A Pennsylvania practitioner used a national open house initiative devised by executives at state and local REALTOR® associations to promote a property in a unique way for her market.
Location: Effort, Pa.
Square footage: 3,750
Lot size: 1 acre
Bathrooms: 3 1/2
Year built: 2003
Extras: Heated in-ground pool, great condition, cook's kitchen, oversized two-car garage, two master suites with private bathrooms.
The owners didn't anticipate a problem when they put the Effort, Pa., house on the market and relocated to the home they built in Lehigh Valley, Pa.
With a cook's kitchen and four bedrooms, including two master suites with private baths, and an in-ground pool on more than an acre of land, the Effort home was the perfect retreat from the Big Apple.
But with a shift in the local high end, the sellers' hopes faded as the months rolled by and the two-year listing anniversary loomed.
When the listing expired with the former real estate company, Vickie Brockelman, e-pro, gri, broker-owner for Commonwealth Real Estate Your Way LLC in Brodheadsville, Stroudsburg, and Mount Pocono, Pa., got the listing and got to work.
First, Brockelman suggested the couple reduce the asking price to $349,000, about $100,000 less than the original 2008 list price.
The sellers took Brockelman's advice. But even with the steep price adjustment, the property had trouble competing for attention among a sea of lower-priced area homes and garnered only one showing in two months.
There is a ton of real estate out there. Anything under $200,000 is selling. Any over that is taking longer to sell. But with an average sales price of about $150,000, anything over $300,000 is sitting for a very long time, explains Brockelman.
Market challenges weren't the only issue. The area is favored by New York and New Jersey buyers, but Brockelman says this particular location (about 30 minutes from favored routes to New York and New Jersey) was inconvenient for commuters.
The home was not easy to get to, she says.
How did you overcome the challenge?
BROCKELMAN: I found out about the REALTOR® Nationwide Open House Weekend (April 10-11, 2010) event and decided to hold an open house. Historically, open houses are not done often or with much success in our market area because we have a lot of secured and gated communities and five- and 10-acre farmettes with long distances between the houses. So holding an open house in our area is challenging. Sometimes when sellers come from other areas, they request an open house as part of the marketing. But it is not common in our area.
However, I felt that with the REALTOR® Nationwide Open House Weekend, if we pushed it and did a real marketing extravaganza with this listing, we could get a lot of attention and generate real interest.
Our local real estate association made an arrangement with the local newspaper to provide discounted pricing to real estate practitioners and firms that were participating in the nationwide open house. We ended up with a two-page spread in the local newspaper. We started advertising on Friday and ran the ad through Sunday, the day of the open house.
I hoped that if we got some traffic during the open house, we could show people how they could purchase the home. So on the day of the open house, I had a sales associate and a mortgage officer on site to answer any questions. I was hoping that if a prospect came to the open house and fell in love with the home, we could show them on the spot how to buy the home. And that's exactly what happened.
On the day of the open house, the sales associate, the loan officer, and I arrived at the house to find a woman waiting for the door to open. She fell in love with the home, but said it was out of her price range. Nancy Craig, the sales associate, ended up working directly with the buyer on the sale. And the loan officer helped the buyer find a way to get her dream house by suggesting a reverse mortgage.
There are so many myths about reverse mortgages: A reverse mortgage sells the home to the bank, the heirs will not inherit the home, the home owner could get forced out of the home, someone can outlive a reverse mortgage, the home owner pays taxes on a reverse mortgage, a reverse mortgage comes with large out-of-pocket expenses, and the idea that reverse mortgage is similar to a home equity loan. Many people have these and other false assumptions about reverse mortgages.
We had just done a seminar on reverse mortgages at our company, and this loan officer specialized in this type of mortgage and spoke with the buyer about it. Because the reverse mortgage is calculated with a formula based on age and the equitable interest in the home and not on credit score and income, the buyer was a good candidate. With the assistance of the loan officer who understood the program, we were able to show the buyer how to purchase the home with a reverse mortgage and use her current home as equity for the transaction. We closed this property with a very joyful buyer and a thankful seller.
How long did the sale take? What was the selling price?
BROCKELMAN: We listed the home in February 2010 for $349,000 and closed at the end of May for $305,000. The seller wasn't lowballing. This was her maximum affordability based on all the numbers.
How did you find a buyer?
BROCKELMAN: The buyer was an older single woman who lived within the area. She had always wanted a large home with a pool but never thought it was attainable. She wasn't coming to buy. She saw the two-page advertisement for the open house in the newspaper and decided to take a Sunday drive and have a look at the house.
How did you market the listing and how much did you spend?
BROCKELMAN: We probably spent about $4,000. We did the print ads in the newspaper, but we also used our Web presence. We have a pretty dynamic Web site, and each listing has a virtual tour. We have our own channel on YouTube. The channel has two videos about the company and features videos of all our virtual tours. In addition, most of my 24 salespeople have Facebook and Twitter accounts.
When we get a new listing, we send a link to the entire company, and each associate shares that information with their center of influence. We started uploading our files to YouTube and other social media sites about 10 months ago. It is new, I know, but we have generated some good leads from it. In fact, I would say about 80 percent of our buyer leads are directly related to our Web site and social media.
What's the biggest factor you attribute to closing the deal?
BROCKELMAN: The Nationwide Open House event was the key to this sale. We secured two additional contracts during the event, both on homes over $250,000. The advertising in the paper drew this buyer in and skills of the people on site helped the buyer make an informed decision.
Nancy Craig, the associate in my office, greeted the client, recognized the interest, and started asking questions. And the loan officer, being educated in reverse mortgages, was able to communicate with the buyer, who was a little hesitant at first because of all the fallacies about reverse mortgages. In the past, you could take money out of a home with a reverse mortgage. But now, you can purchase a home with a reverse mortgage. So the reverse mortgage really gives seniors a great opportunity.
How did you get started in real estate?
BROCKELMAN: I have been in real estate since 1987. I worked for a building contractor. I loved the sales part and the industry in general. One of our salespeople said I should look at getting into real estate sales. This was when women were just getting into the industry, and I was looking to build a career. So I got my license and went to work for a small company. After that, I took my first GRI class and went to work for a franchise.
My goal was to have my broker's license within three years and eventually own my own company. So I worked toward that goal. I managed a company. About five years in, I got the opportunity to buy a large franchise. I owned that company for 15 years and sold. I was going to retire, but I decided to come back and put together a company that could customize solutions for homebuying and homeselling needs.
Do you have a specialty or niche?
BROCKELMAN: Marketing. There isn't any one thing that works in real estate. You have to look at every listing and find the best way to market that individual property. That is what I love to do.
What lessons did you learn from this transaction?
BROCKELMAN: You have to move beyond the negativity of whatever is happening in the market and look at how you make the transaction work for the buyer or seller. When I started, the interest rates were 18 percent to 19 percent. I have seen it all - good markets, bad markets.
But at the end of the day, it's not about what the market it is doing. It is about what you are doing as a sales professional. You can sit and wait for people to come to you, or you can get out there and find them. A lot of real estate professionals are fishing in the same pond. I fish in that pond, too. But I also look for other opportunities.