Keep Your Eye On Your Money

What is your cost to get your house noticed, per eyeball?

The interent has changed the way people buy and sell homes. Gone are the days of flipping through the big green MLS book at your local real estate office. Gone are the long Saturday drives in the back seat of your realtor's lincoln looking at 30 houses to see what you like within your price range. Gone is the lack of information for the consumer.

People are searching for homes while in their underwear. Come on you've done it. Just as your getting ready for bed your partner calls you "Honey come and see this one!" You rush over to the computer with your best pair of Calvin Kliens on. You catch a glimpse in the mirror and think "this is not the way my parents hunted for their first home".

The internet is a great tool allowing people to make a short list based upon what they see in the listings posted to their favorite sites. But as a home seller how do you choose where to list your home? Is there a way to measure the value of those eyeballs looking at each and every site? Let's boil it down with simple math. Depending on who you talk to Private Sale is garnering somewhere between 10 and 25% of the market. So as a conservative figure I am going to work with 15% for the purposes of this calculation. We are going to forget that people are looking at multiple websites and assume that 15% is decidedly Private Sale and the remainder are only looking on the MLS.

The cost of an average detached home in KW is just over $300,000. Based upon the industry average of 5% it would cost you $15,750 incl. GST to sell or $185.29 per set of eyeballs out of 100 home buyers. Looking at the same home being sold with PropertyGuys.com shows us a much better scenario. To ensure you are getting all the same coverage including paper advertising, virtual tours, and even an appraisal done by a 3rd party licensed appraiser lets look at the $1,500 package. With tax you would pay $1,575 or $105.00 per set of eyeballs a savings of nearly 44% per set of eyeballs. Remember that is the most expensive package. If you went with the $350 package it would cost you $23.33 or about 1-8th of the cost of the realtor.

I know what you are thinking. They get more eyeballs and that means more chance of selling, right? Wrong! The stats from November 2008 to October 2009 show that for every 100 listings that were listed by an agent in the Waterloo Wellington area 58 of them sold. Same time frame, same area for PropertyGuys.com and the numbers show 60 out of 100. The list to sell ratio (how many homes were listed vs sold in a given time period) for PropertyGuys.com in October was 81.67%, MLS was only 68.08%. I guess taking the commission off the table and making your pricing more attractive is what buyers are looking for.

Give your buyers a reason to have their eyes pop out when they see your home...


M

Honesty Works

Ever been sold something that didn't live up to the claims?

Real Estate is the same way. You have to be honest about what you have. You cannot lie in your advertising.

If you own a two bedroom, story and a half, century home with stone foundation and a dirt floor in the basement, say that.

Imagine you saw what you thought was a great home online. Took the time to make sure the neighbourhood was what you needed (schools, shopping and amenities), booked an appointment even though your spouse thought it was too good to be true, packed up the family to drive over (maybe 15 min maybe 2 hours) only to find the truth was stretched online.

Your home is what it is, nothing more, nothing less. Price it accordingly and be truthful. Like the way this guy advertises his mobile homes...


It worked for me.

M

HST....Not If Your Realtor Has A Say

There was an article printed in this week-end's real estate papers in KW and Cambridge. The one that appeared in the Cambridge Times was entitled "HST threatens home buying dream". It was written from the board and quoted Mike Toffner, president, "No matter how you sell it, the HST is a big tax increase for local home buyers, sellers and owners." The article goes on to claim with the average home price being $302,354 (Ontario) that the cost to home sellers would go up an estimated $1,449.

Realtors are very much opposed to the HST, and I suspect it is for a reason different than they claim. The following chart was included with the article to show you how much you would be effected.
Not pointed out is that of the $1,449 in additional tax, 83.5% of it is a direct result of their fees. If they are so concerned with home buyers being able to live out their dream of home ownership lets not worry about $1,449 in potential taxes when they are charging 10 times that amount for a simple process.

If a home seller decides to pay themselves commission, which the government can't tax, then they end up not only saving HST on the commission but also the $15,117.70 in commissions. What would the chart look like if it considered the cost of a an average Private Sale marketing package?

Realtors appearing so adamant on reducing costs for the home seller by going after a proposed tax that equals a small fraction of what they charge seems a little misguided. They claim that HST will add an additional $262-million to residential resale real estate transactions. That means that they are expecting to charge $3.275-BILLION to you the home sellers. Put your equity in your pocket where it belongs. Pay for all your marketing with less than the taxes you would have paid for using a Realtor.

Here is their "official" stance:


M

Am I Priced To High?

You don't need Bob Barker to answer your question!!!

When you are considering selling your home the big question is "How much is my house worth?" It's a great question. It's the most important question you should be asking.

So how do you go about finding the answer? Well the best way is to hire a third party appraiser. This unbiased professional opinion is your best bet. The investment of $250 is a good one in the sale of your home. Knowing that you are priced right can save you time and money! Heck you can even make this report available to prospective buyers!

If you are more inclined to figure things out on your own there are a few things you need to do. Watching the market is a great way to understand what is going on but you have to know what you are looking at. People can list there home for as much or as little as they want. You can learn from this if you are paying attention. Specifically it is good to watch comparable homes in your neighbourhood. Are they sitting for a long time? Did one just list and sell right away? Are their reduced price stickers on the signs? These nuggets of knowledge are all telling you something. The one thing you should always keep in mind is if a home is priced correctly it will sell (so long as you get the needed exposure).

If you are looking for better information, than the key number you want is their SOLD price. A home is only worth what someone will pay for it, no matter what they were listed for. So how do you get this info without calling a home appraiser or real estate agent? One way is to use the public info available to everyone through MPAC. As you can see on this sample report you can chose comparable properties within your community and it will show you the last sale date (if within the last 5 years) and the price it sold for. When I SOLD my house last winter I printed this report with 4 comparable properties and handed them out with my feature sheets to prospective buyers.

Giving prospective buyers information on how you priced your home is a great way to avoid situations like this...


M

Inspecting For Who?

Have you ever wondered just who the home inspector was working for?

The key to avoiding this is to hire your own. By all means get some references but you should have final say on who the inspector is. Hire based upon ability, skills and value, not on referrals from a party gaining from the transaction. Even worse if the real estate agent is offering to pay for it this should raise all kinds of red flags!! (Author’s note) Make sure you ask the agent if they are willing to pay for any inspector or just one in particular. If they will pay for any inspector than it is simply your commission dollars paying for it. Where the flags should be raised is if they will only pay for one inspector in particular. I was unable to get any details of the program offered by the agent in the link as it was not spelled out on his website. I have emailed him for details on just how his program works. I have asked him to post the details as a comment on this post. Added 11/5/09.) I have met a few inspectors in my travels that said they lost referrals from local real estate agents because their thoroughness had caused deals to fall apart, losing the agent's precious commission.

I did a post on this back in July when Mike Holmes announced his new inspection business. I really respect Mike for his ability to stand up for what is not right. Take this quote about the inspection business as an example:

"There also are questions over whether some inspectors are too cosy with real estate agents who don't want an inspection to kill a sale."

Let's hope that Mike can do for the inspection business what he did for the renovation business!!

He is putting his money where his mouth is too. Have you been stung from a bad inspection in the past....Mike wants to make it right....

M