As referenced yesterday, we're seeing quite a few price changes --- nearly 700 so far in 2009 --- so let's examine why they are happening, and whether they are necessary.

First, most (but not all) price changes are reductions.  Price reductions happen primarily because a house isn't selling at the existing asking price, and the hope is that more interest and activity (and perhaps an offer??) will be generated by lowering the price.  Put another way, a price reduction is an indication that the original asking price was too high.  So.....why is it so important to get your price right from the get go?  Mainly because if you don't, you're house will sit on the market until you do.  That's right --- my slightly scientific analysis (below) indicates that your house won't sell until you get the asking price set properly.

It's a long and arduous task to examine price reductions in detail via our Multiple Listing Service, so I was only able to analyze trends based on a small sample size --- the 60 most recent home sales in Harrisonburg and Rockingham County.  Here's what I found....

The 35 homes that did not reduce their asking price:

• sold in 84 days (median)
• sold for 97% of their asking price (median)
  

The 25 homes that did reduce their asking price:

• sold in 196 days (median)
• sold for 97% of their final asking price (median)
• sold for 93% of their original asking price (median)
• were reduced 6% in price by (median)
  

Did you catch that?  Houses that sold quickly, with no price reductions, sold for 97% of their original (and final) asking price.  Houses that took much longer to sell, with one or more price reductions, sold for 97% of their final asking price.  From this information I conclude that the market, largely, won't respond until you get within a certain distance of the price for which your home will ultimately sell.

Thus, if a home is "worth" $200k, there would be two options:

• List it for $206,000 and likely sell it in approximately 3 months, for 97% of the asking price ($200,000)
• List it for $215,000, reduce it over time to $206,000, and sell it in approximately six months, for 97% of the final asking price ($200,000).

My conclusion for home sellers is that (unless you enjoy the waiting game) you ought to price your home reasonably from the start rather than starting higher (with great optimism) and then later reducing it down to where it should have been from the start.

Two weeks ago I showed some clients two houses in Massanutten.  My clients had reviewed the photos (interior and exterior) of both homes online, and were quite a bit more excited about the second house.

And yet --- when we went to see both homes they were somewhat surprised to discover that the first house was MUCH more attractive (generally speaking, and specifically to their interests).

As it turns out --- beautiful photos can be taken of a less than attractive home to make it look moderately interesting and exciting.  And yes, not so great photos can be taken of a beautiful home, making it seem mediocre and drab.

What does this mean for you?

BUYERS ought to consider going to visit homes that they have disqualified based on interior photos.  Unless you are convinced that the photos are a true, accurate, fair representation of the extent and condition of the home's interior, you should go take a look!

SELLERS ought to make sure that their home is presented in the best possible manner when it comes to exterior and interior photographs.  I have found that a wide angle lens and an external flash unit can make an extraordinary difference in photo quality.

Without a doubt, we're in a very challenging real estate market right now --- we've seen fewer and fewer home sales over the past several years.  Thankfully, we haven't seen a significant decline in home values (as has been seen in most areas of the country) --- but it's still a difficult time to sell a home.

Amidst this, it's great to be working with seller clients who are dedicated to working hard to do everything possible to sell their home:

• The owners of one of my current listings spent multiple late, late (2am) evenings cleaning, organizing, painting, and doing small carpentry to prepare their home for sale.
• The owners of one of my upcoming listings is currently working their way down a list of 15-20 repairs and improvements to make their townhome ready to sell.
• The owners of another of my upcoming listings are moving some of their belongings out to to storage, painting, changing light fixtures and more to prepare their duplex for sale.

This isn't to say that my buyer clients aren't also working hard --- to make sure they are getting a great deal on on the homes they are purchasing:

• One of my current buyer clients has a detailed spreadsheet that they use to keep track of homes they might potentially buy, and they are conducting a detailed analysis of comparable sales and listings as they decide on an offering price for the home for which they will make an offer to purchase.
• Another set of my buyer clients takes multiple (20+) photos of each home that we view, and then sorts and archives those photos after the showings to keep track of each home they might potentially buy.

If you're willing to work hard, and become educated on our local real estate market, you can find a good buying opportunity, or maximize the value of your home when you sell.

As I've mentioned before, sometimes I wonder whether flyers are good or evil.  Having concluded, at least for the time being, that they are good --- I do take some extra time to try to make them as information-packed as possible.  One part of flyer creation that I particularly enjoy is creating floor plans to give a passerby a solid understanding of the space and layout of a home.  Below you'll see what these floor plans start as --- a very rough sketch as I measure the house.  (click on the image for an enlarged version)



Then, the fun begins --- as I re-create the floor plans on the computer to provide a more visually pleasing layout. (again, click the image for an enlarged version)



The floor plans above are actually my first attempt at representing some of the exterior features (sidewalk, landscaping, fence) of a house.  I did so for this particular home (1027 Stuart Street) because the owners have made such wonderful improvements outside the boundaries of the house --- a large patio, extensive flower beds and garden area, a hammock terrace, a solar-powered water feature, solar-powered landscaping accent lights, a fire pit and a storage building, all in a large, flat backyard enclosed with low-maintenance composite fencing.  See for yourself --- view photos of this home on Flickr.

As I expressed some time ago, my hope for the 2009 Harrisonburg and Rockingham County real estate market is that we would see the end of the ever-decreasing number of home sales in our market.  We have seen (approximately) a 25% decrease in number of sales between 2006-2007, 2007-2008, and 2008-2009.

Lot sales, however are doing much worse!



In the first four months of this year (2009), In all of Harrisonburg and Rockingham County, there have only been 11 lot transfers of less than one acre. 

The home pictured below, located at 115 West College Street in Bridgewater came on the market about two weeks ago.  Within a week we had 9 showings and 2 offers, one of which was negotiated and accepted.



But wait --- how could this be?!??  I thought sales were dreadfully slow right now in Harrisonburg and Rockingham County!??

Indeed --- home sales are quite slow right now compared to the past several years, but buyers are still buying, and some are moving quickly!

What were the secrets to the success of the sale of this home?

1. Great location (College Street in Bridgewater)
   
2. Great house inside & out (historic, unique, spacious, yard)
3. Price range with limited supply (sub $225k in Bridgewater)
4. Home improvements / decoration / staging
5. Proper pricing (not overly aggressive)
6. Marketing to best showcase the house.

Can this happen with your home too??  It's possible --- but as I mentioned a few days ago, one of the most difficult questions to answer in our current real estate market is how long it will take for a home to sell.  Since some of the factors above can be influenced (location, supply within price range, etc), here are the things we can focus on...

1. Make repairs and improvements to minimize buyer objections and to entice buyer interest.
2. Thoroughly analyze your segment of the market to appropriately price your home.
3. Use top-notch photos to market the home.
4. Create a compelling and highly informative brochure for drive-by prospects to take with them.
5. Make your home as accessible as possible by being flexible with showing appointments.

These are just a few things that can be done to sell your home as quickly and most effectively as possible.  These ideas and lists, however, are some generic ideas that don't account for the individual and unique nature of your home.  Every home ought to be marketed slightly differently depending on the factors and variables that make it compelling to buyers.

Feel free to get in touch if you'd like to discuss how to best market your home to sell.

National research shows that the top means by which buyers found the house that they eventually bought were:

• hearing about the property via their Realtor
• viewing the property online 
• seeing the yard sign (driving through neighborhoods)

How should this dictate marketing strategies as a seller or seller's Realtor?

Realtor

• Enter all pertinent details about the property into the MLS.
• Make it easy to show your property, and communicate that flexibility via the MLS.
• Enter descriptive, compelling remaks into the MLS.
• Take top-notch photos and enter them into the MLS.
• Remind other Realtors about listings when you see them.
  

Online

• Focus on the few short sentences permitted in the "Remarks" field in the MLS.  Make this attractive and compelling, and update it periodically.
• Take compelling photos that bring to light the best features of the home.

Sign

• Keep the sign looking professional --- pound it into the ground if it starts to sag.
• Install a flyer box with a detailed flyer inside including price and other amenities.
• Include photos (and floor plans if possible) on the flyer.

Remember --- this is just the start of property marketing --- but it is likely to be very effective, as it has been developed based on current buyer behavior.

For almost all of my listings, I have flyer boxes in front of the home to provide interested buyers (or neighbors) with instant information on the home.

Sometimes I wonder....

• Do flyers help possible buyers realize that a home might be perfect for them, and thus incite them to look at the home? or...
  
• Do flyers make some possible buyers discount the home as an option for them whereby if they had seen inside the home they might have been more moved?

And the bigger question....

• If I removed all of my flyer boxes would more or less buyers schedule appointments to visit the home?

No interior photos? 
No need to visit that house!

Some sellers find it absurd that a buyer would have this mentality as they decide which homes to visit --- they assume that if a buyer is serious, they'll come see the house for themselves even if there aren't any (or very many) interior photos.

But buyers are smart, and make reasonable generalizations: most homes without interior photos are hiding something.  Perhaps it is the awful condition of the home, or the hideous decor, or the tiny rooms.  In most cases where only one photo exists for a house for sale, there is something that the seller doesn't want to have highlighted for the world to see.

And thus, as busy buyers pare down their list of homes to view, they will often assume the worst of houses that do not have interior photos.

Sellers -- you don't need to go overboard with how many interior photos are posted to the MLS or other web sites, but do include some interior photos so that prospective buyers can have at least some idea of what to expect.

I was showing a house last evening and as I pulled up, the homeowner was hurrying out of the house to let us view his home.  His departure immediately upon our arrival didn't seem too out of the ordinary, until we walked into the house... and smelled... freshly baked chocolate chip cookies!

On the counter we found some fresh-out-of-the-oven cookies and several ice cold bottles of water, along with a note inviting us to enjoy the treats as we looked through the sellers' home.  We really did partake of the cookies, and they were great! 

Many people would suggest that viewing a home is an experience taken in by all of the senses.  Thus, if the smells (and tastes) that a prospective buyer encounters while they are viewing a home are pleasing, they will be more likely to have a pleasing assessment of the home.  In contrast to our delight upon smelling still-warm chocolate chip cookies, think about how you would experience a home that has a heavy smoke or pet odor!

So --- did the cookies and bottled water convince these prospective buyers to buy this particular house?  This remains to be seen, but we do have a hunch that the cookies may have been laced with a strong aphrodisiac, as we all fell in love with the house!

As I discussed a few weeks ago, the value of an open house is often unknown (and perhaps questionable) to home owners, and the Realtors representing them. But at the same time, open houses often get people inside of homes who may not have viewed the home otherwise --- and an important step of a successful sale is to have people view the home.

So --- I'm testing out a new strategy to get potential buyers in the door at the open house . . .



I printed (front and back) 500 of these business card sized mini-flyers advertising the open house. Then, almost all of them were distributed on parked cars in an often packed parking lot near the home that is for sale. As you might imagine, I had a lot of internal conversations and questions about doing this:

1. Is it o.k. to put things on cars in a parking lot? According to the local police officer who I spoke to, yes, so long as a "no soliciting" sign is posted.

2. Will some car owners be annoyed by the mini-flyer on their windshield? I hope not -- I hope they say "wow, that Realtor really works hard to sell the houses he has listed" -- though I imagine some may be peeved. My apologies!!!

3. Will the owner of the parking lot be upset that some might end up in the parking lot instead of the pockets of the car owners? I hope that all of the car owners take their treasured mini-flyer home --- but I do realize that some may end up in the parking lot. As a result, I imagine that I'll either get a call to come pick them up, or a "no soliciting" notice will be installed (or both!?).

4. Will it actually work? Will I be able to generate more traffic to the open house? Will the house sell as a result? This is to-be-determined. The open house started about 19 minutes ago, so I'll have to provide another update later on.

If this new strategy for getting people into open houses does work --- you know that I'll be repeating it to work to sell the other properties I have listed for sale --- if not, I'll be back to the drawing board to think of a new, creative way to market homes!

I am having an open house today (May 4, 2008, 1:00-3:00) for one of the properties that I am marketing, a 5-bedroom, 3.5 bath colonial with 3,796 SF priced at $469,000, and located at 3064 Briarwood Court in Harrisonburg, VA.

I have held several other open houses over the last few weeks, and will have another two weeks from now.

So . . . how effective are open houses? I suppose it depends on how we define effective . . .

Open houses do (unless nobody shows up) get people inside of homes who may not have viewed the home otherwise. The people who are coming through aren't always qualified to purchase the home they are viewing, and they don't always end up having interest in it, but one important step of a successful sale is to have people view the home for sale.

Open houses don't necessarily sell homes. I don't have the exact figure at hand as I am currently writing, but the research shows that only a VERY small percentage of home buyers find the home that they purchase by attending an open house.

Some Realtors see open houses as an opportunity to meet new buyer clients. I suppose that could happen from time to time, but certainly, that doesn't accomplish any of the original goals of the owner of the home.

Here are some interesting stats to consider from several recent open houses:

Property #1 -
Prior to the open house, there had been 3 showings of the property.
During the open house, 4 groups visited.

Property #2 -
Prior to the open house, there had been 7 showings of the property.
During the open house, 4 groups visited.

Property #3 -
Prior to the open house, there had been 6 showings of the property.
During the open house, 10 groups visited.

Property #4 -
Prior to the open house, there had been 2 showings of the property.
During the open house, 2 groups visited.

Property #5 -
Prior to the open house, there had been 18 showings of the property.
During the open house, 5 groups visited.

For several of these homes, the open house generated more prospective buyers inside the home than had seen it to date. However, none of these properties have sold yet, so the open houses didn't accomplish that main goal of selling the house.