PRICING<\/strong><\/h2>\nWhile we will get into the real secret of finding buyers later in this chapter, we will start with the fundamentals. One of the fundamentals of the fundamentals is pricing<\/em>.<\/p>\nHow do you know where to set the price of your property? Are there any rules you should follow? These are good questions which deserve good answers. The good answer is simple: Set your selling price at fair market value. It doesn\u2019t matter how many buyers you get standing at your door, if your property is substantially overpriced, most of them will back out. Your selling price should correspond with those of the comparables which you and\/or your appraiser earlier gathered. Once the buyer discovers that you are not <\/em>trying to rip him off with too high a price there will be little holding him back from signing on the dotted line. All people want a fair deal. So give them a fair deal, and they will give you some green.<\/p>\nMarketing <\/strong>Advantage<\/strong><\/p>\nAn appraisal can actually assist you in attracting more buyers. When working with a seller, I always explain to them the many benefits of getting an appraisal prior <\/strong>to putting their home on the market. Then, if the appraisal comes in at a price that is in line with our research of the competition, we set the asking price of their home $100 under the amount of the appraisal<\/strong>.<\/p>\nThis way, we can advertise their home as being sold below market value, which always increases the amount of buyer traffic coming through<\/strong>. When hiring an appraiser, they will usually ask what the purpose is. Are you doing so for selling purposes or for refinancing purposes?<\/p>\nAn appraiser will usually put a higher value on your property if you are simply refinancing. As such, always tell them you are refinancing. You will end up with a higher appraised value and a lot more breathing room to negotiate!\u00a0 It is well worth taking a few dollars off your price for the additional traffic it brings, as this typically results in a faster sale.<\/p>\n
There is another factor you need to remember: Because you will almost always buy your properties at discount prices \u2014 you are a savvy investor who buys only distressed property \u2014 you have room for negotiation. In other words, if you are in a pinch or for some reason really want <\/em>or need <\/em>to sell a house, you can set your selling price below <\/em>fair market value and still make a good amount of money. If or when you do this, BE SURE TO LET THE POTENTIAL BUYER KNOW. Show them the documentation of the actual comparables. Let them see for themselves what a great deal they\u2019ll be getting. When you do this, I can virtually guarantee that no buyer will back out. You will sell your home, and sell it quickly.<\/p>\nNegotiating <\/strong>Advantage<\/strong><\/p>\nIf a buyer comes through the property and wants to pay less than we\u2019re asking, the appraisal offers solid ground for us to negotiate. Think for a moment about what a buyer does when looking at a property. In fact, imagine a young couple coming through your home. Alongside of them is their father, tagging along to make sure they don\u2019t buy into trouble.<\/p>\n
One thing you can count on is that they are going to try to lower your price <\/strong>and make a deal<\/strong>. But, let\u2019s say you\u2019ve done what I suggested and set your price just a few dollars lower than the appraised value.<\/p>\nThey tour through your home, checking out the various rooms, looking at the layout, making comments to each other here and there about some of the different features. They ask you a couple of questions about different things in the home and in the neighborhood and make various small talk.<\/p>\n
Eventually, though, the tour ends and you come to a stop with them in the living room for\u00a0 more serious discussion. At this point, if they\u2019re not interested, they will typically say a couple of more things to each other, make a nice comment or two to you and be on their way. If they are interested in your home, however, what will typically happen at this point is the father will start in and begin talking about all of the things that are wrong with your property<\/strong>. All of the reasons your property isn\u2019t <\/strong>worth the price you are asking.<\/p>\nIn other words, he will start setting you up for the kill!<\/strong><\/p>\nBut, having prepared yourself in advance, you simply pull out your appraisal and say, \u201cWell, actually, I\u2019ve already had it appraised. In fact, I\u2019m actually asking less, because I want to get a quick sale.\u201d<\/p>\n
What is he going to say?<\/p>\n
You have pre-empted his strike and stopped him dead in his tracks. Now, the floor will be opened up for realistic negotiations <\/strong>on the part of both parties.<\/p>\nMost buyers aren\u2019t out to wheel and deal, nor are they out to steal your property off from under you for 20% of market value (that\u2019s your job!). They simply want to ensure that\u00a0 they\u2019re getting a fair value<\/strong>. Show them <\/strong>that they are and you\u2019re well on your way to a sale.<\/p>\nPutting It All <\/strong>Together<\/strong><\/h2>\nWhen formulating the perfect asking price for your property, remember that there is no perfect price<\/strong>. The value of a property is, ultimately, whatever a buyer will pay. Your job in researching the competition, and in exploring all of the other avenues we have talked about, is to come up with a price that is as close as possible to a buyers\u2019 perceived value of your property<\/strong>. Then, adjusting it for timing.<\/p>\nIn this way, you\u2019ll have the best chance of getting your property sold on time, for the least amount of hassle and, most importantly, for the absolute highest price the market will bear!<\/p>\n
PROPERTY CONDITION<\/strong><\/h2>\nThe other fundamental which bears on selling property is property condition<\/em>. No one wants to buy or live in a junker. With this in mind, there are a number of techniques that go into making property show well. As most of the properties I buy and sell are seasoned (not new), they usually require degrees of renovation. There are tricks to doing this right. Other than what we covered in \u201cProperty Inspection and Valuation,\u201d there are specific techniques you can use to make your house look as attractive as possible, while spending as little money as possible. Let me tell you what some of these are.<\/p>\nGetting that Curb Appeal
\n<\/strong><\/p>\nWhat you are shooting for is called \u2018curb appeal.\u2019 This means that the property is as attractive as it can be as the buyer pulls up to the curb to look at it. To achieve this there are specific things you do and don\u2019t do. For our purposes \u2014 selling houses \u2014 we will extend the curb appeal idea to the inside of the home as well. It is nice to get people out of their cars and into the front door, but if they turn right around and march back to their cars, you are still not going to sell houses. The interior also needs to \u2018show well.\u2019<\/p>\n
Rule #1<\/strong>:
\nAs a real estate investor you do not spend more money than you have to on any renovation. Making the property functional, safe, and appealing does not mean you or your contractor have to go out and purchase the most expensive repair parts on the market. Don\u2019t use tile on a bathroom floor when linoleum will do. Don\u2019t use name brand faucet fixtures when the cheapest you can find will do. Even inexpensive faucets look nice when they are new! One way to easily tell what quality of replacement parts you should use is the general condition of the neighborhood the property is in, as well as the price range of the house. Because I work with lower-to-middle income folk who have rented all their lives, their expectations are not high. Putting top-of-the-line components in their homes would be a waste of money. On the other hand, if you end-up working with middle or high income people who are accustomed to higher quality items in their homes, achieving curb appeal would include using components of a quality equal to the norm of the neighborhood the property is in.<\/p>\nRule #2: <\/strong>
\nThe house must be as appealing as possible from the curb. This means the landscaping, if there is a front yard, needs tended. Grass should be green and mowed; bushes trimmed; leaves raked; and there should definitely be no debris around (garbage, loose papers, broken swing sets, construction materials, etc.). The back yard, if there is one, is a little less crucial. Because it is usually only accessed from the back door of the house or seen through a back window, it is simply not as important as the front. Even so, it should be clean of debris or clutter; if there is a lawn it should be mowed and green; leaves should be raked, and so forth.<\/p>\nUnless there is new or near new paint on the exterior, the house should be painted, and preferably in a neutral color, such as white or beige. Trim can be almost any color, but stay away from unusual or bright colors (red, pink, bright green, or anything neon). Your aim here is to attract most people, not the rare cookie. Selling houses of unusual colors can be very difficult even if everything else about the property is top notch. So be warned.<\/p>\n
There should be no obvious signs of disrepair from the outside. Torn or missing window screens, or broken fences immediately make a bad impression. An easy and inexpensive item you should always replace is the front door knob and lockset. Nothing is more distasteful for your potential buyer than reaching down to open the front door and finding some corroded, dirt encrusted piece of metal to grab onto. Similarly, if the front door is in poor condition, replace it. First impressions last.<\/p>\n
Rule #3<\/strong>:<\/p>\nThe interior should be tasteful and correspond with the quality of surrounding homes of a similar price. If the home has a distinct entryway\/foyer, it should have new or like new flooring. All carpeting should be new or like new. If you replace the carpeting, be sure to use a thick, high quality padding; it gives the impression of expensive carpeting without having to use expensive carpeting. All faucets should be new or like new. Replace any sinks if they show any wear or defects. Replace toilet seats and lids. Linoleum floors in bathrooms and kitchen should be new or like new.<\/p>\n
New light fixtures are a big plus. Make sure the windows are clean. The entire place needs fresh paint. All paint should be white and the carpet a light neutral color.<\/p>\n
Replacing small, inexpensive items like light switch plates and towel racks go a long way toward improving the appearance of a place.<\/p>\n
Repairmen<\/strong><\/p>\nYour walk-through inspection was completed before you purchased the property. You know exactly what needs fixed to transform the property into marketable condition with high curb-appeal. The question remains: Who should you hire to do the work?<\/p>\n
While there is something called \u201csweat equity,\u201d in which you, the owner, helps increase your equity in the property by doing all or most labor and renovations yourself, this idea does not go along with my program. To make lots of money as a real estate investor you need to buy and sell properties quickly. Doing repairs yourself is a very slow, time consuming process; not to mention \u2014 it is too much like work! I do not recommend it. Hiring your repair work done is the only way for an investor to go. So who should you hire? I suggest you work with two types of professionals, handymen and contractors. Each has their place in the renovation business. While contractors can do or hire someone to do all the work your property may need, if you use only contractors you will end-up spending too much money. Contractors are expensive.<\/p>\n
The thing to do, then, is find a handyman you trust and who does good work, and hire him to do the majority of renovation on your properties. Tell him that you buy and sell many properties in a year, and that if he does good work for you at a bargain price, you will keep him very busy. They like that. \u201cBusy\u201d equals job security; it means bread on their table. But how do you find a good handyman? Put an ad in your local newspaper, saying that you have a lot of work for a handyman; or, just look for advertising handymen in the \u201cServices for Hire\u201d section of your paper. Either way, once you make contact, interview several. Take each of them on a walk-through of one of your properties. It is important that they walk through the same <\/em>property. In this way you can determine many important factors: Do you like them? Are you comfortable working with them? What do they tell you needs renovating? What kind of a price quote do they give you? In short, you can compare handymen and decide which one you want to hire. Hint: It is not always the guy who offers the cheapest quote that you want to hire.<\/p>\nVery often \u2018cheapest quote\u2019 equals \u2018cheapest work.\u2019 Handymen can do most repairs and renovations you may need done. They can usually do interior and exterior painting, drywall repair, minor electrical and plumbing, most carpentry repair, garbage disposals, window screens, linoleum floors, sinks, faucets, toilet repair or replacement, and so on. About the only things handymen should not be expected to do is major electrical, major plumbing, major carpentry, or reroofing. These latter repairs are the domain of licensed contractors.<\/p>\n
As for contractors, you can locate a good one to work with by using the method I describe above for handymen. One exception to this is that most contractors will not be\u00a0 found advertising in papers. Rather, the best way to contact them is through your local Yellow Pages. www.yellowpages.com\u00a0 or www.angieslist.com<\/p>\n
When you come to actually own a property which requires repair, you will not only want to locate a handyman and contractor you can trust, but enter into a repair contract with them so you can all rest comfortably knowing who will repair what, and what those repair costs will total. It is unwise to commission any repair work without a contract. Why? You will know why if you send a contractor in thinking it will cost you $3,000 for his work, but he comes out telling you the house required $7,000 of his labor and materials! Clarity of work parameters and corresponding costs are vital to you if you hope to maintain your calculated profit margin. This being so, two forms of construction contracts are included below for your examination and reference. While the sample contracts are contractor-specific, they can easily be modified to accommodate a handyman; simply duplicate the form, substituting the term \u201chandyman\u201d wherever the word \u201ccontractor\u201d appears. DO NOT send someone in to do repairs without a contract.<\/p>\n
Agreement Between Owner and Contractor<\/strong><\/p>\nThis agreement is hereby made and entered into this _____ day of<\/p>\n
______________, 19______, by and between ________________, of ________________,<\/p>\n
hereafter called Owner, and ___________________, of ____________________, hereafter called Contractor.<\/p>\n
The said parties, for the considerations hereinafter mentioned, hereby agree to the following:<\/p>\n
1. The Contractor agrees to provide all of the material and labor required to perform the following work for:<\/p>\n
(Describe work to be Performed)<\/em><\/p>\nas shown by the drawing(s) and described in the specifications prepared by ______________________ and provided by the Owner, which are identified by the signatures of the parties to this agreement and which form a part of this agreement.<\/p>\n
2. The Owner hereby agrees to pay the Contractor, for the aforesaid materials and labor, the sum of $____________________, in the following manner:<\/p>\n
(Describe Method and Timing of Payment)<\/em><\/p>\n3. The Contractor agrees that the various portions of the above-described work shall be completed on or before the following dates:<\/p>\n
(Insert Dates)<\/em><\/p>\nand the entire above-described work shall be completed no later than the ______ day of<\/p>\n
_________________, 19______.<\/p>\n
4. The Contractor agrees to provide and pay for all materials, tools and equipment required for the prosecution and timely completion of the work. Unless otherwise specified, all materials shall be new and of good quality.<\/p>\n
5. In the prosecution of the work, the Contractor shall employ a sufficient number of workers skilled in their trades to suitably perform the work.<\/p>\n
6. All changes and deviations in the work ordered by the Owner must be in writing, the contract sum being increased or decreased accordingly by the Contractor. Any claims for increases in the cost of the work must be presented by the Contractor to the Owner in writing, and written approval of the Owner shall be obtained by the Contractor before proceeding with the ordered change or revision.<\/p>\n
7. The Owner, Owner’s representative and public authorities shall at all times have access to the work.<\/p>\n
8. The Contractor agrees to re-execute any work which does not conform to the drawings and specifications, warrants the work performed, and agrees to remedy any defects resulting, from faulty materials or workmanship which shall become evident during a period of one year after completion of the work.<\/p>\n
9. The Owner agrees to maintain full insurance on the above-described work during the progress of the work, in his own name and that of the Contractor.<\/p>\n
10. In the event the Contractor is delayed in the prosecution of the work by acts of God, fire, flood or any other unavoidable casualties; or by labor strikes, late delivery of materials; or by neglect of the Owner; the time for completion of the work shall be extended for the same period as the delay occasioned by any of the aforementioned causes.<\/p>\n
11. In the event the work is delayed due to neglect of the Contractor, the Contractor agrees to pay the Owner the sum of $_________________ per _______ as liquidated damages until such time as the work is completed.<\/p>\n
12. The Contractor agrees to obtain insurance to protect himself against claims for property damage, bodily injury or death due to his performance of this agreement.<\/p>\n
13. Neither the Owner nor Contractor shall have the right to assign any rights or interest occurring under this agreement without the written consent of the other, nor shall the Contractor assign any sums due, or to become due, to him under the provisions of this agreement.<\/p>\n
14. This agreement shall be interpreted under laws of the State of _______________.<\/p>\n
15. Attorney’s fees and court costs shall be paid by the defendant in the event that judgment must be, and is, obtained to enforce this agreement or any breach thereof.<\/p>\n
IN WITNESS WHEREOF, the parties hereto set their hands and seals the day and year written above.<\/p>\n
__________________________ _____________________________<\/p>\n
__________________________ _____________________________<\/p>\n
\n<\/strong><\/p>\nTHE SECRET TO SELLING PROPERTY<\/h2>\n
Now that we have the preliminaries \u2014 pricing and condition \u2014 in order and out of the way, let\u2019s get to the good stuff. What is the secret to finding buyers? What is the secret to having buyers standing in line at your door? Why do I have so much success locating buyers when many agents, brokers, and other investors just can\u2019t get the job done? It\u2019s simple! I get MARKETING<\/p>\n
What Is Your <\/strong>Home Marketing Budget<\/strong>?<\/strong><\/p>\nAfter you have arrived at an asking price, there is still one very important step left. You must take the time to sit down and calculate what you will get out of the sale of your property, based on that asking price.<\/p>\n
That is, how much money will you walk out of closing with<\/strong>?<\/p>\nOnce you know this figure, you\u2019ll be able to work backwards and determine how much money you can budget to market and sell your property<\/strong>, without having to invest outside capital.<\/p>\nIn order to do that, you need to complete what I call a Marketing Budget Overview<\/strong>.\u00a0 First, this form calculates what you can expect to get out of a sale, once the standard closing costs, agent sales commissions, etc., have been subtracted out.<\/p>\nThen, it subtracts out the amount of money you need from the sale. Remaining is the amount\u00a0\u00a0 of money you have to spend on marketing and advertising, and still break even<\/strong>.\u00a0 Since you are basing your calculations on the asking price, rather than the actual sale price, this will only provide you with a rough estimate<\/strong>. Even so, it is essential that you know these figures before you put your property on the market. For one thing, this is your last indication <\/strong>of whether or not you should be handling the sale of your property yourself.<\/p>\nOnce you\u2019ve determined how much time and money it is likely going to cost you to market\u00a0 and sell your property, as well as how much your time is worth to you, you might find that hiring an agent would actually cost you less <\/strong>in the long run.<\/p>\nLike it or not, even though you may be selling your property yourself, there will still be a number of expenses involved. If you find yourself unwilling to spend the necessary time and money <\/strong>on marketing to sell your property, than you had better turn the sale over to a real estate agent now and save yourself the time and aggravation<\/strong>.<\/p>\nWithout proper marketing, your property is likely to languish on the market for a number of months without any action. If you have the time to sit and wait for a buyer to stumble in, fine. Otherwise, you\u2019re not making a very wise bet.\u00a0 By completing the Marketing Budget Overview<\/strong>, you will develop a very good idea of what you have to work with, in terms of money and other resources, to get your property on the market and sold.<\/p>\nThe <\/strong>Condition <\/strong>Of <\/strong>The Market<\/strong><\/p>\nThere is still one last important thing to consider when pricing your property.\u00a0 Based on the condition of the market at the time you\u2019re selling your property, you may want to consider offering certain seller concessions <\/strong>to make your property stand out from the rest of the competition.<\/p>\nMany factors can have a negative effect on the real estate market. Factors such as high unemployment, high interest rates, or high inflation. If this is the case, you may want to offer certain concessions to help counteract these conditions.<\/p>\n
\n
Such concessions might include<\/strong>:<\/p>\n\n- Helping a buyer with closing costs<\/strong>.<\/li>\n
- Paying points <\/strong>to help the buyer get a lower interest rate or a lower down payment.<\/li>\n
- Holding some of the financing<\/strong>.<\/li>\n<\/ul>\n
All of these will contribute to helping more buyers to be able to afford your property, and all should be looked at as possible marketing tactics to help make your property more financially attractive <\/strong>to the buyer market.<\/p>\nYou may even want to consider some of these tactics in a good real estate market. As I said before, buyers are usually not as concerned with price as they are with the down payment and monthly payment.<\/p>\n
If you can find a way to reduce either of these, you have the best chance of getting\u00a0 your top sale price<\/strong>.<\/p>\nFor instance, there are going to be many buyers who can afford the monthly payment on\u00a0 your property, but simply can\u2019t afford to make the down payment. You could solve this problem for them very easily by:<\/p>\n
\n- Offering to pay part of their closing costs.<\/li>\n
- Offering to pay a couple of points.<\/li>\n
- Paying points <\/strong>will allow them to get a lower down payment, lower closing costs, or a lower<\/li>\n
- interest rate. This could very easily save them $2,000 to $3,000 <\/strong>or more in up-front costs.<\/li>\n<\/ul>\n
By doing so, the number of buyers who can afford to buy your property could easily double, triple, or even quadruple<\/strong>.<\/p>\nAt this point, you may be thinking, \u201cwhy would I want to give away all that money?\u201d The answer is, you don\u2019t have to!\u00a0 If you offer to pay $2,000 towards closing costs, for instance, just raise the sale price\u00a0 $2,000.<\/p>\n
You will multiply your number of possible buyers, yet still come out of closing with the same amount of money<\/strong>. This is assuming, of course, that the extra addition to your sale price does not take the total price of the property out of the realm of getting financed.<\/p>\nAs noted earlier, a lender will usually not loan out more than the appraised value of a property.\u00a0 If you\u2019re in a bad market, though, chances are you\u2019ve already had to put your property on the market for less than the appraised value, anyway. In other words, you have room to negotiate.\u00a0 Ultimately, there are dozens of different concessions you could take advantage of to make your property available to more buyers. All the while, still coming out in the end with what you had planned<\/strong>.<\/p>\nSo, step out of the box and think creatively. It will pay off to you in huge dividends <\/strong>in the long run.<\/p>\n <\/p>\n
MYTH<\/span>:\u00a0 Frequent <\/strong>Open Houses <\/strong>Are <\/strong>Necessary <\/strong>For\u00a0 A Fast Sale <\/strong><\/h2>\nReality: <\/strong>Open Houses Are A <\/strong>Big Waste <\/strong>Of Time!<\/strong><\/p>\nIt\u2019s a beautiful, Saturday afternoon, 75 degrees and sunny. The birds are chirping. Children\u00a0 are playing. It seems the entire neighborhood is barbecuing or riding their bikes.<\/p>\n
And where are you?<\/p>\n
You\u2019re in your living room, staring out the window, wondering why nobody is coming to your open house<\/strong>.<\/p>\nNot only is it a beautiful, Saturday afternoon, but it\u2019s the eleventh one in a row that\u00a0 you\u2019ve wasted<\/strong>, sitting in your property, waiting for a miracle to happen. You\u2019re alone, while half-hearted prospects and nosy neighbors wander through, tracking mud and dirt into every crevice. In for a few minutes, then back out again to enjoy the great outdoors.<\/p>\nMeanwhile, you still have another hour-and-a-half left of your open house. More time to sit and wait for that one-in-a-thousand buyer to walk in and say, \u201cThis is it! Where do we sign?\u201d<\/p>\n
In reality, things rarely <\/strong>work out that way. In fact, very seldom does an open house actually sell a home<\/strong>.<\/p>\nWhy then do real estate agents hold their listings open every weekend? Why do you see them, every Saturday or Sunday, sitting in a vacant home for hours at a time? Why would anyone waste a perfectly good weekend sitting in a home, least of all someone else\u2019s, if open houses don\u2019t work?<\/p>\n
The main reason, ironically, is to keep their clients happy<\/strong>. The majority of sellers mistakenly believe that open houses sell homes. Therefore, agents feel compelled to hold\u00a0 them just to satisfy their sellers<\/strong>.<\/p>\nIn other words, it\u2019s a complete waste of everyone\u2019s time! <\/strong>Particularly, the poor soul\u00a0 sitting there waiting for a buyer to walk through the door. Most agents know it. Yet, most agents continue to do it!<\/p>\nAt the most, open houses are a hopeful <\/strong>way for real estate agents to pick up new clients<\/strong>. Their hope is that a potential buyer, walking through the home, will say \u201chey, we need your\u00a0 help!\u201d That rarely happens, either.<\/p>\nAt the most, open houses are nothing more than a waste of time, perpetuated by agents who simply do what they see other agents doing. And, sellers mistakenly equating open houses with sales, simply because no one has ever told them any better.<\/p>\n
For the person selling their own property, it\u2019s a real waste<\/strong>. After all, you\u2019re not looking for\u00a0 new clients. And, you surely have better things to do with your time than camping out,\u00a0 waiting for the perfect buyer to come stumbling in. What to do, then?<\/p>\nHome Tour<\/strong>: The Wave Of <\/strong>The Future<\/strong><\/h2>\nOne of the chief reasons for the fact that very few homes are sold by open houses is that very few serious buyers <\/strong>are willing to go through open houses in the first place. Remember the picture we painted earlier of what the public thinks about real estate agents?\u00a0 Take that picture of the typical agent and put them into an open house. What do you get?<\/p>\nAn ambush!<\/strong><\/p>\nThat\u2019s exactly what most buyers think of open houses. They\u2019re a chance for a real estate agent, in a home all alone, to ambush a poor, helpless, prospective buyer coming in the door.\u00a0 After all, they\u2019ve got the buyer all alone in this nice home that just happens to be for sale.<\/p>\n
What\u2019s left to do? Sell! Sell! Sell!<\/strong><\/p>\n\u201cBut, I\u2019m selling my property myself,\u201d you say. \u201cI\u2019m not using an agent.\u201d<\/p>\n
It doesn\u2019t matter<\/strong>. A buyer doesn\u2019t know one way or another what they\u2019re going to run into at an open house, whether listed with an agent or not.\u00a0 A homeowner can push a sale just as much as a real estate agent. In many cases, worse!\u00a0 Consequently, a serious buyer will rarely walk into a home and say, \u201cwhere do I sign?\u201d<\/p>\nAnother reason for the lack of productivity of an open house is the total absence of emotion <\/strong>of the potential buyer. If there is one thing to keep in mind when selling a property, it is this:<\/p>\nA property does not sell on common sense or logic;\u00a0 a property sells on emotions!<\/em><\/strong><\/p>\nEmotional excitement is absolutely necessary <\/strong>to a sale. The typical atmosphere of an open house makes it nearly impossible <\/strong>to create any emotional excitement in a potential buyer.\u00a0 Instead of becoming excited about the potential of the property, they\u2019re far more worried about the salesperson following them around trying to sell them. Their goal is to get out of there as quickly as possible! <\/strong>Thus, no emotion, no sale. So, how do you create emotion in a buyer?<\/p>\nCreating <\/strong>Emotional Power<\/strong><\/p>\nImagine if, instead of an open house, you\u2019ve put together a small \u2018event\u2019 called a Home Tour<\/em><\/strong>.\u00a0 At this Home Tour<\/em><\/strong>, there are several buyers present. All at the same time<\/strong>. They all start out\u00a0 being skeptical. But, when they get there they find lots of other buyers touring through your\u00a0 property.<\/p>\nIn this instance, you have an entirely different psychology going on. They\u2019re no longer\u00a0 worried about a salesperson following them around, trying to sell them. Instead, they\u2019re wondering what they missed!\u00a0 Now, they \u2018re focused solely on the property itself <\/strong>and the fact that there are several other couples going through the property at the same time.\u00a0 Does this create an emotional <\/strong>atmosphere? You bet!<\/p>\nHave you ever been to an auction? What happens at an auction? Rather than one person, wandering through a retail store alone, there are dozens of buyers bidding on the same item.\u00a0 Instead of one person wanting it, a dozen want it! Once the bidding starts, so does the\u00a0 emotional frenzy<\/strong>.<\/p>\nOne person places a bid. Then another bids a little higher. Then another a little higher. Soon, a dozen people are fighting over the same item<\/strong>, each bidding more than they would have paid were the same item sitting on a shelf in a store. All because of emotions!<\/p>\nThey get wrapped up in the emotional cloud of the auction, and of the bidding process itself.\u00a0 They loose their minds. Sooner or later, somebody has to win. Meanwhile, everyone there wants to be that winner!<\/strong><\/p>\nSo, they continue on, further and further. Bidding higher and higher. Eventually, someone wins. Then, the next bidding starts!\u00a0 Now, take this situation, this roomful of people, and place them in a property that you have for sale<\/strong>. Are you getting the picture?<\/p>\nThat\u2019s the power of the Home Tour<\/em><\/strong>!<\/p>\nThe Home Tour <\/em><\/strong>is a sort of auction for your property. The more people you can attract, at\u00a0 the same time, the greater the excitement. The more buyers viewing your property, at the same time, the more the power of emotions will take over <\/strong>and create an effect where the home sells itself!<\/strong><\/p>\nThis seldom occurs in a traditional open house. One house<\/strong>. One buyer<\/strong>. One\u00a0 salesperson<\/strong>.<\/p>\nThe atmosphere this creates is not exactly conducive to emotional excitement. At a Home Tour<\/em><\/strong>, with several interested prospects in a property at the same time, everyone wants it a little more. The fact that there are a lot of people in the home makes the buyers who do like it even more interested and motivated to act<\/strong>.<\/p>\nIt also makes them far less likely to quibble about your asking price, especially if you have an appraisal to justify it.<\/p>\n
You also give them an informative flyer that puts your property in the best possible light. Information they need to know about the property, as well as information on the very best home loans available.<\/p>\n
Suddenly, they\u2019re not only emotionally attached to the property, and the lifestyle it will give them, but now you\u2019ve shown them in black and white how affordable your property is<\/strong>.<\/p>\nIf a buyer likes your home, even a little, they can\u2019t help but be influenced <\/strong>by the\u00a0 powerful emotions <\/strong>of the other buyers. Potential buyers overhear the positive, exciting comments of other potential buyers. Their emotions play off of others\u2019 emotions. They become more motivated. The home sells itself!<\/p>\nLet\u2019s not forget the hidden benefit to having a Home Tour<\/em><\/strong>, rather than a traditional open house. Time and freedom! While everyone in neighborhood is at the park, riding their bikes, or out at the lake, where are you? The same place!<\/p>\nEnjoying your beautiful, Saturday afternoon just like everyone else. Once your Home Tour <\/em><\/strong>is over (after a few minutes, rather than 4 hours), you\u2019re back out enjoying your weekend just as you should be.<\/p>\nAlso, with a regularly scheduled Home Tour<\/em><\/strong>, there is no need for dozens of individual showings. This will save you a remarkable amount of time in itself<\/strong>.\u00a0 Rather than weekly, four-hour long open houses, along with several private showings spread throughout the week, you take care of it all in one shot<\/strong>.<\/p>\nThe only time you will have to hold a private showing is when someone attending a Home Tour <\/em><\/strong>requests it. Then, you can schedule a private showing with them and give them as much time as they need to go through your property. All the while, knowing that you are with a sincere prospect<\/strong>.<\/p>\nContrast this with an open house where you sit and stare out the window for hours at a time, while half-hearted people parade through your property. Or, to a private showing where people trample through your property out of pure curiosity.<\/p>\n
\u201cSo, do you like it?\u201d you ask.<\/p>\n
\u201cNo, we can\u2019t really afford it. We were just curious what a home in this price range would look\u00a0 like,\u201d they say. \u201cThanks, anyway.\u201d<\/p>\n
Hidden <\/strong>Advantage To A <\/strong>Home Tour<\/strong><\/p>\nWe\u2019ve all heard the grueling stories of real estate agents that were mugged, robbed, and beaten in vacant homes, where they were supposed to be meeting with a potential buyer. No one likes to think about it, but the danger is ever present. With a Home Tour<\/em><\/strong>, this danger is greatly reduced<\/strong>, because a homeowner is far less likely <\/strong>to find themselves in a position of harm.<\/p>\nInstead of one buyer, there are dozens. Instead of being a potential target, you\u2019re the last place a criminal would want to pay a visit to. They want an easier target.\u00a0 Once a potential buyer comes back for a second visit, you\u2019ll be all but guaranteed of the fact that they are legitimate<\/strong>. After all, criminals don\u2019t typically schedule their crimes\u00a0 with you in advance.\u00a0 Besides, by the time of the private showing, you\u2019ll have had time to check them out and verify\u00a0 their identify. If it turns out they\u2019re not who they say they are, you can have the police waiting for them.<\/p>\nProtecting <\/strong>Your Ass<\/strong>ets!<\/strong><\/p>\nAs unfortunate as it is, you must also give some serious thought to protecting yourself from the likes of frivolous lawsuits. Meaning, you must do everything you can to prevent the possibility of personal injury <\/strong>to someone touring through your property. Like it or not, once an individual sets foot on your property, they\u2019re your responsibility<\/strong>.<\/p>\nSo, prior to your Home Tour<\/em><\/strong>, it\u2019s a good idea to do one last, thorough check to ensure that there are no hidden safety risks. The more <\/strong>preparation you do, the less likely <\/strong>that you will face what every property owner dreads – a personal lawsuit!<\/p>\n