Tag Archives: selling a home

Roller Coast Ride Through the Wringer

500x_rollercoaster_1618538More on Multiple Offers.   An integral part of our marketplace at the moment. A strange landscape that buyers and their agents are struggling to find better and more effective ways to navigate over, under, around and through.

There are no accurate maps.  Just vague compass points.  An occasional star in the nighttime sky to triangulate from.  Lots of fateful winds and rogue waves that can rise up to ruin your day at a moment’s notice.

Some hopefully soon-to-be Buyers reading this have already been through three or four multiple offer situations without taking home a home as their trophy.  Instead they’ve taken a roller coaster ride through the ringer.  Felt the highs and the lows of being in the hunt.  Gotten close but not close enough.  No banana as of yet.

Other would-be Buyers reading this are just beginning to venture into the market. Stick their toes into the deep end.  They’ve heard it can be tough to buy right now but they haven’t experienced what it feels like in their guts or in their bones when they find themselves sweating out the conclusion of a life-changing process accompanied by a sensation of complete powerlessness.

Any Agent who has done more than a couple of deals in the last six months has undoubtedly mixed it up with a multiple offer scenario or two along the way.  A lot of what is accepted as status quo procedure in a multiple offer land came out of the huge run up of the late 1990’s.  When Silicon Valley was going nuts.  Manna in the form of IPOs was falling out of the sky.  Hordes of 30somethings were wondering through open houses with stock options burning holes in their pockets.

I remember counting multiple offer transactions.  I had a streak of 150 closed escrows that involved 145 multiple offer situations of one kind of another. In some I represented Sellers receiving 5 to 15 offers on their properties. In others I represented Buyers competing against anywhere from 3 to 30 offers on the latest greatest listing to hit the streets.

What was it that Jim McKay used to say at the beginning of every edition of ABCs Wide World Of Sports? “The thrill of victory or the agony of defeat.  The human drama of real estate competition… “

Win or lose, joyous celebration or crushing crash and burn, most real estate deals are accompanied by huge-doses of that mind-altering chemical stimulants known as adrenalin.  Regular real estate is like Wide World of Sports.  Here on the multiple offer channel,  real estate’s altered state of mind is like the Wild World of Xtreme Sports ramped-up on roids.

As much as it is possible to generalize about anything in real estate – let’s outline the typical M.O./M.O  –  Multiple Offer Modus Operandi –  that you are likely to find in the market these days.

Pretend I’m the listing Agent on a great new property worth somewhere in the $600s – $700s.

Here’s probably how I’m going to run it – or at least suggest to my Seller-Client that they run it:

Listing goes on the MLS on Tuesday.  Brokers Open on Thursday.  Open house on Saturday and Sunday.  Both days 1-4pm.   If it is clear that there is significant offer-writing interest on the property by the end of the first weekend, then we set a date and time that’s not too far out in the distance.  Let’s say Wednesday at 12noon.  All offers to be in by then.  No exceptions. No foot dragging.

If it is clear by the end of the open house on Sunday that there is interest,  but not INTEREST,  then the likelihood is that there will be another Brokers Open the next Thursday and another round of open houses the next Saturday and Sunday.

If we haven’t gotten enough of the right people through by the second Sunday to capitalize the word INTEREST…then, the conclusion is clear – we are priced on the high side of where we should be. And before we lose all the mojo that comes with being a new listing – we better lower the price and find the place that the market is willing to compete at.

If we get to a third week or fourth week with a listing in the $500k – $800k price range – then the accrued days on market are going to kill us. We’re going to sell for less than if we had priced it lower in the first place and let the competition between buyers carry the price up.

Sound familiar?  It’s called chasing the market down. More next week.
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Hearing the Inner Ca-Ching

CaCHING21There I was at a listing appointment this week.   The owner of a beautiful ocean-view property was doing his due diligence. Interviewing three prospective Agents – like conventional wisdom says a smart Seller should.

At one point, this likeable, highly-educated, sophisticated home-owner, fixed his gaze intently and said with utmost sincerity: “I’m  looking for an aggressive Agent to get the job done.  Someone who will target the right markets. Places where the money and the buyers are  – starting with Silicon Valley.”

Ok. No problem. Makes perfect sense.  I’m with ya’.

But suddenly out of the blue he took a left turn and started pitching curve balls in my direction.  Holding up a glossy local real estate magazine he continued on with his defacto job description:  “ You know, I want someone who’ll run these big color ads. Someone who’s going to put my place in the Wall Street Journal. Get a special mailing list of big time corporate CEOs. Send them all postcards. Run displays in the San Jose Business Journal to connect with all those up and coming tech millionaires.

A crash of cognitive dissonance washed over me.  Punctuated by ringing in my ears – the sound of inner “ca-ching-ing” as all those imaginary dollar signs rolled along with my eyes back into my head.

I recognized the place. Been there. Done that. Many times.  One of those lonely marketing cul-de-sacs where listings go to die.  Despite everyone’s best wishes, best efforts and best intentions.

Once again I was reminded that there are still an amazing number of Sellers who don’t quite seem to get it yet.  They are unclear on the concept. Running on autopilot with notions that were old even in the old days.  Having trouble reformatting their brains. Possibly doomed to spend the rest of their upcoming days on market as analogue people lost in a digital world.

Perhaps it would help to list a few of the common disconnects between reality and realty that are floating around out there:

– Homebuyers from Silicon Valley aren’t driving over to the car wash in Santa Cruz to pick up a glossy magazines so they can search for available real estate.  They simply log on. Why would any serious buyer window shop randomly – when they can see the entire inventory in a couple of keystrokes?

Most Sellers in Santa Cruz moving to other parts of the Country are doing the very same thing their own potential Buyers are doing – looking on-line. Why would it be different for their Buyers than it is for them?

Advertising isn’t going to convince someone to buy something if they aren’t already moving in the direction of buying something.   Buying is a long process. Property ads don’t create buyers.

The chances that someone reading a four line classified in the Wall Street Journal is going to drop his coffee cup, get on the next plane and plop his money down are none and slimmer than none.  Who reads the WSJ classifieds anyway?

Someone who isn’t already familiar with Santa Cruz isn’t going to be moving/buying here anytime soon.  Near-future buyers are people who already are attracted to our area and have it on the same radar as their homing instincts.

Corporate execs aren’t checking their daily junk mail on the latest and greatest random real estate opportunities. Snail mail or  email. You know how you ignore all the superfluous crap you receive?  Why would they be any different?

And those social media millionaires?  Check our their Facebook pages. Not a lot of them are reading the Business Journal.

The majority of advertising dollars that agents and brokerages spend – are designed to sell the sellers on an Agents’ sell. Not to sell Buyers on what they are selling. We run those expensive ads mostly so more of you will list with us.  Been there. Still doin’ that.

Oops.  Now that I’ve blown my own cover, perhaps next week we can focus on how today’s real estate marketing really does work and which specific things Sellers should be insisting their Agents spend money on.

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KEYS TO NOWHERE

I confess.  I never quite know how to take it when some of you take me too seriously.  Not that real estate isn’t an all-too-serious business these days. But if everyone starts taking everyone else too seriously, it could go viral!  We might miss that last little bit of endangered humor that’s hiding out there, cowering under a rock.

Last week, we discussed an exceedingly odd phenomenon that’s been occurring. Properties put on the market by Sellers going out of their way to make homes hard to see and/or make showings they do get, less inviting for prospective buyers.

Almost like they don’t really want to sell them at all!  Almost like they are just going through the motions to satisfy some other strange agenda!  Almost as though they think the showing process itself should be a kind of modern-day Spanish Inquisition! Trial by fire, weeding out true buyers from those masquerading as such to indulge their penchant for kicking tires!  The premise?  Prospective buyers should be judged guilty until proven innocent and of pure intent – by first surviving the experience!

We speculated what the underlying psychology might be but didn’t come to any conclusions.  We just left it as one more contradiction in a growing list of contradictions. Symptomatic of a marketplace turned inside-out and upside-down by recent events.

But one of you picked right up on the theme without missing a beat.  An anonymous entrepreneur claiming to be a lifelong Santa Cruz tenant immediately e mailed me a 50 page catalogue called Buyer Be-Gone (Products to Make Sure Your House Doesn’t Sell.)

Apparently he has been waiting for just the right moment to step up and promote his wealth of experience. And this is the right marketplace – with so many ambivalent sellers becoming more ambivalent each day. I suspect ulterior motives. An April Fools joke perhaps. But I’m just going to pass on some of his offerings and let you be the judge.

PREEMPTIVE STRIKE:  Buyers will Be-Gone before they even get there: Insist on 24 hours notice prior to showing.  Purchase one of our cheap answering machines guaranteed not to work. Can’t get ahold of you? They can’t show the property.  Also comes with free Mobile App that diverts calls to an automated message declaring voice mail cannot receive any new messages.

FAKE HOSE-BIB: Fool the Agents.  Convince them to put their lockboxes on what looks like the real thing. After they are gone, simply slip fake hose-bib off the handy exterior wall mount.  Dig a hole in the garden and bury the lockbox. Replace fake-hose bib and repeat same. As often as necessary.

KEYS TO NOWHERE:  Purchase this new I Phone App showing the location of all local hardware stores and key-making kiosks that have proven themselves incapable of making copies that actually work.  Locks that don’t turn, don’t turn into sales.

PETPOURRI: Buyer Be-Gone’s equivalent of new car smell.  Handy spray can that duplicates and distributes the distinctive aroma of Old Dog Smell.  Apply ten minutes prior to showing for maximum effect. Also available in Old Kitty Litter.

SECOND HAND SMOKES:  What do you think they do with all those cigarettes they collect at the beach on clean-up day?  We buy, recycle and package them in five-pound bags.  All the stale butts you will ever need.  Each order comes with a free decorative ash tray and a 30 day supply of inhalers. Want to turn off prospective buyers? Smoke ’em out.

TAKE THE PLUNGE:  Cheap plungers, made in China. Six for a dollar. They don’t actually work, but place several next to each toilet in the house and watch them flush buyer fears about the old plumbing right to the surface.

FAUX FINISH:  Apply our special line of faux mold paint to the inside of closets, behind dressers, along baseboards and underneath bathroom sinks.  For most effective results, we recommend black.

NIGHT AND DAY:  Sturdy blackout blinds, made from recycled plastic trash bags.  Guaranteed to darken any space and make any room feel small and depressing.  It’ll be curtains for prospective buyers. Don’t miss your window of opportunity.

DIM BULBS:  How many Realtors does it take to screw in a light bulb?  Have fun watching and counting after you purchase a large supply of our burned-out bulbs, packaged to look like new. No matter how many times they try to screw and unscrew them, you’ll still screw up the sale.

Other Items:  Rusted Fifty Pound Hazardous Waste Drums for Backyard Staging,  Handy Stick-on Foundation Cracks. Bulk Termite Droppings,  Wide Selection of Cracked Roof Tiles,  Limited Supply of Edvard Munch prints of “The Scream.”  Special Eerie Doll and Owl Collections Available Upon Request.

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Strange Rites of Passage

When you work in real estate inexplicable things come up that often boggle the mind. Things that throw you off kilter for weeks, trying to figure out the answer to the age-old question: “What were they thinking?”

Sometimes it’s best to avoid going there.  Practice good mental hygiene.  Don’t over-think whatever it is “they” might be thinking.  Stop trying to make sense out of things that don’t make sense.

But…of course…this is Real Estate of Mind.  Dedicated to the exploration of both the sacred and the profane. The undiscovered country where brains suffering the post-traumatic effects of real estate regularly unravel to sort themselves out.

We keep some of them in specimen jars on the shelf.  Someday we’ll open up the secret vault for public viewing.  But in the meantime…what should we mull over today?  What odd bone of contention has real estate tossed up for us to chew on?

How about this?   In a market where it is incredibly hard to sell a house, why are so many places so incredibly hard to get in to see?  Why so many stumbling blocks? Strange rites of passage buyers have to go through just to earn a peek?

Maybe I haven’t plumbed the full depths of my dog-eared copy of Real Estate for Dummies yet, but isn’t there a relationship between offering something for sale and actually letting prospective buyers examine the goods?  Don’t they have to get to first base first, before you can expect them to make it home?  Why so many blatant cases of Seller IDD (Intention Deficit Disorder?)

In the good old days, the frequent phrase on the MLS was:   “Offers Subject to Inspection.”   It meant certain properties couldn’t be viewed until you wrote an offer.  That’s right! The dubious opportunity for Buyers to write blind offers on places they hadn’t seen.

Not a particularly appealing sales m.o. in the here and now.  Better suited for markets like 2004/05 when frenzied buyers were willing to offer almost anything for any place under any circumstances, just to get their big toes in the door.

Nowadays, there’s a more insidious version of “subject to” rising up from the quicksand. For lack of a better name, I call it:  ” Showings Secretly Subject to Offer.”

Tough to describe. One of those things that makes one say:  “I’m not sure I smell what the Rock is cooking  here.”   There are way too many places, ostensibly for sale, that when push comes to shove and prospective buyers come to town, it turns out they really don’t want to show themselves after all.

So what’s up? Why are increasing numbers of people putting houses on the market without committing to the basic notion showing them?

Most obvious scenario?  Tenant Occupied. Why would any self-respecting tenant cooperate fully in a process that could result in a 30 day notice?  That’s not Human Nature 101.  Any agent who has shown houses occupied by renters understands 1001 ways they can subtly vibe buyers and ruin the mood.

What else? Short sales. If a Seller knows that there’s nothing coming out of it other than another chapter in a long tale of woe, there’s not a lot of incentive to roll out the red carpet.

Then there’s the fishbowl effect. Not a single soul likes living in a house that people come tromping through, poking heads into closets.  It’s an uncomfortable experience. Some sellers start out with the best of intentions, but wilt quickly along the way.

Perhaps in some cases it’s deeper.  A factitious disorder of the mind similar to Munchhausen’s Syndrome.  People exhibit symptoms of selling.  Hire an agent to create a lot of attention.  If the house sells, they’ll stop getting the attention they desire. So they make up excuses not to show it.

For some, resistance to showing is a form of passive/aggressive behavior.  Sellers are angry that the market is lousy.  It feels personal.  All those looky-loos not stepping up to buy are stealing their equity.  What better way to punish them than the “Ole” trick? Hold it out in front of their noses and then pull it back as soon as they show interest.  They’ll see who’s boss!

And finally,  maybe its all part of  the elaborate wish-fulfillment fantasy many Sellers have ingrained. There’s always one imaginary buyer out there.  Willing to step up. Pay cash. No questions asked.  The logical extension of this one-in-a-million chance at the lottery is:  you only have to suffer the inconvenience of showing your house once – to this same exact right buyer.  You can edit out all the other unwashed tire-kickers before you even have to make the bed or do last night’s dirty dishes.   One showing. One perfect offer. Priceless!

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