Real Estate Archives - The Phoenix Real Estate Guy

Why a national MLS is bad for agents and consumers

February 15, 2019 By Dean Ouellette

Do we need a national MLS system? Compass owner Robert Reffkin recently called for a national MLS system at this winter’s Inman Connect conference in New York.

Reffkin stated there shouldn’t be hundreds of MLS’s, but a single one. I couldn’t disagree more.

His argument is more and more consumers are going to Zillow or Realtor.com, so for that reason we need to build a single national MLS system.

Not only did Reffkin call for a single MLS, he is also calling for a single CRM and mobile search platform.

How can someone so smart, say something so …. well I will be kind, something so not smart.

How about this Mr. Reffkin, how about a single national brokerage too? Why do we need so many brokerages? Shoot… if Zillow is already acting as a national MLS, and they have a CRM, and they are everywhere, let’s fold up Compass and add them to the new national brokerage Zillow.

When does less competition and less choice ever lead to a better experience for the customer? Go ahead, think of something. I will be just waiting right here for someone to come up with a great example.

Getting a car ride to the airport was a way better experience before Uber right? Apple was a much better company when they were chasing Microsoft and other companies and innovating.

While there is more garbage on television every night than ever before, there is also better shows than every because instead of just ABC, NBC and CBS we now have hundreds of companies including Netflix and Amazon trying to produce the best content they can.

Remember the glory days of Friendster or MySpace? Why did we need Twitter and Facebook anyways?

Competition makes everyone better. Without competition you become stale. You become the FAA where the technology running our airports and air traffic control is outdated because there is no incentive to get better.

Imagine if we only had one brokerage, why would we need a Compass. Compass is known as an innovator in the real estate market. But if we would have all just consolidated around a Century 21, or a Coldwell Banker brand to fight Zillow, would that make us better?

The answer is not less competition, the answer is more people working more angles to make our industry better. Any business owner who does not realize this, well maybe they should look at a political career because DC is one place great ideas can quickly go to die.

Selling my house: 7 Things for Getting Ready To Sell Your House

September 6, 2018 By Dean Ouellette

Getting Ready To Sell Your House: Here are seven things you are going to want to do to ensure you get top dollar and sell your house quickly.

Hire a great agent. Sure I say that I am a real estate agent. This is important though. If you hire the wrong agent, like a low flat fee agent, you may not be doing everything you need to sell your house quickly and for top dollar. A good agent is going to have a plan to get feet through the door. While people look at houses online, houses are sold when people walk through the door. Use this easy access to Self Storage in Melbourne for more information.

If you are still unsure if the agent matters, check out this short video I did on what happens when you hire hour ‘homie’ to sell your house and not an executive.

You need to price it right. I would rather underprice my house by 10% than overprice it by 10%. If I were selling my house there is a better chance I would underprice my house a little than overprice it at all. When I underprice my house I will cause a bidding war. When I overprice, I kill the feet through the door which is what I am looking for. Overpricing also causes the house to sit on the market much longer than you want. And ask yourself as a home buyer, when you see a house has been on the market for a few months what are you thinking? I bet it is something like, “I bet I can get a good deal on this one.” According to Homeads Barrie, the best strategy is to price your house where it should be. Pricing your house where it should be is going to help get it sold.
Take care of the cosmetic work. Last week I talked about if you should be doing paint and carpet when selling your house. Besides those, you need to do take care of all the cosmetic issues in your house. Worn-out carpets need a new carpet installation, just as lack-luster walls need a new painting. The more things that are wrong with the house, the more the buyer is going to question how well the house was taken care of. Take care of the small cosmetic issues to put the buyer’s mind at ease.
Take care of the 3-De’s. Declutter, depersonalize and de-pet. Start by getting everything out of the house you can. Make the house feel bigger by having less stuff in the house. Try storing them in wire shelving units in your garage, just be sure to use shoulder screws so you can hang them properly. Make sure you hire someone to help you with garage door repair if you need it, because issues with garage doors are very easy to verify. If people identify easily detectable problems, they’ll wonder what else there might be wrong that they couldn’t find.
Get a short-term storage unit from a self storage facility if you must. There are some self storage places around that will even give you the first month at a discount rate. We have also used self-storage when space gets tight in the house and we used this great self-storage service in Camden recently which was amazing so look into facilities like that if you need some more space. You want to depersonalize by placing in self storage anything that is personal and identifies the house as ‘your house’ such as family photos. When a buyer comes through the door we want them to be able to see themselves in the house, and when the pictures of your family are all over the walls and bookcases, they have a hard time doing that. The last de is de-pet. We know, you love Fido and Whiskers and they are part of your family. But the Jones may not have the same attachment to furry pets. Get all the animal toys out when you declutter and make sure the pets are not there during showings.
Next, you are going to want to deep clean the house. Clean the house like you are in military boot camp. If you have not been in the military, the Drill Sergeant is going to come through your area and pick it over with a fine tooth comb. Make sure your house will pass the inspection. If you need to, hire a professional cleaning crew from steam cleaning in Melbourne to come in and let them spend a few hours cleaning the place for you.
Have your friends do a smell test. Invite your family and friends over o do a smell test. You are used to how your house smells. Invite them over and have them be the judge. Make sure you tell them to be honest. After the cleaning, adding an amazon reed diffuser and fresh paint, hopefully the house smells fantastic. If not, identify where the odor may be coming from and fix it.
Hire a stager. The final thing you will want to consider is either hiring a stager to stage the house or bring in a stager to do a consultation. Many stagers will come over with tape and spend an hour with you walking around and marking things with tape. They will tell you what to move, what to get rid of and what to add. Take their advice. A good stager is easily worth their fee.

There you go. When you are getting ready to sell your house, follow these seven things as a good place to start and get your cash for houses.

Selling my house: Should I put in new carpet and new paint before I list my house?

August 29, 2018 By Dean Ouellette

Should I put in new rug and paint before I sell my house?

When selling the house should you do interior painting and put down new carpet? Today we are going to tackle this question, which tends to be one of the more common ones. To begin, there are two myths I want to address. The first myth comes from some agents who will say no, let the new home buyer pick out what they want and let them make it their home. Just price the house 3500 cheaper which is what it will cost. Get in contact with dallas flooring to choose your favorite design.

That there is a myth. And a bad one at that. I have probably shown over 3,000 houses in the last decade. Sure it seems half of those were with the one couple who saw every house in the east valley before they finally picked one, but let’s please not remind me of them.

Showing so many houses I have seen the reaction of home buyers when they walk into houses. Besides the curb appeal, carpet and paint are often the first two things that people notice in a house. If the carpet is worn and the paint is aged, the first impression for the home buyer is, what else is wrong and what am I going to have to do for work. Before you show the house, make sure to hire professional house painters from Tony Painting to improve the look of the home.

According to CleaningPRO Wellington, if the first impression is fresh paint and nice carpet, the home screams I am nice, make me your home. Having a clean and tidy home with a fresh clean smell of paint and carpet says the Seller cares and made their home ready to sell, sometimes you do not necessarily have to put a new carpet, many times just hiring proficient services like Eco Clean Solutions is enough to bring them back to good as new.

Most buyers cannot see past the work that needs to be done. Even those who think they want to do work, when the option is between a house that they ‘can’ do work to vs. a house where they ‘need’ to do work, they are always willing to pay more for the move in ready house.

The other thing buyers will see is the money. Let’s say you have a 2,000 square foot home where about half of the laminate flooring, carpet and the whole thing need work you can go to Home Depot and buy very basic padding and neutral carpet plus have the inside of your home professionally painted and it may cost you about $3500. A good rule of thumb is a buyer is going to double that price. They see the money they need to spend, automatically assume it will be more than it could be and factor in the time and hassle, and that $3500 likely becomes 6-7-8,000 in their mind.

First impressions are everything. I had a client who was relocating from Michigan and they were coming in for a weekend to look at houses. They said they were fine with houses that needed work. I pulled up a list of about 20-25 houses that we were going to see in the two days they were here looking.

Day one we looked at something like a dozen houses. They were very critical of many of the houses. they had given me a narrow price range and I had pulled up a bunch of houses in that range. I actually pulled in more houses that needed work than not. The reason is when you are buying a house that needs work, in theory, you should be getting more house for your dollar.

After an exhausting day, I realized what they thought they wanted and what they actually wanted was two things. The next day I put together a list of houses that were move-in ready. They were much happier with the houses that we saw. I realized by listening to their feedback that what they thought they wanted and what they really wanted were two different things. Most people want move-in ready houses.

The second myth is from the skeptical people who say the agent just wants to get more money because they make more money if it sells. So, of course, they want you to do upgrades.

First when you look at the numbers that are just silly. But, let’s say for a minute that is 100% true. Let’s go worst case scenario and you have a bad agent who wants to sell the house for 10,000 more than if you didn’t do paint and carpet. So just to pick a round number they will make $300 more than if you didn’t do it. Now you spend $3500 on the upgrades so your agent can make an extra $300. Now, you sell the house for $10,000 more than if you didn’t do the upgrades. So no the questions are, is the $6,000 more you put in your pocket worth it? These, of course, are estimated numbers and you cannot guarantee you will get a certain amount more by doing paint and recarpeting or even carpet cleaning as stated in this important source. But I can assure you it will make a difference.

So then the question is what about nicer floors. Should you spend more money and put in nice tile or wood? I would say it depends on the house and the neighborhood and price point you can look at a few options at the RD Tiling Decor website. But for the vast majority of houses, new paint and the inexpensive carpet is going to go a long way and give you a nice return. If you really want to go all out, you can go for Flake Epoxy Flooring.

So when someone asks “Should I put in new carpet and paint” the answer for most is yes, and you should even consider additional upgrades, like getting powder coating from National Powder Coating Services for a greener solution.

Are OfferPad, OpenDoor and Zillow Offers really good for the homeowner?

August 4, 2017 By Dean Ouellette

OfferPad, OpenDoor and Zillow Offers, what are they?

OpenDoor was first out of the blocks, they would buy your house in a quick close, and you would never need to deal with agents and showings. Then OfferPad was next up, run by a local Phoenix real estate agent and they were offering the same thing. Then a few months ago Zillow announced they were getting in the game and connecting the users of their website with investors for cash offers, again you could avoid the real estate agent.

Real estate agents for the most part that I talked to started going berzerk. “Why would a seller sell their home for less than market value?” “They are trying to eliminate us.” “Zillow is trying to go around the agent.” These are all common things we heard.

Jim Sexton, a long time beloved broker of John Hall Realty and another office which I don’t like to name, just this week announced he was moving over to OpenDoor to head up their Broker operations.

The first thing you need to know about Jim is, I have been in the business for nine years now. Nick has been in for over 25 years, and Shar has been a Phoenix real estate agent 15 years. That is a half century between us. I don’t think in all our year’s any of us has ever heard anyone say anything bad about Jim. Jim is a class act, one of the truly nice guys in the business and one of the nice guys in life. So when another agent posted on his Facebook wall under the job change “Really? Wow! Is that the same Opendoor that seeks to eliminate agents?” Well, the reaction from agents off of Jim’s wall was mixed. They all love Jim, but many do indeed think that OpenDoor and OfferPad and Zillow want to eliminate agents. So is there any truth to that or any real fear?

What is the real threat of OpenDoor, OfferPad and Zillow Offers

Not much, that is what the real threat is. Sure we can get paranoid and think they are all out to get us, or we can do our job and not worry about it.

How OpenDoor and OfferPad work

Many would love to avoid a real estate agent when they sell their house. And when you think about it, how many of those real estate agents who complain sell their car on Craigslist. How many of them now use Travelocity to book their trips instead of a travel agent. And how many of them use Zoom for a basic will instead of forking over the payment to a lawyer. And why not, it is cheaper and often less hassle. I know, “but real estate is different.” Spoken like a true real estate agent.

Say you want to sell your house, you want the top dollar and the least hassle you can get. Why not contact OfferPad and OpenDoor and see what you can get. The way it works is they will ask you all about your house and give you an offer. You can then select to accept the offer or reject it. If you accept the offer, the company will send someone out to do an inspection. Remember, they have never been in your house, they have never seen the inside. They are making a blind offer. Here is where it can get interesting. I have heard stories ranging from they kept the same price all the way to they beat me up bad on price after because of the inspection. I am sure there are cases where both of these are true.

Why are OpenDoor and OfferPad buying houses? Typically they want to buy the house, put as little work into it as possible (think paint and carpet) and flip your house. Now like any investor who wants to do a flip, they want to make a profit. They are not a charity organization. So typically your house is going to sell for less than if you sold the market on the open market.

So why would you sell for less?

There could be plenty of reasons. Maybe your family is, unfortunately, going through a bad divorce, you have several kids at home and a few pets, and you just want to be done with it without having several people coming through on a two-hour notice.

Maybe you started a remodel five years ago, then lost your job and have not had the money to finish it. You know the house needs a lot of work. You know the AC is not blowing as cold as it should, and someone is going to need to spend $15k to finish the remodel job that you started and never finished.

Maybe you are like one neighbor I talked to about selling his house. He had work issues, was working part time and didn’t have the money to finish. But he also had 12 cats, and imagine what a house with 12 cats may look and smell like. Yea, well this was a little worse. And he insisted on being home for any home showings because of his kids…. er I mean cats. I passed on the listing, another agent took it, and a few months later the home owner sold the house to OfferPad who did a complete remodel and greatly helped the values in our neighborhood.

There are many reasons that you may not want to do a traditional listing.

Then there is the mistake.

I have a friend; I will call him Aaron. Aaron came to me and said he wanted to buy a new house and sell his house. Great! Let me see what I can do for you. I ran comps on his house and came up with a number of maybe $315k. $315k was a good midrange with the standard builder grade materials that he had. I told him maybe, maybe, we could stretch it a little. I told him if he wanted to put some money into the house he could probably get it up to $350-$360k, but that is with $30k of upgrades. A remodel was not something he wanted to take on.

Aaron decided to call OfferPad which I encouraged him to do. I was not afraid. I knew they could not pay more than $315k, what was I to be worried about? OfferPad came back at $342k, and after all closing costs and fees, he would walk away with $309k. I laughed. Then I went back wondering what I missed and looked at the comps. Then I laughed again. No way, no freaking way. I said shit; I would take that in a heart beat. I also told Aaron do not get your heart set on that number. They will likely beat you up on repairs, so just be prepared for it. He understood.

Nope, they gave him $342k. And yes, I am certain my pricing was right. OfferPad kept it off the market for two months and during that time put in all new stainless steel appliances, put in nice tile, great looking everest granite countertops with backsplashes, new paint throughout, all new fans and lights and faucets, all the fixtures were replaced. The remodel I had said would need to be done to fetch top dollar. At absolute best, with a very nice contractor discounts and cheap labor, they probably spent a good $20k in upgrades.

OfferPad put it on the market and sold it. It sold for $362k. They also offered a 2% concession to the buyer. And they paid a 3% commission rate to the buyer’s agent. So after those two expenses, they walked away with $344k on the house they paid $342k for, and that is assuming they had no other carrying costs, which we all know they did. So what about all those upgrades they had to pay for? I am sure they had some profit built into their costs on the buy side, but I doubt they had anything close to $20,000k. I am almost certain, without seeing their books on the deal, that OfferPad lost money on this deal. It was not a good deal for OfferPad at all. Even if they had $20k built in, they still lost money. It was a great deal for Aaron and his family though.

I had an investor I have sold some properties for in the past recently call me and say he had one more to sell in Downtown Chandler. I ran the numbers and thought he could do well, but my well and his well were two different numbers. I showed him the comps, and with the work his rental property needed, he saw the problem. I told him, call OfferPad and OpenDoor. Why would an agent do that? Because this investor wanted more than I could get him, and hey, they overpaid before so maybe… I was looking out for the best interest of my client. That investor called, and well, it is back on the market as a rental for another year.

OfferPad and OpenDoor may make a mistake now and then and overpay for a house. But don’t expect them to do it often or they won’t be in business for long. But if you are looking for the best deal why wouldn’t you look at every option? It likely won’t be the best option, but Aaron is sure glad he checked into it.

What has been the impact of OpenDoor and OfferPad on the Phoenix real estate market?

Phoenix has been at the center of operations for both of these companies and we were a very early market. Looking back over a year time frame (ending in March 2017), the total purchases by these companies reached 1,839 sales. According to the Cromford Report, this is 1.5% of the total housing market of 121,379 units, a market which incidentally has grown by over 10% in the last 12 months. During the last 12 months the share has split 21% / 79% in favor of Opendoor, though the OfferPad share has increased to 26% during the first 5 months of 2017 and 36% in May 2017. It seems that the gap between Opendoor and OfferPad is closing. Opendoor’s first sale was in November 2014, 14 months prior to OfferPad’s first sale, so they enjoyed first-mover advantage for quite some time.

Also according to Cromford, it also appears that the market share has peaked. In February 2017, they reached a combined 2.37% of units closed, and this has fallen in the following 3 months to 1.93%, 1.53% and 0.95%.

What about Zillow Offers

Zillow recently announced in a couple of markets that they have a new program that allows homeowners to submit their house and have some investors bid on it. Again, agents went absolutely crazy saying, “See…. Zillow is trying to put us out of business.” Of course, that is not even close to what Zillow was trying to do. Zillow uses this as a way to get a list of homeowners that are interested in selling their house. 90% (or more) of the time the offers will not be acceptable to the owner. Then Zillow can turn around and give the info to a Zillow Premier agent, their real paying clients, and this is a great opportunity for those agents. A list of people who want to sell their house.

Stop being paranoid and do your job

My advice to agents, cease to be paranoid and just do your job the absolute best you can. Give your clients the best service they ever had, and you will have nothing to worry about.

But IF Zillow or anyone else came out with a way to take the hassle out of selling a home. To get the seller top dollar while most importantly giving them the legal protection they need, a way to handle all that paperwork and deadlines, then so what. Game over. If it is best for the client, then that is what will happen. Then we will need to do like travel agents did and just find a new line of work. While I don’t want that to happen, I’m ok with it if it does. I will survive. So enough with the sky is falling and get back to work for your client.

And homeowners, if you want to call OfferPad and OpenDoor and see if they can get you a better offer then go ahead. On those few cases, they can be then great! Take advantage of it.

But also make sure you call one of the Phoenix Real Estate Guy team members to show you how we can help you!

When To Pay More And Get Less Home

July 17, 2017 By Nick Bastian

You never want to pay more and get less home than you have to. Right? Typically, that makes total sense. Everyone likes a deal, too. A blue light special, red dot sale or maybe a clearance rack are places where bargain hunters love to move in for a kill. Many people think that when buying a home it is crucial to get as much bang for your buck as possible. Hard to argue with that, for sure. So they start to crunch numbers and look at price per square foot. They ask their 70 year old parents for their opinion and shockingly the parents also tell them to be frugal, get a great deal, find a nice neighborhood and make sure the house is perfect in every way…

Wait, times change. Although a lot of people wants a big house, a 2 story with white picket fencing, not everyone does. Some people actually prefer to spend more for a smaller home in a more “convenient” location for many reasons. Terra Hill will provide residents with access and convenience. With just a four-minute walk between Buona Vista as well as One-North, MRT stations, residents will have access to both. Do keep in mind that if you do so it would be a good idea to call a fence builder and have them put up nice and secure fencing that will complete the look of your home.

I’m reminded of this “bigger isn’t always better” article where our friends at Realtor.com talked about people wanting a more intimate space for their family. A shorter commute, a place where you know your neighbors, etc. We’ve seen lots of people pay $200, $300, $400 per square foot for a home in a neighborhood they love and pass up a place just 30 minutes further away with a much lower price per square foot for a simple reason: It’s not close to where they want to live, work and play.

We fully understand that not everyone has a Billion $ budget for a home, but it seems like more and more, we are reminded that the whole, location, location, location thing still holds true.

Of course, we know that there will always be the people who say that size does matter, so we’ll leave those kinds of decisions up to you…

Just remember that we’re here to help you with any size or type of home in the Phoenix metro area.