How We Pick The Home We Buy
August 31, 2009
Interesting post from the Zillow blog that puts a little science behind what I’ve always told my sellers – home buyers make decisions based on emotion, usually within the very first few moments they’re in the house. In my experience, those first few moments make about 80% of the decision for a large portion of the population.
The post references a Katherine Salant column. Excerpts:
In the first two or three minutes you are in a model home, your sensory organs are feeding data into the emotional centers of your brain. As you glance at the living room, these emotional centers rapidly register the details.
Then, on the spot, the emotional networks vote up or down. The deal starts or ends with the firing of a few billion neurons.
If our nearly instantaneous visceral response is positive, our dopamine receptors go into overdrive, Lehrer said. They make us want that house, and they make us want it immediately.
Once your emotions have voiced their opinions, a different set of neurons in the frontal cortex, which control your brain’s "executive function," start to kick in. They generate seemingly logical reasons why a particular house is the one, Lehrer said. As you continue to think about this purchase, your list of good reasons gets longer: It has all the formal living and dining space that we need for resale! We’ll have a place to put great aunt Julia’s living room set, which we just inherited! We can have romantic dinners for two by the fireplace in the family room!
This is why I’ve always argued that the point of good home marketing is to get a potential home buyer inside the house. When I represent home sellers here in Tucson, I want to show people enough information, pictures, and details that they’re curious to see more, that they’re drawn to see the house in person. I want that visceral emotional reaction from those home buyers.
I don’t want someone looking online and rejecting a house because they looked at 50 pictures and decided they don’t like the oak cabinets or the guest bedrooms seem to small in the virtual tour – I don’t want potential home buyers dismissing a house out of hand because of some perceived flaw or omission, most of which could be changed or otherwise addressed. I want people in the house, seeing it in person, getting that emotional reaction. That’s successful home marketing.
All of which – if you’re looking to buy a home - is why you should work with an agent who knows your wants and needs, who understands that you can get caught up in that visceral reaction, and can remind you to evaluate the house from a more objective view point.
How We Pick The Home We Buy
August 31, 2009
Interesting post from the Zillow blog that puts a little science behind what I’ve always told my sellers – home buyers make decisions based on emotion, usually within the very first few moments they’re in the house. In my experience, those first few moments make about 80% of the decision for a large portion of the population.
The post references a Katherine Salant column. Excerpts:
In the first two or three minutes you are in a model home, your sensory organs are feeding data into the emotional centers of your brain. As you glance at the living room, these emotional centers rapidly register the details.
Then, on the spot, the emotional networks vote up or down. The deal starts or ends with the firing of a few billion neurons.
If our nearly instantaneous visceral response is positive, our dopamine receptors go into overdrive, Lehrer said. They make us want that house, and they make us want it immediately.
Once your emotions have voiced their opinions, a different set of neurons in the frontal cortex, which control your brain’s "executive function," start to kick in. They generate seemingly logical reasons why a particular house is the one, Lehrer said. As you continue to think about this purchase, your list of good reasons gets longer: It has all the formal living and dining space that we need for resale! We’ll have a place to put great aunt Julia’s living room set, which we just inherited! We can have romantic dinners for two by the fireplace in the family room!
This is why I’ve always argued that the point of good home marketing is to get a potential home buyer inside the house. When I represent home sellers here in Tucson, I want to show people enough information, pictures, and details that they’re curious to see more, that they’re drawn to see the house in person. I want that visceral emotional reaction from those home buyers.
I don’t want someone looking online and rejecting a house because they looked at 50 pictures and decided they don’t like the oak cabinets or the guest bedrooms seem to small in the virtual tour – I don’t want potential home buyers dismissing a house out of hand because of some perceived flaw or omission, most of which could be changed or otherwise addressed. I want people in the house, seeing it in person, getting that emotional reaction. That’s successful home marketing.
All of which – if you’re looking to buy a home - is why you should work with an agent who knows your wants and needs, who understands that you can get caught up in that visceral reaction, and can remind you to evaluate the house from a more objective view point.
<SomeItem> is Broken/Old/Worn/Ugly/Stained. Should I Fix It Before I Sell My Home?
June 30, 2009
Yes.
I know it isn’t fun.
No, we’re not going to offer an allowance instead. Trust me. I’m looking out for your best interests.
Let me know if you need help finding people to help you. I know all kinds of helpful folk.
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Other Information That Might Be Helpful
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- Don’t Depend On The MLS Comments (November 1, 2007)
”Seller will give a $2000 flooring allowance at close of escrow.”
…but only if you buy it for full price.“Roof will be placed prior to closing.”
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- How Long Does It Take To Write An Offer? (September 28, 2007)
Sometimes people ask me how long it’s going to take to write an offer. That’s a question I can’t really answer. It could be 20 minutes, it could take 2 hours.
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Fixing and Flipping Homes in Tucson?
June 23, 2009
I had an inquiry the other day from someone about to move into Tucson about potentially fixing and flipping homes along the Valencia corridor in Tucson - basically, the Southwest and the South side.
I gotta tell ya - that’s something I wouldn’t do right now, at least not operating in the open resale market. I think the idea was to pick up a foreclosed home at a steep discount, make repairs, and resell it for profit.
The problem is that in those parts of Tucson, pretty much the only thing selling is the foreclosures. If you find one at a crazy low price, I’d bet it is in terrible shape too. Which means even more cash you have to put into the thing.
Not to mention that prices over the last year in that area have fallen - on average - 3% a month. So not only do you have to recoup your repair costs, your purchase costs, the holding costs, and the selling costs in order to just break even - you lose money just owning the thing over a very short term because of the declining market.
It’s not a bet I’d be taking right now.
Where’s the Floorplan?
April 22, 2009
Question from the audience: why do listings for existing homes show tons of details, maps, pictures, virtual tours, fact sheets about every possible detail - but not floorplans?
My Answer:
I do floorplans occasionally - they’d be linked along with the rest of the virtual media. I know in some other parts of the country, it is customary to have room measurements along with the listing - in Tucson, we don’t do that, we don’t have fields in our MLS for room descriptions or measurements.
But beyond that - I have floorplans drawn when I suspect the assessor square footage is incorrect, usually in older homes. When I represent a Seller, I want the house to be as big as possible. If having a floorplan drawn finds 1100 square feet instead of the assessor-listed 900 square feet, then we can price that house much differently.
In the luxury Tucson market, floorplans tend to be a typical item used in marketing. I suppose the logic is that when you sell a high-end home, there’s a larger marketing budget - but floorplans are in the $0.10 - $0.15/square foot range, so we’re not talking thousands of dollars anyway.
Personally, when I represent home sellers, I know that more often than not, people buy on emotion. Someone who swears they’ll never buy a home without a split bedroom plan will drop that requirement if they walk into a house with the right "feel," the right view, the right light, the right everything else. So I want people inside the house - sensing, feeling, reacting - not discarding that listing sight-unseen because the floorplan doesn’t look exactly right.
It’s the same reason I’m not a huge fan of virtual tours. Though if I ever find home video that does an awesome job of getting people to be curious about the house, I’ll adopt that strategy immediately.
I get 25 photos, and I’ll use up as many of those slots as possible to show the house from a multitude of angles and rooms. But the point of marketing a home for sale is to entice people to come look at the thing, in person. Floorplans are one of those things that I think can turn people away before they look. I’ve seen too many buyers forgive a floorplan when everything else is right.
And I know that may not be an incredibly popular answer, in this age of information-freedom where we want all our answers up front. But it’s honest. When I represent a seller, my job is to get real live people into that house. And despite what we often tell ourselves, emotional reactions are a HUGE influence on our buying decisions.
New For Sale Signs!
February 3, 2009
The picture is a little dark, and admittedly was taken from my camera phone, but you get the idea. We have new signs!
The top part is the regular part - how could I leave behind the recognition that comes from having that yellow sign in the yard? Long Realty has such a dominant market share, I couldn’t give up that part.
But - there’s more. See that bottom sign? It has pictures of the inside on it, as well as the address, the MLS number, contact information for the latest pricing info, and a description of the house. I think it’s pretty cool, all in all. I might tweak the design yet, resize some of the text, but isn’t this so much better than an empty flyer box sitting in front of your house, taunting potential buyers?
I think so.
Dealing with Kneejerk
January 14, 2009
So I submitted a low offer yesterday.
Well, let me rephrase. I submitted a reasonable opening offer on an overpriced house yesterday. When the same house is under contract 2 streets over at $80,000 less…
Within about 4 hours, I had a rather terse call from the listing agent, saying his clients were not going to respond to our offer. But they had another day and a half to consider it. Why not sleep on it, get over that initial emotional kneejerk response, and at least counter with something? I know our offer wasn’t what they were hoping for. But they ain’t going to get what they were hoping for. And when that house 2 streets over closes for $80k less, they’re going to be hurting, and our offer is going to start looking better. But we’ll already be gone.
Now, if they’d gotten over that first emotional horror when confronted with the reality of the market via our offer, we might still be talking. And when there’s no other buyers on the table and a 48 hour acceptance window, there’s usually time to turn it all over in your head, time to step back and think rationally. Why answer in 4 hours?
Oh well. We can find other houses in this market, no problem. Sorry, home seller.
Proposed Rule Change for Short Sales in the Tucson MLS
December 20, 2008
Landed in my inbox today, a proposed rule change, if I understand the message correctly:
MLS Rule Change for Short Sales
Section 3.18- Short Sales:
As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies.
Participants are required to disclose potential short sales to other participants by stating the following in the Agent Only Remarks: ‘Potential Short Sale’.
Within two (2) business days of seller’s acceptance of written contract, the listing broker shall change the short sale listing’s status in MLS to ‘Active Contingent’, ‘Active CAPA’,’Pending’ or ‘Sold’, as is appropriate per MLS Status Definitions.
Disclosure of short sale shall not be made in the Property Description, Marketing Remarks, or any other publicly viewable component of the MLS without the seller’s written permission to the listing broker.
What does that mean? It means that short sales will be harder for the public to identify, assuming most sellers won’t want their property stigmatized by being advertised as a short sale in the public remarks. I’ve got mixed feelings about this one. From the seller perspective, it may generate more activity for their home sale - but then there’s a large group of buyers who don’t want to touch short sales, so they get excited about a home, call me about it, and then I get to tell them it is a short sale.
The problem with short sales is that only a small percentage actually close, and they can take months to do so. Not every buyer can afford to wait like that.
What say you?
What Did They Pay For It?
December 12, 2008
It used to be a discussion mostly had with Sellers - why the amount they paid for it however many years ago doesn’t really impact the market value today. But now I find myself answering this question more and more for Buyers. And the same answer still applies - it doesn’t really matter what they paid for it, we’re trying to figure out market value now, not market value four years ago.
However. In our public record, in the same place I look up previous sales, it tells me the loans that have been taken out against the property, and when. So if someone bought a $200,000 house 2 years ago and financed 100% of that, then I know that the loan balance most likely hasn’t gone down all that much, and that if we’re making an offer on the property below $200,000, then we’re probably looking at a short sale situation.
Which still doesn’t make the property any more valuable. But it might make a seller more reluctant to sell if they don’t really have to.
The Camera Phone House
October 20, 2008
I showed a home the other day that has been on the market - continuously - for 899 days. Which begs the question: why hasn’t this home sold?
Two big reasons.
1) It’s overpriced for the condition of the home. It’s a partial remodel, with a bad paint job, missing baseboards, some original vinyl, with a brand new kitchen, new carpet, and some badly laid new tile. Please note: a new kitchen does not a ’stunning complete remodel’ make. The seller’s last price adjustment was in June 2008. So that house has been sitting there, at the same price, for 139 days. You know what happens when you do the same thing that isn’t working, over and over, and expect a different result? But that’s not the only problem.
2) The seller hired an agent - their second agent for this home, the first was a relative - who took 6 pictures with what appears to be a camera phone, wrote a 2 line description, and plopped it onto the MLS. This is the one that is so frustrating to me. Why, as a home seller, would you settle for someone who does a bare minimum - and doesn’t even do the minimum well? The pictures and description in the MLS are so very important. With around 80% of home buyers starting their search online, the representation of the home online has to be spectacular to stand out from the crowd.
Needless to say, we weren’t impressed. Next.
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