Tuesday, January 17, 2012

What will sell your house in 2012?

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Looking Back at 2011

We had a great year at Lappin Properties.  Every home that we listed, sold. We worked very hard the week between Christmas and New Years!

The question is: why is this happening during what is widely considered to be one of the toughest real estate markets in recent history? Many real estate agents have quit the business.  Some statistics say the number of real estate agents has dropped approximately 30% in the last 4 years. Despite the statistics, our business has been great.

I spend a lot of time analyzing this. I like to think we have great customer service, but realistically, it is a lot more than that. I’ve identified two main reasons.

FIRST: we market our listings with an individual marketing plan, not a mass marketing plan.  Our marketing brochures have our name and contact information featured in small print, so that our name is not the dominating feature of the brochure.  We feel if we do a good job marketing your home, people will notice and use us. We don’t use our clients’ homes to help us advertise. We respect and honor our clients’ decision to hire us.

As a result, we have an 80% referral rate when the industry has a 20%.

SECOND: we know that people want the truth and we work accordingly. For real estate agents, the changes in our industry do not always work in our favor.  Buyers are extremely educated.  I joke that they are on the Internet more than I am looking for homes. When they come to me, they already know the market.   

Some real estate firms teach their agents to take listings at a high price and walk the client down later, once they’re locked in. So don’t let an agent’s high number give you an unrealistic idea about value. Even if they list your house at an incredibly high price, they’ll often accept a low offer for you and tell you it’s the smartest move you could make. It’s fun to dream sometimes, but this market is not the time for dreaming. If your house is overpriced, all you're doing is providing a marketing tool to help your neighbors sell their more realistically priced home.

True story: a doctor once called me to list his home.  I told him $1.6 and the other real estate agent came in and told him that was way too low and it needed to be listed for $1.9.  So guess who he went with? But 16 months later his home sold for $1.55.  If your real estate agent is requiring a 12 month listing agreement, I would question the price they have put on your home.

MLS data shows it time and again. Homes priced on the market sell within 4% of their asking price.  Overpriced homes come down to the market price and sell within 9% of the price.  Overpricing costs you big!

2 things sell houses: individualized marketing and a realistic pricing. These two worked for selling in 2011 and I'm guessing it will work in 2012.