This week we're going to talk about the Online Search Process. Back in the day, searching for properties a big reason why Buyers worked with agents right from the beginning... that's because agents were the only ones that had access to the listings.
Today, anyone with an internet connection can see any listing anywhere in the world. Yes this is a good thing, but it can be information overload without guidance.
When I'm looking on my phone, I use Redfin. It has the best interface, even though it's a little slow, and it has the most reliable information. Some websites take DAYS to update, and Redfin usually updates within an hour. Some people say they can find more listings on Zillow or Trulia, but that's because those listings probably shouldn't be on there in the first place. Redfin also has the "Hot Property" designation which means they can tell which homes will sell faster than others based on how many people are looking at them. But, if you go on your computer, Zillow will tell you EXACTLY how many people are looking at a listing on any given day. I like to use that feature before I write offers to see what I'm up against.Search Techniques
If I said it once, I've said this a million times, Buyers don't write strong offers, because they lack confidence. This is because they have serious "tunnel vision". If their budget is $800,000, they don't look a PENNY over 800 and usually, and never below 700. They tighten the criteria so much, that they miss out on things. They do this with price, square footage, bedrooms, you name it.
Two points here:
1. There’s a lot of incorrect listings out there, so you need to open your search criteria to make sure you're not missing anything.
2. You need to be looking at a wider range of homes regardless, so you know what’s selling throughout the neighborhood even though it’s out of your price range.
This will start to give you perspective. Next, A lot of buyers think something's wrong with a house just because it's been on the market for a couple months. Not true. Sometimes the home is just overpriced, so it sits. Sometimes they went on the market the same time as a KILLER listing that took all the attention, and they got buried. Sometimes they opened escrow and it fell out. That doesn't mean anything is wrong with the PROPERTY though. Usually it has to do with the Buyer not getting qualified for the loan, or having disagreements with the Seller.
Basically, if you see a house that's been sitting, don't assume something's wrong with it. That's usually not the case. For that reason, one of my favorite things to do is look ONLY at homes that have been on the market for more than 30 or 60 days. This is especially great for Buyers who are tired of multiple offer situations and getting outbid by other buyers.
I compare this to Black Friday shopping
People get trampled while fighting over jeans at the sales rack.
Walk right by all those maniacs, go into the dressing room, and pick up the same pair of jeans right off the floor.
When I list houses, I always think about HOW buyers search for homes, and then consider that in my pricing strategy. Most agents don't do that which means you need to cast a wide net. Honestly, if you're looking in a specific area, you should be looking at EVERYTHING. But, if you're looking all over, that probably isn't doable. In that case, you should still be looking at a wider range. If you're in the $1.5 million dollar range, go up to 2 million at the least. At $750,000, you need to be looking at everything up to a million. This isn't because you're going to buy one of those more expensive homes, but you need perspective. With perspective comes confidence. You need to know if your price range is in the BULK of listings, or if you're at the bottom of the barrel. That way, when that underpriced listing comes up, you know to jump on it.
There are two main types of listings you'll see online: First are the professional listings. Good photos, thoughtful list prices, and property descriptions written in complete sentences. Keep in mind these photographers are talented. It's like online dating! Take every picture with a grain of salt. The second type of listing is the complete opposite. It's mostly bad iPhone photos where you can see grandma in the reflection in the mirror, and weird list prices with really specific numbers, like 824,995... what is that?
Another signal is a property description that's written in all caps. Now, that doesn't mean it's not a good house, just a sloppy listing. A lot of people will shy away from those. Me? I smell opportunity. Once you know it’s a bad listing, you can shift your focus and begin to train your eye.
See THROUGH the creepy marionette dolls on the couch and see how big the living room is… Ignore the newspapers piled up on the dining room table, and see if your furniture will fit there. You have to connect the dots yourself. Now... the thing you DO have to watch out for... are the "in between" listings.
Are the photos REALLY that bad, or are they just not showing you everything on purpose? Like when you see a picture of the view from the patio, but they don't give you the full shot. What AREN'T they showing you? Also, is the picture really colorful and staged, or does it just have a lot going on? Is there continuity with the floors, light switches, and moldings? Or can you tell that every room remodeled during a different decade?
Most buyers never get out from behind the computer. If you’re about to start writing offers, you need to be out every weekend seeing all the new listings. If you’re still months away, you should still be out looking in all price ranges to get your “sea legs”.
This is called "refining your palette". You have to taste a lot of wine to know what’s good and what’s not. Same thing with real estate. So get out there and hit the pavement. OK, that's enough for today.. Tune in next week when we talk about working with lenders and how to choose one. See you then!