The sellers wanted to move closer to their son in Florida. But the dated home, an abundance of inventory in the neighborhood, and a recent murder-suicide next door made for a tough sale. To get it sold, the practitioner utilized the power of personal relationships.
April 1, 2010
Location: Gulf Hills Estates in Ocean Springs, located on the Mississippi Gulf Coast
Square footage: 1,700
Lot size: 3/4 of an acre
Year built: 1960s
Extras: Home office. Backyard overlooking a golf course. Wood-burning fireplace. Original avocado green toilets.
THE CHALLENGE: Al Allegue, CRB, CRS®, GRI, SRES®, co-broker-owner of the Al & Dee Real Estate Group, RE/MAX by the Gulf, in Biloxi, Miss., could feel the sellers’ despair.
Although the couple, ages 85 and 89, had lived in the golf community for many years and survived 2005’s Hurricane Katrina with minimal property damage, the emotional aftermath of riding out the nation’s most costly storm prompted a decision to move closer to their only son in Tampa.
Pulling up stakes was easier said than done. Built in the 1960s, the Ocean Springs. Miss., home still sported the look of the defining decade: avocado green and harvest yellow appliances, shag carpet, and dark-brown paneling. The only thing missing was a 1965 Volkswagen Bus in the driveway.
“The bathrooms were small with yellow- and green-tile walls. The closets were even smaller. And a large room, almost the length of the home, served as the formal living and dining room,” Allegue says.
The Mississippi Gulf Coast home, paid off in 2008, had appraised at $220,000. But in the 2009 market, comparable homes in the area, which had a 24-months supply of inventory, were selling for around $105,000.
Listed with another agent in early 2009, the home sat on the market. Six months in, Allegue recalls, “a terrible murder-suicide took place next door.” Three months after the murder-suicide, perhaps stigmatized by time, condition, and events, Allegue notes, the listing expired. Christmas was coming, and the owners were lost.
“Are you getting the mental picture?” Allegue asks.
How did you overcome the challenge?
ALLEGUE: When I first visited with the owners, I immediately felt their despair that the economy that had taken more than 50 percent of the equity they had relied on for their retirement. They were frustrated that the home had not sold with the previous agent. And there was a sense of urgency in their need to move closer to their child. After listening for about 90 minutes, we agreed that a unique and more proactive strategic marketing program was key to selling the home.
When we counsel a buyer or a seller, we look at the service from the other person’s point of view. We ask questions like: How can we best serve this person? How can we provide value to them? How can we make certain we are watching out for their financial interest so they can build their worth and their financial stability? In my opinion, this is the bedrock of sales success.
Our strengths were the location of the home and the sellers’ vast network of friends. Our plan was simple: Get the Christmas list from the seller and start calling on behalf of the seller. Stage the home. Conduct a sales practitioner-only open house. Notify the 20 percent of local sales practitioners doing 80 percent of the real estate business about the listing. Call the agents who also had golf-course listings and ascertain what agents had buyers looking for a golf-community home. And get the owners to vacate the home to complete the sale with minimal impact to them.
This final component is important. It was more about relationship-based marketing as opposed to technology-driven [marketing]. When you are dealing with seniors, they do not want to be disturbed. With all the activity we were going to do, we realized it would have been difficult for the husband and wife to deal with people coming in all the time.
It was important that the marketing strategy be molded to their needs. So I called the sellers’ son and arranged with him for his mom and dad to stay with him for a 30-day vacation while we got the home sold. This allowed us to bring in a staging specialist.
While the home was being prepared, my partner and I started to call the sellers’ Christmas card list to let their friends know about the sale. I had never done this before. But the sellers had a vast network of friends and neighbors, and we wanted to capitalize on their social sphere. So I asked them for a list of friends and neighbors and ended up with their Christmas card list.
Once the home was staged, we telephoned the top local real estate producers, e-mailed them an electronic flyer — using Top Producer 8i — and invited them for a private open house. We also invited practitioners with golf-course house buyers.
The day of the open house, we were visited by 12 real estate salespeople, nine people from the sellers’ Christmas list, two agents with buyers, and a husband and wife who wanted to retire in a quiet golf course community and had been told about our home by someone from the card list.
How long did the sale take? What was the selling price?
ALLEGUE: The property was on the market for nine months with another agent. It expired. We picked it up in December 2009 and sold in 25 days. Our current average [for] days on the market is 156.
I received two offers 10 days after listing the home, and we negotiated a contract for $113,350, which was 3 percent higher than the list price of $110,000. We closed Jan. 29, 2010.
How did you get the listing?
ALLEGUE: Every morning, we go through the MLS and find listings that have expired or been withdrawn. If the listing has not been relisted, we send out a letter. Let’s say there is an expired listing today, we check the listing the next day. We check the address, not the MLS number, which can change, to make sure that the home has not been relisted before we send out a letter. If the property has relisted, we terminate the expired campaign. We are very careful not to violate the code of ethics. The sellers called after receiving our first expired campaign letter.
How much did you spend marketing the property?
ALLEGUE: The cost to implement the plan was $350 for the staging specialist and about 10 hours of telephone calls. When money is tight, it’s important to pick up the phone. It works and doesn’t cost anything but time. Case in point: We called the seller’s Christmas list friends after closing to let them know we had sold the home in less than 30 days with their help. Because of those calls, we added 36 new people to our database and expect lots of referrals.
How many times did you show the property?
ALLEGUE: We showed the home during one open house. We don’t normally do open houses. We find that home tours work best. I will show seven or eight homes in one day. For instance, on a Monday, I will decide which houses we will hold open. Then, we put up a sign that says this home will be open on Saturday between 1 p.m. and 1:15 p.m. We put a sign on the next house that says the home will be open on Saturday between 1:30 p.m. and 1:45 p.m. We give ourselves a 15-minute driving time between each house and get together a team. If anyone wants to stay beyond the 15 minutes, we leave an agent behind and move on the next tour.
Many times, we will caravan or people will show up at one house and follow us to the others. Some people are interested in one house and waiting for us when we arrive. This is what usually works for us. But in the case of this listing, we decided that inviting the sales practitioners and friends to an open house would be more effective than incorporating the home into a tour.
Can you tell me about the buyer?
ALLEGUE: We felt that a retired couple who liked to play golf and had no children would be the most obvious person to buy this home. But we couldn’t ask the seller to spend thousands in remodeling. We had to find a buyer to fit what the home.
The home was bought by a couple who came to the open house and wanted to retire in a quiet golf course community. They were told about the home by someone we contacted from the sellers’ Christmas card list. They remodeled the home. And it looks like a million dollars now.
What do you attribute to closing the deal?
ALLEGUE: Our model starts with adding value to our services. Our job is not to make a sale, but to create value in our services. We believe that 90 percent of selling is creating value and 10 percent is the sale itself. We don’t use straight-line logic in our business. The degree to which you focus on consistently adding value to others, will determine your worth and your ability to resolve obstacles. More value translates into more positive relationship, a greater sense of self-worth and more income.
We place these core values every day when we work with buyers and sellers. Each seller and each home is different. So we put together a valued marketing based on that home.
For example, I will be taking a listing tomorrow for a seller who is a military family. Both husband and wife are in the military and were just transferred to a base in Washington, D.C. They are upside down, so we will have to do short sale. If a military member’s home goes into foreclosure, it can impact that person’s security clearance. And if that member cannot hold a security clearance, their career will be damaged. This individual holds a high security clearance, so it is imperative that we list this home and sell it as soon as possible and coordinate a marketing program that fits that specific need.
What lessons did you learn from this transaction?
ALLEGUE: Making a sale is a concept; so is prospecting. But touching lives is a reality. Sales are not about concepts. Sales are about people. Our income and the ability to remove obstacles in real estate is directly tied to how many people you serve and how well you serve them.
Do you have any other thoughts?
ALLEGUE: A good real estate professional finds out where the business is going to be and prepares for that shift. Right now, we are seeing a lot of foreclosures.