Let's make a deal!

It's one of the first questions I hear in both sales and property management: "What do you charge for commission?" This used to make me a little nervous because the wrong answer might have them laughing in my face or running out the door. Not too long into my career it started making me angry. After all, I don't see anyone asking other professionals to lower their fees! Now, it doesn't bother me nearly as much because I use it as an opportunity to educate the public about what I do and why I charge the fee that I use.

Let's take a look at an all-too-common scenario. I'm regularly contacted by Landlords looking for someone to manage their rental property. They've typically had a slew of bad tenants and are frustrated. No matter how hard they try, the tenants don't take care of the property, don't pay rent on time, and eventually leave the place trashed and owing the Landlord a month (or seven) of rent. So they tell me the problem and then ask me if I can help. Usually, before I can get the first sentence out of my mouth, they ask, "What do you charge?"

There are some that hear my answer and immediately ask if I can lower my commission. Here's how I would like to respond:

"Sure, I can lower my fee to match XYZ Realty as long as you don't mind me matching their services. I can start by accepting the first applicant to show up with cash in hand instead of screening them thoroughly. Then I'll put them under a verbal agreement, or maybe I'll use the lease agreement I found on the internet or borrowed from some other part-time Property Manager without the protections you and your home deserve. When they call with maintenance requests, I'll ignore them and allow your property to slowly decay. Of course, the more the property falls apart, the harder it will be to rent at market value or find quality tenants. Eventually, you'll be making hundreds of dollars less each month in rent income, your home will lose tens of thousands in value, you'll have higher turn-over and lower-quality. Is that worth saving $40 a month?"

OK, so I'm not so smug as to answer this way, but the thought crosses my mind on occassion. Instead, I focus on the services I provide and the value I bring to the Landlord. Here's just a sample list:

1. We have superior marketing due to our size and positive reputation within the community. We receive referrals from Landlords, tenants, other REALTORS, and other businesses.
2. I screen applicants thoroughly. Our high standards result in higher-quality tenants, fewer problems, higher rents, and happier Landlords.
3. Every form and document I use is custom built by me and approved by my attorney. I know them inside/out and they are designed to protect the Landlord, the rental property, and my company. I document everything.
4. Although I am very nice to tenants, I have the ability to lay the hammer down - fast and hard - to limit the damage to the Landlord and/or the property.
5. I am responsive to tenant  maintenance needs and expect owners to keep their rentals in above-average condition. This not only keeps tenants happy, it protects the Landlord's investment and enables me to keep rent rates up. If the Landlord ever sells the rental, it will be ready because I have provided regular maintenance instead of letting problems build up.
6. Because of my reputation and knowledge of the market, I am able to keep rent rates high. Most owners make more money AFTER hiring me than they did while working with another agent or handling the rental on their own.
7. I provide quality services. Tenants are willing to pay a little more for the peace of mind that comes from working with an honest Manager. They also tend to stay longer.
8. Although my primary responsibility is to the Landlord, I treat tenants with honesty, respect, and fairness. This is true whether they are renting a $400 studio apartment or a $2,000 home.

That's just a short list. As I explain my services, people start to understand the value I bring to the table and it's very rare that they try to negotiate my fees. I don't deal in sales transactions very often, but the same technique applies and I am prepared to give an answer if the question ever comes up.

What about you? How do you explain your fees? How do you stand up to someone when they try to talk you into taking a reduced commission?

This land is my land...this land is NOT your land!

I'm dealing with a difficult tenant that enjoys fighting me about everything. Their behavior is so odd that I can't help but conclude they are certifiably insane. That said, we ran into a problem yesterday that provided some fodder for my blog, so all is not lost!

Because of some problems we've had with them, the owner and I wanted to inspect their rental property to ensure it's being maintained. The owner called them directly (long story) and explained we would be arriving four days later. We invited them to meet with us so we could walk through together and discuss any problems found. We also wanted to talk to them about their behavior and whether we would be willing to renew the lease in a few months.

Two days after scheduling the meeting and walk-through, the tenants texted the owner and told him they would not be attending. No problem! They are so difficult to speak with that their absence was a welcome reprieve.

That morning, the owner decided to go to the property alone before meeting with me. When he pulled into the property, one of the tenants came off the porch and started screaming at him! She accused him of trespassing (on his own land?) and said he has no right to be on the property because they pay rent and are the sole legal occupants. Huh???

There's much more to it, but I'll focus on this one bit. Our lease agreement clearly states that we (Owner and Property Manager) have legal access to the property at any time during the term of their lease as long as we meet two conditions:

1. Provide a minimum of 24 hours notice
2. Provide the reason for our visit

We met both conditions by notifying the tenants four days in advance and by telling them that it was a routine inspection to ensure they are caring for the property after 8 months of occupancy. The same clause gives me permission to place a "For Rent" sign on the property during the last 30 days of any lease AND to schedule showings with 24 hours notice.

Our lease is clear and I reminded the tenants of their obligations. How will they respond? They will fight me. They will refuse to allow access or attempt to harass me. Which means I will be scheduling my next visit with a written notice that includes a statement that I will complete the inspection with a witness and a video camera!

What about you? Have you experienced a situation where a Landlord or Property Manager intrudes without proper notice? Do you have a tenant that refuses to let you inspect or handle routine maintenance? We'd love to hear your story!

8 Tips for Adding Curb Appeal and Value to Your Home

By: Pat Curry

Published: February 18, 2011

Here are eight ways to help your home put its best face forward.

Homes with high curb appeal command higher prices and take less time to sell. We’re not talking about replacing vinyl siding with redwood siding; we’re talking about maintenance and beautifying tasks you’d like to live with anyway.

The way your house looks from the street -- attractively landscaped and well-maintained -- can add thousands to its value and cut the time it takes to sell. But which projects pump up curb appeal most? Some spit and polish goes a long way, and so does a dose of color.

Tip #1: Wash your house’s face

Before you scrape any paint or plant more azaleas, wash the dirt, mildew, and general grunge off the outside of your house. REALTORS® say washing a house can add $10,000 to $15,000 to the sale prices of some houses.

A bucket of soapy water and a long-handled, soft-bristled brush can remove the dust and dirt that have splashed onto your wood, vinyl, metal, stucco, brick, and fiber cement siding. Power washers (rental: $75 per day) can reveal the true color of your flagstone walkways.

Wash your windows inside and out, swipe cobwebs from eaves, and hose down downspouts. Don’t forget your garage door, which was once bright white. If you can’t spray off the dirt, scrub it off with a solution of 1/2 cup trisodium phosphate—TSP, available at grocery stores, hardware stores, and home improvement centers—dissolved in 1 gallon of water.

You and a friend can make your house sparkle in a few weekends. A professional cleaning crew will cost hundreds--depending on the size of the house and number of windows--but will finish in a couple of days.

Tip #2: Freshen the paint job

The most commonly offered curb appeal advice from real estate pros and appraisers is to give the exterior of your home a good paint job. Buyers will instantly notice it, and appraisers will value it.
 
Of course, painting is an expensive and time-consuming facelift. To paint a 3,000-square-foot home, figure on spending $375 to $600 on paint; $1,500 to $3,000 on labor.

Your best bet is to match the paint you already have: Scrape off a little and ask your local paint store to match it. Resist the urge to make a statement with color. An appraiser will mark down the value of a house that’s painted a wildly different color from its competition.

Tip #3: Regard the roof

The condition of your roof is one of the first things buyers notice and appraisers assess. Missing, curled, or faded shingles add nothing to the look or value of your house. If your neighbors have maintained or replaced their roofs, yours will look especially shabby.

You can pay for roof repairs now, or pay for them later in a lower appraisal; appraisers will mark down the value by the cost of the repair. According to Remodeling Magazine’s 2014 Cost vs. Value Report, the average cost of a new asphalt shingle roof is about $19,000.

Some tired roofs look a lot better after you remove 25 years of dirt, moss, lichens, and algae. Don’t try cleaning your roof yourself: call a professional with the right tools and technique to clean it without damaging it. A 2,000 sq. ft. roof will take a day and $400 to $600 to clean professionally.

Tip #4: Neaten the yard

A well-manicured lawn, fresh mulch, and pruned shrubs boost the curb appeal of any home.

Replace overgrown bushes with leafy plants and colorful annuals. Surround bushes and trees with dark or reddish-brown bark mulch, which gives a rich feel to the yard. Put a crisp edge on garden beds, pull weeds and invasive vines, and plant a few geraniums in pots.

Green up your grass with lawn food and water. Cover bare spots with seeds and sod, get rid of crab grass, and mow regularly.

Tip #5: Add a color splash

Even a little color attracts and pleases the eye of would-be buyers.

Plant a tulip border in the fall that will bloom in the spring. Dig a flowerbed by the mailbox and plant some pansies. Place a brightly colored bench or Adirondack chair on the front porch. Get a little daring, and paint the front door red or blue.

These colorful touches won’t add to the value of our house: appraisers don’t give you extra points for a blue bench. But beautiful colors enhance curb appeal and help your house to sell faster.

Tip #6: Glam your mailbox

An upscale mailbox, architectural house numbers, or address plaques can make your house stand out.

High-style die cast aluminum mailboxes range from $100 to $350. You can pick up a handsome, hand-painted mailbox for about $50. If you don’t buy new, at least give your old mailbox a facelift with paint and new house numbers.

These days, your local home improvement center or hardware stores has an impressive selection of decorative numbers. Architectural address plaques, which you tack to the house or plant in the yard, typically range from $80 to $200. Brass house numbers range from $3 to $11 each, depending on size and style.

Tip #7: Fence yourself in

A picket fence with a garden gate to frame the yard is an asset. Not only does it add visual punch to your property, appraisers will give extra value to a fence in good condition, although it has more impact in a family-oriented neighborhood than an upscale retirement community.

Expect to pay $2,000 to $3,500 for a professionally installed gated picket fence 3 feet high and 100 feet long.

If you already have a fence, make sure it’s clean and in good condition. Replace broken gates and tighten loose latches.

Tip #8: Maintenance is a must

Nothing looks worse from the curb -- and sets off subconscious alarms -- like hanging gutters, missing bricks from the front steps, or peeling paint. Not only can these deferred maintenance items damage your home, but they can decrease the value of your house by 10%.

Here are some maintenance chores that will dramatically help the look of your house:

• Refasten sagging gutters.

• Repoint bricks that have lost their mortar.

• Reseal cracked asphalt.

• Straighten shutters.

• Replace cracked windows.

Read more: http://members.houselogic.com/articles/adding-curb-appeal-value-to-home/preview/#ixzz35WazdGp9
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Document, document, document!

In the world of property management, it's all about documentation. As a property manager in Cody,

Wyoming, I need everything documented to protect me, the client, and the customer. I have detailed agreement between myself and the owner that spells out my responsibilities, what I charge, what services I provide, how much they want for rent, and much more. I also document everything with the tenant to ensure there is no confusion about their responsibilities or the services we provide.

A very important part of this documentation is the condition of the home. We document it with pictures and a detailed inspection before the tenant moves in. We do it again when they vacate so we can compare the two and see if the tenant is reponsible for any cleaning or repairs. Unfortunately, I learned the importance of documentation (again) this week.

An owner came to me with a small house to rent in Cody, Wyoming. I inspected it and it was a disgusting, filthy little bachelor bad. His only furniture was in the living room and included a mattress on a frame, an easy chair, and a TV dinner tray to hold his TV remote. Everything was coated in dust. Counters and cabinets had bacon grease and other food splattered on them. The large picture window in the living room had a crack from top to bottom. This was not going to be easy. Because it was in such bad shape, I took pictures but wasn't as detailed as I normally am. After all, why document it when my tenant will likely leave it in better condition?

I managed to find him a tenant pretty quickly, despite the condition and negatives. She cleaned the entire house, top to bottom. She even offered to paint the interior AND renovate his bathroom with new flooring, toilet, vanity and medicine cabinet. We worked everything out, she had a friend do the work, and the place looked better than it ever had before. The owner inspected it six months later himself and was amazed at how the place looked.

She moved out after 18 months and the owner moved back in. He said everything looked great and that she left it nice and clean. Two days later he comes back and tells me a window in the dining room is cracked and she is responsible. I checked my pictures and discovered that because I wasn't detailed enough, I only have one picture of the window and there is a bush covering half of it. UGH!

Without documentation of window condition prior to occupancy, I am stuck. Based on how the owner lived, I suspect it was broken before he left. But I can't prove it. The tenant is long gone, she was an excellent renter, and it wouldn't be worth the trouble of going after her for $200. So, being the honest Broker that I am, I will eat the cost of this window to keep the owner happy.

The moral of the story is to practice what I preach and DOCUMENT COMPLETELY every time. When I get lazy, I make mistakes and it comes back to bite me. This time it was a small bite. Next time it might take off an arm!

Marketing to a FSBO

I was recently contacted by a home owner attempting a for-sale-by-owner (FSBO) transaction. The interesting thing is, I had just been reading about how to market to FBSO sellers, so I had already rehearsed a small script in my head and was prepared for the conversation.

Naturally, the seller's first question was about our commission rate. I hate this question with a passion! Nobody goes to a surgeon and asks them what they charge; they look for the surgeon that is best suited to fix the problem. Anyway, this is (approximately) how I answered:

"Our commission is X% of the sales price, but there is much more to an agent than just a commission rate. What we really need to do is sit down with you to determine your goals. If I can understand where you are trying to go, I can demonstrate how I will help you get there. After I've shown you the value of my services, then we can talk commission. And keep in mind that I won't earn a dime unless my services enable you to meet your goals!"

Most FSBO sellers are listing on their own for one of three reasons:

1. They don't see the value of a REALTOR and their services.
2. They have had a bad experience with a REALTOR and don't trust the profession.
3. They believe they can save money by not paying REALTOR fees.

Our job is to educate the seller; getting a foot in the door is the first step. In this case, it worked and we were given the opportunity to sit down with the seller to discuss our services and how we can help them achieve their goals. By demonstrating our value, we knock the socks off the first two objections above. then, armed with a current market analysis and a proven track record of sales, we show how the seller can typically earn more by using a REALTOR, even after paying our commissions!

I have personally made the same mistake. I used an agent to purchase my home and then sold it FSBO just 18 months later due to a mandatory move with the military. I assumed there wasn't much equity after such a short time and I didn't want to spend it all on an agent. I had it under contract in just 24 hours, which tells me it was woefully under-priced. But I thought I knew it all...until it took over three months and a LOT of pain before the official closing and we nearly lost the deal a couple times. Looking back, I now understand that using an agent would have brought a higher asking price, fewer problems, and I would have probably walked away with about the same cash in pocket. Lesson learned!

If you are thinking of saving money by going it alone, please talk to one of our agents today and get the truth about the value of a REALTOR!

For Sale By Owner (FSBO) Statistics

FSBOs accounted for 9% of home sales in 2012. The typical FSBO home sold for $174,900 compared to $215,000 for agent-assisted home sales.

FSBO methods used to market home:

• Yard sign: 48%
• Listing on Internet: 32%
  • For-sale-by-owner websites: 20%
  • Sites with real estate listings (e.g. Yahoo!, Google, etc.): 11%
  • Social networking websites (e.g. Facebook, Twitter, etc.): 10%
  • Video hosting websites (e.g. YouTube, etc.): 2%
• Friends, relatives, or neighbors: 30%
• Print newspaper advertisement: 14%
• Open house: 12%
• Direct mail (flyers, postcards, etc.): 2%
• Video: 1%
• For-sale-by-owner magazine: 1%
• Television: <1%
• None: Did not actively market home: 31%
• Other: 2%

Most difficult tasks for FSBO sellers:

• Understanding and performing paperwork: 18%
• Getting the right price: 14%
• Preparing/fixing up home for sale: 11%
• Helping buyer obtain financing: 6%
• Attracting potential buyers: 6%
• Selling within the planned length of time: 6%
• Having enough time to devote to all aspects of the sale: 1%

Price reductions or goal adjustments?

We recently listed a home in Cody, Wyoming and the buyer wanted a slightly higher listing price than we recommended. It was a minor increase; not a problem. However, time went by without an offer.

We sat down with the owners to discuss the situation. They had moved out to facilitate short-notice showings and keep the home clean (multiple kids and pets). We could tell by their actions that they were interested in moving the home quickly because they had plans in another state.

So our question was, "What is your goal? Why are you really selling this home? Is it to make top dollar or to facilitate your move to another location? Is it more important to earn an additional $10,000 from the sale or to sell the home quickly?"

After a short discussion, they realized the true goal was to free themselves of this home so they could move to the next stage of life. They also wanted to try and settle before the school year starts, leaving us with an even tighter schedule.

I've learned that buyers and sellers tend to see things in terms of dollars and cents. When they want to sell, they can't see past our commission rate, as if a lower commission rate will automatically result in a bigger payout. This isn't necessarily true and it's our job to explain this to the client.

Instead of commission rates, we try to focus on goals. What is the seller really trying to achieve? How can I help them achieve this goal? Are they looking for a quick sale? Are they patient and testing the waters with the hopes of getting top dollar? Maybe they have no equity in their home but need something bigger and you can facilitate a trade. Once they understand how we can help them achieve their goals, then we can discuss commissions easier because they can understand what we bring to the table.

So what are your goals? How can we help you meet them? Whether you are buying, selling, renting or seeking property management services, we can help. Contact us today!