FSBO Mistake #1 (and #2, #3, etc.)

by Ross Kaplan on January 27, 2012

Asking Price:  $475,000 (“Yeah, Right!”)

I’ve previously documented examples of FSBO (“For Sale by Owner”) mistakes.

See, “FSBO Mistake #4“; “FSBO Mistake #37.”

So, what’s FSBO mistake #1 (and #2 and #3)?

Mispricing (want to guess which direction?).

Latest Example

Exhibit A would be this 1 1/2 story home a few blocks east of Lake Calhoun that came on the market this morning, aggressively priced at $475,000(!), as they say.

Of course, the second most common FSBO mistake is poor marketing.

Here’s a shocker:  the two usually go hand-in-hand.

As the Cal Tech football team likes to brag, “we may be small . . . but we’re slow.”

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Client “Ten Commandments”

by Ross Kaplan on January 27, 2012

How to Make Sure Contractors Will Love You

What’s sauce for the goose is sauce for the gander.

In previous posts, I’ve discussed what constitutes “model behavior” for contractors.   See, “Contractor Etiquette“; “Giving Good Invoice.”

So, it only seems fair to spell out the equivalent standards for being a good client.

Do the following (or most of them), and I promise you’ll get terrific service ever after.

One.  Be flexible about scheduling — especially if you have a small project.  

Obviously, if you have a plumbing leak, three weeks out isn’t an option. 

However, most work isn’t an emergency, and clients have some discretion about scheduling it.

Two.  Clearly describe the work to be performed. 

If the scope of the job is undefined — the contractor needs to do “exploratory surgery” to find a problem — be available for consultation (see also, Fifth Commandment).

Three.   Agree on how much the job will cost.

The two usual choices are by bid/quote, and time and materials.

The former is typically higher, but provides the client with more certainty (and the ability to shop around). 

Time and materials is more appropriate for a more open-ended project and/or after you know the contractor.

Four.  Provide easy access to your home, and a clean, clear work area.

The reciprocal to expecting contractors to be meticulous about clean-up is starting out that way.

That means a minimum of kids’ toys, off-leash pets, and general debris in the effected part of the house — plus a clear shot at your driveway and garage entry if they are delivering a lot of materials.

Contractor Access

It also means leaving out a lockbox with a key in it to access your home. 

Yeah, that’s a risk, but for a bigger project spanning more than a few days, what other option is there if one or both owners work?

If you don’t trust the contractor enough to do that — don’t use them.  

Five.  Check-in. 

Especially at the outset of the job, be available for any questions the contractor(s) may have, and to discuss any mid-course corrections, if needed.

Six.  Respect their time.

Presumably, you’re not around when most of the work is being done (per Commandment #4). 

When you are, some social chitchat is perfectly appropriate, but long-winded discourses about sports, politics, etc. aren’t.

Since you’re the boss, some contractors won’t necessarily tell you that you need to stop talking so they can get back to work.

So, don’t put them in that position.

Of course, if they’re on the clock, they may be perfectly happy to shoot the breeze!

Corollary to Commandment #6:  getting 3 bids for a big job is fine (and prudent). 

Getting 5, 6, or more is wasting people’s time (ditto for interviewing Realtors).

Seven.  Provide feedback. 

Obviously, most contractors would rather receive positive than negative feedback.

However, negative feedback is much preferred to none at all.

The contractor can’t respond to a problem if they don’t know about it.

Eight.  Thank them.

Good contractors are busy, and can decide who they want to work for.

If you appreciate their efforts, they’ll want to work for you.

Nine.  Pay them punctually.

Compliments don’t go very far if you pay the contractor’s invoice three months late.

Contractors hate doing bookkeeping and having to be bill collectors — so don’t make them.

Paying punctually in a tough economy, when it takes longer to collect on things generally, is especially appreciated.

Ten.  Tell other people about them. 

That means not just referring them, but “liking” them online, writing a positive review on Angie’s List, Yelp!, etc.

Doesn’t that increase the risk they’ll get too busy to take care of you?

Probably not.

For one thing, good contractors keep track of where their business is coming from, and take especially good care of clients who frequently refer them.

For another, exactly how much of your contractor’s time do you need, anyway?

I refer a lot of home inspection business, but to make a living, the home inspectors I know need a lot more clients than just me.

So, I’m more than happy to share.

Just don’t ask me for the name of our favorite babysitter.

P.S.:  What does it say about someone when all their contractor relationships seem to be short-lived?

A certain Realtor in my office has been in real estate 15 years . . . yet never seems to have the name of a good inspector, handyman, plumber, etc.

Hmmm . .  .

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Is a Home Bomb Shelter a Sales Feature?

by Ross Kaplan on January 26, 2012

How About Calling it a “Wine Shelter?”

A colleague of mine has an upcoming listing with . . . yup, a bomb shelter, and is wrestling with how — or whether — to market that to prospective Buyers.

Just out of curiosity, I did a quick search on MLS to see how many Twin Cities listings mentioned that the home came with a bomb shelter.

Going back 20 years on MLS, I found about  . . . 30 — the majority built in the late 1940′s and 1950′s, as you might expect.

I don’t have any hard data, but I’m guessing that a whole lot more Twin Cities homes from that era were built with bomb shelters.

Verdict? (at least for marketing purposes)

Skip it, at least on MLS.

Instead, I’d put it somewhere in the Seller’s Disclosure, as well as use a “Home Highlights” sign to identify the room to people touring the home.

P.S.:  at least one Seller billed it as a bomb shelter/wine cellar.

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“Who (Else) is Watching the Listing?”

by Ross Kaplan on January 26, 2012

False Negatives and False Positives

In a post earlier this month titled, “Who’s Watching the Listing?,” I talked about the utility — and lack thereof — of tracking how many times a particular property has been saved on MLS.

Generally speaking, the more people watching a listing, the better; presumably, prospective Buyers like the home but not the price, and want to know when it’s dropped.

However, the number of times a listing has been saved also depends on the demographics of the likely pool of Buyers.

So, a seniors-only building is likely to appeal to older, less techno-savvy Buyers, who are probably less likely to tweak the ”dial settings” on MLS.

Bottom line:  even though the listing has been saved few (or no) times, it doesn’t mean anything.

Call that a “false negative.”

Looking for Bargains — Or Business?

What’s a “false positive?”

When the people saving the listing aren’t prospective Buyers, but Realtors.

And why would they do that?

Because they want to know when the listing expires, so they can try to re-list it (or so I’m told by a colleague).

(If you weren’t aware, the day after a listing expires, homeowners are typically deluged with calls from Realtors looking for business.)

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Fixing the Housing Market (Cont.)

January 25, 2012

Proposal Du Jour I literally got 4 words into James Wilcox’s Op-Ed piece in today’s New York Times before finding something objectionable. That would be the word “make” — as in, “A Way to Make People Buy Homes Again.” To paraphrase a certain character from the movie Jerry McGuire, “James, you lost me at “make.’” [...]

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Christine Lagarde Doppelganger

January 24, 2012

If Hollywood ever needs to cast someone to play Christine Lagarde, head of the International Monetary Fund, I have just the actress: Allison Janney. Compare these two photos, and tell me you don’t see a striking resemblance. A little hair dye, and a different hairstyle (and a suntan!), and you wouldn’t be able to tell [...]

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Home Seller’s Golden Rule

January 24, 2012

Telling Buyers What They Know About Their Home’s Condition “Treat people the way you’d like them to treat you.” –The Golden Rule “Home Sellers should tell prospective Buyers anything that they would want to know if they were buying the home.” –The Golden Rule, real estate version Given that 90%-plus of all residential real estate [...]

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Jumping the Gun on Pre-List Marketing

January 24, 2012

Realtor Mistake #7 First, a caveat:  by far the more common Realtor mistake is not doing pre-list marketing – touting an upcoming listing to colleagues — far enough in advance. Or, not doing it at all. However, at least in my opinion, it’s also possible to err on the side of doing it too soon. Call it an ”advanced beginner” (or [...]

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