Foreclosure auction

[sdrealtor]

AN,
If you price it right out of the gate and market it right out of the gate you can create a sense of urgency among buyers @ 0 DOM. You can’t do that @ 100 DOM. It’s not just selling it quickly, it’s selling it quickly at the highest possible price.

sdr

[an]

sdr, in a declining market, I agree with you. Price @ 0 DOM would most likely be higher than price @ 100 DOM. However, if it was an appreciating market like it was 2-3 years ago, wouldn’t price @ 100 DOM be higher than price @ 0 DOM? So, in an up market, if you priced a $700k house @ $750k, no one will touch it @ day 1. But 100 days later, if price appreciated past $750k, all of a sudden, to buyers at the time, $750k would be a deal and they would snatch it up. Maybe I’m just talking nonsense, but i swear that make sense to me :-).

[SD Realtor]

Your point is well taken and I would absolutely agree with you about pricing it right, AND pricing it right at the right time. Many times my biggest obstacle is the other agents who my potential clients have already had listing appointments with. In just about every case these people tell me I am to pessimistic and that they wonder why my suggested pricing is less then these others. This happened the other day at the Crest at Del Mar listing I was at a few days ago. I routinely tell them I will list at the higher price that they (the client) wants to sell at. However I also tell them that this is well above my recommendation. Anyways I did only think that you took listings in your submarket, as I thought I had read that in other posts, my bad. So yes I would absolutely agree that it is more pricing then anything else. In fact the less desireable the sub market the MORE pricing becomes the dominant factor. I don’t have hard statistics on how many sales are due to marketing such as newspaper ads and such. Seems like we have had this chat before eh?

[an]

The only way to prove if the price or the marketing or both is the main factor would be having 2 exact same house next to each other with the price. One with a lot of marketing and one with few marketing and see which one sell first. Then do the same experiment with a lower price for the house with less marketing and see which one sell first.

[sdrealtor]

AN
You are right on target! We are in a declining market so what I am talking about is a current strategy. When the market was climbing, I did things very differently.
sdr

[sdrealtor]

I pretty much limit myself to lisitngs in North County not just my submarket. I wont go to East County, South Bay or Temecula but I would go to RB (used to live there and know it very well), San Marcos, Vista, Oceanside etc.

Dealing with the mess that other agents create can be challenging. I press my clients to focus on what is selling and what prices are being paid in the market today not what others listings are priced at. I explain that I dont know everything and that some people get lucky though it is increasingly rare. I’m ask them whether they want to sellers or gamblers?

I dont think it is doing one thing right that makes a difference be it price, marketing or anything else. It’s easy for limited service guys to discount the value of marketing but the truth is we never know what will work and what will be the cause of a sale. In a market like this, I think it requires doing EVERYTHING right out of the gate to give yourself the best opportunity to succeed. The amount of money our clients pay us whether its 1%, 3% or anyhting in between is HUGE and they deserve the best.

[sdrealtor]

AN
I take it you are kidding. there are no perfect laboratory settings in the real world. As I said to SD R, you dont know what is going to work so your best option is to do everything and to do it all right the first time.

sdr

I think we should all go to bed now.

[an]

sdr, I’m not kidding, but I do agree that there are no perfect laboratory settings in the real world. That’s why I don’t think we’ll ever know if it’s price or marketing or both that sell the house. As a buyer with access to listings from ZipRealty, price is the key for me. But maybe other generation are different. I think people in my generation and younger will be gladly buy everything online. I know many people who bought their cars online from across the country and have it shipped to them. So buying RE is only logical next step. If we have all the listings online, either through Zip or Zillow or Craigslist, it doesn’t matter to us. We find what want, we don’t like going to sells people and ask them want we should get.

I usually don’t go to bed till at least 12 or 1, so the night is still young for me :-).

[SD Realtor]

As you said, we don’t have a correlated method to test the means to which the sales contacts are created. Us “limited service guys” however are the ONLY reason that consumers have freedom of choice to pay or not to pay high commissions while still receiving representation. When people ask me what other marketing tools actually sell homes, I tell them they need to gather that data from an agent who provides that and that I do not know because all of mine is done 100% on line. Some say they asked that to other agents they interviewed but they do not ever get an exact answer.

Please note, I tell them I do not know. I tell them I believe additional marketing is absolutely helpful. I also tell them they should ask anyone offering that additional marketing for statistics to see how many sales are facilitated by it. Finally th cost of that additional marketing should be priced to see if it justifies the additional commission. So I am not discounting the value of additional marketing. I am sure that mailers, union tribune ads, and caravans help alot as well as other marketing means. I am also sure you can come up with lots of stats that show these were the absolute means of providing the initial contact with the buyer of your listing. Consequently I can come up with saying that 100% of my listings were sold without them. We can debate forever if my listings would have sold for more with the additional marketing or if yours would have sold for less without the additional marketing and if those differences would have covered the cost of the higher commission. Furthermore my personal belief is that the higher commission doesn’t match the dollar for dollar level of the additional marketing. Like I said, giving people choices is never a bad thing.

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Was at the Auction as well, There was not any bidders (buyers) anywhere near where I was so I did not get the chance to ask (WHAT THE HECK IS WRONG WITH YOUR MIND ANYWAY).

Seems most went for market to above market. either there were a lot of idiots with way too much credit being made available, or the banks were bidding them up (who knows !!).

This RE downturn may take awhile (unless something drastic happens to the economy anyway).

[JJGittes]

What exactly is all this ‘additional marketing’ that, along with good pricing, will particularly get the job done? Are we talking about a color ad in the Sunday paper? (Yawn.)

I guess I just don’t get it. Everbody I know goes to realtor.com, craiglist, and/or maybe coldwell’s, prudential or (if they are smart) zip’s site which has useful info about DOM and price reductions. Any listing in the MLS lands in all these of course.

And then there is the sign with some decent flyers on it. Overall though, it seems to me the basics more than sufficiently expose your house to the market.

I do strongly agree about good pricing from the gate though. Otherwise you just ride the market down and send out a bad vibe. Oh, and paint the darn thing, clean it, clear the clutter junk out and maybe plant some flowers for goodness sakes — ie make a friggin effort if you want somebody to actually give you their hundred of thousands of $$.

[sdrealtor]

W/O killing myself over this, additional marketing includes Magazine Quality professionally taken photographs that get people excited about coming to see the property, its choosing the right photos that give them enough information to get excited but not too much that they feel they have already seen it all and dont rush out to see it, its a well marketed open house the first week you go on the market with newspaper ads/online ads/email marketing/neighborhood networking, its professional quality brochures, its an agent that understands what makes the property unique and is able to convery that in the marketing so as to draw in a targeted audience, it is realtor caravans with 100 top producing agents walking through the property the day it hits the market who usually generate 2 or 3 showings of the property within 24 hours. Its having 30 REAL potential buyers bumping into each other the first week the property is on the market and feeling uneasy that they might miss out on something special. Its paying a professional stager to get the house set up to show its best when all this happens. It is all this and more at an out of pocket cost to me in excess of $2,000 before hitting the market while taking a chance that I might not ever see that money again. I look at the listing of a house as if I was launching a new version of Coke. Doing everything at once and right generates excitment around a listing and gives you the best opportunity to sell quickly and for top dollar.

BTW, I know that most agents charging full service fees dont do this and arent capable of understanding this. I agree that SD R that it is important to know what you are paying for. I disagree on the point of being able to provide real statistics on what has worked in the past. The sample sizes for a given agent are just too small and you just dont know what is going to work each time. I’m a big believer in top of the line marketing and service. I believe I’m worth it and that my clients get a reasonable return on their investment.

[HereWeGo]

That’s a very clever sales strategy, sdr.

[davelj]

Another thing (I think) this auction shows is something I’ve discussed in the past. Despite the fact that these properties are overvalued and should get huge haircuts, there is a HUGE amount of money on the sidelines this time around. This wasn’t the case during the early-90s meltdown. I know a lot of wealthy, liquid folks who are not overextended and are waiting for property values to drop. While I think there’s a lot of downside left, when people start talking about 40%-50% drops from peak to trough I keep thinking, “Ain’t likely to happen – there’s just so much real dough out there waiting for the sh*t to hit the fan.” Just something to think about.

[NotCranky]

sdr…WOW..I know you are not the only one doing these kinds of things.Like some of the others here, I am not sure the strategies sell the houses. I am in the price & MLS sells camp along with the idea that a clean and neutral presentation of the house is best if anything is to be done along those lines.I do guess you have a repution for going the extra mile that is paying you dividends. Your strategies may work best in times like this when Turn key properties are getting the most action(If you agree with that?).If your selling clients believe it works and that something less would not have gotten the job done that is what matters ultimately.

[Author]

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