Transcript How Not to Play Poker with Your Inventory Homes

How Not to Play Poker with
Your Inventory Homes
May 21, 2008
Presented by
Kate Kelley-Dilts, SCRP, GMS, CERC
Vice President, Client Development-Western Region
NEI Global Relocation
Omaha, NE
Relocation Home Sale
All transferees:
• Home Marketing Assistance
With formal home sale programs:
• Pre-Inventory
• Inventory
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Home Marketing Assistance
• For all transferees
• Transferees engaged in the process
– Educate and advise on today’s challenges
• Key factors:
– Partnering with a proven relocation Realtor
– Pricing competitively
– Condition
– Marketing strategy
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Maximum Exposure
• Relocation real estate professionals
• Ensure great condition and appearance
• Best price out of the gate
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Maximum Exposure
• Internet is where it’s at!!
– More than 20 photos generate 10 times the leads/views
– Statistics show
• 1 photo = 70 DOM
6 = 40 DOM
20 = 32 DOM
• 1 photo = 91.2% of original price
• 6+ photos = 95% of original price
• Location, location, location is now
photos, photos, photos!!
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How NOT to Stage a Home
Advertised on the
Internet as a
“Showcase
Relocation Home”
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Maximum Exposure
• Attract attention
– List at even numbers for two search ranges
– Listing at non-round numbers between
ranges: i.e., $231,102
– Weekly, bi-weekly reductions
– Unusual open houses
• Evenings, Sunday mornings
• Make the interested buyer an offer
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Marketing Actions
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Condition – improvements to compete
De-clutter, de-personalize
Staging options
Know the competition
– Foreclosures, construction, days on market (DOM),
absorption rate
• Educate and advise on competitive list price
– Aggressive action with “stepped down” reductions
– Add verbiage “home listed below appraised value”
• Next steps
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Marketing Trends
• Guidance/mandate on Realtor selection
• List price parameters
– i.e., initially 105% of BMA averages, then reduce
– Adjust again if/when appraisals conducted
• Transferee encouraged to entertain all offers
– Listening to the news, articles, TV
– Rely on assistance to evaluate purchase offers
• Repair and improvement allowance
• Home sale bonus
• Appraisals to gauge listing price
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Marketing Trends
• Transferees consider offers less than Buyout
• Formal home sale offers less than established
price (appraised value)
• Buyer incentives
• Loss on sale (capped)
• Short sales
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Pre-Inventory
• Preparation required
– Before a home is purchased from a transferee
• Review marketing strategy used to date
• Order updated BMAs
• Condition of home
– What has been repaired
– Bids on repair/improvements needed
– Strategize on expense vs. value
• Project marketing plan
– List price to established value (loss on sale)
– Advise on sale price to extended carrying costs
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Inventory Marketing
TIME IS MONEY
Industry Average Home Sale Costs:
Employee-Generated Sale
Guaranteed Buyout
Difference
9%
18%
9%
Additional cost on home value of $250,000
$22,500
Additional cost on home value of $450,000
$40,500
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Inventory Home Sale Challenges
• Prolonged market exposure
• Market conditions vs. initial marketing efforts
• Curb appeal
• Condition – house is “naked”
• Marketing tools
– Internet, creative approaches
• Negotiations for highest price
– Concessions that make sense
– Critical buyers
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Assessing Purchase Offers
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Home Marketing Success
• BMAs revealed
“too much stuff”
• Advised transferee to
de-clutter and store
extra/personal items
• House showed much neater, cleaner
• Sold in shorter timeframe
Employee Sale =
higher transferee satisfaction, lower company costs
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Preparing a Home for Inventory Marketing
• Pre-arranged for painting
upon transferee vacating
• Competition: supply of
homes in area = 12+ months
• Staging and neutralizing
costs = $10,400
• Home sold within 3 months
• Saving 9 month’s carrying
costs = $71,800
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Inventory Management
• Resistance to pink kitchen
• Extended marketing time
due to new construction
in local market
• Immediate paint, appliances
to compete
• Reduced carrying time net savings = $17,222
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Challenging Home Sale
• Remote location
• 2 heavy smokers, 4 ferrets
• Property required
reconditioning
• Ducts and floors cleaned,
repainted, tear down shed
Employee vacated upfront, repair immediately
Sold in 90 days
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Emu Ranch – SOLD!!
Fireman’s Dream
• Condo across from fire station
• Noise a challenge
• View – direct and rooftop
• Appeal to market buyers
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Where to Park?
• Home improvement
resulted in no off-street
parking
• Added a front circle drive
• Competitive home
• Sold shortly thereafter
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Functional Obsolescence
• Attracted to home – until
you opened the front door
• Entry post a challenge
• Staging benefit?
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Walk Right In?
• Stairs immediately inside door
• Addressed in HMA, appraisals
• Some things cannot
be changed
• Creative descriptions
needed
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Listed for a Year
• 3 exterior photos
online
• Rehabbed historical
home
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Bright Colors
• Transferee color choices
• Neutralize or accent?
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Relocation Homes Sell
• With transferee’s knowledge of market
• Proactive marketing plan
• Put your best “house” forward
– Realistic listing price
– Best condition
• Maximized exposure
– Relocation Realtors
– Web photos
– Identify potential buyer pool
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Resulting In
• Increased transferee satisfaction
• Managed home sale costs
• Partnerships providing expertise
The next concern ~
Transferees buying smart in the new location
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Case Studies
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Round Tables
Review Case Study
Offer recommendations to sell the home
Follow corporate policy provisions
Recap all groups to gather ideas, input.
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