Here's the third, well, kinda the fourth (if you count the introductory teaser) installment in my series "Pricing Historic Homes in Urban Neighborhoods." You can read the rest of the series here:

Introduction
Step One - Before you price, prepare!
Step Two - Preview, preview, preview

I've had a few comments come in to the tune of "Wow - that's a lot of work - is it really necessary to spend so much time pricing a home?" Well, I say - YES! It is necessary! After all, our product is property, and our sellers pay us darn good money to know our product and move THEIR product off the shelf... so I believe with all my heart that we owe it to our future adoring fans to do our homework and make the most knowledgeable recommendations we're capable of.

Although... we'll never be perfect. Sigh.

Back to Pricing.

In the last installment, I talked about how important it is to preview preview preview. The more competing listings you preview, the better sense you'll have of where your listing falls into the mix.

Remember, the houses you're previewing are 1) the competition for your listing and 2) houses that haven't sold.

Why is it important to check out the active listings? Some agents don't preview because they don't think the active listings are relevant. "All that matters is SOLD." Eh, I disagree. First, what's SOLD is not competing with your upcoming listing, and when you're dealing with older homes, buyers don't always have a lot of options that meet their criteria. In many cases, the buyer will only find one or two homes that even come close, so knowing what they're comparing your listing to is critical.

Second, it's important to know WHY that active competition hasn't sold. Especially if it appears to be "priced well." You'll never know for sure why a house hasn't sold by looking at the MLS, although you may have your suspicions. It's not as if the listing agent is going to tell you that the house reeks of cat urine or point out that there's no bathroom on the main floor.

So, when you're previewing, ask yourself...

• WHY hasn't this house sold?
• WHAT makes it superior (or inferior) to "my" listing?
• HOW could the listing agent do a better job marketing this home?
• WHO is the ideal buyer for this property and is it the same ideal buyer as "mine" will attract?
  (I can't think of a "when" or a "where," so I'll move on).

Training yourself to ask these questions at every house you preview makes you a better previewer, and therefore, a better pricer. It also helps you to remember each house so you can speak intelligently about the competition with your seller when discussing pricing, as well as down the road when that homes' status changes (sells, withdraws or reduces the price), you'll be able to nod and say to yourself, "Hmmmm, I thought so!"

Speaking of down the road... this is another important reason to preview. When or if the competition sells, you'll be familiar with it in case appraisal problems come up on YOUR property and the appraiser wants to use comparables that aren't appropriate. If you've been IN all the comparables, it's much easier to make a compelling case!

Okay, ‘nuff about previewing. Next time, we'll talk about how to evaluate the SOLDs in your CMA to help you price your historic home in your urban neighborhood!

In my continuing effort to better understand the professional value of a presence on Facebook, I am now going to ask for help on the concept of the Facebook Fan Page.

Let me disclose upfront that I have Fan Page and I am grateful for every one of the 305 310 313 fans who have, well, become fans. I even post there most days, and get a huge kick when someone comments on my postings.

But I must admit, I really don't see the point. As far as I can tell, conversations generated on Fan Pages tend to die out pretty quickly since the conversationalists aren't notified that someone has replied to a comment. Outta sight, outta mind.

And, well, this next bit is a little touchy.

I get invited to become a fan to at least a dozen fan pages a day. Mostly from real estate agents who are Facebook Friends on my personal page. That's totally cool.

But again, what's the point of becoming a fan of a real estate agent in another market except just to be polite? I can't say I'm much interested in the comings and goings of their local market, or of their listings or open houses. No offense, but well, I'm just not. Now, if the point of becoming a fan IS to do so out of politeness, that's fine, I'll do it. I want to have good manners, to be sure. If I never visit the Fan Page, I guess no one will know, so what harm does it do?

Am I missing something? Is there something really cool about these Facebook Fan Pages that has escaped my notice (MINE INCLUDED)? I'm serious - it may very well be the case because I'm still utterly perplexed by why anyone would want to Twitter. Although, I do have a Twitter account, too... 

So... if YOU have joined a Fan Page (mine or anyone else's), why did you do it? Because you care about what that person or company is up to? Or just to be polite?  

Just another installment in the series: Pricing Historic Homes in Urban Markets...

Introduction
Step One

In the last installment, I recommended that you always, always, always drive by your subject property before doing anything else. If you can get inside, so much the better...

So after you have a good visual of your subject property, it's time to go check out the competition - otherwise known as "previewing." (If your market frowns on previewing, and many do, please share with the audience how on earth you properly price homes!).

When I interview to list a property, I often find myself bonding with the home, to the point where it's almost as hard for me to be objective about it as it is for the sellers. I really have to fight the temptation to be overly critical of "my" listing's competition, while excusing "my" listing's challenges and flaws. Sometimes I'll take another agent with me on my previewing tour to help keep me objective.

SELECTING THE HOMES TO PREVIEW
Which homes should you preview? In a word (okay, a phrase) - as many as you can. Even if they aren't exactly comparable. With every house you tour, you gain a little better grasp on the up-to-the-minute marketplace, which makes it much easier to pinpoint the proper price range to recommend. It just happens naturally. As you look at the competition, you'll start to get a feeling for where your listing falls in the scheme of things, and the more you look at, the more confident you'll be in that feeling.

I try to preview at least 10 houses when I'm pricing a home. Sometimes I'll get lazy and only hit five - and I always regret it. It seems that it's right around the sixth or seventh house that I start to trust my gut about pricing. And that gut feeling is further confirmed on the eighth, ninth and tenth.

Depending on my price range, I'll preview all comparable houses within $50,000 (on each side) of where I think my listing will fall. By "comparable," I mean homes that offer similar square footage for the money. I probably won't preview a 1,000 sqft Bungalow if I'm listing a 2,000 sqft Victorian; they just won't attract the same buyer, even though they may very well be priced similarly. I always preview any homes within one block of my seller's property, even if they aren't comparable at all. It's just good practice in case the seller asks you about it.

Always preview the low outliers. A "low outlier" is a house that looks good on paper, but seems to be a screaming deal. You need to know why it's priced so well... but hasn't sold. There probably is a good reason. If there isn't, then this is the listing to beat. But we'll talk about that later.

How about the high outliers? The houses that are priced way above the rest, which are probably getting your seller all excited? Look at those, too. Chances are that they're just grossly overpriced (and the more houses you look at, the more sure you'll be of this). If they aren't overpriced, there's something really fabulous about them, and you need to know what it is.

As you're setting your previews, note if any homes are difficult to show. That will definitely affect market value. And frankly, if they are, I'll skip them. Lazy? Maybe, but on the other hand, a difficult-to-show home is not going to be comparable to MY listing because I don't take difficult-to-show listings!

Effective previewing in an urban market entails a lot more than just looking at a bunch of homes. Sure, that's what you're going to do (look at a bunch of homes), but in order to really evaluate the information you're gathering, you need to go in with the heart & mind of a detective.

We'll talk about that next time.

Ahhhhhhh... flickering jack-o-lanterns... the changing o'the leaves... the first snowfall... chestnuts roasting on an open fire... and time to order your end-of-year Doo-Dads!

Every year 'round this time, real estate agents open their checkbooks (or, better said, key in their credit card numbers) and spend millions of dollars on calendars and other Doo-Dads designed to be distributed to anyone and everyone who crosses their paths. The goal? Why, to ensure that every human being on the planet knows who they are, what they do and how to reach them, of course!

A worthy goal, indeed.

Even I, staunch opponent of the typical Doo-Dad, am sorely tempted this time of year to spend my few remaining marketing dollars on something of value to throw at my sphere of influence in hopes of drumming up some last minute fourth-quarter business or filling up my pipeline for the spring season.

But sheesh, most Doo-Dads are really silly. C'mon - personalized fly-swatters? Ice-scrapers? Lip balm? Oh, I'm not sayin' that I won't use a free fly-swatter, ice-scraper or lip balm, but I can pretty much promise you that such Doo-Dads are NOT going to make me feel obligated to use the person or company whose name graces said Doo-Dad!

That said... I like magnets. Always have. Not just any old magnet, mind you; it has to be cool if it's gonna go on my fridge. Even more important, it has to be cool if it's gonna get sent out to my precious sphere of influence.

What do I mean by "cool?" Glad you asked.

A "cool" magnet is one that is 1) extremely clever or attractive, and/or 2) contains truly useful information that the recipient will appreciate and 3) reflects my personality or interests.

What are some examples of UNcool magnets? Oh, how about a plain-jane, vanilla business card magnet? Or a list of kitchen measurements? Or, from someone like me, the sports schedule of the local hockey team? (But if you LOOOOOOOVE hockey, this would be totally cool for you).

If you're going to spend your hard-earned dollars on Doo-Dads, put your money where your heart is. If something seems a bit silly to you, it probably is. As with every other prospecting method you evaluate, be willing to listen to what your gut has to say on the matter. If your gut seems to be saying "Eh... we can do better," trust me, you can.

Here's a link to what I consider to be the ULTIMATE in Doo-Dad-Coolness. Yeah, I had a hand in creating it, so of course I think it's cool, but I'd love your thoughts as well. And please share your own experiences with Doo-Dads - d'good, d'bad and d'ugly!

I've been re-blogged a lot lately. Well, maybe not a LOT, but some. And in the past, it never occurred to me to check out the re-blogs - I just saw that little blue dot (or two) at the top of my post and smiled, knowing someone thought enough of my writing to include it in their own blog.

Then suddenly, one morning, duh, I realized that when others post my stuff, they attract their own audiences to the blog and start up whole new conversations about me behind my back in front of my face!

How cool is that?!

I visited all my re-blogs. Whoa - talk about fun! All these nice comments about me and my stuff that I didn't even know were out there! And more than a few people who had never heard of me (oh my!) who said they'd go check me out. Sweeeeeeet.

So, Lenn, Bob, Robin, Shirley, Donald, June, Gabe, Anthony, John and joe blow (yeah, seriously) ...... THANKS for the Re-blog! I shall endeavor to return the favor...

Happy Hallooooooweeeeeeen!

Earlier this week (or maybe last week?) I promised to do a little series with tips on how to properly price historic homes in urban markets. Here's where I promised that - you might want to read it first.

Got distracted by conversations ‘bout Real Estate Reality Shows, but here I am again, back to the more mundane issues of our daily grind... pricing homes to sell. Yawn. (I say that a little sarcastically; I totally love this stuff).

Pricing historic homes in urban markets is a bit (a lot?) more time-consuming than pricing newer homes in planned developments. But, at least to my way of thinking, it's a whole lot more fun! Hope you think so, too...

Step One is to Drive by the Home. Never, ever, ever begin the pricing process until you've at least driven by the subject property. You need to have an accurate mental picture of the home and its general location on the planet in order to take the next step. When you drive by, be sure to look for any locational challenges such as nearby railroad tracks, overhead high-tension power lines, undesirable neighbors (either commercial or residential) or obvious parking issues. If the home has an alley, drive through it to see what the back of the house overlooks.

Very few older urban homes are in a perfect location; almost all have some locational "amenity" that buyers will object to. You need to be aware of any such objections upfront. On the other hand, if the subject property IS in a perfect location, that's something you need to know as well, because most of the comparables you'll be using won't be.

While we're on the topic, it's far better if you can get inside the house before you prepare your CMA. I usually handle this by doing a 2-step listing presentation - the first being an information-gathering/rapport-building meeting and the second focusing on the current market - i.e. pricing. (Actually, I do a three-step listing presentation, but I'll talk about that later).

That said, whether you do a one-step, two-step or even three-step listing presentation, never meet face2face with a seller without first, driving by the house, and second, perusing the relevant market data online. You need to be at least conversational about the local market, even if you haven't done your detailed research yet. Remember, the general public thinks all we do all day is drive around and look at houses, so if you stutter, stammer and hedge when the seller asks you about his neighborhood's market activity during your first meeting, he'll certainly doubt your professionalism and expertise.  Being able to casually toss out a few neighborhood statistics or hyper-local market factoids will do wonders for your confidence and credibility.

If there are any homes for sale or any that have recently sold within one block of the seller's home, know the details of the listings or sales, even if they aren't comparable. Your seller knows all about them and he'll expect you to as well.  

Homeowners in urban markets tend to be pretty enamored with their neighborhood and will expect their real estate agent to be, too. So, be as prepared as you can, as early as you can.

Next Time - Step Two - Gentlemen (and ladies), Start Your Research!

The 2009-2010 Winter of Soul Kicks off November 18th! Click here to read more  

We hear this all the time - heck, I say it all the time! "Real Estate is a Relationship Business" - meaning that the more people who know you and like you, the more real estate you'll sell. As opposed to the good old Numbers Game philosophy that the more people who throw away your monthly marketing postcards or ignore your newspaper advertising, the more real estate you will sell.

And of course, I believe that - at least the part about how the more people who know you and like you, the more real estate you'll sell.

But is real estate really a relationship business?

I say no.

This blog was partially inspired by an episode of Million Dollar Listing (don't get me started). Okay, too late.

The three twenty-something boys young men drama queens who are the stars of the real estate reality show seem to have an unending supply of "Dear Friends" with gazillions of dollars to spend on real estate (or gazillion-dollar homes to sell). Dear, dear friends. "After all," sez Chad, "Real estate is a relationship business."

Hmmmmm.

If you've ever watched the show with a critical/cynical eye, you might have noticed that these boys young men drama queens give abysmally bad counsel. Often laughably self-serving, almost always bordering on incompetent. They advise their Dear Friends to make full price offers in a declining market before the house even hits the market. They allow their sellers to dictate the price and terms of their listings, whining all the while that the seller is being unreasonable (but not knowing what else to do). They talk their buyers out of even asking for repairs at inspection because the seller has already come down on his price (again, in a recessionary market).

I don't know anything about agency law in California, but if it's anything like Colorado, these boys young men drama queens are failing in their agency obligations to their clients. Or, if not technically violating agency law, definitely doing nothing to earn their $100k+++ commissions.

Speaking of commissions, a recent episode showed Madison being dismayed when his seller client accepted a lowball offer on her $3.75M listing which resulted in - get this - a $42,000 decrease in commissions for him! Poor Madison.

So, what does this have to do with real estate and relationships?

Selling real estate is about knowing how to sell real estate. Let's say that differently. It's about knowing how to manage and facilitate the exchange of real property so that the buyer or seller who hired you is satisfied with the outcome.

Sure, building your real estate business may have everything to do with your relationships, but THAT'S NOT WHAT WE DO! Is tax preparation a relationship business? Is dentistry a relationship business? Is dog-training a relationship business?

No, we expect our tax preparers to know how to prepare taxes. We hope our dentists know how to fix cavities. We expect a dog-trainer to be a master in dog behavior. That's their business.

Our buyers and sellers have the right to expect that we know our business. Which is... how to manage and facilitate the exchange of real property. Not how to persuade our Dear Friends to provide us with easy paychecks.

Rant Over.

As promised, I'll return to my little series on pricing historic homes in urban neighborhoods... I just got distracted today.

Hey Dave Ramsey Fans...

I have a big box of CDs I've burned of Dave Ramsey's podcasts from the TMMO website. I listen to 'em in the car and then toss them in a box in the back seat. There are dozens, maybe even hundreds of these CDs just sitting there, and I have no further use for them.

Anyone want 'em? They aren't fancy - just a whole bunch of unlabeled CDs with two commercial-free DR shows on each.

Let me know and I'll send them to you...

Earlier this week, I spoke on the subject of Selling to Your Sphere of Influence - No Sales Pitch Required! at the Colorado REALTOR Convention.

As I usually do, I did my best to debunk many of the sacred cows of the SOI- business model training industry, such as how important it is to ask for referrals, why it's a great idea to categorize your friends based on their history of referring to you - stuff like that.

The crowd seemed to accept my protestations that this behavior is not only obnoxious, but that it's not terribly effective. Cool.

I closed my presentation by encouraging the audience to evaluate every prospecting strategy that crosses their path from their gut... to ask themselves if the strategy they're considering is one they're excited about and proud of; to be honest with themselves as to how they would respond to the strategy if used on them and whether or not it would annoy them, if used on them. And to trust what their guts have to say on the matter.

A woman in the back of the room raised her hand and asked if I "approved" of Client Appreciation parties. I asked her if she would enjoy holding such an event and she said she would. I responded with "then absolutely - have that party" with the explanation that if you enjoy doing something, it's probably a good prospecting activity for you. Me? Nah, I'd be too afraid no one would show up and it wouldn't be worth the pre-party stress!

But later I gave this some more thought and wish I had just another 45 seconds in that room to share the rest of the story...

Which is... I just can't get excited about the phrase "client appreciation party." Oh, it's not the worst thing in the world, but to me, it sounds like an event specifically held to make me feel obligated to the host with my future real estate business, as opposed to a party where I'll have a great time. I dunno - there's just something about that title that gives the introvert in me the heebie-jeebies - even more so than a run-of-the-mill party invitation might evoke.

Am I saying not to have the party? Heavens no! Party on, my friend! But call it something else! Have your party in conjunction with an event of general appeal - Oktoberfest, Halloween, your or your spouse's birthday, the World Series or Super Bowl, your housewarming celebration (even if you moved over a year ago!), or just your "first annual wine and cheese tasting" party.

Don't approach your precious Sphere of Influence as a real estate agent first and foremost, as if that's all you are to them. Be a friend or pleasant acquaintance, who throws a good party, and oh, yeah, also happens to sell real estate.

The Winter of Soul Cometh!
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CLICK HERE TO REGISTER

Now that the listing agreement is signed and your FOR SALE sign is in the yard, you're done, right? Onto the next victim prospect to WOW with your fancy listing presentation and 132-point marketing plan! Of course, most of those 132 points are pretty much fluff & nonsense, but by the time you've overwhelmed the seller with your promises of Exceptional Service and Total Commitment, he probably won't notice.

No, he probably WON'T notice at the time, but he'll certainly notice later. The good news is that by then it's too late! He's committed to stuck with you! And you'll be damned if you'll let him out of your listing agreement after you've spent ALL THAT MONEY and ALL THAT TIME on his listing! Besides, he probably won't have the guts to even ask (whew!).

Want to Show Your Seller How Much You (Don't) Care?

It's easy! Just follow these simple steps...

1.  Don't send your seller a copy of the MLS listing entry to get his feedback.

2.  Don't let him know when his house officially goes "on the market."

3.  Don't offer to do an open house, and be sure to argue with him if he asks you to.

4.  Don't call the seller after your open house with feedback.

5.  Don't call the seller after you show his house with feedback.

6.  Don't call after the first few showings just to check in.

7.  Don't monitor showings, but the next time you talk, ask "Have you had any showings lately?"

8.  Put up a brochure box, but never fill it (or let it stay empty after the first batch is gone).

9.  Don't send the seller copies of your advertising.

10.  Don't contact the seller at all until it's time to ask for price reduction or to extend the listing.

If you follow these simple instructions for each and every one of your listings, you will be assured a long, glorious career of prospecting, prospecting, prospecting to keep that pipeline filled! You'll never have to worry about repeat or referral business distracting you from your all-important prospecting schedule...

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