SELLING REQUIRES THE PROPER STRATEGY.

Metro Milwaukee home values appear to have stabilized despite a daunting inventory of homes for sale. Although this is certainly good news for anyone trying to sell their home, it can prove to be quite tricky when it comes to developing a pricing strategy.

If you are unsure about the changes in home values, and how this may affect your pricing strategy, you’re not alone. Most sellers want to price their homes aggressively, and also price them to reflect the changes in buyer habits; but they also don’t want to price themselves right out of the market.

How to Develop an Accurate Pricing Strategy:

• Hire a qualified, seasoned real estate agent – This is one area of selling your home that you don’t want to skimp on. Find a top-notch agent who understands the market and will advise you on how best to present your property to the buyers. Such an agent sells a lot of properties (far more than the average), works full time and is a veteran in real estate. As many of you know, all of Homeowners Concept agents fit these requirements.
• Price it right – Although this may seem like a no-brainer, many sellers, absolutely sure of their ability to sell their home at a higher rate than other comparables in the area, find themselves sitting on their property without an offer in sight. The bottom line is that your pricing strategy should accurately reflect neighborhood home values, not your idea of what you think your home is worth.
• Develop a realistic sales strategy – Decide upon your sales strategy beforehand so that your game plan is put in place. More importantly, however, make sure your sales strategy is flexible so that you can react according to the market and according to home values.
• Make it ready to sell – Most buyers of today are looking for turn-key properties, so make sure your home is in excellent condition before you list it for sale. It is important to realize that all the pricing strategizing in the world can’t make up for a home that doesn’t compare to other homes in the neighborhood. Clear out the clutter, stage it to sell, and perform any repairs or upgrades that will allow it to compete with other homes for sale in the neighborhood. Homeowners Concept expert agents can assist you with recommendations.

BEWARE OF BUYERS WHO ARE NOT PROPERLY APPROVED.

Homesellers need to be wary of prequalified homebuyers who appear as if they're ready, willing, and able to buy a property because unless buyers are properly preapproved by the right institution, problems could arise during the transaction.

Often, the terms “prequalified” and “preapproved” are used interchangeably and this is a gross oversight when it occurs. While there are various interpretations and definitions of either term, experienced real estate professionals want homesellers and homebuyers alike to know that when applying for a mortgage loan, there is a huge difference between pre-qualification and pre-approval!

When a homebuyer has been prequalified, it simply means that a lender has provided an estimate of what the buyer can afford, based upon the information that the lender was given.
Buyer has been interviewed by a reputable mortgage lender and buyer has provided information on income, assets, debts, and down payment. The lender provides an opinion of the buyer’s potential based upon the information provided.

When a homebuyer has been preapproved, a more thorough process has been followed. A pre-approval is a conditional commitment to receive a loan. Buyer has submitted a full loan application to include a credit check, paying an application fee, a completed FNMA Form. Lender has verified income, assets, debts, and down payment The lender provides an approval letter indicating an amount and remaining conditions to be met (such as appraisal, title, etc.)

A pre-approval is far more desirable than a pre-qualification, but it is still no guarantee that the buyer will get a loan. Experience shows that mortgage brokers have a much higher probability of closing on a loan than a bank or a credit union (see post of 1/14/2011). At Homeowners Concept and because of our high volume of sales we have a running list of the best lenders in Metro Milwaukee.

TOO MANY AGENTS FOR THE AMOUNT OF SALES

At the end of 2011 the number of agents nationwide stood about 28% higher than the number of agents before the real estate bubble began (2001). Although the number of agents is declining, there is still a tremendous amount of agents in the market for the amount of sales.

This is a subject that we have touched upon before that even though the number of sales have reverted back to pre bubble years the number of agents have not. The large number of agents continues to be an issue for sellers and buyers as, unknown to them, have to work with many sub par agents. In metro Milwaukee the average agent closed just shy of 5 transactions last year. That's barely one sale every other month, hardly enough to maintain real estate expertise.

The reason for so many agents is that the traditional, hefty commission companies continue to hire unsuspecting agents. You see, besides some initial training, there is no ongoing expense to the real estate office. Furthermore having as many bodies around only helps the bottom line. Not only does the office can count on the occasional friend or relative who would work with the rookies but the companies also pay these low production agents less commission (split). Each brokerage has a few high volume agents and they're paid higher splits sometimes as high as 80% of the commission earned. The army of agents who do very few deals a year get usually only 50% or less of the commission.
We are one of very few real estate companies in the country and to our knowledge the only one in Metro-Milwaukee that do not operate this way. We maintain the high volume sales production per agent by not adding to our roster at our low attrition rate. We want all our clients to be working with a top selling Realtor who has been in business many more years than the average agent (17 years vs 4.5).

The real estate profession should eventually change, as consumers become more aware of the issues, to a more efficient and effective program such as ours. Fewer agents who negotiate and close a lot of sales each year, who are extremely proficient in real estate yet charge a low commission but enough to make a decent living.

ONE OF MANY PRAISEWORTHY TESTIMONIALS!

I never considered selling my home with anyone other than a full service realtor with the usual 6% commission. It was my mindset and I didn't think of any alternatives. Because of that I called a 6% realtor and had one of their best known realtors come to my home. The price was a true low ball that she suggested I make the asking price. I was concerned about the service. I felt like just another potential commission. Then, believe it or not, a friend told me that her parents home was sold by Homeowners Concept. I called and talked with Mary who immediately made an appointment to come and see my home. Talk about day and night. First, she answered my questions candidly on the phone. She came to my home and explained the services to me. We listed shortly thereafter. I could not believe the work she put into the sale of my home. Seriously, ALL I had to do was occasionally show my home to the buyers without a realtor. We had a lock box for agents to use. Mary fielded all the calls, took care of the listing, put the sign in my yard, took wonderful pictures that were on her website & MLS and scheduled all the showings. Mary, while realistic, did not encourage me to lowball the price on my home. I would recommend her to anyone selling. She was meticulous, professional and incredibly efficient. All this and fun to work with as well. Hard to imagine there is a better agent and company to work with, never mind the lower commission!!
Janet P.

OUR PROGRAM DELIVERS MORE THAN WHAT ONE RECEIVES FROM HIGH COMMISSION BROKERS.

In the world of real estate today, there's a lot of confusion about what you get for the money you pay in commission. So many things have changed that even Realtors find it hard to explain what differentiates them from anyone else.

And then there's confusion over what really matters in the sale of a home! Do the big firms have an advantage? What matters more - the agent or the firm? What services truly impact a sale? What's fluff in the Realtor sales pitch?

If you analyze the way buyers go about finding and writing an offer on a property in this internet connected era, you will come away with the following important items. Buyers care about how your home is priced for its location, features and condition. An agent and the respective company should assist the seller to optimize the way the property presents itself to the market, pricing it correctly, maximizing exposure and use his or her experience during negotiations once a buyer(s) wants to buy. In other words a seller should be employing a Realtor that has considerable expertise, offers to cover all bases to expose the home and have strong negotiation skills and attention to detail. To that end, one will be hard pressed to come up with a better package than what Homeowners Concept offers. The savings in commissions is really a bonus.

It's all in the data

You see the average agent at Homeowners Concept sells 3 to 4 times more homes per year than the high commission agent and has been in real estate for 17 years vs only 4.5. Add to this the extensive marketing we provide via our unique magazine and high trafficked website. The differences are SUBSTANTIAL and our services stand above of the higher priced solutions! High commission agents persuade sellers to pay unnecessary commissions when in fact, on average, they deliver less than us.

UPFRONT FEE BROKERS ARE DISAPPEARING AS SELLERS WISE UP.

In just a few years we have witnessed the birth, explosion and demise of the flat fee/pay upfront/limited service brokers. Limited service is just that. They put your home in MLS for hundreds of dollars upfront but you're still selling the property on your own. If another agent brings the buyer you must pay the other agent in addition to having someone else like an attorney or another agent represent your side. The sellers that sold homes this way paid, on average, about 3.6% when all said and done. What became evident over time though, was that very few sellers could sell this way (only 1 in 4 sellers were successful in the last 3 years) for various reasons that I have explained in past blog posts.

As more and more of these homes listed with limited service would go unsold, home sellers started to wise up. Why pay hundreds of dollars UPFRONT when you have such a low, low probability of selling via this method? Unfortunately a lot of sellers found out the hard way that the flat fee model does not work after wasting months and years on the market without success. We estimate that sellers have spent well over $1.1 million dollars in upfront fees in Metro Milwaukee, without selling their home this way.

As a result, a number of these outfits have closed doors and the rest have considerably less home sellers willing to part with hundreds of dollars Upfront. One of the top 2 outfits completely converted to a full service model. The other offers full service in addition to limited but suggests right on their website that limited service decreases the marketability of the home!

So, it appears that the explosion in limited service way of selling a home was merely a fad just like we saw with the advent of the internet and the For Sale By Owner websites. It proves once again that selling a property requires proper marketing and a skilled agent to make it happen (most of the time). Homeowners Concept continues to offer that rare program whereby a seller gets to work with any of our highly experienced Realtors while paying thousands less in commission.

TOP 5 TRENDS IN REAL ESTATE

Top 5 Trends in this Real Estate Environment:

1) The amount of commissions agents charge. Reduced commission models such Homeowners Concept's are sweeping the nation. Our 1.5% listing offers sellers more marketing than is normally provided by a traditional 6% agent. Couple that with the fact that our agents sell many more homes/year than the average agent and have been in business 17+ years vs 4.5 and you have a winner. On the other hand, we understand that some people do prefer the traditional model where the agent does all the showings and that is why we offer the 3.9% program.

2) The use of technology as a means to do more for less. Companies like ours have used technology and the economies of scale provided by a high-volume based business model to offer homeowners massive exposure at lower costs to market their homes. Sellers who are savvy and who want to remain empowered during the home selling process naturally gravitate to this model, because they are knowledgeable enough to know that it gives them the best chance of selling.

3) Flexibility to allow clients to participate in the home selling or home buying process. Another great component of this growing realty model, is that we allow our sellers to show their own properties and if the buyer comes in without an agent, pay just the 1.5% just like thousands in Metro Milwaukee have done. Sometimes the thousands of dollars saved in commissions could make the difference between a home selling or not. In this market, a seller can afford to price the home outright better than the competition or offer concessions to the buyer to make the transaction work.
4) The number of inexperienced, unethical and just plain inept agents being culled from the ranks of the real estate industry is on the rise because the effects of a prolonged, tightening economy. The part-timers, novices and those agents that really don’t know what they are doing are being forced out of the business by market constraints allowing having more proficient professionals being left to steer and grow the industry as a whole.

5) The power of the Internet is vital in marketing properties. The first time someone sees your property is not when they visit it in person anymore. The first time they see a home is on the web. To make a great first impression and to entice buyers to come to your home you must have great pictures. If you are listed today and you think the pictures your agent has provided are ugly and make the house look unattractive, so does everyone else. Just another reason why it is essential to have your home in as much exposure on the net as possible and make sure it appears as the best product it can be.
The new and more innovative ways of getting out the message and the flexibily one can have by not paying a high commission can mean the difference between a home selling in a reasonable time and for a decent price and one languishing on the market.

TIPS TO MAKE SURE YOUR HOME DOES NOT SELL.

Many articles and web sites exist that give sellers tips on selling their home. With thousands of properties in SE-WI on the market for over a year now we thought it was appropriate to put forth a list of 5 major tips to make sure your home fails to sell.

GO AT IT ALONE. This one is a no-brainer and we have written extensively about being FSBO in previous posts. Despite the great odds (less than 10% of properties sell this way, in this market), some people still try this route wasting money and time. The very reason Homeowners Concept exists and has been so successful for 27 years now is because we bring the missing link to FSBO sale. The vast majority of these FSBOs will gladly pay a broker a commission (usually 2+%) if they bring the buyer which is more than our 1.5% commission. Amazing!

USE A FLAT FEE BROKER. This is another avenue of selling with very low odds of whereby sellers pay hundreds fo dollars UPFRONT. Past blog posts explain why the reputation of “list them and forget them” exists in the industry. Most of these outfits are doing just MLS data entry, and they could care less whether the home sells. Thousands of sellers have fallen victim to paying the hundreds of dollars upfront, wasting months or years on the market and having to turn to another broker or Homeowners Concept to eventually sell.

CASUALLY CHOOSE YOUR AGENT/REAL ESTATE COMPANY. The third biggest mistake out there is thinking that all real estate companies (and all real estate agents) are alike. HUGE mistake. The fact is, real estate is an industry that is easy to enter and many people do so every year. This results in the majority of agents been mediocre at best. You see, there are way to many agents in the various real estate offices for the existing real estate sales. At Homeowners Concept we hire only experienced full time agents that have been in business for many years. Of all the major real estate companies in Metro Milwaukee we are the only one with the least amount of turnover. As a result, our agents sell 3 to 4 times as many homes as the average agent and have been in business for 17 years vs the average of 4.5 years.

Selling a home is typically a very important, and costly event for most people. It involves their most expensive asset, so it always blows my mind when sellers pick their friend who “also does real estate.” Think about it, in every profession you have the “best in the business,” and then you have everybody else. Why trust this most precious asset to somebody who cannot deliver the very best for you? How can anybody who does real estate part-time and for a just a few years compete with those of us who do it full time and are veterans in the business? Also lets not forget that those same friends and relatives who happen to be agents still sock you with a 6% commission.

PRICE YOUR HOME TOO HIGH. Up until the 2005 peak in sales, a common method for marketing a home was to put a high price on it and then “let people bring you offers.” This made great sense, as you know everybody wants a deal, so you might as well build in some wiggle room. Another reason that this method was not so bad is that real estate always appreciated! No matter what price you put on the home, eventually the market would catch up to it and you would be able to sell your home. But not now. Prices have been dropping. If you are overpriced today, the market is not catching up, it is leaving you behind.

IGNORE BUYER FEEDBACK. If you listen really closely, the market will tell you everything you need to know. First of all, when a great agent lists your home (which all of Homeowners Concept agents are), he or she will tell you on how best to position and price the home to attract an offer. Also a great agent will also get good feedback from the buyers that view your home. How does the home show? How does it compare to other similarly priced homes? So the key to not selling your home is to either not ask the questions, or at least ignore the answers.

Selling a home is not rocket science, paying attention to the above tips and using a company such as Homeowners Concept where an expert Realtor costs much less can aid tremendously.

ANOTHER TOP AGENT JOINS HOMEOWNERS CONCEPT!

This past week, Jules Kaulfuerst previously with Exit Realty, RE/MAX and Realty Executives joined our company. Readers of this blog and people familiar with Homeowners Concept know that we only hire experienced agents with many, many years in business, in other words the cream of the crop. Our agents sell 3-4 times more homes per year than the average agent and have been in business 17+ years vs 4.5 for the avg agent. Jules has been in real estate for 30+ years and has been a top agent for most of those years.

Jules offered: "I am excited that I was able to pass the stringent requirements and join Homeowners Concept. This is a company with a 28 year history of providing real estate expertise, superior marketing without charging a premium. They have figured out a system that best serves buyers and sellers and I am glad to be a part of such a progressive company. I love that I can give sellers real options, that I can assist them for 1.5% or give them the same service just like I did at the other companies for just 3.9% but with more marketing."

Our clients can be rest assured that they are in very good hands with any of our Real Estate Professionals at Homeowners Concept. You see, unlike most traditional companies that hire just anyone with a license, we are very selective. We continue to offer our clients much more service and real estate expertise than one can expect from paying 6%. The savings in commissions is a bonus!

4 STAGES OF THE SELLING PROCESS.

If you are thinking of selling a home in Metro Milwaukee, what stage of the home selling process do you currently find yourself? You see, we have found that most homesellers go through several important stages, and if they are lucky, they meet a highly experienced real estate agent who can help them make a proper decision for their important housing needs (you may already know that Homeowners Concept agents rank in the top 5% of all agents with many more sales/year than the average agent) .

Homeowners need or want to sell a home for various reasons, and with the right counseling, they can make the best decision on what to do. We know that “knowledge is power,” but the application of knowledge to a set of actions designed to attain a goal is far more important than just being informed.

Many people would like to move but the current state of the housing market (low values and reduced sales activity) forces them to stay put in their current home. The group of people who are moving up, downsizing, relocating or for any other reason have to sell the following might enlighten you as to the stages you are about to encounter in your decision making process.

4 Stages Of The Home Selling Process

“It’s all about me” – The first stage starts with simple reasoning. Homesellers determine their current situation and then consider the optimal outcome. They start doing some simple “me” math … “I need to get $X from the sale to buy my next home, and I currently owe $Y on the home, so I’ll go ahead and sell it for $Z and that will get me what I need.” It is simple, it is logical, but unfortunately it has nothing to do with the current market value of the home. If a seller in this stage of the process consults with a weak real estate agent, then the house goes on the market for $Z and it will fail to sell.

“What’s wrong with my house” - If the homeseller has hired a great real estate agent, this stage is never encountered. But with about 45% of the homes failing to sell in Metro Milwaukee in the first 6 months, many homeowners hit this stage. Some spend a lot of time here, as they do not know how (nor are they enlightened by a great real estate agent) to proceed to the next stage. This stage is the beginning of depression for the home seller. They do not understand why little or few people are looking at their home, and they start to wonder what their real estate agent is doing to get the home sold. Ultimately, it is during this stage that many home sellers start to do the research about selling a home that they should have done before hiring their real estate agent. Sadly, many find that they are in a world of hurt.

Homes fail to sell because they are not being marketed correctly and/or because they are overpriced. Homesellers usually do not put a lot of thought into hiring a highly qualified real estate agent because it never dawns on them that it matters. But it does. Today, 94% of homebuyers are using the internet, so home sellers who hire a real estate agent that does not have a dominant internet presence will most likely be ineffective at getting the home sold. This stage continues until the seller’s pain threshold has been met, and then they decide to get serious.

“I need to get serious” – When sellers get serious, they have reached the stage in which they have a chance to sell their home. Up to this point, they usually have given the market very little consideration in the pricing and staging of their home. Serious homesellers are focused on what BUYERS are thinking and what options BUYERS have in the market. After all, selling a home does not occur in a vacuum, it happens in a market where supply and demand dictate property values. Real estate prices go up, and real estate prices go down. The only factor the seller controls is whether or not the house will sell and how much they pay in commission. Buyers determine value.

A serious homeseller will take a look at the likely value the home will fetch under current market conditions. Factors such as “what I need to buy the next home,” and “what it appraised for 2 years ago” are no longer considered, the serious home seller finally “gets it.” If this stage is reached soon enough in the home selling process, then the seller either decides to sell and prices the home accordingly, or the seller chooses one of the three other options.

“It just doesn’t matter” – Sadly, this is the stage that home sellers reach when they take too long to reach the previous stage. Exhaustion and apathy set-in and the seller typically takes the first offer that they receive. After being on the market far longer than they ever expected, sellers at this stage often make poor decisions. And of course, they are at this stage with an agent who did not do much to enlighten them, so the agent will only further this apathetic response in the hopes of getting paid a sales commission. It just doesn’t have to be this way.

Our Promise To Homesellers

If you are thinking about selling a home in Metro Milwaukee, we will meet with you and spend enough time with you to help you move immediately to the third stage. There is no need to lose money in a market where values are stagnating or dropping simply because you do not understand the market or the process of selling a home. We will show you with great precision the value most likely to be attained in the market and save you thousands of dollars in commissions. I find it terribly sad that there are homeowners in this market who have not been given this very basic help, and they find out far too late that their hasty choice in selecting a real estate agent is going to cost them tens of thousands of dollars.

You will be able to take this information and make a decision. Whether or not you choose to sell your home should be based upon real information and an understanding of your most likely outcome. Do not just work with a friend or the first agent you meet, rather sit down and first become informed. Remember, knowledge is power!