Inventory Home Challenges

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SPRING CONFERENCE 2007, DEERFIELD BEACH FLORIDA

• Inventory Home Challenges
• in a Changing Real Estate Market

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INVENTORY DISCUSSION PANEL

• CLIENT PERSPECTIVE
• NANCY CARTER, CRP, GMS
• SUPERVISOR RELOCATION
• DARDEN RESTAURANTS, INC.
• THIRD PARTY PERSPECTIVE
• RANDI MILLER, CRP
• SENIOR ASSET MANAGER
• WEICHERT RELOCATION
• REAL ESTATE BROKER PERSPECTIVE
• JUDY BISSELL, CRP, GMS
• CORPORATE COUNSELOR
• WATSON REALTY CORP.

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THAT WAS THEN!
In a great market, only homes that looked like
this came into inventory.
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TODAYINVENTORY HAS NO BOUNDRIES
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INVENTORY EXPENSE

• Tangible Expense
• Paying for Mortgage interest Utilities
  Insurance Association dues
• Upkeep for Lawn Pool
• Maintenance Repairs Painting Cleaning
• Intangible Expense
• Perception of relocation home
• Low ball offers
• Extravagant repair requests
• Requests to pay buyers closing
• costs

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Adding to Inventory Homes

• Rise in interest rates
• Negative equity situations
• Company culture
• Constant media focus on downward markets etc.

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Inventory Home Costs

• EXAMPLE
• Home value 300,000
• Monthly carrying costs (1.00) 3,000
• Inventory time of 3 months x 3
• Increase in costs () 9,000
• Increase in costs () 3.00

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Marketing Inventory Homes

• Selling inventory homes quickly
• Price reduction
• Creative Marketing Techniques
• Agent/Buyer Incentives
• Open House and Door Prizes
• Membership fees-Association Dues
• Gift Cards-Travel Packages
• Listing agents suggestions
• Aware of the market competition
• Knowledge of condition of home
• Provide pictures to accurately
• assess situation

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Inventory Home Challenge

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GARAGE DRIVE-WAY CONVERSION
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SOLUTION
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OUR CHALLENGES

• Every BMA needs to be executed perfectly!
• Accuracy is critical in many fields,
• especially in a softer market.

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STAY UP WITH THE BUYERS

• Whats different this time around?
• So much is about the internet!
• Echo Boomers find, preview, mortgage and close on
  internet.
• It is no longer about an ad in the newspaper!
• Be on all sites where Buyers are visiting!
• 77 of buyers search on the web

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ATTRACTING THE BUYER

• More Photos More Property Views

Homes with 6 photos are viewed 558
more! National Association of Realtors
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YOU HAVE 15 SECONDS!

• THE FIRST IMPRESSION

• Curb Appeal
• The Model Home Effect
• Appeal to the Senses
• -Light
• -Color
• -Sound
• -Smell

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OH, WHAT TO DO WHAT TO DO..

• Top rooms for most bang for the buck!
• Kitchen
• To brighten, paint cabinets and put up new
  curtains
• Update major appliances
• Leave a delicious smell in the kitchen
• Bathroom
• Replace old caulking around the bathtubs
• Repair any dripping faucets
• Remove stains from toilets, bathtubs and sinks
• Keep sinks and mirrors shining
• Use a deodorizer in the bathroom area

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EASY FIXES, BIG REWARDS

• Living Areas
• Have all plaster in top shape on walls and
  ceilings
• Use white and neutrals if painting and
  redecorating
• Clean fireplace
• Wash windows and replace any cracked or broken
  glass
• Keep draperies open, window shades up
• Replace burned out light bulbs
• Be sure every light switch works
• Lubricate any sticking or squeaking doors
• Keep air/heat settings at comfort level for season

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EASY EXTRAS

• Basement, Attic, Garage
• Keep stairways and entryways well lit
• Keep basement bright with new paint or lighting
• Ventilate or dehumidify
• Repair cracked floors and walls
• Outdoors Drive up appeal
• Invest in landscaping where it can be seen at
  first sight
• Cut back over-grown shrubbery and keep lawn mowed
  
• Paint exterior if necessary
• Repaint front shutters, window frames, and front
  door
• In winter, walkways should be free of snow and
  ice
• Place flowers outside of the front door

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SET THE STAGE FOR A SALE

• Create a warm, welcoming atmosphere in a vacant
  house. Enlist the help of a local florist,
  furniture store and accessory shop. Let them
  place a few pieces around the home to create a
  feeling of someone living there.
• Decorate the bathrooms with fresh towels,
  accessories and fragrant soaps. With a Jacuzzi
  bath, set a relaxing mood with books, wine,
  candles, etc.
•   Display color pictures of the property as it
  was furnished in the house and also on the
  web site.
• Accessorize fireplaces with plant arrangements in
  the summer and laid fires (use white birch logs
  if available) or fireplace candles during the
  winter. 
• Install a seasonal door decoration.

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THEN AND NOW

• Past 5 Years
• Most Properties Sold Under Home Marketing
  Assistance/Employee Sale
• Adverse properties went into inventory
• Policy trends to BVO
• New Pulse And Trends Show
• Market Stabilization
• Less appreciation in property values
• All involved must be realistic on property value
• Home sale efforts must be focused

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CORPORATE COST

• EMPLOYEE GENERATED SALE REDUCE OVERALL CORPORATE
  COST BY AVERAGE OF 6!!
• Average home sale costs as a percent of home
  value
• Employee-Generated Sale (AV, BVO) 9.40
• Inventory
  15.10
• Total Inventory Sale cost may exceed 25 for
  extended inventory time.
• ERC Home Sale Program
  Costs

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Average Total Cost

• Average property value
  300,000
• Average inventory sale 45,300
• Average employee sale 28,200
• Difference per property 17,100

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COMPS AND TRENDS

• CURRENT COMPS
• APPRAISER
• REALTOR
• AVERAGE PRICE VS. PREMIUM PRICE
• TRENDS
• LOCATION
• TIME OF YEAR FOR MARKETING
• LISTEN TO THE LOCAL EXPERTS
• METRO VS. RURAL
• SINGLE FAMILY VS. CONDO

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OUTSIDE INFLUENCES

• Local job market (plant closings, layoffs)
• Natural disasters
• Property history, reputation
• Location of property
• Number of competing listings

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Managing Inventory Cost

• Stay ahead of the market!!
• Pricing
• Time on market
• Competition
• Weigh loss on sale to continued carrying costs
• Potential monthly carrying costs 1-2
• Proactive recommendations
• Staging
• Incentives (HOA, golf membership, out of box
  advertising)

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SO MUCH FOR SO LITTLE
BEFORE
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LOOK AT ME!!! LOOK AT ME!!!
AFTER
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CHALLENGED PROPERTY
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A PICTURE IS WORTH THOUSANDS
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CHALLENGED PROPERTY THANK EMU VERY MUCH!
EMU NO MOVE
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SO FROM OUR EMU TO YOUR EMU

• Price em right!
• Spruce em up!
• Show em to Everyone
• And
• Mark em SOLD!

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THANK YOU!

• NANCY CARTER
• RANDI MILLER
• JUDY BISSELL