The Reasons That Homes Fail to Sell Even In A great Market!

January 8, 2019January 8, 2019 dennisjrathLeave a comment

The Reasons That Homes Fail to Sell

I gotta talk to you. I was just out to lunch and I got asked a question for the second time today, so I figured you may be asking it, too.

The question was: Why didn’t my house sell? The market is good, so why didn’t it sell?

Well, they were right. The market is good right now. But that doesn’t mean your house will be automatically sold. There are actually only a few reasons that homes fail to sell, so let’s take a look at them.

Reason #1: Your house isn’t priced to sell.

You may have heard me talk about this before. A real estate agent will list your home at a price way over what it’s worth just to get you to sign a 6-month contract. Then they slowly reduce the price until you’ve missed your honeymoon period. This is called buying the listing and should be avoided at all costs. Also, some agents will show up with a comparative market analysis and price for your home already in mind. If they do this, just run! Or listen and check out, just like my house does when I’m listening.

Reason #2: You hired the wrong agent or brokerage.

This may be one of the biggest mistakes you could make when selling your home. Don’t just hire an agent because you see their signs all over town. What if all those signs don’t mean that they’re good at their job, but have a lot of houses listed that they can’t sell? I used to work exclusively with expired listings when I first started in this business and I saw a lot of things go wrong. If you hired a discount brokerage, or even brokerage who assigned a new agent to your case, it is common to see your home listed wrong on the MLS. I have seen homes listed completely in the wrong area. Make sure to interview multiple agents before you hire one or try to hire a broker directly because they have more education and higher stakes in the game.

Reason #3: You’re not marketing enough.

This isn’t always your fault. Sometimes, larger brokerages have a set pattern that they don’t stray from when it comes to marketing houses. They may not do Facebook ads, share it on social media at all, or keep your listing up to date on all websites where people are looking for houses. I’ve even seen some realtors not use Zillow just because they don’t like it, even though 9 out of 10 people say they use Zillow to look for homes. If you’re having trouble with your home’s marketing, you have to hold the agent’s feet to the floor and make sure they get it done.

Reason #4: You didn’t have professional pictures taken.

You’ve probably heard me say this before, but you NEED to have a professional photographer take pictures of your home. You just do. In today’s market, you can’t afford not to use a professional photographer. You know that if you heard the story about the expired listing of the house over in North Olmstead where the agent took pictures of a $200,000 home with her iPhone. You just can’t do it. Take my word for it.

Reason #5: Your home is not in good condition.

The market is moving right now, but it’s only certain price ranges and only house that are in the top level of that price range. If there are 10 houses on the market, you need your house to better than all 10 in order to sell it. That means beds have to be made, dishes have to be done, and everything should be neat and tidy. You don’t want to have a messy home when trying to sell your house, especially if a viewing is taking place. What potential buyers see can impact their final decisions more than you know.

So, price your house to sell, interview multiple agents, market your home, take professional photos, and make sure it is in good condition if you want your home to sell! Don’t make fundamental mistakes, which you can read more about in my book!

If you have any questions, let me know in the comments below or shoot me an email.

Good luck and have a great day!

Uncategorized

Why is the cost to market your home based on a percentage of the sales price?

January 4, 2019 dennisjrathLeave a comment

Why is the Cost to Market Your Home Based on a Percentage of the Sales Price?

Happy New Year! I hope everyone is refreshed and ready to start 2019 off on the right foot!

To start off the new year, I have a question for those of you who are struggling to price your home or wondering how pricing your home works.

Why is the cost to market your home based on a percentage of the sales price? Do you know?

Let’s look at an example to find out: if you sell a $150,000 home, the marketing commission would be roughly 4%, which is $4,200. If the exact same home sells for $300,000, that marketing fee goes up to $8,400.

Do you know what makes up that difference?

Is the paperwork different? No. The paperwork for selling the home for $300,000 is the same as selling the home for $150,000.

Is there more staff involved? No. The same amount of staff is involved in selling the $150,000 home as in selling the $300,000 home.

Does the copy machine run slower? Nope. The copy machine runs the same exact speed no matter what is put through it.

So, why do you get charged more for the exact same service?

I can’t think of a reason. Can you?

That’s my question of the day. You should ask your agent the same one.

I’d be interested in hearing your comments. Leave them down below or message me!

If you want to sell your home in a different way that will even save you some bucks, give me a call.

Education · Lessons Learned · Maximize Your Profit · Real Estate Sales · Selling a home

Don’t Just Hire Any Real Estate Broker (Even if They Are Your Family)

January 2, 2019 dennisjrathLeave a comment

I’ve seen it time and time again. People want to list their house for sale. They see a yard sign in a neighborhood and call that agent up, ready to list their house- all without doing any research!

Instead of looking up their options and familiarizing themselves with the process, they decide to just dive headfirst into selling their home. Not doing any research and hiring the first real estate broker you see is not something I recommend.

In fact, I recently had a client who had a bad experience with trying to sell his house before he came to me. He listed his house with a relative of his, his sister-in-law, because he was expected to. He didn’t even consider any other real estate brokers.

Don’t get me wrong, I understand the situation. Being a part of a family myself, I know how families can be and how awkward Christmas could get. But, there is one thing he could have done that could have made his situation better: research.

You Have to Do Your Research

Research can help you in numerous ways when choosing a real estate broker to list your house. First, it helps you understand what you are getting into. Second, it helps you develop some expectations of your real estate broker and the process. Lastly, it helps you make decisions that are best for you.

This is a Business Decision on Your Part

You’re handing over $10-20,000 of your equity when choosing a real estate broker. That’s more than some people make in a year! If you were spending this kind of money on a car or another large purchase, you wouldn’t go into it without doing research on what you’re buying. The same goes for your real estate broker. Do your research and form some expectations before sitting down with your broker. You don’t want to just give into someone else’s expectations with money on the line.

The same goes even if your real estate broker is a relative. Do some research before you sit down with them by interviewing a few other brokers. Then, talk to your relative and ask them questions. Make sure to tell them exactly what you want up front. Even if you hire your relative to sell your house, doing your research will put everyone on an even keel.

You Don’t Have to Hire Them Because They Are Your Relative

My parents were very generous, but they never said, “Hey, here’s $15,000 just for being our sixth kid!” The same goes for hiring a relative to sell your house. Let your relative know you understand the situation and that you have certain expectations that you are going to hold them to.

If you do this and go into it with your eyes wide open, you’ll have more luck than my client who hired his sister-in-law!

Do you have a question? Let me know! Leave it in the comments or send me a message. I’d be happy to answer it!

Education · Lessons Learned · Real Estate Sales · Selling a home

Have your home Pre-inspected before selling

January 2, 2019January 2, 2019 dennisjrathLeave a comment

Have your home Pre-inspected before selling

Having your home pre-inspected is one of the most important things you can do in the selling process and is something I highly recommend to all of my clients. It can save you time, money, and worry. Just take it from one of my previous clients.

My client decided to list their home without doing a pre-inspection. Once a buyer came up and had an inspection done, there was a small punch list of items that needed repairing. There were things like reverse polarity on some plugs, GFCI that didn’t work in the bathroom, and it was noted that the hot water tank was getting towards the end of its life expectancy. The list of repairs didn’t seem so bad so, no big deal, right?

Wrong. The buyer ending up coming back and wanted $5,000 from the seller just for the hot water tank. The back and forth and negotiating that took place after this could have all been avoided all together if the seller had done a pre-inspection.

Save Your Time

Just like my client, you could just list your house for sale and let the buyer do the home inspection when they come along, but then you run the risk of small repairs turning into large ones as the contractor has to substantiate his fees and more. Not only will you pay more, but it will take longer to finish the sale. Wouldn’t you rather knock it out before things get too far along?

We have also found that of all the houses that have been pre-inspected, 60% of buyers aren’t even doing their own inspection. They take your inspection, review it, and see that the repairs are made without even hiring their own contractor. Isn’t it worth the investment of a pre-inspection if that means the deal will move forward even quicker?

Save More Money

When you have your home pre-inspected by a reputable company, it will cost you anywhere from $350-450, depending on the size of your house. If we’re selling your home for $250,000, that’s small potatoes. When you put the inspection in the buyer’s hands, you have no control over who does the inspection. And if they choose a company that isn’t reputable, you could be overcharged or even told to repair things that don’t even need fixing.

Save Yourself the Hassle

In the end, having your home pre-inspected before you sell it will provide you with a peace of mind. You won’t have to worry about any large repairs coming out of nowhere or other costly problems. By having your home pre-inspected, you will know exactly what to expect and will be able to move forward with the deal sooner rather than later.

Trust me. Doing a pre-inspection of your home before you list it for sale is the best thing you could do. If you have any questions, leave it in the comments or send me a message. I’d be happy to answer them!

Education · Lessons Learned · Real Estate Sales · Selling a home

When is the best time to sell your home?

December 21, 2018January 2, 2019 dennisjrathLeave a comment

When is the best time to sell your home?

Selling your home is a big step. It’s important, so you want to get it right the first time around without any mistakes or regrets. And most of the time, that feeling comes with a lot of questions.

I get questions every day. And I love questions! I like to help where I can. But, there is one question I seem to get every day and I wanted to address it in case others who hadn’t reached out to me were wondering the same thing.

The number one question I get every day is this: when is the best time to sell your home?

The Answer is: Any Time.

Yes! You heard me right! The best time to sell your home is when you and your house are ready. You don’t want to list your house before it’s ready just because you think the timing will attract more buyers. That could cost you in the long run.

I know many people think that there are less buyers in certain seasons, especially during a cold and snowy winter, but that’s simply not true. Actually, houses look their best during the holidays if they’re all dressed up and have decorations out. If you are ready to sell your house around Christmas and love to decorate, take advantage of it and list!

Buyers Buy in Every Season

Buyers are ready to buy when they have the money and financing ready to go and that timing is different for everyone. A buyer isn’t going to get everything together and then say, “I’ll wait until spring when it’s not so cold and snowy to buy a house.” There are serious buyers in every season.

The only time of year that can be slow is in the dead of winter when there’s 24 inches of snow on the ground. But, that only lasts as long as it takes to get the roads plowed. In fact, it’s the week before Christmas right now. It’s 38 degrees outside, but the sun is out, the streets are clean and dry, and we’re having plenty of showings this week. Serious buyers still find a way to get out and look at a house if they are ready to buy.

Accommodate the Season or Weather

One thing to keep in mind when selling with snow on the ground, or in any wet weather, is the potential for wet boots tracking in water and mud throughout the house. To avoid this, keep a mat available for guests to wipe or take off their shoes or boots and keep your home looking tidy. If you’re ready for any season or weather, you’re ready to sell your home.

I hope that clears some things up for you! I understand that deciding to sell your home is tough. If you have any questions, let me know in the comments or through a message. I’d be happy to answer them!

Best of luck!

Education · life and experience · Maximize Your Profit · Real Estate Sales · Selling a home

Pricing Your Home to Maximize Your Profit

December 20, 2018January 2, 2019 dennisjrathLeave a comment

When selling your home, one of the first hurdles that you will face is pricing your home. Naturally, everyone wants to profit as much as they can, but it can be tricky since there are several different ways you can go about pricing your home. Here are some tips to maximize your profit:

Don’t Use a CMA

This will be our little secret. The most common way realtors decide what to price a home is to run a Comparative Market Analysis, or CMA. When I started in real estate 24 years ago, they taught us to do a CMA when pricing home by finding what other homes in the area sold for then listing the client’s home a little above that.

Nowadays, that is a mistake. There are too many other factors that matter to pricing a home these days that only looking at just the prices of other listings in the area will not do your home justice.

If a realtor comes into your home with a CMA already in hand, run away. If they have already done a CMA, they already have a price in mind and will not be open to whatever you want to do.

Use a Market Absorption Report

The best report for today’s listings would be a Market Absorption Report. These reports take into account seasonality, staging, pre-inspection, the condition of the home and property, and more. It’s more than just letting the market dictate the price of your home.

For instance, if you are selling a five-bedroom home and another five-bedroom home recently sold two streets over, a Market Absorption Report will note that the home had tremendous pet odor. The odor was reflected in the price and would affect your CMA. But, with the Market Absorption Report, your home will not be lowered to the price of the home with pet odor.

Another thing the Market Absorption Report will do is look back on the history of homes sold during a specific period of time. The report would tell me that last December, there were 26 houses sold in a particular community and we could expect to sell about the same number of houses because the rates are still somewhat the same.

Don’t Let Your Agent Buy the Listing

Another thing an agent will do that you need to stay away from is called buying the listing. When they do this, they start with a price that is way over what you’re really going to get as long as they get your name on the contract. What happens is you’re locked in for six months and they’ll slowly reduce the price of the home until it is a more marketable price. By then, you’ve missed your honeymoon period. Make sure you don’t fall for this.

Get Multiple Opinions

Before you set a price for your home, or even invite an agent in, get a general idea of what you want to get for your house. When you are ready to invite an agent in, don’t invite just one. Invite in three. Even try to invite in a broker instead of an agent. Invite them in, get their opinions, and take a look at their values. Even if you’re going to sell it for sale by owner. It’s your responsibility to get the most amount of money you can for your house.

Once you’ve taken all of these steps, you will be on the right track to maximize your profit from selling your home. Make sure to let me know if you have any questions by commenting or messaging me. I’d be happy to answer them!

Education · life and experience · Maximize Your Profit · Real Estate Sales · Selling a home

Always Demand That Your Agent Use a Professional Photographer

December 19, 2018January 2, 2019 dennisjrathLeave a comment

Always Demand That Your Agent Use a Professional Photographer

Whether you realize it or not you realize it, photography can make or break a home listing. Bad photos can really turn away potential buyers. The best way to avoid this is to hire a professional photographer to take pictures of your home for the listing- it can make all the difference.

It’s Your Home’s First Showing

Think of it this way: if you were scrolling through dozens of home listings online, would you be more interested in learning more about the home with crystal clear photographs of every room, or the house with blurry photos of just a few rooms when the photographer’s finger can be seen too close to the lens? The first one, right?

The photos on your home’s listing is the first impression your home will make on a lot of people, and you want to make a good first impression if you want all those buyers flocking to your house. Since it’s the first showing your home will get, make sure the photos make people want to buy, or at least learn more, with professional photography.

It Could Lead to Bad Publicity

If you’ve ever searched for a home online, you know that there is a lot of bad photography associated with home listings. In fact, I just came across one in the MLS today where you could literally see the tips of the shoes of the person taking the photo.

There’s a website out there called, something along the lines of, Outrageous Pictures in Real Estate. They feature different pictures of home listings and the lousy photography that people use. Do you think people would want to buy your house if it ended up on this website?

Don’t Skimp Out on Photographs

It may cost you a couple hundred dollars to have a professional take pictures, but when you are potentially making $250,000 from selling your home and paying $14,000 in real estate commissions, it is only a small investment to get the best you can get. There are professional photographers out there that this is all they do and they know how to touch up a photo properly. Not to say that they will photoshop stuff in there, but they will know how to make it pop and catch the eyes of your buyers.

And please, please, please, don’t let your realtor use their iPhone. In fact, ask that they don’t even deal with the photos. Use a reputable photographer whose work you can see and know that it’s good. Get the best pictures that you possibly can to attract more buyers.

The way I see it, professional photography is the ONLY option when listing your home. So, take my advice and make sure you hire one! If you have any questions, please comment or message me! I’d be happy to answer them.

Lessons Learned · life and experience

Get out of the tub before you go down the drain.”

July 11, 2017January 2, 2019 dennisjrathLeave a comment

Picture this. Bath time was over. I was tired and my back was killing me. Anyone who has kids or been around kids knows it’s hard as hell to get them into the tub on bath night, and at two years old it’s real hard. What you might not know is, it’s almost as hard to get them out of the bath when it’s over. So being a newer dad, I said the words, “Get out of the tub before you go down the drain.” Not my finest moment as a dad. My wife was so mad at me because if you thought it was hard to get my daughter to take a bath before I said that, just imagine what it was like now that I added a chance of going down the drain.

I have a lot of moments like that, and after it’s over I think about my dad now. My father had the patience of Job and I, as a new dad, did not. As an example of his patience, once I wrecked my father’s car. I came around a corner going too fast. The car slipped on the ice in the intersection and I hit a car stopped at a red light. I came home, went up to wake him up around 2 a.m., and told him what happened, and then he asked three questions:

(Dad) Are you all right?

(Me) Yes, I am fine

(Dad) Was anyone else hurt?

(Me) No.

(Dad) Where is the car now?

(Me) Parked in the drive.

(Dad) Okay, hit the rack. We will look at it in the morning!

Now my older siblings tell me our dad would have had a much different response had they done the same thing. I sure am lucky to be the youngest of six children! I realize now my parents had a lot of experience raising kids long before I came along. With experience and time they learned to change and adapt, or it could be my older siblings wore them out and I was such a good child I did not need the extra discipline. It seems if those are the keys to life, time and experience, you can’t buy either one.

Why is it that some people don’t see that, I wonder? I have been in the real estate business over 22 years, and today is nothing like it was when I got into it. At the risk of sounding like an old man, back when I started in real estate, we had just received our first fax machine. It had rolls of paper, and the question on everyone’s mind was, would a faxed signature be considered legal on a contract? Only 11.65% of households in the USA had modem-equipped computers back then. (Don’t know what a modem is, ask your parents or grandparents or look it up in the encyclopedia). Needless to say, we had no Zillow or Realtor.com back in that day. Some real estate offices were still receiving listings in books delivered every few weeks. You wanted to buy a home, you came into an office and received a list of homes; the agent pre-qualified you for a mortgage, and more times than not, escorted you to the bank to be qualified for a loan.

Now fast forward to today. Never mind a faxed signature, we don’t even use paper contracts. I meet with some clients who know more than some agents when it comes to buying and selling real estate. Today it’s odd to run into a buyer who has not already been pre-approved. Today’s sellers and buyers are asking me about information about a home that just came on the market 20 minutes ago.

Back when I started, you wore a suit to an appointment, and if you didn’t you were considered un-professional; today if you are wearing a suit you put people off and you are considered some kind of salesman from Glengarry Glen Ross.

Back then the brokers held all of the information on the homes for sale and then getting financed. Today it is a totally different business. Now clients have greater access to the actual marketplace, allowing them to make decisions based on their ability to analyze their entire market area. The monopoly of brokers and agents to control market access should have led to real change, right? Wrong, even with all of the changes, I still see and hear of real estate agents doing business like 1994. They go to a listing appointment armed with their “sales presentation” and try to get the customer’s signature on the listing agreement. They over promise and under deliver, talk about market stats, their company, and their sales. It’s all about the agent. They use ridiculous gimmicks like “A Buy-Back Guarantee program” or “Your Home Sold Guaranteed… or We Buy It” Some agents think it’s 1994 and you are stupid.

What they need to do is help you to make good decisions on how to maximize the home’s value while avoiding fundamental mistakes.

Now when I talk with other agents in the industry, they look at me like I am out of my mind. I had one guy tell me, “The real estate industry has not changed and it never will!” Can you believe that? I don’t know about him or the others in my industry, but my experience has changed me as a dad and broker.

The truth is, this business is broken. A no sale–no fee is only the tip of the iceberg. Imagine for a moment how different this picture would look if the real estate industry dropped the commission-driven 1990s sales culture and worked on a consultancy-based model. More like how any other professional service provider would operate, where the fees are based on the actual work and outgoing costs involved for serving each individual client, rather than a large % of your equity.

When you are ready to sell, call me and I will show you what 22 years of experience has taught me, and if you don’t think my approach is best you are free to hire the gimmick-pitching salesman and give away a % of your equity. It’s your money.

life and experience · Uncategorized

Selling for sale by owner? Here are the pitfalls to avoid!

July 6, 2017 dennisjrathLeave a comment

If you’re considering selling for sale by owner, you’re not alone as I can’t think of anyone who would be happy paying a broker $10,000+, even if they are a friend of yours.

I had a seller call me to discuss marketing for their home as they were on the market For Sale By Owner and she told me she had received at least 25 calls from different agents in attempts to list her home. They called and texted her cell phone, her daughters cell, and they were quite relentless, one agent even showed up at her door at 9am on a Saturday morning. I can’t believe how desperate some agents have become. If someone did that to me, I would have called the police. I think there is a fine line between being aggressive and being a pest, I am telling you this because if someone tells you that I engage in this behavior be rest assured its fake news.

I asked her what kind of marketing they were aiming to do. The vast majority had told her “don’t worry about that”; they would come up with a custom marketing program for her home. I am going out on a limb here but, I would guess it’s as custom-made as a vanilla ice cream cone and a word to the wise, if an agent tells you that they do not have a marketing plan at all then you better run as fast as your legs can allow

Selling For Sale by Owner

Rule number one- Have flyers that can be picked up off the yard sign. This is your best way to engage with a buyer directly. Tell them everything about your home and what you like best about the home and the street. Sell! Sell!! Sell!!! Send them to your website or video, better to have both though.

Next, statistically speaking, the buyer will have an agent with them because according to the last study I read, about 88% of home buyers use an agent or have access to one. So when an agent calls you, tell them that they can bring a buyer through (no preview without the buyer), you are willing to pay them something, but Do Not Agree on a certain percentage over the phone. When they come over, stay out of the way and when they finish touring the property tell them in front of the buyer that you are willing to pay 2% if the buyer buys the home. The buyers are in charge and if they love the home they will buy it, it’s quite unfortunate that the vast majority of agents are not sales people but rather ordinary tour guides.

Next, call around to title companies and negotiate for the best seller fees you can get and then include in your flyer the title company you have chosen to use. At the end of every tour, tell the agent what title company you want to use and if they want to use a different one then let them know that their company will bear the fees. This is crucial in order for you to avoid getting hooked with an expensive title company.

Last and most important, do not accept a contract without A Preapproval certificate for the purchase, Do not accept ”a Prequalification” and make sure you call the lender to check on the financing before signing the contract.