How Not to Play Poker with Your Inventory

Homes

Presented by Kate Kelley-Dilts, SCRP, GMS, CERC

Vice President, Client Development-Western RegionNEI Global Relocation

Omaha, NE

May 21, 2008

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Relocation Home Sale

All transferees:

• Home Marketing Assistance

With formal home sale programs:

• Pre-Inventory

• Inventory

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Home Marketing Assistance

• For all transferees • Transferees engaged in the process

– Educate and advise on today’s challenges

• Key factors:– Partnering with a proven relocation Realtor– Pricing competitively – Condition– Marketing strategy

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Maximum Exposure

• Relocation real estate professionals

• Ensure great condition and appearance

• Best price out of the gate

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Maximum Exposure

• Internet is where it’s at!!

– More than 20 photos generate 10 times the leads/views

– Statistics show

• 1 photo = 70 DOM 6 = 40 DOM 20 = 32 DOM

• 1 photo = 91.2% of original price

• 6+ photos = 95% of original price

• Location, location, location is now photos, photos, photos!!

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How NOT to Stage a Home

Advertised on the Internet as a “Showcase Relocation Home”

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Maximum Exposure

• Attract attention– List at even numbers for two search ranges

– Listing at non-round numbers between ranges: i.e., $231,102

– Weekly, bi-weekly reductions

– Unusual open houses • Evenings, Sunday mornings

• Make the interested buyer an offer

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Marketing Actions• Condition – improvements to compete • De-clutter, de-personalize• Staging options• Know the competition

– Foreclosures, construction, days on market (DOM), absorption rate

• Educate and advise on competitive list price– Aggressive action with “stepped down” reductions– Add verbiage “home listed below appraised value”

• Next steps

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Marketing Trends• Guidance/mandate on Realtor selection• List price parameters

– i.e., initially 105% of BMA averages, then reduce– Adjust again if/when appraisals conducted

• Transferee encouraged to entertain all offers– Listening to the news, articles, TV – Rely on assistance to evaluate purchase offers

• Repair and improvement allowance• Home sale bonus • Appraisals to gauge listing price

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Marketing Trends

• Transferees consider offers less than Buyout

• Formal home sale offers less than established price (appraised value)

• Buyer incentives

• Loss on sale (capped)

• Short sales

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Pre-Inventory• Preparation required

– Before a home is purchased from a transferee • Review marketing strategy used to date• Order updated BMAs • Condition of home

– What has been repaired– Bids on repair/improvements needed– Strategize on expense vs. value

• Project marketing plan– List price to established value (loss on sale)– Advise on sale price to extended carrying costs

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Inventory Marketing

TIME IS MONEY

Industry Average Home Sale Costs:

Employee-Generated Sale 9%

Guaranteed Buyout 18%

Difference 9%

Additional cost on home value of $250,000 $22,500

Additional cost on home value of $450,000 $40,500

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Inventory Home Sale Challenges

• Prolonged market exposure

• Market conditions vs. initial marketing efforts

• Curb appeal

• Condition – house is “naked”

• Marketing tools– Internet, creative approaches

• Negotiations for highest price– Concessions that make sense– Critical buyers

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Assessing Purchase Offers

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Home Marketing Success

• BMAs revealed “too much stuff”

• Advised transferee to de-clutter and store extra/personal items

• House showed much neater, cleaner

• Sold in shorter timeframe

Employee Sale = higher transferee satisfaction, lower company costs

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Preparing a Home for Inventory

Marketing • Pre-arranged for painting

upon transferee vacating

• Competition: supply of homes in area = 12+ months

• Staging and neutralizing costs = $10,400

• Home sold within 3 months

• Saving 9 month’s carrying costs = $71,800

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Inventory Management• Resistance to pink kitchen

• Extended marketing time due to new construction in local market

• Immediate paint, appliances to compete

• Reduced carrying time net savings = $17,222

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Challenging Home Sale

• Remote location

• 2 heavy smokers, 4 ferrets

• Property required reconditioning

• Ducts and floors cleaned, repainted, tear down shed

Employee vacated upfront, repair immediately Sold in 90 days

Emu Ranch – SOLD!!Emu Ranch – SOLD!!

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Fireman’s Dream• Condo across from fire station

• Noise a challenge

• View – direct and rooftop

• Appeal to market buyers

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Where to Park?

• Home improvement resulted in no off-street parking

• Added a front circle drive

• Competitive home

• Sold shortly thereafter

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Functional Obsolescence

• Attracted to home – until you opened the front door

• Entry post a challenge

• Staging benefit?

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Walk Right In?

• Stairs immediately inside door

• Addressed in HMA, appraisals

• Some things cannot be changed

• Creative descriptions needed

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Listed for a Year

• 3 exterior photos online

• Rehabbed historical home

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Bright Colors

• Transferee color choices

• Neutralize or accent?

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Relocation Homes Sell• With transferee’s knowledge of market

• Proactive marketing plan

• Put your best “house” forward

– Realistic listing price

– Best condition

• Maximized exposure

– Relocation Realtors

– Web photos

– Identify potential buyer pool

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Resulting In

• Increased transferee satisfaction

• Managed home sale costs

• Partnerships providing expertise

The next concern ~

Transferees buying smart in the new location

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Case Studies

• Round Tables

• Review Case Study

• Offer recommendations to sell the home

• Follow corporate policy provisions

Recap all groups to gather ideas, input.