Post-Katrina: Rebirth in the Bayou
Condo queen Isabel Reynolds shares her strategies for snagging and selling high-priced listings—and the tale of woe that led her to a $39 million-a-year career in real estate.
July 1, 2006
I knew the owner. A few years back, I’d sold him a condo. However, when it was time for him to list his home, he listed it with another company for $2.4 million and never got an offer. That was before Hurricane Katrina. After Katrina hit he was very motivated, and he felt the other broker wasn’t giving him the service he expected. So he cancelled the listing and called me. I have to tell you, it was the most beautiful home I’d ever seen.
What was his prime motivation and how did you help him?
He had bought a house in Florida and was ready to move. I simply told him the truth. That is, after Katrina, there was a lot of price resistance over the $2 million mark. In fact, there was only one other sale over $2 million after Katrina. So he asked me point blank, “For a quick sale, where you would price it.” I said $1.99 million. That was on a Friday. I turned in my all my listing paperwork on Tuesday. It was shown on Wednesday and sold the following Friday.
How did you sell it so fast?
Networking! I talked about my new listing with a broker in my office who sells $20 million a year in real estate. As luck would have it, she had a large contract that had just fallen apart. She showed my listing once to those buyers, and they bought it.
Why didn’t the other listing broker ask for a price reduction?
It seems logical, doesn’t it? I got the impression from talking to the seller that the other broker was just too afraid to ask for a reduction. Sellers don’t like that, you know.
Give us an idea of how the negotiations went.
Both the buyer and seller were motivated, so it was an easy deal. Plus the home was fairly priced. The only thing the buyers asked for was $2,000 for minor repairs, which the seller gladly paid. It was a cash deal, and I know the banker who produced the cashier’s check so it was easy to verify the funds. After a while in the business, you begin to know everyone in the market. The banker personally delivered the check, and everything went without a hitch.
How do you market luxury properties?
I’m a firm believer in promoting myself. That’s all I have. So I send out postcards to my entire previous client roster and all my listing clients. Then I advertise in local newspapers. If I have listings with a historic background, I advertise with the Preservation Resource Center. That’s a nonprofit group here that promotes preservation of historic New Orleans architecture.
I market my luxury listings, too. The New Orleans CityBusiness newspaper is an excellent venue for reaching business owners and other affluent buyers. Signs are also really big in New Orleans so I put signs everywhere I can. I spend about $18,000 per year in advertising.
How do you track your advertising’s effectiveness?
When people call me, I just ask them how they heard of me or the property they’re calling about. That tells me which advertising works. I’m also a big believer in word-of-mouth. I tell everyone I meet that I’m involved in real estate and about my listings. My Web sites also help.
Web sites? How many do you have?
I have two main sites. One is OneRiverPlace.com, where I feature the most expensive luxury condo building in my area, as well as other luxury properties. The other one is IsabelReynolds.com, where I showcase all my listings. I also custom tailor new sites for specific projects, so for example, if I have a project where I can sell many condos in one building, I create a site for that project. Once the project is sold out, I take the site off the Web.
How do your Web sites help you to close more deals?
The Web doesn’t sell real estate but it’s a very useful tool. Recently I experimented with online purchase agreements. I posted a PDF of a real estate contract for buyers to download, so they could fax or e-mail an offer into my office. It worked. I don’t get a lot of offers directly from the Web, but I like having all the paperwork accessible online, because it gives buyers a chance to see the documents and takes away their fear.
How do you generate Web traffic?
I make it a point to include any Web address in every sign I post and every ad I pay for. It also helps to be part of a large organization. Prudential has a relationship with Yahoo! and our listings get a lot of exposure through that.
How do you handle such a large volume?
I just took on a partner. Actually, I made my assistant my partner and hired another assistant. I currently have 39 listings and last year I closed 144 transactions, so the extra help is a great asset. I’ve benefited from the fact that prices in our city have risen for 14 years consecutively.
Specifically, how is Katrina affecting the real estate market in New Orleans, and has it affected you personally?
We lost 30 percent of our practitioners, and many offices are just gone or displaced. It’s very sad to see, but things are getting better. Relief efforts are really helping. After the hurricane, I was very busy; we even saw a small increase in prices in the non-flooded areas. But in the last few weeks, business has slowed down considerably. Prices haven’t come down, but they’re not going up either. A competitor of mine who keeps excellent records estimated we had a six-month inventory in the $500,000 range and a nine-month inventory of properties priced above that. I firmly believe people are sitting around waiting to see what happens this hurricane season. If nothing happens, we should see an explosion around October.
In the 1970s you were a school teacher. What made you decide to change careers?
By 1981 I was 41, recently divorced, and with four children. My ex-husband decided he was not going to pay any child support. My salary at the time was $18,000, and I really wanted to send all my kids to college. So a friend of mine convinced me to get my license and go to work for her. I looked around for other opportunities, but her offer was the best, so I got my license and joined her.
What was your first year like?
I think my first year I made $10,000. Then I began to sell more each year, so I moved to a bigger office in the Uptown area where the market was commanding twice as much per square foot. That led me to investment property, I would sell property that nobody else wanted — like $20,000 doubles.
It sounds like you struck gold. Did you stick with it?
I made a great living selling this type of property. Plus, I was able to create my first contact list. Investors began to call me when they needed property, and I slowly moved up the market. A developer put together a luxury condo project, which at the time — in the mid ’80s — was a risky move. The developer had problems moving the units, so he hired three practitioners from three different areas. I was one of them. That was also a time when the bottom was beginning to fall out of the investment property market. [The Tax Reform Act of 1986 took away benefits of real estate investing for passive investors.] So I started selling full time for this gentleman, and on my own time, I sold homes. By the time I got to his office at 10 a.m., I had already put in three hours selling homes, and after 6 p.m. when I left his office, I worked until 10 p.m. I still sell houses, but I never gave up on condos. I’ve probably sold more condos than anyone in the New Orleans area. In fact, last year 90 percent of my business was condos and 10 percent was luxury homes.
Do you sell other types of property?
Absolutely. I never turn my back on anything, especially since Katrina. In April, I sold a property for $35,000. It had five feet of water.
What are your plans for the future?
Well, I’m 68, and originally I’d planned to retire by 70. However, I’m now helping my grandchildren through college, so I think 72 is a more accurate number.
Is there anything you’d like to say to your fellow REALTORS®who are struggling in the aftermath of Katrina?
Yes. Things will get better. As I said before, if we don’t have a bad hurricane season this year, we’re set to have a real estate explosion in the city of New Orleans. Insurance money is now trickling in, and after those checks are cashed, people will be ready to buy. Plus our college is already showing signs of double-digit enrollment increases for next season. That tells me many families are moving back and many of those families will demand housing. Hang on, work smart, and know your area. Specialize in a niche that works for you.
I can’t even begin to tell you how desperate my situation was when I was 41 years old with four children and an ex-husband who refused to pay child support. Good things came to me because I was out there making them happen.
Postscript: If you’re wondering about Isabel’s estranged husband, she says one Christmas, about ten years ago, he showed up at her doorstep in an old wrinkled suit and announced he had divorced his second wife and was available. Isabel kindly smiled and said, “I loved the boy I married, and you’re no longer that boy, and I’m not the same girl you married.” And with that, Isabel and her new love interest went to a Christmas party.
Isabel’s key strategies for creating a successful luxury real estate business.
Learn it. When I started, I educated myself as much as possible about the market I was pursuing. Make sure you tour as many homes as possible. Find another broker to tag along with during showings. Learn the floor plans, learn what’s important to the luxury buyer, and really understand the market. You can’t sell what you don’t know.
Hold open houses. Volunteer to hold open houses for colleagues with upper-bracket listings. That way you can begin interacting with luxury buyers. A lot of deals are made by being at the right place at the right time. Work hard and don’t give up, there are no shortcuts to success.
Focus on service, service, service. Go the extra mile — and always remember your clients and customers. I’m constantly communicating with my clients, whether it’s postcards, phone calls, or holiday cards. For my big clients, I personally choose and deliver beautiful floral arrangements for Christmas. Your clients need to hear from you, so be sure to give and give, and then give some more.
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