how not to play poker with your inventory homes presented by kate kelley-dilts, scrp, gms, cerc vice...
TRANSCRIPT
How Not to Play Poker with Your Inventory
Homes
Presented by Kate Kelley-Dilts, SCRP, GMS, CERC
Vice President, Client Development-Western RegionNEI Global Relocation
Omaha, NE
May 21, 2008
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Relocation Home Sale
All transferees:
• Home Marketing Assistance
With formal home sale programs:
• Pre-Inventory
• Inventory
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Home Marketing Assistance
• For all transferees • Transferees engaged in the process
– Educate and advise on today’s challenges
• Key factors:– Partnering with a proven relocation Realtor– Pricing competitively – Condition– Marketing strategy
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Maximum Exposure
• Relocation real estate professionals
• Ensure great condition and appearance
• Best price out of the gate
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Maximum Exposure
• Internet is where it’s at!!
– More than 20 photos generate 10 times the leads/views
– Statistics show
• 1 photo = 70 DOM 6 = 40 DOM 20 = 32 DOM
• 1 photo = 91.2% of original price
• 6+ photos = 95% of original price
• Location, location, location is now photos, photos, photos!!
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Maximum Exposure
• Attract attention– List at even numbers for two search ranges
– Listing at non-round numbers between ranges: i.e., $231,102
– Weekly, bi-weekly reductions
– Unusual open houses • Evenings, Sunday mornings
• Make the interested buyer an offer
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Marketing Actions• Condition – improvements to compete • De-clutter, de-personalize• Staging options• Know the competition
– Foreclosures, construction, days on market (DOM), absorption rate
• Educate and advise on competitive list price– Aggressive action with “stepped down” reductions– Add verbiage “home listed below appraised value”
• Next steps
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Marketing Trends• Guidance/mandate on Realtor selection• List price parameters
– i.e., initially 105% of BMA averages, then reduce– Adjust again if/when appraisals conducted
• Transferee encouraged to entertain all offers– Listening to the news, articles, TV – Rely on assistance to evaluate purchase offers
• Repair and improvement allowance• Home sale bonus • Appraisals to gauge listing price
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Marketing Trends
• Transferees consider offers less than Buyout
• Formal home sale offers less than established price (appraised value)
• Buyer incentives
• Loss on sale (capped)
• Short sales
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Pre-Inventory• Preparation required
– Before a home is purchased from a transferee • Review marketing strategy used to date• Order updated BMAs • Condition of home
– What has been repaired– Bids on repair/improvements needed– Strategize on expense vs. value
• Project marketing plan– List price to established value (loss on sale)– Advise on sale price to extended carrying costs
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Inventory Marketing
TIME IS MONEY
Industry Average Home Sale Costs:
Employee-Generated Sale 9%
Guaranteed Buyout 18%
Difference 9%
Additional cost on home value of $250,000 $22,500
Additional cost on home value of $450,000 $40,500
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Inventory Home Sale Challenges
• Prolonged market exposure
• Market conditions vs. initial marketing efforts
• Curb appeal
• Condition – house is “naked”
• Marketing tools– Internet, creative approaches
• Negotiations for highest price– Concessions that make sense– Critical buyers
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Home Marketing Success
• BMAs revealed “too much stuff”
• Advised transferee to de-clutter and store extra/personal items
• House showed much neater, cleaner
• Sold in shorter timeframe
Employee Sale = higher transferee satisfaction, lower company costs
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Preparing a Home for Inventory
Marketing • Pre-arranged for painting
upon transferee vacating
• Competition: supply of homes in area = 12+ months
• Staging and neutralizing costs = $10,400
• Home sold within 3 months
• Saving 9 month’s carrying costs = $71,800
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Inventory Management• Resistance to pink kitchen
• Extended marketing time due to new construction in local market
• Immediate paint, appliances to compete
• Reduced carrying time net savings = $17,222
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Challenging Home Sale
• Remote location
• 2 heavy smokers, 4 ferrets
• Property required reconditioning
• Ducts and floors cleaned, repainted, tear down shed
Employee vacated upfront, repair immediately Sold in 90 days
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Fireman’s Dream• Condo across from fire station
• Noise a challenge
• View – direct and rooftop
• Appeal to market buyers
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Where to Park?
• Home improvement resulted in no off-street parking
• Added a front circle drive
• Competitive home
• Sold shortly thereafter
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Functional Obsolescence
• Attracted to home – until you opened the front door
• Entry post a challenge
• Staging benefit?
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Walk Right In?
• Stairs immediately inside door
• Addressed in HMA, appraisals
• Some things cannot be changed
• Creative descriptions needed
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Relocation Homes Sell• With transferee’s knowledge of market
• Proactive marketing plan
• Put your best “house” forward
– Realistic listing price
– Best condition
• Maximized exposure
– Relocation Realtors
– Web photos
– Identify potential buyer pool
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Resulting In
• Increased transferee satisfaction
• Managed home sale costs
• Partnerships providing expertise
The next concern ~
Transferees buying smart in the new location