Anyone else frustrated by the slow selling market? - Posted by Jim IL

Posted by don, sdca on November 06, 2000 at 16:25:15:

Merle,

Great insights into being more open minded and CREATIVE.

Your experiences and suggestions will help us all!

don, sdca

Anyone else frustrated by the slow selling market? - Posted by Jim IL

Posted by Jim IL on November 06, 2000 at 15:38:56:

Hello all,
I just need to vent, and perhaps get some ideas for marketing one of my L/O homes.
I have a few homes that I am marketing now.
ALL are being sold via L/O.
There is one in particular that is located in one of my “Hot zones”.
This is an area that frankly has been the BEST for me over the last couple years.
Homes are harder to buy here, but they usually sell FAST!
This home is in the middle of the price range for the area.
It is a 4 bedroom 2 bath home, and needs nothing.
Good area, good shape, and I thought a good deal.
Now I know that in Illinois as it gets colder homes sell slower than in the summer months.
But, never do they take this long.
I have advertised this home in my usual agressive manner, with newspaper ads, signs all over town, and at the house, as well as flyers on any surface I could find.
I have faxed a flyer to local mortgage brokers along with a letter outlining why brokers should work with me on it.
All to no avail.
The calls have HIT THE BRAKES, and I am at a loss as to what to do now.
I have a payment coming due on it in December, and do not relish the idea of holding it through that time.
I have also had 3 open houses with this one.
Plenty of people have showed up and some have even filled out apps on it.
And still nothing!
The only people who say they want the home all want me to drop the rent amount per month to a rediculous number.
(Like $400 less per month.)
I even started to ask for feedback from those who look at the home to see what may be wrong with the deal?
Most are just saying, "Well, we were just looking for now and we cannot really afford to move right now."
ARGH!!
So, any ideas for marketing are appreciated.
I can usually move a home just fine, but this one has me stumped.
I even sold two homes just like this one, same area, and same terms offered in less than 10 days last year at this time.
What is happening with this market now?

Maybe after the election tomorrow things will get better.
Are people just not buying because they are afraid of the possibility that Gore will be elected and stunt our economy?

Thanks for letting me rant,
Jim IL

Loved your post! - Posted by Stephanie

Posted by Stephanie on November 07, 2000 at 09:56:25:

Jim your last post was very intriguing(sp?) to a newbie. I have two sfh that I would like to lease option. I loved your idea of the appliances. I have all appliances ready to go in to a completely rehabed foreclosure home and I think I will use your idea (hope it was out there for the taking)! I would like to know how you come up with your down, payments, and option monies. I was offering for my home that I want to sell for $65K - 5% down at $650 per month. Does any of that $650 need to go toward the end purchase price or just the 5%. I was just offering the 5%. Remember, I am just a newbie so anyone out there with more expertise is invited with an open mind!
Thanks!

Re: Anyone else ? - Posted by Robert

Posted by Robert on November 06, 2000 at 18:20:24:

Okay, so you say that the ones who were interested in the home wanted to pay $400/mo less rent.

Sounds to me like you’ve got a built-in market for your next property.

What if you were to go out tomorrow and find 2-3 properties for the people out there who WANT TO GIVE YOU THEIR MONEY?

How many quick and easy deals could you close by the end of this month?

What if the money you made from selling to these people drastically exceeded the amount you originally THOUGHT you would make on this property?

What if you pursued these opportunities with the vigor you just demonstrated while venting?

I’m in the same boat - Posted by T2B - FL

Posted by T2B - FL on November 06, 2000 at 16:33:45:

Jim,
I feel for you, buddy!

I am encountering the same thing in a hot area just north of Orlando (Lake Mary for those who know the area). This area is appreciating fast and I am asking for $5000 down and $1200 a month for a 2 year L/O. My monthly amount is right around market rent and I have seen down payments of alot higher for a much less desirable house. I have gotten many, many calls but all are looking for 800-900 a month (I usually don’t even get to the final asking price). That won’t happen in Lake Mary.

I keep plugging away and marketing the hell out of the property. I hope it pays off soon. This is my first property and I need to get rid of it now. I have a payment coming up December 1.

Good Luck!
Tom

Some thoughts … - Posted by Merle

Posted by Merle on November 06, 2000 at 16:14:32:

Jim …

During times like these, you must be careful to avoid the “poor me” frame of mind. Frustration (in your message title) suggests the lack of hope. There is always hope.

You don’t mention the terms you seek for the house, but perhaps you need to adjust something.

Think about this … you say you have had lookers. Perhaps some of them are just lookers … but, I would guess that some of them are prospects. They just did not want what you offered!

Imagine two houses, side-by-side, exactly alike … right down to the extreme detail. Both are for sale. Ask yourself, “what would cause a buyer to choose house #1 over house #2?” Remember, they are exactly alike. Basically, there is no reason to choose one over the other.

But, what if the price for one of them was $100.00 less than the other? Would that make a difference? Should.

Keep that illustration in mind and picture this. Your prospective buyers become experts at buying homes within a day or two of shopping for a house. They have seen everything on the market … they know what they buy and for what price.

When they look at your house, they are comparing it to all the others. Where do they get the most value for their money? Where do they come closest to getting exactly what they want?

Now, what I hear you saying is that, for some reason, the actual buyers are passing by your house in preference to something else on the market. Rather than becoming furstrated, look around … think.

What are they choosing to buy? What can you do to make your house more appealing to them? How about some creativity in your terms. How much are you asking up front? Is that an issue?

What about your requirements for them to qualify? Can those who might qualify for your house get a better offer on another house?

You mentioned cold weather coming on. How about some type of allowance for heating bills? How much is your payment? You might consider letting them pay a smaller payment for a couple of months by adding the shortage on to their option balance.

We once “sold” 5 houses on New Year’s Day … all on our standard system. Who would have thought anyone would buy a house on a holiday? We had the houses on hand … Pat thought we should run the ad … we did … the phone rang off the wall. No discounts or special deals.

But, guess what. Ours was the only ad in the paper that weekend for houses (except the Realtors, of course).

Hope this stirs your thoughts, Jim. I found in my 40 years in business that many of the “slow” times are merely a figment of our own imagination … or, actually the lack of imagination.

Good luck,
Merle

Re: Loved your post! - Posted by Jim IL

Posted by Jim IL on November 07, 2000 at 15:00:36:

Stephanie,
Sure, go ahead and use the idea for the appliances.
That is what this forum is for, sharing ideas.
I hope it works out for you.
On my L/O’s I generally shoot for 3-5% as option consideration.
I apply that to the price, and hardly ever offer rent credits.
When a buyer requests them I will negotiate, but IF I am going to give rent credits, then I want something in return.
A higher price, more per month, whatever.
Everything is negotiable, and that is a good thing.
Have fun and good luck to you,
Jim IL

Good timing, and thank you Merle - Posted by Jim IL

Posted by Jim IL on November 06, 2000 at 23:08:32:

Merle,
Thank you sir.
That was good timing.
I received the e-mail from your post here just as I was leaving to show this home to a couple of potential T/B’ers.
The first DQ’ed themselves by telling me some stories and getting them mixed up. I don’t like liars.
But, the second couple told me that they “Loved the house” and my “Program”, but were afraid to “Stretch themselves” on the option money so close to the upcoming holiday season.
So, I took your advice and asked them what they felt they could put toward there new home?
They said, "Well Jim, we can put up the $5k you are asking for, but we do not want to totally drain our savings. We would feel more comfortable with a little less."
So, I told them that if they could come up with $4k, that I would allow them to pay the other $1k over time, with a “Finance fee” of course.
Guess what?
I ran there application and we meet tomorrow to go over a few things.
I told them to bring the $4k in CASH, so we can sign them up if they “pass the interview”.
(Notice I placed the burden on them to qualify, and tried to not seem eager to sell to them.)
So, I will get $4k now, with my nice $250/mo cash flow, and $250 per month additional toward the option money for the first 5 months. (Notice the extra $250 option money on the long run?!? LOL!)
Oh, and here is the real kicker.
Just yesterday I pulled the appliances from the home and moved them to my garage. (I have done this in the past to increase cash flow and to use as a negotiation tactic.)
They told me that one of the reasons they wanted to keep some savings was to buy some appliances for the home.
So, I am moving the appliances back to the house for them, and adding $1500 to the price of the home.(Not bad for some appliance I got for FREE)
And imagine this, the appliances I am selling them all match the house. How convenient!

Thanks Merle, you were right.
I am normally a rather creative person, and that is what has helped me to remain in this business and survive. Hopefully my longevity in this business will be as nice as yours.
I just let my frustration block my thinking for a bit here.
Also, one of the lookers from this home before called later tonight and asked me to keep there number in case I find a home with the numbers they can handle.
I just tied one up, and will show it to them tomorrow.

So, tonight was a good night after all.

Thanks again,
Jim IL