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November 24, 2015November 23, 2021

Home marketing may be limited due to agents’ personal wealth strategy

From stagingworkstoronto.ca

If you ask a real estate agent about their home sale strategy, you may get a sanctimonious presentation of the best way to sell a house. However, if you question why they advocate specific procedures over others, chances are they will answer “experience.” Even in the face of an abundance of research, many continue to hold on to old and outdated beliefs about how to sell a house. Furthermore, consider that a real estate agent’s strategy to sell your home may not necessarily benefit your bottom line.

The latest study by Allen, Cadena, Rutherford & Rutherford (2015. Effects of real estate brokers’ marketing strategies: Public open houses, broker open houses, MLS virtual tours, and MLS photographs. The Journal of Real Estate Research, 37(3), 343-369) is the most recent extension of home sale strategy research. The study reinforces the outcomes of some strategies, while shedding light on others; and asks a compelling question about agent motives.

The study looked at home sale price, time on market, and the likelihood of a sale in relation to: broker open houses, public open houses, MLS photos, and MLS virtual tours. The results indicated that all four tactics positively influence home sale price. Additionally, conducting public open houses and having MLS photos have a positive influence on time on market. However, there is little evidence that having more than six MLS photos increases that positive effect. Surprisingly, MLS virtual tours and conducting broker open houses have a negative influence on time on market. The authors conclude that as a package all four strategies may be worthwhile to consider when home sale price is the goal, even though the time on market may be slightly extended.

However, if your goal is a successful home sale, you may consider another strategy. The study concluded that the probability of your home sale success increases when you have broker open houses, MLS virtual tours, and eight or more MLS photographs. The study found that public open houses actually decrease the probability of a successful home sale.

In light of these findings about home sale price and success of sale, the authors rhetorically ask: “Why do all sellers/brokers not use these marketing strategies in every transaction effort?” They propose that, “Perhaps the answer is that brokers follow a wealth maximization strategy that may result in an agency problem with sellers.”

It should come as no surprise that there are agents who have a “wealth maximization strategy” for themselves, and place their own needs before their client’s. However, the authors’ suggestion about agent motives could be problematic with respect to the National Association of Realtors® Code of Ethics (realtor.org). For example, Standard of Practice 11-2 indicates that, “The obligations of the Code of Ethics… shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the Realtor® is an agent or subagent, the obligations of a fiduciary.”

If you’re selling your home, one takeaway you might have from this study is that you should exercise due diligence when choosing your listing agent. Consider discussing the sales strategy, and getting it in writing. Additionally, protect yourself by ensuring that your listing agreement can be terminated without penalty and within a reasonable amount of time.

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Copyright © Dan Krell

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

November 19, 2015September 14, 2019

Keep calm and carry on – building a panic room in your home

There’s a mystique that many mid-century homes exudes. Maybe it’s the unpretentious architecture and retro-future feel that many people find charming. However, the homes also bring us back to a different time and place; yes, these homes remind us of the cold war era. During the height of the cold war, people went about their lives aspiring to advance in their careers, buying homes, and for many – having a bomb shelter of their own. Although building a personal bomb shelter in the back yard during the cold war may not have been as common as we are lead to believe; however, those who had a shelter of their own were most likely well known to their neighbors.

Although bomb shelters are passé today, finding ways to protect yourself in your home is once again trendy, and some say may be increasingly necessary. Today’s version of the in-house shelter is called a “panic room” (also known as a “safe room”). And like the movie “Panic Room,” the room may be able to offer shelter during a home invasion; but it can also offer shelter from other emergencies such as severe weather – and possibly some acts of terror.

When you think of a safe room, you might picture an elaborate shelter with provisions and amenities that will allow you to stay put for a couple of days or even a week or two. And in fact, FEMA (fema.gov/residential-safe-rooms) describes a safe room as “…a hardened structure specifically designed to meet the Federal Emergency Management Agency (FEMA) criteria and provide near-absolute protection in extreme weather events, including tornadoes and hurricanes. Near-absolute protection means that, based on our current knowledge of tornadoes and hurricanes, the occupants of a safe room built in accordance with FEMA guidance will have a very high probability of being protected from injury or death.” FEMA offers plans and funding opportunities to build a safe room in your home.

As you can imagine, building a panic room can get expensive, especially if you are planning for long term shelter and for a variety of emergency situations. Many spend tens of thousands of dollars in designing their shelters. And even though you may not consider yourself a “prepper;” however, it is possible to create a basic shelter room with limited funds.

The Allstate Blog (Brendan ONeill; Storm Shelter? Safe Room? Build Your Own Ultimate Secure Shelter; blog.allstate.com, May 22, 2013) states that a safe room is simply “… a secure, reinforced, well-stocked room where individuals can go to avoid the risks and potential dangers that may arise in other parts of a home.” When designing a “shelter room” consider the basics. Choose a room that has no windows, impervious to flooding and is as close to ground level as possible (Allstate suggests a garage or a main level room). Consider reinforcing the room with a solid core or steel door, as well as lining the walls with plywood or other materials (some suggest metal sheathing or Kevlar). The room should be stocked with supplies that include emergency food, water, and first aid. Don’t forget communication devices, which should include a battery operated radio. A more elaborate panic room may include close circuit video monitors, a toilet and/or shower, and even a separate ventilation system.

By Dan Krell
Copyright © 2015

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November 11, 2015October 20, 2020

The open house – still important when selling a home

Have you wondered how the open house tradition evolved? Earlier this year, Realtor.com detailed its history. Apparently, the first recorded open house was over one hundred years ago and described as “open for inspection.” The inspection was held over days or weeks allowing home buyers to inspect the home’s structure, layout, and features. It wasn’t until the 1950’s when the more familiar format and term “open house” took hold (Rachel Stults, A Brief History of Opening Our Homes to Total Strangers (aka the Open House); realtor.com; April 21^st, 2015).

Transformation of the open house can be gauged along with licensing, sales and cultural trends. If you were selling your home one hundred years ago, having your home open to buyers for a week or two made sense because it allowed prospects to see what they were getting. In a time before licensed home inspectors, the internet and virtual tours; a week of inspection was an important selling tool.

Home buyers are once again taking the time to “inspect” homes through multiple visits; usually initiated at the open house. The internet has empowered buyers to be proactive, giving them the means to search on their own; often visiting open houses without an agent. Seeing a home virtually is just the first step, visiting the home logically follows. The visits give buyers the ability to view the home with their own eyes (not the camera’s); as well as being able to make the all important emotional connection – deciding if they can live in the home.

Regardless of what you hear about the effectiveness of the open house, it’s still an important sales tool. And if you’re planning on having one or several, there are a few important points to keep in mind:

Advertise. You could say… “if you advertise they will come.” Most open house advertisements have moved away from the Sunday classified section to online real estate portals. I can tell you that when I ask visitors how they found out about the open house, the overwhelming answer is that they saw it advertised online. When setting up your online open house announcement, make sure that there is an enticing and brief description of the home to grab the buyer’s attention.

Make sure the advertised times for your open are accurate. More importantly, confirm your agent is at the home on time, if not early. A common faux-pas is not having anyone at the home when the open house is planned to begin. And unfortunately, a buyer left waiting to get in will more than not move on to the next open house.

Prepare. Organizing an open house offers the opportunity for you to focus on the details. No matter how much de-cluttering you have undertaken prior to listing your home, you can always tidy-up. Additionally, pay close attention to your home’s curb appeal, as it can be the difference between buyers entering the home or driving on.

Finally, make sure your agent is working the open house to sell your home. Agents know that many buyers visit open houses without an agent. And in the past, many agents advocated to have the opens not for the seller’s sake, but instead to build their buyer pipeline. Knowing this, the Maryland Real Estate Commission reminded listing agents a few years ago of their duty to their seller, clarifying their role at the open house.

By Dan Krell
Copyright © 2015

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November 5, 2015November 23, 2021

when real estate agents go over the line

Although not listed in this year’s Careercast’s annual Top 10 Most Stressful Jobs, “real estate agent” has been included in previous years’ lists. Supposedly, real estate is one of those industries where “frequent or difficult interactions with the public or clients” along with high levels of stress may also be responsible for high levels of depression, as described by Wulsin, Alterman, Bushnell, Li, & Shen in their 2014 study (Prevalence rates for depression by industry: A claims database analysis. Soc Psychiatry Psychiatric Epidemiology, 49,1805-1821). Results suggested that the real estate industry has the second highest rate of depression, second only to bus drivers and transit workers. Certainly to be included in such lists is not an achievement. However, it may explain the erratic behavior of the few agents who are willing to go over the line to gain an edge over their competitors; such as in this recent account…

In their November 2^nd Miami Herald article (Secret tapes, blackmail threat: Luxe real-estate rivalry turns nasty in Miami; miamiherald.com), David Ovalle and Nicholas Nehamas gives us insight to the highly competitive Miami uber-luxury real estate market. What seems to be the plot of a TV crime drama is the real life story that will soon conclude in a court room. Having pleaded not guilty, a middle aged real estate agent is now awaiting trial for “felony extortion, resisting arrest with violence and attempting to deprive an officer of his weapon.”

The story’s main characters are the agent duo known as “the Jills” and Kevin Tomlinson. The Jills have been recognized as being a top producing team in Miami’s luxury real estate market for some time. Tomlinson is no slouch either. He has also been recognized as a top Miami luxury agent, and in the past served on the board for the Miami Association of Realtors®. And although Ovalle and Nehamas’ report suggested that the Jills garnered jealousy from other agents; others have also questioned their business practices.

At the heart of the matter was the allegation that the Jills hid expired listings so the properties would not be solicited from their competition. The allegation is that MLS listing data (such as address, city, and neighborhood) were changed to “hide” expired listings. In an attempt to end the practice, Tomlinson filed a complaint of listing manipulation in April of this year. And that’s when things got interesting.

Rather than waiting for the ethics complaint to process through the system, Tomlinson allegedly asked the Jills on several occasions for large sums of money (up to $800,000), to rescind the complaint. Tomlinson supposedly also threatened to go public if they didn’t pay up.

The combination of high end real estate, allegations of unethical behavior, extortion claims, a police sting operation, may already be the basis for a night’s entertainment. However, the ending sounds like a “take down” scene from Hawaii Five-0: no one expected that Tomlinson would be also charged for going for a policeman’s gun while charged for resisting arrest.

Although the public details may seem incriminating, it appears that there’s more to the story; and maybe each is a “villain protagonist.” Many in the Miami real estate community have rallied around Tomlinson, and some “have petitioned the Miami Association of Realtors® to take ‘disciplinary action of the highest severity’ against the Jills.” For the thrilling account details, please read Ovalle and Nehamas’ story at (miamiherald.com/news/local/community/miami-dade/miami-beach/article42178872.html).

Original published at https://dankrell.com/blog/2015/11/05/when-real-estate-agents-go-over-the-line-to-gain-edge/

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October 28, 2015October 20, 2020

Living with a ghost in your home

A recent Trulia poll (infographic at right) revealed how men and women differ about living in a home associated with the paranormal or macabre (Trulia’s House of Horrors; trulia.com; October 13, 2015). Respondents (45% of women and 36% of men) answered that they would prefer to be haunted by a “vengeful ghost” rather than a demon, evil leprechaun, or possessed doll. When asked, 59% of women respondents indicated that they would lose interest in the “perfect” home if they knew the home was a former crime scene; while 47% of men indicated the same. Additionally, 32% of women indicated that they would rule out an otherwise perfect home knowing that a person died there; while 23% of men indicated the same. Apparently, living next to a cemetery was not a detractor from purchasing an otherwise perfect home, according to 61% of the men and 50% of the women who responded.

Ghost or not, the “creep factor” is definitely an issue for many home buyers. So much so that home buyers are turning to services such as DiedInHouse.com to determine if a death occurred in a home they are considering buying. For a fee, DiedInHouse.com will provide a report indicating if a death has occurred and the cause, as well as other information about the home including any reported meth-lab related activity or fire incidents.

Although many alleged haunted homes are old and in many cases have historic significance, new homes can also have ghostly activity. Local historian, Karen Yaffe Lottes, re-tells this story on her blog Montgomery-Ghosts (montgomeryghosts.wordpress.com) about a modern Germantown home where a police officer lived. The officer reported that the house shook and he heard heavy footsteps on the stairs, when putting on “dress blues.” Apparently, the house was built on the site of the farm where Lincoln conspirator, George Atzerodt, was arrested by a uniformed Union soldier – the Union Army uniform was blue. Atzerodt, was subsequently jailed and hanged for his part in the conspiracy. Could Atzerodt still reside on the site where he was apprehended and sent to his demise?

Karen knows a thing or two about local haunted homes, and told me that she uses ghost stories as a medium to tell a history. Along with co-author Dorothy Pugh, years of stories from their “In Search of Ghosts (ISOG)” event at the Montgomery County Historical Society was published as In Search of Maryland Ghosts: Montgomery County (Schiffer Publishing, October 28, 2012).

When asked what to do if paranormal activity is suspected in a home, Karen explained that people try various methods to rid their home of ghosts; some work and some do not. She pointed out that not everyone is uncomfortable with the thought of living with apparitions. Some people actually welcome the spirit to stay; and in some cases ask the ghost to move with them to their next home.

By Dan Krell
©2015

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