sec.

For the rest of us... those of who work primarily retail markets...

If your seller gave you $2,000 and asked you to spend it for him with the goal of getting the highest price in the shortest amount of time... what would you spend it on? Obviously every home and situation is different, but give me a list of priorities you'd address.

For example, would you...

• Take out a full-color ad in the neighborhood newspaper? and/or
• Bring in a stager? and/or
• Bring in a handyman? and/or
• Replace/refinish flooring?
• Paint?
• Hold a catered broker open house? and/or
• Board the dogs?  and/or
• Landscape? and/or
• Have the house professionally cleaned? and/or.....

I have a very clear list in my head of what I'd tackle first, next and after that, depending on what the home needs, but I'd like to hear yours. But here's the big question... DO YOU THINK IT WOULD MAKE A DIFFERENCE in the market value and ultimate sellability of the home? Or would your seller be throwing his money away?

Your thoughts are very much appreciated!

RELATED BLOGS:

• Any idiot can give his house away
• Stop! Before you reduce the price...
• When your listing's not selling...
• Houses aren't pet rocks...

 p.s. As alluded to above, perhaps this is not relevant to a distressed market... but maybe it is. What if banks gave their listing agents $2k to spend on improving the property... do you think it would help move these properties faster... for more... or at all?

 Available now at www.SellwithSoul.com!

I'm watching Jason Crouch's featured post today entitled: "How many other professionals work on contingency all the time?" The premise of the blog is to explore other compensation models that don't require us real estate-types to do so much work for free.

Good stuff.

However, what I don't see discussed (much) in the post or comments is an acknowledgement that part of the reason our fees are what they are is that we're paid on contingency AND THAT'S WORTH SOMETHING! Working on contingency is risky and is therefore entitled to a higher compensation structure.

If we remove the risk associated with our compensation, it follows that we should also reduce our fee. More RISK = More REWARD. Less RISK = Less REWARD.

And I'm not sure that's what we, as entrepreneurs, really want. We got into this business because we thrive on the challenge of working on commission... which by its very nature, involves risk. Maybe we're not so enamored with our entrepreneurial-ship these days when the risk seems to outweigh the reward, but just a few years ago it was FUN! We LOVED it.

And we can't have it both ways.

Many in our ranks have abandoned their real estate careers in favor of a guaranteed paycheck - and all the goodies that with that like benefits, paid vacation and oh, yeah, weekends off. Of course, also included in that lower-risk job is a boss, an inflexible schedule, a salary cap and perhaps excruciating boredom, ‘specially after the thrill of being your own boss.

If we want some semblance of guaranteed pay, we must be willing to forego some of the potential upside of a contingency-based pay scale.

Frankly, I'm probably fine with that, although my tune might change when good times return. And maybe that's okay. Maybe in today's less certain market, it makes sense to charge upfront or by the hour, and when good times return, revert to the traditional real estate model of a 100% success-based model when success is much more likely...

Related Blog: Upfront Fee versus Pay for Performance... I'm torn!

Here's an excerpt from Sell with Soul on the topic...

Successful real estate agents can make big bucks. For a career that requires only a month or two of education, the rewards can be tremendous. But be aware of the reasons the economy supports paying real estate agents such high fees...

First ......

... Second, you agree to be paid on contingency. You take the risk every day that the work you do will not be compensated. More Risk = More $Reward$. Less Risk = Less $Reward$. Not too many professions work with no guarantee of payment. Therefore, you can justify higher fees upon success. If you could convince your clients to pay you hourly (good luck), you could charge a reasonable hourly fee and would probably make much less money per transaction. Overall, you might come out ahead though.

So remember that the next time you get a $10,000 paycheck for, say, ten hours of work-that $10,000 is also paying for those flaky buyer clients who run you around and mysteriously disappear. It doesn't mean that you and your services are worth $1,000/hour.

We real estate agents get spoiled by our big paychecks. We actually think we earned that $10,000 check during that specific transaction. Even if a client put you through the wringer for a year, it's not likely you spent more than 50 hours on his transaction. And, $200 an hour is pretty good pay for anyone.

My personal mantra is that "I sell real estate every day. Sometimes I even get paid for it!" It keeps me sane!

So before you get hostile toward prospects who never take you to a closing, realize that real estate fees are structured to pay you for that "wasted" time. Of course, the better your closing ratio, the less you have to worry about such things, but in your first year(s) you will "waste" a lot of time on unproductive people. But, as we will see later, there is no such thing as wasting your time in your rookie year.

www.SellwithSoul.com

Why do we put such stock in the Average Days on Market (DOM) statistic in our MLS's? I suppose it might be meaningful if YOUR average DOM is much less than the overall DOM, but otherwise, I believe it's a totally meaningless number.

If I were to run a market analysis of all the 1920's Bungalows that have sold in my market (NW Denver) in the last three months... (okay, wait a sec, I'm going to do that right now... BRB).

Okay, I ran my analysis. Had to go back six months 'cause the last three have been kinda quiet around here.

The DOM of my subject search ranged from 2 days to 171 days. The average DOM was 53. However, out of 21 properties, seven sold in under a week (five of those in less than 3 days), eleven in less than three weeks, while five took over 100 days to sell. Only three of the 21 properties had a DOM of anywhere close to 53.

So, when a seller asks me what the average Days on Market is in Northwest Denver, I tell them "I don't know" and explain why. I then explain why my goal is to sell their home in 30 days or less (obviously it's perfectly do-able in my market), and how I'm going to do that.

But maybe that's just my market. Do you feel that the DOM statistic is meaningful in yours? If so, please explain!

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For Sale Signs Don't Pay the Bills - 74 Ways to Sell Your Listings in Any Market
On Special $14.95!

I remember interviewing for my second listing back in 1997. The seller asked me this question: "Jennifer, I assume our house will sell quickly because it's so cute (it was), but if it doesn't sell right away, what will you do?"

Hmmmmmmmm. Hell, I dunno. I was a green bean agent; I'd only had one other listing in my career and didn't have a clue. I came up with something, that probably sounded like this: " I'll do a broker open house, I'll do mid-week open houses, I'll distribute color brochures throughout the neighborhood and post an ad on the nearby college's bulletin board."

Lucky for me, the house did sell quickly, so I didn't have to implement my admittedly weak Plan B.

But it's now 12 years later and I still don't have a good answer to the question: "What will you do in 30 days if my house hasn't sold?"

However, with 12 years of experience under my belt, I KNOW that there ISN'T a great answer to the question! Especially if the seller is expecting me to reach into some magic bag of tricks and pull out a secret marketing strategy that I reserve only for my non-selling listings!

Here's the thing. Even if I HAD a magic bag of secret marketing tricks, why would I hold out using them until after the listing is stale? Wouldn't it make more sense to hit the market with all guns blazing?

But the truth is, I don't have a magic bag of tricks (and neither do you). NO AMOUNT OF MARKETING CAN SELL AN UNSELLABLE HOME. You can do broker opens every day of the week, distribute enough color brochures to kill a small forest and refresh your Craigslist ad every 21 days for the next five years and your listing will not sell if it's not properly priced, properly prepared and properly presented! NO AMOUNT OF MARKETING CAN SELL AN UNSELLABLE HOME!

Our job as professional real estate agents is to know what it's gonna take to get a house sold. We need to know how to price the home TO SELL; how to prepare our sellers for the reality of Being on the Market and how to help them prepare the home to evoke the most positive emotional reaction from the greatest number of potential buyers (and their agents). It needs to look good, smell good and photograph well. It needs to be easy to show without the distraction of barking dogs or a work-at-home owner. If there's an obstacle to sale, we need to recognize it and have the balls to be frank with our seller about it (and help ‘em fix it).

That's how you sell your listing. By working with your seller to create a marketable product, not to throw time and money at advertising after the sign goes in the yard. Frankly, the MLS system is an incredibly efficient system to sell houses and there's nothing we can do individually to out-market that MLS.

WARNING - infomercial to follow...

I wrote a little book last year called "For Sale Signs Don't Pay the Bills" which is a very detailed list of 74 things you as a listing agent can do to get your listings sold. It's a damn good book, if I do say so myself and it's only $14.95 right now at my bookstore. If you have listings that aren't selling, or don't WANT listings that don't sell in the future, check it out. I also do live presentations on the material, if your Association is looking for a speaker in 2009.

Okay, Infomercial Over.

Let's go sell our listings!

www.SellwithSoul.com

Stand your ground on pricing. Confidently, respectfully, politely. But firmly.

You're not doing anyone any favors when you take a listing you can't sell. Not you, not your seller, not your market.

You may be pleasantly surprised by the outcome.

You could be the best thing to ever happen to that seller.

(GO, YOU!)

 Check it out!

During the now-becoming-infamous Real Estate Radio USA interview earlier this week, I made the comment "I'm the Best Listing Agent I Know." Arrogant, eh?

Not really. It's not as if I said "I'm the prettiest girl I know" or "I'm the smartest girl I know." It's more along the lines of "I'm the hardest worker I know." It's a choice.

I choose to be a terrific listing agent. It's not a God-given skill or something I was lucky enough to be born with. It's a choice.

I choose to spend time (and gas money) properly pricing my properties. I choose to have relationships with exceptional home stagers and responsive home improvement contractors. I choose to be respectfully upfront with my sellers as to what they need to do to help me get their homes sold. I choose to own a great camera with a wide-angle lens. I choose to write killer MLS descriptions and ensure that they are accurate. I choose to work for a company who offers a 7 day/week showing service and to pursue feedback from all showing agents. I choose to frequently update my seller on the competing market activity. I choose to build and maintain rapport with my sellers so that they trust me when I offer advice and recommendations. I choose to keep my brochure boxes full. I choose to be prepared for and attend my appraisals. I CHOOSE TO CARE MORE ABOUT THE CLIENTS I HAVE TODAY THAN THE CLIENTS I HOPE TO HAVE TOMORROW.

I'm a heckova listing agent. Are you?  

Have you ever heard the commission-negotiation-avoidance strategy of creating a menu of packages for a seller to choose among? For example (all figures are illustrative only), you might offer a 4% package which includes minimal services; a 5% package which has a moderate level of service and a 6% package that includes a kitchen-sink level of service.

Sounds good, doesn't it? After all, it demonstrates to the seller what you actually DO to sell a house and probably reduces the likelihood of his asking for a discount. If he wants to pay less, he gets less. HIS choice.

Sorry, but I think this is a lousy idea. Why?

Oh, let me count the ways...

You want to sell the house don't you? Yes? Well, then why are you asking your SELLER how to market it? As the expert in selling houses, YOU know what needs to be done and you, as a professional, should do those things.

You should also know what doesn't sell houses in your market. And you shouldn't be offering and charging for those services if you (as a professional real estate agent) know they aren't effective.

When I get a new listing, I really want to sell the damn thing and I spend a lot of time and energy figuring out what we need to do to make that happen. By "we," I mean me and my seller. I don't market every house exactly the same, nor do I advise every seller to do the same things. It's part of my service to analyze each situation individually and proceed accordingly. Some listings will benefit from Open Houses, some won't. Some (most) homes need staging, some don't. Some listings will benefit from newspaper ads, most won't. It's my job to know these things.

Besides, you want to provide exceptional service to all your clients, don't you? Don't you want their future business and referrals? By purposely limiting your service (especially if it affects the marketability of the home), you may be blowing your reputation and credibility with this client and potential source of future business. And of course, you may also be blowing your chances of getting a paycheck if your seller doesn't pick the right package and the house doesn't sell.

I do offer two commission options, but they aren't priced according to the service provided; they're based on whether or not the seller pays an upfront marketing fee. You can learn more about this strategy on my website...  and yes, I tell the world what my commission is - which is a topic for a different blog, but it works amazingly well!

Be a professional real estate agent and do what it takes to sell your listings. That's your job.