Foreclosure auction

[sdrealtor]

My strategies are set for the current conditions and exploiting them. I have no standard marketing plan. As times change, I adjust as I see necessary. I dont pretend to be a genius or that this is rocket science. Frankly I often wonder why others dont do things better. The I look around at the 90% of licensees adn see a bunch of nitwits.

I;m in the price + mls sells camp too, just not 100%. I think that is 80% to 90% of it. I do believe the quality of the agent makes up the other 10 to 20% of the selling process. A good agent’s greatest impact is probably on the terms and getting non-price concessions for the client.

[sdrealtor]

One last thing to make sure we are on the same page as to what is the difference we are talking about. The discount brokerages harp on the savings over 6% commisions to inflate the savings they offer. I have never been on a single website or seen a single piece of marketing by discount operations that isnt focused on the savings over 6%. Every single survey I have seen the last 3 years and eveything Isee on the market indicates that the market average commission is 5% not 6%. I havent taken a 6% lisitng in at least 3 years and know very few agents that have.

So on a $400K home we are talking about a maximum of $6,000 savings not the $10,000 that gets tossed about. Beyond that you can do the math. I’m not saying $6000 isnt alot of money because it is alot of money. But I think there is a ton of misinformation going on among the discounters.

[NotCranky]

sdr…I Never really thought about it much but reading your posts this last week or so, along with a little introspection and its pretty clear why I have only been advocating for the seller in 25% of my deals.I tend to want to guess you have a higher proportion of sellers in your mix of transactions? Advocating for buyers suits me just fine anyway. I do see the limitations of being one sided on the situation.
Thanks

[NotCranky]

JJ,
You are making good points . Some clients come up to me and say I want to see x house. I do some research and find they have found the best deal for the area. They don’t want it though, They call me a week later …I want to see this house in this location, again they have found the best deal hands down. This type of person does not want to spend time with Realtors really. For many people the celebrity of buying a house is a big deal.They milk it and if you don’t have the whole cow forget it. I think sellers like what sdr is doing and it may have a profound effect on willingness to take his suggestion on price and other issues. HE has won them over. I think the staging and expensive presentation of literature can backfire too. There are plenty of people who would say “these people are trying too hard I am out of here.” Or “I am not paying for this crap”, If they feel the staging was a gimmick for suckers. Thats why I think the real deal is what do sdr’s clients think about it ….I think they are impressed.I think higher end buyer’s would expect it too if it is trendy too. Trend seems to have something to do with it. Besides a large percentage of people think that they should be sold to in a certain fashion, even if they are not aware of it.

[drunkle]

sdr’s strategy seems quite rational, time tested, effective… and obvious. for the same reason that the auction sold homes at market or higher, for the same reason that car dealers use the same tactics, for the same reason that churches use similar tactics. get the people in the door and you’ll make money.

assuming that some percentage of people are lookie loo’s, some percentage are non-competitive and some people are simply obstinate. the rest is your market. so, the more people you draw in, the greater the percentage of potential buyers. if it turns out that only 1% of your exposure is a buyer, you’re obviously going to be better off with 100 heads than you are with only 10.

now, taking that 1%, you manipulate their psycology. of 10 heads, only one makes an offer, they aren’t going to budge if they know it. if, on the other hand, you have 100 heads, 10 of which are buyers, they’re going to be anxious if they see other potential buyers. they don’t know whether or not those others are serious, they just know they’re there. and an anxious (or panicked, as in the last “houses are going away and never coming back” chicken little scenario) buyer is more likely spend than a calm and in-control buyer.

and of course, the house (car, tv, game console, cabbage patch kid, etc) still has to show better in down times than in up…

as for discount or “honest abe” minimal marketing/effort services:

“you get what you pay for”, meaning anything that goes wrong will be blamed on you resulting in bad word of mouth.

people want everything for nothing, meaning they’ll bargain hunt services, try to milk you for additional work and cut and run if it is opportune.

low price = cheap. people perceive value in dollar signs.

they couldn’t afford it anyway; they’ll just suck your time and energy dry.

lack of long term stability in cut throat markets. when a market is defined only by price, name brand loyalty goes out the window.

just a thought.

[JJGittes]

Sounds good. Yes, seriously, all that, and maybe even pricing it at what the others in the neighborhood have recently sold for, or even lower considering the current downward trajectory of the market, could actually bring in some buyers.

Now, if you could excuse me, I have to supervise a rocket launch in 5 minutes.

[NotCranky]

JJ,
Hate to bother you in the middle of a launch…
You still have your rocket scientist job after that little Space Shuttle Columbia thingy?

[JJGittes]

Of course, civil service and all that…

[drunkle]

“Sounds good. Yes, seriously, all that, and maybe even pricing it at what the others in the neighborhood have recently sold for, or even lower considering the current downward trajectory of the market, could actually bring in some buyers. ”

right, that’d be the biggest attractor in this or any market; a good price. even if the house is crap and looks it, offering it at a reasonable price is key. “reasonable” is of course subject to market pressures. once you get people’s attention, get them in the door, get a few offers in, you have the leverage to pick, chose and counter (up, of course).

that doesn’t guarantee the owner will be living high on the hog, just means you made a sale…

[sdrealtor]

a reasonable price alone isnt getting it done these days. crappy houses just arent selling well in this kind of market. W/O the prospect of appreciation people want something turnkey.

[an]

I would have to disagree. As a prospective buyer, I don’t care about being turnkey or not. Price would make a bigger difference to me. If a non-turnkey house is price as such, I would prefer that over an similar turnkey house since I get to customize it the way I like to. Many turnkey houses still have things that they upgraded that I do not like.

[no_such_reality]

I’d agree with AN, turnkey is nice, but the primary problem with non-turnkey homes is the owner isn’t accepting the reality that they aren’t turnkey. That the difference between the turnkey and them is $50,000 of hard cash and 3 months or 6 months of having a contractor around the house.

That’s a hard, big hunk of money and time.

What I’ve seen in the OC is turnkey, new kitchen upgrades is $899,000. The one that needs paint, carpet, and has a kitchen from 1977 wants $875,000.

[drunkle]

“a reasonable price alone isnt getting it done these days. crappy houses just arent selling well in this kind of market. W/O the prospect of appreciation people want something turnkey.”

since appreciation is out of the picture for the time being, “reasonable price” will have to reflect that.

i would think that in an appreciating market, a crappy house will still have a smaller price tag than an equal but pristine home given the same time period.

it seems however, that you’re alluding to two different markets; the flipper market and the residence market. “reasonable” is going to mean two different things for those two groups. for either group, “reasonable” is gonna be low for either the depreciating market conditions or for “real”, non speculative valuation.

alot of the people that post up “my wife is hounding me to buy a house, should i?” are in the residence position, people who are willing to take a loss in the short term for ownership. they’re actually looking at the house, the neighborhood, etc and not particularly dollar signs. a crappy house for them that would require work is going to be worth far less simply because they don’t have the connections, the contractors to do the labor cheap/shoddy (edit: if they even have any vague notions of how much the work will cost; ignorance probably leads to exaggeration), not to mention whether or not “crappy” relates to the surrounding area… you’re obviously not going to sell an upscale 2+2+dog a shack in city heights no matter what the price.

[sdrealtor]

In a rising market inventory tends to be very thin and buyers more apt to take whatever they can get. In a falling market buyers want turnkey AND a great price. That is what is selling right now. Fixers arent selling and overpriced palaces arent selling. We can express our opinions all we want but that is what’s is happening right now among real rather than “prospective” buyers. When we hit bottom bargain hunters will swarm the fixers in an attempt to be at the absolute bottom. The problem is a fixer is often alot more of a fixer than they bargained for.

[drunkle]

In a rising market inventory tends to be very thin and buyers more apt to take whatever they can get.

sure, but assuming that there are two equal homes for sale at the same time, the fixer is going to be worth less.

In a falling market buyers want turnkey AND a great price. That is what is selling right now. Fixers arent selling and overpriced palaces arent selling.

isn’t that what i’m saying? you say that buyers want turnkey and a great price, i’m saying that a dump requires an even “greater” price. if a circa 1996 dumpster price *won’t* be offered or even a circa 2000 dumpster, then it wont sell and it’ll simply slide down anyway: “When we hit bottom bargain hunters will swarm the fixers “.

We can express our opinions all we want but that is what’s is happening right now among real rather than “prospective” buyers. When we hit bottom bargain hunters will swarm the fixers in an attempt to be at the absolute bottom. The problem is a fixer is often alot more of a fixer than they bargained for.

i think we’re surely in the middle of discussing sales and marketing theory at this point. while you certainly have real sales to show for, you can’t deny that the prospective buyers, not just bottom bargain hunters (who are more likely than not to be the investor or flipper types anyway) are apt to become real buyers if given the opportunity. that opportunity is “reasonable pricing”, pricing which really still doesn’t exist.

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