Let’s talk about Home Selling Strategies. From what I’ve been reading lately I guess there are two schools of thought on these, one that is based on “Price” and the other that is based on “Traffic”
The ‘Price’ strategy more is more traditional and more likely to appear dominant in a Balanced or Sellers market, some of the characteristics are
-Pricing the house in the lower part of the determined market range, this draws qualified interested parties to the table, in general most homes have a value range 10% variation www.zillow.com http://activerain.com/blogsview/535342/Negotiating-for-a-House
-Pay regular commissions to agents; in our region this is typically 7% on the first 100,000 and 2.5 or 3% on the remainder, attracting agents from all realty companies, who have the largest pool of qualified buyers www.fvreb.bc.ca take a look at the FVREB or the Fraser Valley Real Estate
-Someone will ‘Wheel and Deal’ on the price, it has been proven to me time after time that the moment they say “I don’t want to barter and play games”, that’s exactly what they want to do! If you give them the best price up front thinking they will thank you for making it short and sweet they will pound on you until there is bone fragments left!
-Articles of home are used as bargaining, that old wagon wheel chandler simply must be included in the sale
Traffic has been used by developers for years, and it has been extremely successful for them, just take a look at the success of Del Webb http://www.delwebb.com/About/History.aspx and Rennie Marketing Systems http://www.rennie.com/ using a series of slick promotions, glossy advertising they sell ‘lifestyle’ and emotions rather than bricks and mortar. This creates a parade of people – hype – and can create a frenzy causing people to become caught up in their emotions and make silly decisions, like paying way overvalue. Here are some of traffics characteristics
-Pricing in the upper part of the range, giving the seller quite a bit of wiggle room, this allows for things like, ‘purchase by X and get the upgraded stainless package included at no charge”http://www.omalife.com/
-Financial Incentives, this is plain and simple most often expressed by a ‘reward clause’ move in by X day and we will pay your GST and taxes, or I am starting to see rate buy downs coming back, Sutton West Cost has arranged a Fixed 5 year rate with a unnamed insurance company for 4.5%….
-Bonus Commission structure, the ‘builders representatives’ like Rennie Marketing Systems http://www.rennie.com/ will offer have bonus for selling X amount of units within a predetermined time phase, so if they sell out the entire phase in a month they will be rewarded by the builder and it will be passed down
-They will show the model unit AS MUCH AS POSSIBLE, they will take anyone and everyone through, they are not there to qualify they know that someone will fall in love with there project and buy, its just a numbers game pure and simple.
-Curb Appeal, these marketing companies are masters at having you buy into a lifestyle with dozens of glossy photos and co-branded imagery http://www.southpointlife.com/ You know if you are hearing Sub-Zero more often than the size of the construction beams used curb appeal is at work. http://realtytimes.com/rtpages/20030620_curbappeal.htm Lovely little fixer upper!!
Over the weekend I had the privilege of assisting in a open house for a truly unbelievable Edwardian period character home in East Vancouver, the open was conducted on both Saturday and Sunday from 2-4 pm, as well as a ’sneak peak’ Thursday evening from 5:30-6:30. This home was one of those that you are truly proud to help show, all original un butchered mahogany woodwork, leaded and stained glass windows, pocket doors, a butler room and a basement suite with wine seller to boot! The house was partially staged and landscaping was in show home condition.
Thursday brought a few interested parties, mostly neighbors who new the homes pedigree, but a few interested parties, Saturday on the other hand turned into remnants of last year, we went through over 55 feature sheets and had to start limiting them to one per group! The open was heavily marketed using a variety of tactics from old fashioned legwork to the ‘ugly yellow signs’ but the turnout was one of the best I have seen all year. Sunday was much the same story; in fact the home had an accepted offer that was finished at 12am last night! A truly amazing feat as the purchase price was near the one million dollar mark, I should also point out that the home was on a smaller lot as the coach house had been build & sold off, property was stratified with a common backyard area, but one garage space owned by this house in the coach house.
Being that I have helped and held quite a few opens in my day and I keep hearing that ‘the market is slow, the pending Olympic meltdown, oil is at $136 US a barrel, the sub prime will happen up here or my favorite I am waiting till prices crashJ. It sure felt good be involved in something that positively proves all of this doom and gloom is wasted energy that becomes a self fulfilling prophecy.
Does anyone else have a positive story in this market they would care to share? Do you think it was simply the quality of the listing that made all of this happen or just luck?
On Thursday a I was asked by two of my Bishops University Alumni and friends to help at the event ‘Chip’s Not Dead Yet’ as it turned out it was one of the most satisfying events that I have attended all year. For those of you who asked me why traffic was shut down on west 10thhere is the information on the event: http://www.chipsnotdeadyet.com/. Chris Clarke from BrandBridge Enterprises www.brandbridge.ca was out representing one of his current projects http://www.purityorganic.com/ helped Chris set up his booth, they were giving away free samples at the finish line, the product Purity Organic™ is absolutely top notch, for those who have not tried it get your hand on a bottle, Chris tells me that they are also doing a tasting even in Whistler this weekend. For the main event I was assisting Jordan Rodgers, sales and marketing of http://www.providentsecurity.ca/ with their incredible 45’ inflatable slide, this was one of the most popular even especially for the children and a few reluctant parentsJ , we must have had hundreds with grins ear to ear, at times the line up was over a half hour wait! Provident Security also donated some of their top notch personal security to ensure that the beer garden sponsored by Russell breweries http://www.russellbeer.com/index.html remained a great time for all. The top prize for first place in the run was $20,000!! The Winner donated a portion of this back to charity . Chip Wilson made a appearance in the run, dressed up as one of the brides maids and later arrived in a vintage ambulance to make a short but sweet presentation of the monies raised to representatives of Children’s Hospital. A big thanks to Jordan Rogers of Provident Security for inviting me to help!
Everyone always seems to be quite curious when it comes to the mortgage application, how do the Blue power suits come up with what a ‘good’ application is? and were does my application stack up to this standard? Just think about how you would feel if someone was to ask you for a loan. You would consider how long you have known them, are they punctual, do they move around a lot -good with there obligations, do they live within there means….. What you are doing is creating a picture of how likely you will see your hard earned money again! Lenders call this the Five C’s of credit. Today I would like to talk about what each of these components mean and how it is my job to position your application in the best of light to the lenders.
Character is the general impression you make on the potential lender. Imagine if you were lending money to a friend, how well you think that they will be willing to repay the loan thinks like your educational background and experience in business will be reviewed. The length of time at your current employment and your current residence will be considered. The longer you have been at both, the higher you will score on the character scale. One important thing to note is that with the large percentage of Lower Mainland residents that are now self employed, if you worked in the same business for several years as an employee and now you are business for self, Genworth and CMHC have programs that will look at your previous employment background, as most traditional institutions require 2-3 years as business for self.
Collateral is what the loan is secured upon; Mortgages are a part of the banks Real Estate Secured Lending department. In real estate transactions this generally means the property that you are looking to purchase or a property you are using as collateral (such as a Home Equity Line Of Credit). If for some reason, you cannot repay the mortgage, the bank wants to know that the real estate the mortgage was taken out for is good and marketable real estate. A real estate appraisal will determine the value for the property in today’s market. The appraisal will also indicate to the lender the type of property being financed and any deficiencies that may affect the ability to re-sell, in case of default. A property that is located in a North Vancouver is considered a better risk than a farm in rural parts of the Province. Simply, there are more buyers for the home in the city than for a rural farm and therefore is easier to re-sell. Capital is the money you personally have invested in the purchase, otherwise known as your down payment. The more of your own money you invest as a down payment, the more likely that you will do all you can to maintain your payment obligations. Banks want to see a vested interest in the property that you are acquiring; this is why rates and insurance premiums are generally higher for a rental property as it is not occupied by the purchaser who is comfortably living in another location. Capital is also reflected by your ability and willingness to save money and accumulate assets. The higher your net worth, the more you have as a cushion for repayment in the event you run into a financial set-back. Credit is the evaluation of your habits in performing credit obligations. The information about your credit history is stored at the “credit bureau” and indicates how well you paid your bills over the last 6 years. All major credit cards, auto loans, leases etc. are reported to the credit bureau. A lender will evaluate your ability to maintain your obligations and try and determine how well you live within your means. Some individuals make the mistake of not paying the minimum monthly obligations on loans and credit cards with the expectation of making a larger payment the following month. These missed payments appear on their credit report branding them as chronic “late-payers” for the next 6 years. In Canada we use an empirical system of your score which is called the Beacon score, in the US it is referred to as a FICO score, they are on a scale from 400-900 the higher your score the more favorable your application will be.
Capacity to repay the loan is probably the most critical of the five factors. The lender will want to know exactly how you intend to repay the loan. The lender will consider your income as it relates to the loan that you are applying for. Does the monthly carrying costs of the loan represent less than or equal to 32% of your total monthly income? If it is, the probability of you successfully repaying the loan is fairly high. Prospective lenders will also want to know about any other sources of income you may have to repay the loan, if your steady income stream is interrupted. Some of the institutions such as TD Canada Trust allow you to use rental income to offset this obligation, either directly or as supplemental income, please send me a email if you have any questions regarding this policy, it is a important tool that can make or break a transaction.
Lovely little fixer upper!!
