Crains Chicago-February 2007
Seen & Noted: Anxious to sell? Don't let it show
In this extreme buyers' market, real estate advertising catch phrases such as "motivated seller" and "bring all offers" can do one of two things: embolden buyers, or scare them away.
A buyer working with Craig Hogan with the Chicago Home Sellers Team at Keller Williams Lincoln Park parlayed an ad that said "willing to entertain all offers" into a 13% price reduction on a one-bedroom condo downtown. The buyer offered $205,000 for the condo, which was listed at $249,900, says Mr. Hogan, a broker in Keller Williams'
"Normally, it would really bother me to put in an offer like that," Mr. Hogan says. "I didn't want the agent to think I was ridiculous."
But the lowball play worked. The final sale price: $217,000.
"It's like having blood in the water; sharks get wind of it real quick," Mr. Hogan says of such ads.
Adding "priced to sell" to an ad didn't work for Ronda Parmacek, a broker in Coldwell Banker Residential Brokerage's
After consulting with the homeowners, Ms. Parmacek rewrote the ad two months ago to include "priced to sell" — and recently changed it to remove the phrase. The house is still on the market.
"I got a few callers who were looking to lowball, and I knew my sellers didn't want that," Ms. Parmacek says. Price-oriented ad phrases "can work as a big negative," she adds. "It can seem like they're desperate to sell."
©2007 by Crain Communications Inc.
Open Houses. Are they history?
AS SEEN IN THE FEBRUARY 26 2007 ISSUE OF CHICAGO AGENT MAGAZINE WWW.CHICAGOAGENTMAGAZINE.COM
ARE OPEN HOUSES HISTORY?
News reports of real estate agents being attacked while showing a property or hosting an open house alone and the availability of virtual tours and photo galleries online may have impacted the frequency and purpose of the traditional open house, but will they be done away with altogether? Some think they may.
By K.K. Snyder
Cover Story
The audience of potential buyers who likely have already seen the properties on the Internet through a virtual tour or photographs. But the events are often less attended than in the past, when the only way to view a property was to do a physical walk-through during an open house.
Daniel Glick, a broker associate with @Properties, says open houses are not an efficient use of time. “There are so many other ways for people to get information on a property,” says Glick, who joined the industry six years ago. “If I have an open house for two to three hours and only three people come, that’s not a very good use of my time. I’d be better off knocking on doors and handing out flyers.”
Glick says it’s often the seller who pushes the open house, as it’s the only time he actually sees the agent physically working for him. “Open houses are a great tool to get buyers but not a great way to sell houses,” he says.
Craig Hogan, a Realtor with the Chicago Home Sellers Team at Keller Williams, believes open houses are slowly becoming dated. “Now we just use them for our own reasons, but there was a time when open houses were what you did because nothing beats walking through an actual home.”
Hogan says that, with the market being slow these past eight months, he’s actually noticed an increase in open houses but doesn’t think the trend is here to stay. With a huge percentage of homes available on the market, buyers are taking more time to buy a house, and that extra time might include visiting properties in person.
“If you’re in the $350,000 condo range, you can literally pick an area of the city and go through [units] for weeks,” says Hogan, who joined the industry in 1996. “We’re using open houses right now, because we’ve not worked with this many buyers at the same time,” says Hogan. “On a Saturday or Sunday, there are only so many places you can be at once; we’re sending our people to the open houses to fill in the gaps.”
Sharon J. Kozak, a Realtor with Coldwell Banker Residential Brokerage in Evanston, says she hasn’t noticed a decrease in the use of open houses. In fact, she says, agents often use open houses as an opportunity to find new clients among those buyers who don’t have an agent. But, she acknowledges that the Internet has had an impact.
“Buyer traffic has dropped tremendously because of the Internet, virtual tours and Web sites,” she says. “It’s a process of elimination. If they don’t like what they see on a development’s Web site or virtual tour, they probably won’t bother to come by the open house.” Kozak says sellers tend to be more optimistic about finding a buyer through an open house. “We, as listing agents, go through the motions, but 98 percent of the time in my market area, that’s not what’s going to happen.” Hogan acknowledges that the Internet does impact the attendance at open houses and the information viewers have before they get there. “To me it’s all about the Web, photographs and people seeing everything before they get to the open house,” he says. “I make it a point to tell them there’s a full photo gallery on the Web or a virtual tour, and they always tell me they’ve seen it already.”
Safety first...Another area of concern with regard to open houses is the safety factor, especially for female agents working such an event alone. While no one on the Chicago Home Sellers Team has had a bad experience during an open house or a private showing, they’ve certainly experienced some things that were “on the edge,” says Hogan. “It happens to the women, where occasionally a whacko turns into somebody that stalks the agent and shows up at every open house they have. That’s off-putting, of course, and makes the women ner vous, understandably.” Kozak says she’s worked many open houses since leaving the banking business for a career in real estate and hasn’t had any problems. “I work in the city 99 percent of the time and have never had an issue,” says Kozak, whose background is in resale and development work, which requires her to hold four or five openhouses every Sunday, hosted by sales associates. “I’ve worked in some rough areas and never had an incident where I thought I was in danger; I’m very thankful, because it is a risky situation. ”
Open House: Tool for the Agent
The open house has been a mainstay of real estate sales for many years. The house to be sold is cleaned up, painted, landscaped, primped and polished to a spitshine. Agents produce flyers listing features and benefits, and put cookies in the oven to make the place smell “home like” and engage all the potential buyerswho walk through. The buyers are enthralled by the home and write full-price offers on-the-spot. A contract for sale is signed, a“sale pending” rider is placed on the yard sign post outside, and off to escrow we go. Such is the typical scenario sellers hope for when they ask their agents to hold an open house.
Let’s take a closer look at the reality...
Who comes to open houses? Buyers who come to an open house may not be represented by an agent. They are prime targets for the agent. Sellers come to an open house to see how agents market homes. They are also prime targets for the agent. Friends and neighbors stop by to see what was done to the house. Other “Looky Lous” stop by, because attending open houses is their hobby. They have no intention of purchasing, and looking at the house is fun forthem. Others come by with less-than honorable intentions.
Open houses are really a tool for agents to find clients...
The probability of selling due to an open house is rather small. It does indeed occur, but not often. If that isthe case, what happens? Agents are there to try to capture the people who want to buy. Most of the time, visitors rule out the specific house for one reason or another.
The on-site agent’s job is to capture and convert that buyer to another home if they have no interest in the open home. No conversion, no commission. Agents will try to qualify visitors to determine if they are buyers, sellers or both; the time frame of the sale/purchase under consideration, and if the visitor is already working with or loyal to another agent. Buyers/sellers, aware they will be subjected to these friendly queries, put up barriers so they can view the house with the least amount of disturbance by the agent lurking in the kitchen.
One of the major problems with an open house today is that it is a passive activity for the agent: Once the house is open, the agent must stay at the location and wait for prospects to arrive. The number and quality of prospective visitors is unpredictable.
Agents should use active prospecting techniques to drive traffic to the open house: invitation cards; door-knocking around the neighborhood; cold-calling the neighbors to invite them to view the home; and calling the agent’s buyers and sphere of influence (in addition to advertising).
So, why do sellers want their agents to have open houses?
Mostly, because their agents have not shared with them the low probability of their home selling through this marketing method. Holding an open house on Sunday is the slowest method of selling a home on the slowest real estate sales day of the week. Sellers are much better served by an agent who will actively search for a buyer using prospecting techniques and posting listings on high-traffic Web sites along with virtual tours. The majority of qualified buyers have an agent who can arrange for house showings as needed.
Open houses may never go away, due to tradition, but their usefulness as a sales tool is diminished in the online world of technology.
Copyright 2007 Inman News Source: Mortgage News Daily
CONTACTS:
Craig Hogan @ Chicago Home Sellers Team at Keller Williams – Lincoln Park
773.472.9000
chogan@kw.com
