Roger Smith’s Blog

The population continues to grow in North Texas, and that puts you in the prime area in which to be a real estate professional.  Dallas-Fort Worth placed among four other areas in the Texas as the nation’s top 10 growing cities.  Census Bureau estimates recently released show that we added more than 162,000 residents between July 2006 and July 2007, more than any other metro area in the state.  Houston, Austin and San Antonio also placed in the top 10. 

Remember, REAL ESTATE IS LOCAL.   People move to our area because of the strong local economies, cost of living,  and the fact the have some of the most affordable housing the country.  A report earlier this month by Global Insight found that housing prices in our area are undervalued by as much as 30 percent.  This allows homebuyers more purchasing power where they can buy more home for their money than other cities in the country.

Economic drivers like the Barnett Shale, DFW International Airport and the other various major companies help to make our area thrive.  Share this with the consumers you work with and show them why more families and professionals are choosing Dallas-Fort Worth as their home.  The buyers are out there!

Last week we discussed some of the more traditional marketing techniques, that although still used, have fallen by the wayside and have minimal effectiveness.  This week we will discuss marketing techniques that appear to be more effective.  

The key to sales, whether it is a car, office products, grocery items or your home is, of course MARKETING.  Companies like Proctor and Gamble, GM, Toyota and any other name brand company out that is a “household name” spend millions of dollars each year on marketing.  They spend those dollars so that when you think of their product type you think of them.  No doubt they hope that their marketing campaigns will get you to rush right out and buy their product today.  In reality, they know that this is only a small portion of the market.  Impulse buys are important, and they do market to your impulse through store displays and in store marketing campaigns, but their true goal is long term sales and generalized marketing campaigns.

How does this relate to you?  You only one to sell one home, your home.  You are not looking to sell hundreds of homes to hundreds of consumers.  True, that is not your goal, but it is the goal of every major real estate brokerage firm in the country.  The big three, Coldwell Banker, Re/Max and Century 21 each spend millions of dollars every year to get buyers and sellers into their offices.  You must remember that when you are looking to sell your one home you are competing against all of these professional brokers that are looking for long term business.  According to realtor.com as of this morning, in the city of Fort Worth alone, there are 6,470 homes listed for sale, by professional Realtors®. In Dallas there were 9,110 homes listed for sale by professional Realtors®.  This does not include the countless number of sellers who have chosen to sell their homes themselves and are never listed in the multiple listing service, MLS.

Whether selling you home yourself or through a Professional Realtor® it is important that a marketing plan is developed and implemented from the beginning.  In most cases I have a general marketing plan that I can adapt as necessary to any particular listing.  I market consistently with each listing and for the most part the marketing is done the same each time.  The target audience for my marketing campaigns vary from home to home.  It does no good to market million dollar luxury properties to first time home buyers living in an apartment complex. 

With todays tech savvy consumer the internet is our most valuable resource as a Realtor®.  I am constantly reviewing new internet marketing tools.  The key is to find the tools and resources that will give my customer the most bang for my buck and be the least time intensive as they can be.

When speaking to customers who were previously listed with other Realtors®, I am often told that the previous agent kept telling them to lower the price.  Although price is very important, it is only one part of marketing.  If a home is properly priced from the beginning, significant repositioning should not be necessary.  I will say that if you did not price appropriately in the beginning you will need to reposition.  The problem is that by the time most sellers get around to repositioning, their home has already gone stale, and a good marketing plan may not be enough. 

Marketing to other realtors has not changed greatly since the advent of the digital MLS system.  We all still primarily use our local MLS service.  Once a Realtor becomes proficient with their MLS system the capability to search is much stronger than most public internet web sites.  I do highly recommend that you add as many pictures, virtual tours and documents that you can to your local MLS service.  Obviously you need to follow your local MLS rules, i.e. unbranded virtual tours and no agent signs in the pictures.  As a Realtor, when I am searching properties for my clients, I am much more inclined to recommend properties with lots of pictures and documentation.  The more there is the less surprises you have in the end.

Of course, we now find ourselves in the position that most buyers, although wanting a buyers agent, often come to us with a list of properties that want to see.  They have already done most of the research and found the properties they think will fit their needs the best.  As a listing agent this puts much more responsibility onto our shoulders.  Now we must make sure that we emphasis our internet marketing more heavily than any other.

I highly recommend using the enhanced features of realtor.com.  They are still the premier web site for buyers looking for homes. With realtor.com’s  new enhanced features you can post up to twenty five still pictures, virtual tours and video tours. Yes you can now post video to your realtor.com listings. Although it is still in the “beta” phase it appears to be working well.  They have fairly straightforward directions online for posting your video.

Another option are services like youtube.com.  You can create a free account on youtube and upload your videos there as well.  Youtube.com is a very active site and not heavily used by realtors at this point.  When I searched youtube.com for “fort worth real estate” I had one hundred and thirty seven hits. “Texas real estate” garnered over one thousand hits, and “real estate” garnered over twenty-seven thousand hits.  Hmmmmm just think of the possibilities.  You always wanted to be a move director didn’t you.

Electronic flyers have changed my business in many ways.  I know I harped on not using flyers in the first half of the article.  Now I advocate electronic flyers.  The thing I like about the electronic flyer is its versatility.  I use vflyer.com, but there are probably hundreds of different venders that offer similar services.  When I create an electronic flyer I can e-mail it to my clients,  sphere of influence and other agents.  In addition I can auto post to multiple electronic advertising services such as googlebase, trulia, oodle, vast, zillow.com, hotpads.com and backpage.com. They don’t auto paste to craigslist.com, but it is very simple to do so. 

I get a lot of flyer traffic from backpage.com and a fair amount from craigslist.com.  The others seem to be hit and miss.  In addition They give me the html code so that I can post these flyers anywhere I want on the internet.  I also like the fact that I don’t have to do just property for sale flyers.  I can build personal marketing flyers that can be posted as well.  They also allow me to track my traffic levels and where it is coming from so I always know how effective I am being.

Ultimately it comes down to developing a strong plan and following up on it.  If you want to use electronic services like craigslist you have to update it almost daily if not multiple times a day. Other services are more user friendly and you can repost more easily.

Electronic marketing seems to be the key.  I can honestly spend most of my marketing time in front of the computer.  Don’t get me wrong, they will never replace call arounds,  door knocking and meeting and greeting and pressing the flesh.  Networking and pressing the flesh in today’s market is more important than ever. You need to get your name out there, brand yourself and become known as the local expert.  You want to be top of mind at all times when someone thinks about real estate.  I still keep a stack of business cards at my barber, my local grocery stores and the gas station.  I send an electronic newsletter out to over a thousand e-mail address every month, and I send out “personal” e-mails to my client base and sphere of influence every month.

Stimulus Plan Aids Buyers of High-Priced Homes

·         For a high-priced home, 1 percent can make a big difference. A monthly payment on a jumbo 30-year loan of $729,000 at 7 percent would be $4,850. Monthly payments on a conforming loan of the same amount, at 6 percent, would be $4,371, a $479 difference.

·         The change in loan limits, which allows the federal housing agencies Fannie Mae and Freddie Mac to purchase or guarantee the mortgages, is intended to encourage lenders to write more mortgages because they can easily sell them to the agencies.

·         It should also stimulate house buying and mortgage refinancing. As the thinking goes, once people start borrowing money, they will set back into motion the economic machine of brokers, agents and lenders that has been stalled for the past year and has helped stall the overall economy.

·         “Of all the various strategies proposed to help the housing market, I think this one has the greatest potential, particularly for expensive housing markets.”

– Gus Faucher, director of macroeconomics at Moody’s Economy.com, “Stimulus Plan Aids Buyers of High-Priced Homes,” by Katie Hafner, The New York Times (registration required), Feb. 23, 2008.

Waiting on the Sidelines Won’t Benefit Buyers

·         Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today’s rate of 5.5%. Monthly principal and interest come to $994.31. Let’s say that 12 months from now the same house goes for 10% less, or $197,010. But by then the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you’d have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you’d rather not be.

·         You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It’s time to get serious–before an inevitable rise in interest rates wipes out your advantage. “The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher.”

– Jim Svinth, chief economist at mortgage firm Lending Tree, “Ignore the Headlines,” by Dan Kadlec , Time Magazine, Feb. 19, 2008.          

U.S. Regulators Remove Limits on Freddie Mac, Fannie Mae

Unconstrained by portfolio limits, the government-chartered companies may buy more loans and bonds, replacing buyers who fled the market amid the collapse in subprime mortgages. “Since they’re the only game in town, anything that allows them to play on a more open field is going to be a help for them and mortgage borrowers.”

– Bob Walters, the chief economist at Quicken Loans Inc., “Fannie Mae, Freddie Mac Portfolio Caps Will Be Lifted,” by Jody Shenn and James Tyson, Bloomberg, Feb. 27, 2008.

Numbers Show Market Improvement

Even the Conference Board, a research group that represents a broad spectrum of U.S. industries far beyond real estate, said things are beginning to look up for housing. Chief economist Gail Fosler said in a report last week that “the housing market correction is about over … Housing affordability is beginning to improve, and with the recent interest rate cuts and house price declines, it should improve further.” January and February, said Fosler, “are not big months for housing, but rising affordability (plus favorable demographic trends) bode well” for the overall outlook.

  — “Real Estate Outlook: Numbers Best in Months,” by Kenneth R. Harney, Realty Times, Feb. 28, 2008.  

Bargain Hunters May Lift Market this Spring

In many areas, the choice of homes on the market has increased considerably, with unsold inventory double the typical supply as foreclosures mount and sellers hold out for higher bids. Indeed, possible buyers are already coming out the woodwork seeking deep discounts. Signed contracts that have yet to close were higher in January than any month in the prior six. “We’ve seen quite a bit of increase in traffic. A lot of people are shopping for deals right now.”

– Floyd Scott, president of an Arizona real estate office, “Bargain Hunters May Toss a Lifeline to Housing,” by Lynn Adler, Reuters, Feb. 25, 2008.

Roger Smith, REALTOR®

Residential Marketing Consultant

Coldwell Banker Residential Brokerage

817-921-8108

2 March 2008

So you have made the decision to sell your home. Now you must decide how you are going to reach that goal. How are you going to attract the highest number of qualified buyers to view your home, make an acceptable market value offer and close the deal without any undue hardship or expense to yourself? The majority of sellers choose a professional Realtor®. The question then becomes: “Is my agent doing enough to market my home?”

The fact is most sellers don’t really see the effective marketing that is really going on for their home. They want to see newspaper ads, yard signs, flyers and open houses. None of these things are “bad” marketing techniques, but they are not “good” marketing techniques either. These are what we call “vanity” marketing. They make the client feel good. The sellers see something tangible and assume that it is working for them. When in reality it does little good or actually works against them.

Let’s look at some of the techniques and what they really do.

Newspaper Ads: Although newspaper ads were a strong marketing tool years ago, they currently do little for us. The fact is that most home buyers shop the internet for their homes. The National Association of Realtors has placed the internet as the number one shopping tool for homebuyers. In fact NAR estimates that over 76% of all homebuyers start their search on the internet and take their findings to an agent. Whereas only 4% of homebuyers search the local papers. In most cases I would estimate that the “newspaper” shopper is also the “bargain hunter”. The shopper is looking for a seller who, in their eyes, is in trouble and truly cannot afford the expense of a professional agent.

Yard Signs: Yard signs are still a staple in Real Estate Marketing. The yard sign is the key indicator to neighbors and friends that your home is for sale. Yard signs do drive some traffic to the listing agent or their office for the “drive by” customer. It can peak a potential customers interest to get more information about the home. The yard sign can be very effective, if it is left to do its work. A yard sign needs to be simple, meet state regulatory guidelines and get the buyer to call for more information and to schedule a showing. The down fall of the yard sign is often the flyer box associated with it.

Flyers: If you are going to use flyers they should be left inside the home. Flyers are good reminders to potential buyers of the homes they have been in to see. It can remind them of the important facts and special features of a home. The problem is that most sellers believe that you need to put flyers outside on the for sale sign. When you place flyers outside for anyone to pick up as they drive by, you eliminate more buyers than you attract. Regardless of how good the flyer is, when someone picks it up and reads it, they know all they think they need to know. They often discard the flyer and never give the home another look. This is an expensive waste of resources. A high quality flyer can cost you fifty cents a copy, and a flyer box can eat fifty to a hundred flyers a week and generate few, if any, telephone calls.

Any good salesman will tell you, the best way to sell a product is to get it in the consumers hand. If you want someone to buy a car, let them drive it, take it home for the weekend and fall in love with it. If you want to sell pots and pan, put them on display and let the consumer pick them up, feel them, inspect them. You want them to the buyer to become attached. As a seller of your home, you want the buyer to come inside, feel the home and feel at home. You want the buyer to feel that this is their home, not yours. (That is another article in itself.) If all they do is look at the flyer, they don’t get attached, they don’t want more. They don’t “feel” the home, they just move on to the next flyer box.

Finally, Open houses. The purpose of an open house is to get the most buyers into your home at one time and to get one of them to buy it on the spot!!!! Well that sounds good, and in a strong sellers market where there are lots of buyers and very few homes that might work. I have heard the stories of agents in California who used to rent minibuses on the weekends and drive multiple buyers around and make deals right there on the bus. In todays market they might be better off driving the sellers around to buyers to pitch their homes.

Don’t get me wrong. Open houses are good things and they do occasionally bring buyers to a home to make an offer. The open house actually works to the listing agents advantage. The open house often brings buyers, just not for that specific home, that the listing agent can work other deals with. It also brings other listing clients for the agent holding the home open. Kind of an impromptu job interview. “See what I did for Sally and John. . . I can do this for you too!”

The question begs to be asked. So what is a good marketing technique and how do I get my home sold, quickly and at a good, fair and equitable price?

Well next time we will look at some high end, high quality marketing techniques that can be used to sell your home. We will look at the things that Professional Realtor® do quietly behind the scenes that the seller doesn’t always see. But most importantly we will let you answer the question; “Is my agent doing enough to market my home?”

Welcome to Roger Smith’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Fort Worth.  My team and I hope to provide you, our customer, with useful information that will help you make positive real estate investment decisions.  Please visit us frequently and feel free to join in on the conversations and add your questions.  We can only be successful with your input.

Thanks

Roger Smith, REALTOR

Residential Marketing Consultant