A Student of Superior Real Estate Approaches – Questions Answered!

QUESTION #1:

I am facing a dilemma. I have a family member who is a real estate agent, and would love to use their services—but I am unsure if they are the most qualified. I don’t want to hurt 

their feelings, but I also don’t want to lose profit on the saleof my home.  Jeff Parker, Eugene OR

First, loyalty is important. But in my experience, having researched the difference between superior real estate approaches and inferior real estate approaches, or as I talk about in my new book, The Warren Buffett Approach to Sell Real Estate—a price-driven approach vs. the better value-driven approach—the difference in profit you extract/or lose, depending on which approach you use, can be upwards of $30,000 or more.

Loyalty matters. Good friends are loyal. Good family members are loyal. But the secret to financial success, sometimes, is separating the roles and relationship duties of a family member or friend, someone who is willing to help you move, grab a beer with you, or will let you cry on their shoulder, etc. from that of the professional you hire that is capable of getting you the best result. These are judgment calls you must make. In some cases, if your friend or family members is using an inferior approach, are you willing to walk away from of up to $30,000 of additional profit? Maybe you are, to maintain that relationship—even if you’re the one who gets the short end of the (financial) stick.

For more of my thoughts regarding this, read Chapter 5 in my book, where I explain the value-driven approach and its benefits, that I learned by studying Warren Buffett, the world’s greatest investor, and his investment philosophy.

QUESTION #2:

I am considering hiring a stager for my home sale but don’t know if it’s worth it. I’m not afraid to spend money to maximize my investment, but I’m on a limited budget and I don’t want to spend money, frivolously, if it won’t help.

Jessica P.
Eugene OR

The answer is, it depends—on who you hire and what kind of staging they perform.

Here is a fact: Model homes generate higher profit. So, why do more real estate agents NOT spend more time, helping their clients make their homes look and show like model homes?

Once buyers can visualize themselves in a home, can see how the layout will work for their family, can feel the openness and the love of the home; you have lowered their resistance to making an offer and, have vastly increased the likelihood of getting a strong offer—not a conditional one with many “contingencies.”

When buyers can openly see a house, as their house, not one that is lived in by another family, then the buyer will start—as we want them to—making emotional decisions, not logical ones. This is why home builders, and you may not know this, spend so much time studying the science of staging homes. Scientific staging offers much greater profit potential than conventional staging, as most real estate agents and home stagers push their clients toward.

For my clients, this is why I hire THE BEST, MOST SUCCESSFUL stagers in the area, Stacy and Sharon at Limelight Staged Homes.

Have you ever seen the show Love It or List It? If not, it’s a simple premise.

First, there is a homeowner. This homeowner, usually, is a person who’s grown somewhat bored with their home and now is considering selling it. Then there are the hosts of the show. Interior designer, Hilary Farr, and real estate agent David Visentin – these are the people responsible for the transformation of each home.

While designer Hilary attempts to restore the homeowner’s excitement about their home, real estate agent David tries to find the couple the home of their dreams.

Once all work has been complete and all potential homes have been viewed, the couples must decide whether to “love their home” or “list it” – about seventy-percent of the time – the homeowner chooses to “love their home” and keep it rather than sell it

This demonstrates how the proper use of scientific staging, can be powerful. And can be a huge motivator in making a buying decision. This works on a behavioral level. Scientific staging pushes buyers from just comparing beds, baths, and square footage, to being emotionally connected to a home for which they can see themselves living in—the end result—equals, higher sales price.

This is why I hire Stacy and Sharon on behalf of all clients when executing “The Warren Buffett Approach To Sell Real Estate.” These two women, like Hilary Farr, can transform your home from a “lived in home” that is comfortable and fits your family needs, to one that could be mistaken for a model home. I don’t claim to know Staging Science – so I bring in, locally, the very best.

There is an old adage that says, “You never get a second chance to make a first impression.” This is especially true when selling your home. Just as we do with our photographer, Annie Walters, we depend heavily on Stacy and Sharon as a part of our team, to help tell your home’s story.

This “buzz” created—from the total package—makes your home stand out, leading to a quicker, higher priced sale. And this is not just my opinion. It has been proven. A recent study by ASP® concluded that staged homes sold 5 times faster than non-staged homes.  (The average was 29 days for staged homes vs. 145 days for non-staged homes). Of course, and it goes without saying, “it must be done right,” there is a science to this.

A lot of real estate agents will claim to be “stagers”—I don’t—so be careful and cautious about those claims. Stacy and Sharon are my stagers, and they do it brilliantly.

The ugly part is, for non-staged homes or, an incorrectly staged home, that additional time-on-market (statistics say: extra 116 days) means that the homeowner is likely to experience one, to as many as three price reductions and, typically, most agents push for at least five to $10,000 per reduction.

This can get extremely costly. Off the top, that’s $15-30,000 in lost profit, not mention 4 extra months of mortgage payments, property taxes, utility and maintenance bills, 4 months of extra stress, frustration, being inconvenienced, having people traipse in and out of your home – in your personal space. This is why we operate the way we do and have carefully chosen (and invested in) the team that we have.

Unless, for a good reason. Every client of mine is required to scientifically stage their home—because, through our research, it’s what we have found that works best, and maximizes profit—if they won’t do this, typically, we refuse to accept that homeowner as a client.

So the answer, “to stage or not to stage?” is it depends—on whom you hire and what kind of staging they perform: Scientific or conventional?

QUESTION #3:

I listen to a lot of talk radio on my commute to work. At least a couple times a week, I hear a commercial from [a real estate agent—name omitted] where he says, “I’ll sell my home in 59 days, guaranteed, or he’ll buy it myself for cash.” Is this a scam or is his promise for real? What’s the catch? Is there a catch?

J. Swordoski
Eugene OR

I THINK you already know the answer to this question. Yes, this “promise” is a scam. Well, maybe not a scam, but definitely bait-and-switch. If you go to Google and type in “Guaranteed Sale Program,” you will find over 51,000 search results, from agents offering this program throughout the country.

Truth is, this “program” was devised by a sales trainer named Craig Proctor, who teaches real estate agents how to get rich in real estate. In my forthcoming book “The Warren Buffett Approach To Sell Real Estate,” I dedicated an entire chapter to protecting yourself—Chapter 1: Be Smart. Do not fall for gimmicks and/or bait and switch advertising—someone’s outright intent to deceive you. I that chapter, I talk about the ins and outs of the “Guaranteed Sale Program” as well as others, how they’re designed to be “bait” to attract homeowners to the real estate agent, not as legitimate solutions.

Again, I THINK you already know the answer to the question above. Common sense says, no person can run around and offer to buy everyone’s home for cash if there wasn’t an element of bait-and-switch. How rich would such a person have to be?