Sensationalizing Real Estate News Does Not Provide A Solution
On Saturday, May 26th, the St. Petersburg Times ran an article in the Business Section about a homeowner -- who will remain nameless in this blog -- who is having a very difficult time selling his house near Euclid/St. Paul's.
The Times led off with a large color photo of this homeowner on his hands and knees, painting large signs which he hopes will sell his home. The signs say things like "Do I have to hit somebody over the head with a brick? This is a truly beautiful home. Are you going to force me to stand out here in a clown suit?" He changes the appeal every few days, according to the Times.
The Times article goes on to point out that the owner had listed his house with real estate agents who were unable to find him a buyer, so now he trying this unconventional approach to selling on his own without the aid of an agent.
Perhaps I'm overly sensitive, but it seems like the Times never misses an opportunity to zing area real estate agents for everything, including the fate of this homeowner. In several instances in this article, the Times is quick to point out all the failures of this seller's real estate agents. In many instances, those comments by the Times were unnecessary and added nothing of importance to the article except to try to put real estate agents in a bad light.
Here's the real situation ...
Apparently this fellow has owned his house for about six years, has lowered his asking price by $86,000, and is now reduced to painting signs and placing them in his yard. The article points out that the seller is now getting a few "lookers", and that he thinks he's doing better now than with a real estate agent.
Well, of course the seller is going to say he's doing better now. Does the Times expect this seller to say he's doing worse with his approach?
To tell you the truth, this situation as detailed in the Times is a classic example of a seller doing it all wrong. Consider these facts ...
1. He wants to make a killing. The fellow bought this house in August, 2001 for $164,000. He put it on the market initially for $433,500, probably around March of 2006 if the MLS system is correct. So his goal was to make a profit of almost $270,000 in about 4-1/2 years. Nice.
2. He overpriced his house at the beginning and it is still overpriced today. How do I know? Simple. He has trimmed $86,000 out of the price and nobody has bought it. That's the market talking to him, but he's not listening. The market is saying that at his current asking price of $339,000, his price for a 2 bedroom/2 bath house in that neighborhood is too high and they are not going to pay it. Despit the price reductions, his house is still not a good value.
3. He went the discount broker route. When he first listed his house, he hired a discount broker who offered a selling commission of only 2%. That is below average and many agents simply don't show homes that don't pay what is considered a full commission. Also, at a discount brokerage, he got a discount broker-style marketing plan, which isn't going to drive many qualified buyers to his door for showings. It looks like he caught on to this lack of marketing effort after about 100 days and fired the discount broker; that might be the only smart thing he did.
4. He hired a full service broker but probably didn't listen. After he fired the discount broker, he hired one of this area's premier agents who works for one of the best brokerages in the city. But he still kept his price too high, originally at about $400,000. He managed to lower it to $345,950, but still no buyers. Reason? His price was still too high. How do I know? The house is still for sale, isn't it?
5. He fired the full service broker and is now doing it For Sale By Owner. He's got some goofy signs he's putting up and is planning to buy some kind of big "For Sale" flag in his yard. What these signs are really saying is "I'm desparate! Come bail me out. I'm looking for an offer. HELPPPPPPPP!"
This man needs to come to grips with the way things are today.
First, in an oversaturated market like we have today, ONLY THE BEST GETS SOLD. Not only does your property have to stand out from the crowd, but you have to make it the BEST VALUE. The market is telling this man his house is not a good value when compared to similar homes.
Goofy signs are fun for people passing by to read, but solid marketing is needed to sell homes in today's market and that includes use of the internet, flyers, newspaper advertising, open houses, broker opens, magazine advertising, and the Multiple Listing Service to name but a few things. There is a very good chance that the next buyer for his house does not even reside in the St. Petersburg area, or even the United States. His signs will not reach those potential buyers, will they? By doing this on his own, he is missing the opportunity to find the best buyer -- the one who will pay him the most money. These days, that requires a world-wide marketing program, not some homemade signs in the front yard.
I guess nobody has told our friend that 80% of today's buyers find the house they eventually buy by looking on the internet before they contact a real estate agent. I don't see how those signs he's painting and planting in his front yard are going to help him with the 80% of people who do their house-hunting on the internet. Do you? Of course, the Times neglected to mention any of these facts in their article on Saturday, as usual.
This seller also needs to give some serious thought as to what he is selling. My gosh, no matter how great it looks from the outside, it's still just a 2 bedroom house in a neighborhood that is questionable. Let's face it, Euclid/St. Pauls is not Old Northeast, Crescent Lake, Snell Isle, or Historic Kenwood. Location matters.
Anyway, this was a pretty crummy story. While the Times probably thought it to be real insightful, those in the know see a different set of circumstances, causes and solutions. Someday, maybe the Times will hire a writer who knows something about what really goes on in the world of real estate rather than writers who just seek to sensationalize a situation.
As for our friend the seller, he needs to get up off his knees, stop painting signs, and hire a real estate professional who will put together a written marketing plan and then execute that plan. He also needs to get his price into a realistic realm. Frankly, I'd like to know if he would be willing to pay his asking price for the house. My bet is that he wouldn't. And obviously, neither will anybody else.
The Times led off with a large color photo of this homeowner on his hands and knees, painting large signs which he hopes will sell his home. The signs say things like "Do I have to hit somebody over the head with a brick? This is a truly beautiful home. Are you going to force me to stand out here in a clown suit?" He changes the appeal every few days, according to the Times.
The Times article goes on to point out that the owner had listed his house with real estate agents who were unable to find him a buyer, so now he trying this unconventional approach to selling on his own without the aid of an agent.
Perhaps I'm overly sensitive, but it seems like the Times never misses an opportunity to zing area real estate agents for everything, including the fate of this homeowner. In several instances in this article, the Times is quick to point out all the failures of this seller's real estate agents. In many instances, those comments by the Times were unnecessary and added nothing of importance to the article except to try to put real estate agents in a bad light.
Here's the real situation ...
Apparently this fellow has owned his house for about six years, has lowered his asking price by $86,000, and is now reduced to painting signs and placing them in his yard. The article points out that the seller is now getting a few "lookers", and that he thinks he's doing better now than with a real estate agent.
Well, of course the seller is going to say he's doing better now. Does the Times expect this seller to say he's doing worse with his approach?
To tell you the truth, this situation as detailed in the Times is a classic example of a seller doing it all wrong. Consider these facts ...
1. He wants to make a killing. The fellow bought this house in August, 2001 for $164,000. He put it on the market initially for $433,500, probably around March of 2006 if the MLS system is correct. So his goal was to make a profit of almost $270,000 in about 4-1/2 years. Nice.
2. He overpriced his house at the beginning and it is still overpriced today. How do I know? Simple. He has trimmed $86,000 out of the price and nobody has bought it. That's the market talking to him, but he's not listening. The market is saying that at his current asking price of $339,000, his price for a 2 bedroom/2 bath house in that neighborhood is too high and they are not going to pay it. Despit the price reductions, his house is still not a good value.
3. He went the discount broker route. When he first listed his house, he hired a discount broker who offered a selling commission of only 2%. That is below average and many agents simply don't show homes that don't pay what is considered a full commission. Also, at a discount brokerage, he got a discount broker-style marketing plan, which isn't going to drive many qualified buyers to his door for showings. It looks like he caught on to this lack of marketing effort after about 100 days and fired the discount broker; that might be the only smart thing he did.
4. He hired a full service broker but probably didn't listen. After he fired the discount broker, he hired one of this area's premier agents who works for one of the best brokerages in the city. But he still kept his price too high, originally at about $400,000. He managed to lower it to $345,950, but still no buyers. Reason? His price was still too high. How do I know? The house is still for sale, isn't it?
5. He fired the full service broker and is now doing it For Sale By Owner. He's got some goofy signs he's putting up and is planning to buy some kind of big "For Sale" flag in his yard. What these signs are really saying is "I'm desparate! Come bail me out. I'm looking for an offer. HELPPPPPPPP!"
This man needs to come to grips with the way things are today.
First, in an oversaturated market like we have today, ONLY THE BEST GETS SOLD. Not only does your property have to stand out from the crowd, but you have to make it the BEST VALUE. The market is telling this man his house is not a good value when compared to similar homes.
Goofy signs are fun for people passing by to read, but solid marketing is needed to sell homes in today's market and that includes use of the internet, flyers, newspaper advertising, open houses, broker opens, magazine advertising, and the Multiple Listing Service to name but a few things. There is a very good chance that the next buyer for his house does not even reside in the St. Petersburg area, or even the United States. His signs will not reach those potential buyers, will they? By doing this on his own, he is missing the opportunity to find the best buyer -- the one who will pay him the most money. These days, that requires a world-wide marketing program, not some homemade signs in the front yard.
I guess nobody has told our friend that 80% of today's buyers find the house they eventually buy by looking on the internet before they contact a real estate agent. I don't see how those signs he's painting and planting in his front yard are going to help him with the 80% of people who do their house-hunting on the internet. Do you? Of course, the Times neglected to mention any of these facts in their article on Saturday, as usual.
This seller also needs to give some serious thought as to what he is selling. My gosh, no matter how great it looks from the outside, it's still just a 2 bedroom house in a neighborhood that is questionable. Let's face it, Euclid/St. Pauls is not Old Northeast, Crescent Lake, Snell Isle, or Historic Kenwood. Location matters.
Anyway, this was a pretty crummy story. While the Times probably thought it to be real insightful, those in the know see a different set of circumstances, causes and solutions. Someday, maybe the Times will hire a writer who knows something about what really goes on in the world of real estate rather than writers who just seek to sensationalize a situation.
As for our friend the seller, he needs to get up off his knees, stop painting signs, and hire a real estate professional who will put together a written marketing plan and then execute that plan. He also needs to get his price into a realistic realm. Frankly, I'd like to know if he would be willing to pay his asking price for the house. My bet is that he wouldn't. And obviously, neither will anybody else.
-30-
posted by Terry Ward at 6:37 AM
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