Tom gets a call from David who owns a home in Sarasota, Florida. David wants to sell his home and move to Bridgeport, Connecticut so he needs to list his house. Tom agrees to meet with David to discuss the marketing of his home.
Tom visits David the next day to see his home and present his marketing plan. Tom's marketing plan consists of:
- Professional photographs taken of home
- Virtual tour
- Enter property on MLS (multiple listing service)
- Feature home on Tom's website as well as his companies website
- Listed on several real estate national websites including Trulia.com, Realtor.com, Zillow.com
- Highlighted on Tom's personal, Activerain.com and RealEstateWebmasters.com blogs
- 250 "Just Listed" direct mailers to immediate area of listing
- E-blast to thousands of local Realtors featuring new listing
- Listed on Tom's monthly Homes and Land advertisement
- Advertised periodically in the local newspaper on Tom's companies advertisement
- Pitched at companies Tuesday morning meeting
- Sign in the yard
- Flyers on yard sign
David is impressed with Tom's marketing plan however he asks about open houses. Tom explains that open houses are primarily used as a tool by Realtors to find new clients and that they have a small chance of success of actually selling the home. David accepts Tom's explanation and feels that all of the other marketing will be enough to sell his home.
Tom did a thorough job of arriving at a range of value for the home and feels that the home should be listed between $475,000 and $500,000. Of course, like many sellers, David thought his home was worth around $550,000. Tom emphasizes that home prices are still dropping and how important it is to price the home properly from day one. David understands Tom's logic but still wants to list at $550,000. Tom reluctantly takes the listing at $550,000.
Later in September 2008
Tom implements his plan to market David's home. After the home hits MLS there immediately are five showings on the home. Tom pitches the home to other Realtors in office which produces two more showings. David is excited about the activity although none of the showings produce an offer.
David is happy thus far with Tom's efforts. Through Tom's marketing plan David consistently gets about two showings a week. In late October Tom discusses a price reduction with David. Unfortunately, it fell on deaf ears and they don't lower the price.
David is still averaging about two showings per week on his home. He is still happy but a little concerned that he has not received an offer yet with somany showings. One of David's competitors sold so he asks Tom about an open house. Again, Tom reiterates that open houses rarely sells homes and that they are mostly used to pick up buyers. Tom mentions a price reduction to $500,000. David, reluctantly, drops his price to $525,000. Home prices have continued to drop.
The showings slow down to about one a week. No offers.
In early January one of the showings produces an offer for $425,000. Tom emphasizes how challenging the real estate market is and how David should do his best to hold on this buyer. David counters at $490,000. The buyer goes as far as $455,000. Tom feels that this is a very fair price and recommends that David take it. He doesn't and the buyer walks away.
The showings are getting more sporadic. Tom asks David about another price reduction. They drop the price to $500,000. No offers. David asks Tom about doing an open houses. Tom tells his wife, "I am tired about hearing about the damn open house." Just to please David he does an open house. Since the home is in a popular part of town 15 groups of people come through the house. No offers.
An offer comes in at $400,000. David counters the offer at $475,000. The buyer reaches as high as $440,000. David doesn't take it and the buyer walks.
The listing is up at the end of March. Tom discusses relisting his home with David. At this point David feels that he needs some new blood to market his home. One of the reasons David has decides to list with another Realtor was because Tom did not do enough open houses.
David lists home with Realtor Joe for $500,000. Joe does 2 open houses. No offers.
David reduces price to $475,000. Joe does 2 open houses. No offers
David receives an offer and sells the home for $420,000 - $35,000 less than his 1st offer and $20,000 less than his second offer.
Lessons Learned by Tom
- Some sellers suck
- Some sellers are stupid
- Sometimes it is best to be the 2nd Realtor. The 1st Realtor softens up the seller.
- If there are any missing elements in a marketing plan sellers can use that as a reason to not list with you
- If a seller is stuck on open houses sometimes it is better just to do them.