Nothing But View
In a market saturated with distressed properties, two Denver practitioners found an alternative way to market a tiny, outdated REO home.
June 1, 2008
Square footage: 600 square feet
Lot size: 6,260 square feet
Year built: 1951
Extras: Multiple types of carpet, including a “fabulous shag,” and a nightmare of a kitchen with a large, unenclosed water heater.
THE CHALLENGE: Marcus Harris and Dan Jones, broker associates with the Harris Team at Coldwell Banker Residential Brokerage in Greenwood Village, Colo., listed a small, neglected real estate owned (REO) home in a not-so-desirable neighborhood on Dec. 26, 2007, the height of the slow season in Denver.
Jones expected the small two-bedroom home with one shared closet and a disastrous bathroom to take months to sell. “The Denver market in general was in a depressed state with high marketing times,” Jones says. “The specific area of the property was averaging 102 days on market with sold properties yielding 86 percent net-to-list ratio — a poor market to say the least. But the biggest hurdle was the state of the house itself and the poor location.”
What approach did you take to overcome the challenge?
JONES: The property’s biggest asset was the view. The bungalow had a great view of the downtown skyline. But given the fact the target market for this property wouldn’t be driving around this particular neighborhood, the MLS had to do the talking. As I sat thinking of what it was going to take to sell this eye-sore, I recalled the view. The seller elected to price the humble abode at $61,900. So we gave the description our best shot, and in the public remarks section simply put: “$60,000 View.”
HARRIS: We have an exclusive contract with a bank to market REO properties in the Denver metro area. Essentially, we are the cream of the crop when it comes to peddling horrendous properties. This one was an REO that was bank-owned via foreclosure.
How much did you spend marketing the home?
JONES: All in all, with subscription costs for the MLS and yard signs, we probably spent about $12.
How many times did you show the property?
JONES: The property was shown a total of four times before a contract was accepted on Jan. 7.
How did you finally find a buyer?
JONES: The buyer, a family investing a recent inheritance, found the property on the MLS. They were looking for a fixer-upper with a view.
What was the final selling price?
JONES: We listed the property for $61,900 in December 2007. It closed 35 days later on Feb. 11, 2008, for $61,000. I guess we undervalued that view.
HARRIS: We knew going in that it was essential to prepare anyone who might have interest in buying the home for the condition and state of the property while still focusing on the best aspects of the home. Also, to get the best value for the house without excessive days on the market, we completed a very detailed broker price opinion, which helps us determine, with the current market, the most value we can get for a property in the shortest possible time. All of our time and focus goes into determining the best price. But a little humor never hurts.
What lessons did you learn from this transaction?
HARRIS: The real estate business is typically thought of as a no-holds-barred, price-driven model that thrives on marketing to no end. But we have had success with modest marketing, pricing to sell, and being up-front and honest about our listings. It is what it is, and sometimes telling people that you’ve got the best priced ugly duckling on the block is just what they want to hear.
Do you have a "How I Sold It" story of how you used savvy marketing and sales techniques to sell a challenging property? To be considered for a future column, send an e-mail to REALTOR® Magazine Online. You must be able to supply a photo of the property.