The DIY Property Sale KIT. By Mike Cuevas EXIT Realty Redefined

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1 The DIY Property Sale KIT By Mike Cuevas EXIT Realty Redefined

2 Introduction The first thing to know about how to sell a house fast is that it is all about exposure. You need to market your home to as many people as possible in the shortest amount of time. Creating that buzz for your property is the key to selling a house fast. The Internet has allowed us create massive exposure for properties for sale today. Real estate search engines and social media have transformed the way properties are bought and sold. The Power of The Internet Selling a house today is not like it was 5-10 years ago. In order to understand how to sell your home in today s market, you must first understand how homes were traditionally sold. Before the Internet all real estate was sold the traditional way. A local real estate agent with an established market presence used to be your best resource to sell your home for top dollar. Real estate agents controlled the access to market data needed by homeowners for pricing and listing competitively. They controlled the flow of information and had access to what was for sale. There were no real estate search engines like Realtor.com, Trulia, or Zillow. If you wanted to buy real estate you would have to drive around, look up listings in the local newspaper, or be working with a wellconnected real estate agent. Real estate agents had large databases of contacts needed to sell your home. They knew everyone in the neighborhood and the good agents were the go to

3 source for real estate in their respective communities. Real estate was a local business. Once a Realtor listed the property for sale, they would market the property to the other real estate agents and their network in the community. Networking was a powerful way of getting the word out there about a new listing. Realtors with prospective buyers would bring over any of their current clients. Additional marketing activities for the property typically consisted of placing a sign in front of the property, hosting an open house, and publishing the listing in the local newspaper s real estate section. Today s Real Estate Marketing Today, technology and the Internet have changed how properties are marketed for sale. The simplicity of logging online and finding properties can be done by anyone who has a computer. Technology has changed the behavior patterns of both home buyers and sellers. Buyers are beginning their property searches online. Understanding how buyers are gathering property information and conducting real estate searches today is fundamental for any homeowner looking to sell their property. Think about your upcoming real estate search. Have you used any of the above websites to get an idea of what other properties like yours are selling for?

4 Your first showing will take place online! If you want to get maximum exposure you should be experienced in Internet marketing and positioning. Social media has come onto the scene in a major way. Sites such as Facebook and YouTube serve as additional channels for marketing real estate. Using YouTube videos is a perfect way to boost SEO (search engine optimization) for your home. It is not difficult to have your home rank in search for videos right away with the right tricks. Using a video of your property on social sites like Facebook can help reach hundreds of extra potential buyers. Social media is an inexpensive way to reach a large amount of potential buyers within a budget that is doable amongst anyone. In the past this would cost several thousands of dollars. Social Media has completely reversed that entire process and has become a new medium to inexpensively market your home for sale.

5 Chapter II-Understanding Pricing & Market Time If you are trying to sell your house for top dollar you must take market time into consideration. A very important strategy in selling your house for top dollar is to minimize the overall market time on a property. A lower amount of market time typically results in a higher to list priced offer. A higher amount of market time typically results in a lower offer price. Buyers perceive high market time as an invitation to low ball you. The first few weeks you are listed for sale is when you should receive the most amount of traffic. Your best chance of receiving an offer will come within the first 30 days you are listed. This time is crucial because that s when everyone will take notice of your home. Buyers and real estate agents closely scour the market for homes that have price changes or brand new to the market. When a home comes on the market it becomes the new hot listing and raises eyebrows. Serious buyers will quickly schedule an appointment for viewing the property before it s gone as they have exhausted all other options and waiting for the perfect property to pop up.

6 Why Buyers Will Pay Closer To List Price With Shorter Market Time The key to selling a house fast is creating too good to be true perception with proper positioning of your home. It is the perception of, someone may buy it, that will have many potential buyers create their own sense of urgency. Buyers and real estate agents know that a new listing gets a lot of attention. It is for this reason that much of the leverage is on a home seller s side. People will pay more for something today that they fear can be taken away from them tomorrow Think about that statement deeply. No buyer wants to picture their Dream Home being sold to someone else. They are more likely to increase in offer price when negotiating with you. An educated buyer understands the minimal effect $5,000-$15,000 has on their monthly payment if obtaining financing. Because of this, a seller tends to have the upper hand in negotiations on a newly listed property. You will know immediately if you are priced too high if you are not receiving much activity the first few weeks on the market. As long as you incorporate a decent online marketing plan, you should receive many showings the first few weeks on the market. If showings are slow then you are most likely priced too high or not marketing the property the way it should be. Why Market Time Is A Bad Thing

7 One of the first questions that come to mind for buyers are about the amount of market time a property has accumulated. They want to know how long a property has been for sale. Buyers justify their purchasing decision by recent closed sales and the current inventory that exists. The longer a home sits on the market, the more likely a potential buyer will come further away from the list price regardless of what it is. Buyers begin to second guess the value of a home that has been sitting on the market. They ask themselves why it hasn t sold yet. They want to know why nobody else has scooped in and purchased it if it was such a good deal. In today s market, days of market time is a lot! If it does not sell it is more than likely a matter of price or marketing. CASE STUDY There are two houses on the market. Let s assume the houses are identical. One house has been on the market for 98 days and the other house was newly listed. Assuming you would buy either house, do you think you have more negotiation room on the newly listed home or the home that has been on the market for over three months? When a property sits on the market it creates a stigma amongst buyers that something must be wrong with it. The seller who just listed their home is not as likely to have as much negotiation room since they are still in their I m testing the market mode. The seller who has been on the market for 98 days is starting to get a little anxiety of the sale of their property. They tend to be more open to look at all offers. When I am working with a buyer client and I see long market time, I am more likely to advise my client to start off with a much lower initial offer price. I know newly listed properties have more activity and showings. I know that the property sitting for 98 days has not moved and that their showings are dropping off. Therefore I would advise that we start much lower on the house with a lot of market time.

8 Chapter III-The Truth About Print Advertising Print advertising for marketing your home is DEAD. The exception to the rule is that you are either famous or selling a very high-end home. A good example was when Michael Jordan s house went on the market. That property is a landmark type of property both in the uniqueness of it and because of who he is. A home like that should be featured in some kind of high-end print magazine with mass distribution. However, for the rest of us who did not win 6 NBA championships, marketing your home online is the way to go! Good Types of Print Advertising Not all print advertising is bad. There are still some traditional print marketing tricks that do work. I am a fan of just listed postcards. A just listed postcard is a postcard that alerts your local neighborhood that your home is now for sale. The best cheerleaders for your property are very often the people who live in the same neighborhood. A post card like the one below encourages word of mouth advertising and you will be surprised at how well these can work. Sending a Just Listed postcard to your local community is a good way to announce to the neighborhood that your home is for sale. Postcards and postage can be very expensive though. The United States Post Office recently introduced a new program called Every Door Direct Mail. This allows advertisers a very inexpensive way to market their local community. You can save over 70% on the postage as the postcards are mail inserts and delivered to every mailbox on the mailman s route of your choosing.

9 Signage A for sale sign is also something that can help get the word out that your home is for sale. The easiest way to let everyone know your home is for sale is to put a big sign in front of the property. If you wanted to get a little creative here you could get add sign riders to your for sale sign describing the number of bedrooms and baths. Along with your sign you can also have an information tube that has the property listing sheets and other information printed on it. If you ever taken a stroll through a neighborhood and seen an empty information box in front of a home for sale, it s because people take them! They do work and the neighbors will take them to see what is going on.

10 Chapter VI-The Importance of Pictures and Video Real estate video tours and professional pictures are essential to selling your house. It s the videos and pictures of the property that drive online traffic to inquire further. It s a fact that the more pictures you have of your home online, the more online views and engagement you will get. Consumers want to see the inside of a property before doing any further inquiries into it. Time is Money People are more time-conscious than ever right now. They do not want to take the time out of their day to go look at a house they have no idea will interest them or not. In today s market, potential buyers view homes online first. If the house looks like it might be a match, then they will take the next step of scheduling an appointment to view the property. It was not long ago when pictures and videos were very rarely posted online. Consumers and real estate agents had to rely on the description or listing remarks to get an idea of what the inside might look like. The Right Way To Use Pictures Pictures help show the potential buyer the home s selling features. Buyers want to know whether or not the kitchen or bathrooms are updated. They want to see how big the back yard may be or the view out the rear window. Your pictures should show off the main selling features of a home. For example,

11 if you have a large super updated kitchen, you should take multiple shots of that kitchen from different angles. There is no such thing as too many pictures when it comes to real estate marketing. Think about the last time you looked at a house online. Did you want to see the kitchen from the living room and couldn t? Did you want to see if the kitchen had an eat-in area for the kids? Some of the search engines like Homes.com will feature and rank listings higher in their search results based upon the number of pictures a property has. The home that has 23 pictures will rank higher than then one that has 16 pictures. Wouldn t you like your home to be listed first on the search results? One of the ways you can have your home rank higher on search results is by adding more pictures than your competitors. Go online and look right now on any of the real estate search engines and see for yourself. Below is an example of how Homes.com determines what properties they place higher on their search. They understand that their users like more pictures on properties and reward listings with many pictures by giving them better placement in search results. The quality of the pictures is also important. The platform that your home is featured on will have picture sizing preferences. Different social media platforms have different sizing preferences that make a HUGE difference when marketing your home. You want to make the image pop! On the next page you will see 3 separate kitchen pictures. How do you feel they portray the kitchen? Do the different angles give you an idea of the overall size of the kitchen?

12 Use A Professional Your pictures should be of professional quality. It is ok to use a Smartphone as long as the photographer knows what they are doing. The quality of pictures that come out on Smartphones is amazing. It s the person taking the pictures that needs the skills. A skilled photographer will use a wide-angle camera lens to take quality pictures. You get one chance to make a good first impression! A poorly photographed property will give you showing results. If your pictures look bad online, expect a dismal number of showings, which always results in a lower sales price. Real Estate Video Tours

13 Real estate videos are so important. We suggest using both pictures and a professionally done video of the property. Pictures lack the ability to walk through the property. They work great for showing the selling features of a property, but they do not allow someone to visualize the overall flow. Video allows another dimension in marketing your property. Potential buyers can walk through a property online to get a feel of it without being there. Video allows us to show off the entire property and leave a lasting impression! Real estate video tours also allow for further Search Engine Optimization of your property if you are properly marketing your home on sites such as YouTube. YouTube, which is owned by Google, is the world s second largest search engine. Do you think you might want to get on that train? It is not difficult to rank on page one of Google videos for your property if you know how to properly optimize your video uploads. We also see a direct correlation in engagement in properties that have a professional video done vs. properties without any video. Engagement is when people on social media like or comment on your video. The more engagement you receive, the more exposure you get. People love property videos and it s a great way to advertise your home. Think about the lasting impression that is made on a property with a video. The mental image of your property will stay with the consumer longer. You can get an example of how a real estate video should be done at: Scroll through some of the listings on the home page there and see the examples of different property videos. Did the video leave a better impression on you? Are you able to get a full walk through of the property? Did it pop and make it stand out? Once you have pictures and videos created for a property, you can set up an online brochure or website. This really creates a buzz and allows you to position the property attributes and show them off rather than talk about them. You can use the website to post your property on social media sites such as Facebook, YouTube, Pinterest, Twitter, Linked In, and other blogs for further exposure. If you are unable to create a property website you can post your video on YouTube and then just share the link on your social media sites. This is the fun part!

14 Chapter IV-How To Position Your Home Online Proper positioning is how you present your home for sale in all your marketing. Many people do not fully understand what proper positioning is. Positioning is what I use to refer to how a house is appears or is perceived by the general public. It is how your home is portrayed in image, tone, and even pricing. Who are we trying to reach? Who is the most ideal buyer for this property? To properly position a home you need to find out the who, what, where, when, and why someone would want to buy your property. Once you can answer those questions then you can begin to create the storyboard for your home to get it ready to take to market. Proper positioning is what ties everything together to sell your home for top dollar. Think like the big brands do Big brands position and cater to their intended audience. You want to market your house the same way a big brand would market their products to the general public. You will see a HUGE difference in showings, market time, and offer prices by properly marketing and positioning your house for sale. There are many different ways to position a house for sale. Let s start with pricing.

15 Pricing Positioning Pricing is probably the most important part of positioning. The asking price is very important in the overall marketing plan. A good marketing plan for a house should have 2-3 pre-determined price change/repositioning points should you not get enough traction with your initial asking price. This will allow you to pre-plan your next move ahead of time. A strategic pricing plan also avoids accumulating too much market time, which always invites low-ball offers. The number one criteria consumers search is based on price. Go look on any of the major search engines and you will realize that search prices tend to be in $25,000-$50,000 increments. People search up to $100,000, $125,000, 150,000, and so on(if this is their price point). It is important to take this into consideration when determining your initial list price. Every time a price change occurs and your list price changes in a $25,000 increment you will target a new pool of potential buyers who previously were not seeing your property in their search. Case Study There was a listing that has been on the market for over 265 days without ever having a price change. The market time accumulated on the property alone tainted the listing. Nobody wants to buy the house that sat on the market FOREVER. When the property was re-listed it came on the market at $214,900. This was only a $5,000 price change from when it was previously listed at $219,900. The seller was taking a big loss on the property so every dollar counted! It was on market for roughly 3-4 weeks with a good amount of showings and even a second showing, but no offers. This time trying to sell the

16 property the owner had to take into consideration the market time. They did not want to accumulate too much of it to avoid re-tainting the listing. The seller decided to go below the $200,000. Once they listed below the $200,000 mark they would be targeting a completely different buyer pool. They were now marketing to the up to $200,000 buyer. Many buyers did not previously see the listing when it was priced above $200,000. Within 4 days of changing the price, the seller received an offer for within $1,000 of list price. The buyer decided to offer near list price because they did not want to lose out to any other buyer. The property was relisted which erased previous market and price change repositioned a sense of urgency into the property. The buyers knew the seller could likely get another offer, which would put them into a multiple bidding situation. That is pricing re-positioning! Description Positioning It is very important to tell a story of the home in the description rather than trying too hard sell it. Potential buyers are looking for an investment and a home to live in. Based on the type of property you are trying to sell, you need to position your property to speak to who would most likely be your buyer. If you are selling an investment property the remarks should be focused on numbers, cash on cash return, net operating income, gross operating income, and CAP rates. If I am selling a single family home, the remarks should be focused on school districts, local restaurants, and parks. They are more focused on lifestyle. When you put your home for sale it is very important to express the things you love most about the property. Make sure you describe how you take walks to the lake or how you love the short walk to the train. You need to write a story board for your house so that they can speak to potential buyers to strike an emotional cord with them.

17 Case Study There was a property located in north side of Chicago in a neighborhood that Loyola University is located in. It is also just a short walk to Lake Michigan, train, and the college itself. It was determined that the buyer was going to come from one of these 3 categories. These are the listing remarks: PRICED TO SELL!Recent gut rehab w/all the upgrades galore steps from Lakefront,Loyola,& Redline stop around the corner.ultra convenient location.super bright unit feels brand new w/ exposed brick,featuring hardwood flrs throughout,cherry cabs,stainless Steel appliances, granite c- tops,3 large bedrooms and both bths completely upgraded.nice size deck off living room for grilling & outdoor space,pkg leased,storage room Focusing on the location of this condo really talked to potential buyers. The couple who bought the condo loved to take walks on the lake. The description helped get their attention to come see the unit. This is Description Positioning! Marketing Positioning When you are listing your home for sale you should focus your marketing efforts in areas where your buyer is more than likely to come from. You can target potential buyers in many ways. There s more to do than just placing a sign in the yard and listing it on a few websites. You need to proactively market the home to the areas you believe the buyer will come from. Marketing positioning is targeted marketing focused specifically on the geographic location or demographics of your most ideal buyer.

18 Once you have created your ideal buyer avatar for your home, it s time to find out where they hang out! This is the fun part! With the use of social media you can really zero in on where this buyer avatar is at online. In Facebook, you can target people based on location, zip code, or even what Facebook pages they like. Case Study There was a house in Woodridge, Illinois. We knew immediately that the buyer for this home was going to come from one of the nearby cities. We wanted to advertise locally so that people would know that this house was for sale. Using the YouTube video of the property and targeting consumers in Woodridge and nearby cities with a Facebook ad, the views and reach were incredible. Within a week there were over 500 views on the video. All of this was because social media allowed the targeting of the ideal buyer for this home. The sellers were very excited about this, especially after it sold the house!!! The house sale set a new record sales price for the neighborhood on top of it! You can target your potential buyer as long as you know where they are most likely hanging out. Social media allows you to do this. That is Marketing Positioning!

19 Chapter VI-Closing Costs One of the most important things when selling your home is the bottom line figure you walk away with. As in any transaction there will be costs to doing business. This is especially true in today s market as the rebounding values are allowing more sellers the ability to sell their home for more than they owe. A few years ago many sellers were underwater on their homes. If you get an accurate net sheet (closing cost sheet showing your walk away figure) up front, you will be better prepared to accept or counter an offer when the time comes. Without knowing the true costs of selling your home, how can you determine what an acceptable sales price is for your property? One of the first things you should before you put your home on the market is to prepare an accurate net sheet. A net sheet should give you accurate information on the NET number you will walk away with after all closing costs. This is the number you should be most concerned with. Don t you want to know what your net proceeds will be before you execute an offer for your property? When you have a net sheet done up front, you are able to make a decision fast. CASE STUDY There was a couple who bought their condo in 2007 at the absolute peak of the market. Even today they are still underwater on their property, but THEY HAVE TO MOVE. The couple knew they had to bring money to closing to sell their house, but they had no idea how much. How can you to make an educated decision on an offer for your property without knowing your costs to sell?

20 They couple was prepared to bring up to $50,000 to closing. Preparing a NET sheet allows you to have a good idea what your net proceeds will be based on what is being offered for your property. Ordering a net sheet ahead of time allows you to know where you stand and make an educated decision on any offers you receive. Typical Closing Costs For Sellers Some of the closing costs you can expect to incur when selling your home are as follows: Realtor s Commission- Commissions should be around 5-6% of the sales price depending on your agent. Many people view this as an unnecessary cost of doing business, but I totally disagree. I believe that if you have a good agent who knows how to properly market your home that the sales price will result a minimum of 5-6% more due to increased exposure and marketing. A seller trying to sell a home on their own should be prepared to pay a buyers agent commission which will run roughly 2.5%. Roughly 88% of all buyers are represented by a Realtor. Title Fees-This will vary on sales price and title company, but most title companies will range in the $1,200($100,000 purchase price) to $3,000

21 ($1,000,000 sales price) expense. The seller in Illinois is responsible for paying the title insurance. There could be some miscellaneous title fees as well. Attorney s fees (if applicable)-illinois is one of 2 states that I know of that has real estate attorneys close transactions. Their fees tend to range in the $500- $700 range. Survey fee-if you are selling a detached single family house, you will need to get a survey of the property. This usually costs around $500-$750. Real Estate Tax Prorations (if applicable)-in Illinois the seller has to credit the purchaser with a real estate tax credit for their unpaid share of taxes accordingly. We pay taxes in arrears in Illinois. This means that we are always paying our property tax bills one year behind. Plan on giving about one full year of real estate tax credit. This is not really a cost since it s a bill that you owe since you occupied the property during the time the bill was assessed, but it will deduct from your bottom line. When you purchased the property you should have also received a tax credit from the seller at that time for the prior year s unpaid share of taxes. Real Estate Transfer Stamps/Taxes (if applicable)-this will vary by based on county and state. The seller in Illinois pays for the state and county transfer taxes. Payoffs To Any Existing Loans-This is your payoff owed is their is debt on the property.

22 Chapter VII-Agent or No Agent If you do decide to list your house with an agent down the road, my best advice is that you should interview a few. The first thing you must know about real estate agents is that they are not all the same. There is a reason 10% of real estate agents do 90% of the business. I believe the 10% agent crowd understands marketing entirely different that the remaining 90%. The company they work for is not as relevant as it used to be. This is because it is the agent you hire not the company they work for who makes or breaks a deal. Agents are independent contractors, which means they all conduct their businesses differently. You might have two agents within the same firm, but receive two entirely different marketing strategies and experience levels. When interviewing real estate agents to list your home for sale there are some key questions you can ask them to see how good at marketing they are. Remember that an agent s job is to create the additional exposure on your property to justify the 5-6% in commissions you are going to pay them. It is a fact that properties listed with Realtors sell for more money. A good Realtor s commission will pay for itself if their marketing plan creates the extra exposure that results in an offer of at least 5-10% higher than selling it on your own. If that s the case then it s worth it! They handle all the paperwork, inspection, financing coordination, and a whole lot more. One of the ways you can tell if you are hiring an agent who understands marketing is by evaluating their online marketing capabilities. If they emphasize a large part of their marketing plan on print advertising, they might not be too online saavy. If they tell you that your home is going to go in the Sunday paper and that is a major part of their marketing plan, you should expect dismal results. Sit back and think about it. If you are in the market to buy a property, what is the first thing you do? Do you go out to the corner and pick up a newspaper and look in the Homes section or do you stay in bed and simply log onto the Internet. I hope you enjoyed this report and best of luck in your home sale!