Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Hey everyone, it's Rowena Patton at the Real Estate
News Radio, your friend in realestate, realestatenewsradiocom.
I just had a conversation withAlan and Denise, some wonderful
buyers that are coming in fromFlorida, and we took them around
a dozen homes yesterday.
They have their home for salein Florida and I was talking to
(00:25):
them about the importance ofknowing the entire strategy and
how it all works.
Any agent with experience willdo this for you and I'll get on
Zoom with you and do it.
We did it on Zoom in Florida.
They came here, we showed themhomes.
They're retiring here Veryyouthful retirees.
We can't wait to help them.
And they were asking about whatwas going on with the market in
(00:47):
different places and they werea little concerned get this
listing agents that theirlisting agent hadn't asked for a
price drop when their househadn't sold and now it's at 50
days.
So it was kind of aninteresting conversation and
they allowed me to share it withyou.
So, alan, you had that question.
(01:08):
Ask me that question again,just for clarity.
Speaker 2 (01:13):
So we live in Florida and I guess my question is why
are they doing so much buildingthere when the price
Affordability index and.
Affordability is just not youramount.
Speaker 1 (01:34):
So you got a couple of things going on.
Let's talk about South Florida,right.
So we're talking about SouthFlorida now.
What is different about SouthFlorida in terms of who buys
homes there, is it?
I mean, yes, there's some NewYorkers coming in, there's some
Texans coming in, there's someDCers coming in, there's some
Virginians coming in.
We get that, but what'sdifferent about South Florida in
terms of the buyer makeup?
(01:54):
If you walk down the street inMiami, do you see more Spanish
signs or less Spanish signs inthe rest of the country?
Speaker 2 (02:02):
I would believe more.
Speaker 1 (02:03):
That's because so many, so much of the money
coming into South Florida isfrom South Americans and wealthy
people around the world.
At this point, right, it's amarket where we bring a lot of
buyers from a lot of differentplaces.
It's quite unique in that.
So we've also had the SouthFlorida issue of the condos,
(02:24):
where we had surfside collapseand that sent HOA dues through
the roof and all of the newrestrictions that have been
brought in where the inspectionshave to go.
For Now, just full disclosurehere, people who are listening
on the radio show, I am not anagent in South Florida, but I
did used to live there and Iknow a lot about what's going on
(02:45):
and you two can correct me ifI'm wrong here but a lot of new
restrictions and laws came inwhere now any building over two
levels so three levels and up incondo buildings have to be
inspected and they have to makerepairs and that's having
special assessments happening,especially on the older
buildings that are drivingpeople out of the condos.
(03:05):
So a lot of these new buildingsthat you're seeing going on are
condo buildings that don't havethose issues, right.
So which is actually hinderingthe problem.
But let's talk about nationwidethe National Association of
Home Builders, which you know isthe big association of home
builders, have just seen thelowest score in confidence since
(03:26):
they started scoring.
Home builders and this isnationwide are very unsure about
what is happening in the market.
When you see you knowClermont-Juglar 1860, 7 to 11
year cycle most of the countrycrested two years ago.
We've just been bumping alongthe top.
Some notable states in thenortheast are still having price
increases, but for most of thecountry, specifically Florida
(03:50):
and Texas and Arizona are seeingprice reductions.
Now that's getting everybody alittle bit nervous, but it takes
a little while to makeheadlines.
So if you look at my, you knowI've got a great shift chart on
this.
We bump along the top and thenwe go into the first stage,
which is denial.
Last year we're in denial Likeyou had celebrity agents going
oh, home prices are always goingup, don't worry about it.
(04:12):
Whereas now you're starting tosee headlines oh, this terrible
stuff is happening here andterrible stuff is happening
there, and people are startingto get the message, which is why
we're seeing price cuts throughthe roof.
We're seeing higher level ofprice cuts than we've seen in a
decade or more sometimes inhistory, since they first
started being recorded.
Price cuts mean that in a fewmonths those houses will close
(04:36):
at a lower level, which is goingto push prices down even more.
If you're selling now in any ofthese markets where there's a
decline, get out now, especiallyif you've been sitting for a
month.
Do certified, pre-owned Talk toyour agents.
Get the inspection.
Get the appraisal.
Price it just below appraisal.
Get two.
If you're not happy with it.
Slip it in a drawer.
(04:56):
If you hate it, keep going.
If you can hold it out for 10years, hold out for 10 years
Because Clermont-Jouglas 7 to 11year cycle.
It will most likely be worthmore.
Does that kind of put it in anutshell, or do you have any
more questions on that?
Speaker 2 (05:11):
No, I think you've answered the question.
So the developers, with all thebuilding that they're doing,
they're going to have to holdout either 10 years or they're
going to have to do the pricecuts.
I guess that's what I'm takingaway from the conversation.
Speaker 1 (05:25):
You are so spot on.
So here's the thing You're nowgoing to have think about it.
You're coming in from New Yorkbecause finally you want to
retire and get out of New York.
Everything that's happening inNew York right now, a lot of
people don't agree with that.
They don't want the grocerystores run by the government and
you know the whiteneighborhoods being taxed and
that's a direct quote, obviously, from the new New York mayor
(05:48):
that won the primary.
So a lot of people you'reseeing like it's making
headlines right now veryprominent people are moving to
Florida and a lot of them willmove to South Florida.
So now they're looking at aluxury condo.
We've got a lot of condos thatare cutting their price, cutting
their price, cutting theirprice because they tend to be
older buildings.
Even the newer buildings arebeing hit by this.
(06:09):
So there's actually one in FortLauderdale that just had a
$100,000 assessment.
The building's only 10 yearsold, which is driving people out
right Because they can't affordthe $100,000.
They finally bought theirretirement condo.
So now people coming in fromnew york, people coming in from
california, people coming infrom around the world, because
obviously it's a much moreinternational market.
(06:32):
Now they've got a choice.
They buy a brand new condothat's had a price cut.
Because there's so many of them, the market gets flooded.
Sometimes builders are stillbuilding and they're going, oh,
we're fine in our market.
Talk to agents around thecountry like, oh, we're in a
special place, nothing willhappen.
Well, yeah, I'm in a market inAsheville, north Carolina, where
(06:53):
they said that.
I was also in Miami where theysaid that it pretty much happens
everywhere.
Slowly but surely now you've gotthis buyer looking at a brand
new condo Everything's brand newand it's more modern inside.
Or they're looking at a20-year-old condo that's had a
big price cut.
It just depends on where theirmoney is.
Now you've got lots ofcompetition.
(07:14):
It's simple supply and demand.
You know, if you were lookingfor a house now which of course
you are you're looking for ahouse in the beautiful mountains
and you're looking at a housethat's been on the market for
300 days.
You're going to get that housefor a better price most than a
house that's been on for sevendays.
You are most likely looking ata house that's more modern,
that's got a more modern, it'snatural, a more modernized
(07:35):
kitchen, that's got the thingsthat you want right, but
generally more modernized andnewer is going to win out If
there's a much more highersupply.
Florida we've doubled thesupply in the last couple of
years.
North Carolina in most marketswe've doubled the supply in the
last couple of years.
North Carolina and most marketswe've doubled the supply.
We've gone into what we call abuyer's market.
The buyers have the power.
(07:56):
The problem is, the buyers thathave the power are normally
also selling something right.
So you've got to balance thetwo out and just strategize
between them.
But it's not all bad news.
The bad news is we lost 84% ofagents last year because they
saw this coming and they werestruggling and didn't know what
to do.
There are lots of things you cando.
If you're selling, get out now.
(08:18):
What I mean by that?
Don't just drop the price andyou know.
Get out and oh, run for thehills.
Oh, we're in the hills actually.
So that works well.
Make sure you're certifiedpre-owned.
Get the inspection, get theappraisal, talk to your agent
there.
Have me talk to them if youneed to.
Certified pre-owned has beenaround for 40 years with cars.
Every dealership has them.
Most people would prefer to buya certified pre-owned car, pay
(08:40):
10% more for it, because wedon't want to buy an $80,000
lemon off Craigslist or not thatthey're all lemons, sorry't sue
me craigslist or facebookmarketplace.
We prefer to buy that.
I brought this to the market in2007.
I have a best-selling book onit.
It works.
Any buyer would rather buy acertified pre-owned house.
Any buyer's agent that'srunning around you tell me,
(09:03):
katie, you were running around12 houses yesterday.
What would you be suggesting toyour clients that we're talking
to right now if two of thosehouses were certified pre-owned?
Wouldn't that?
I mean Alan and Denise, you cantell me too?
Wouldn't you sway more to thosehouses that were certified
pre-owned?
Speaker 2 (09:22):
Sure, definitely, definitely.
Speaker 1 (09:23):
Of course.
So let's get your housecertified pre-owned Now it makes
sense as a buyer.
Your perception as buyers wouldbe the same as anywhere else
and katie's run around showingme 12 houses and another few
today.
It would be natural for anybuyer's agent to get.
It's the right thing to do foryour, for you as the buyer,
because she's protecting you asthe buyer.
(09:45):
Getting to into a home that'salready been inspected.
You know you're getting into ahome of a decent value.
Maybe it was an agent thatstarted a week ago, or their
sister or a friend that just gotthe real estate license.
I'm not knocking anyone.
I'm just saying obviously somepeople have more experience than
others.
I know there's a lot of agentsout there that sit down with
sellers and the seller says Iwant 750.
(10:07):
And they go well, we think it'sonly worth 720.
Well, I want 750.
They're scared of losing thelisting, so they list it as 750.
It's called buying the listing.
We have a term for it.
It's called buying the listing.
And then a month later they'llcome back and say you've had no
showings, we need to reduce theprice because they want the
listing.
They're scared of losing it,right?
So when you make sure you'vegot a great agent out there that
(10:29):
tells you the truth based onfacts, not just their opinion,
because their opinion is oh,I've got this handful of
listings and this is what'shappening and I'm a great agent
that sells lots of homes for thelast 10 years.
Whatever it is, markets changeall the time.
It's not about what I sell asan agent, it's about what the
market is doing.
What are the price cuts goingon in that market?
(10:52):
Is it now 40% instead of 20% ayear ago?
That shows nervousness in themarket from the sellers.
That means as a buyer, you canget a great deal and, thank
goodness, you guys are buyingright and you're buying a bit
less.
So you're going to be dollarsin and you're moving a market
where it tends to go down alittle bit less.
I hope I answered yourquestions on the builder side.
(11:13):
Do you have any more questionsfor me on, like, the intricacies
of how this all works?
Do you feel like you'll takeanything away from this that
you'll?
Speaker 2 (11:22):
you know.
Yes, definitely, We've taken alot of a lot away.
Speaking with you is veryeducational.
I wish our realtor back homewould go into that much detail
and, like you say, it soundslike they just are buying the
listing, not really giving us agood breakdown on.
(11:45):
The CPO was never brought upand a few things haven't brought
up.
But we will definitely meetwith them when we get back and
discuss things in that nature.
Speaker 1 (11:55):
My sellers are educating their listing agents.
I love it.
Here's the thing.
So they weren't necessarilybuying the listing.
They were in the mindset of ayear or two years ago.
Two years ago, we were stillgetting multiple offers in Fort
Lauderdale.
You're in a beautiful area,still getting multiple offers in
Fort Lauderdale.
You're in a beautiful area.
You know everybody wants tomove there.
You've got a fantastic house,fantastic lot.
(12:15):
A lot of agents got in.
If you got in in the last 10years as an agent, think about
this for psychology.
All you've done is put a signout, done great pictures, drones
and put a lockbox on, put it onthe MLS and it sells.
You've not learned in the downmarket.
So I advise anybody that'slistening to this have an agent
that got their license in 2006,2007.
(12:37):
They experienced that downmarket.
They know what to do.
Serp Strategic IncrementalReduction Plan reduce it $100 a
week.
Everybody out there is going isshe nuts?
It scoots out on the searches.
It keeps it fresh, right andone of the partners the husband
or the wife, or the husband,husband, wife and wife, whatever
the makeup is doesn't care thatit only dropped hundred dollars
(12:58):
.
It's scooting it out in thesearch again and keeping it
front of mind.
There's one make sure if youhaven't had x showings, your
agent can tell you.
Your agents, when they listedit at that price, by the way,
they should have said, have saidto you if you don't have X
showings and it's probably, youknow, I don't know four showings
in the first month, they'llknow by what's happening in
their market.
Maybe it's six showings, maybeit's 10 showings.
(13:19):
If we have an open house, wedon't get 20 people through.
Whatever it is, I want you to,that's what I would say to you.
I want the two of you to agreeto drop it by 5%, 2%, whatever
it is.
I want us to do a drop for theincrement.
So if you, let's say, youhappen to be at 750, drop it 25
because it drops you into thenext category.
And then, on the MLS, say,$10,000 below appraisal.
(13:44):
That was the magic thing I did.
Okay, so between 2008, between2012, 2015, at the bottom, I
doubled my volume every singleyear.
I'm not bragging here, I'm justtelling you because these
things work right.
I was the rookie of the year,didn't know what I was doing for
the biggest international firmat the time internationally.
(14:06):
And I didn't know what I wasdoing because I was doing things
differently.
You've got to do thingsdifferently in this market.
I want everyone to hear that.
So, as a seller, get itcertified, pre-owned.
If your agents won't do it,first of all get a different
agent.
But you know, find a CPO agent.
I can help you with that.
Get your appraisal, get yourinspection.
In fact, before you sit downand interview agents, it
(14:27):
wouldn't be a bad idea to dothat because at the end of the
day, you're paying for it right,because you're getting an
accurate measurement as well.
You're getting a floor planfrom the appraisal.
Is it a snapshot?
Yes, but that's a wholedifferent discussion.
Put priced below, list it justbelow appraisal, even if it's
$1,000, put price belowappraisal.
Ding, ding, ding.
We all look at it as humanbeings and it says sale.
(14:51):
Think about Black Friday.
They're silly sales, but itjust makes you want to go look
right and then do the inspection.
You don't have to fix everythingon the inspection.
If it's something serious, whatwe call a material fact,
disclose it.
If you've got money, have ahandy person come in and most
states you can do that.
They don't need to be licensed.
Maybe you're're handy.
Put the cork behind the sinkthat's missing, fix the, the
(15:12):
hinge on the kitchen cabinetthat's not working.
Quite right, inspectors have toearn their money.
40 to 60 items on the inspectorreport, 60 page report.
That's why they drop out athird of the time.
Cpo reduces it to seven percent.
It'll cost you about 1200 bucksto do the whole mccoy unless
you've got wells and set ticketand all that good stuff, massive
insurance policy.
(15:32):
The average buyer, especiallyin this market, three to five
percent.
They're going to ask you whenyou're under contract with them
for repairs because they've gotthis 50 page report.
Put it right up front don't getunder contract until your
listing agent sends that.
They're going to send you acontract signed.
Get your listing agent to sendthem the inspection report to
(15:55):
the buyers and say, listen, wetook this into account when we
priced the house, so we wantyour buyers to look at this.
In 3,500 transactions I've hadone pull out.
You want them to pull out ifthey're going to, because you
don't want them to be the 32percent that pull out due to the
inspection and appraisal,primarily when you're under
contract.
Why stigmatize listing?
(16:16):
You do not want to stigmatizelisting.
Drives the price down.
Everybody calls me and sayswhat's wrong with that house?
My buyers really wanted it, orthe buyers call us.
What's wrong with that house?
We see it fell out.
We were watching it for a while.
We couldn't sell our house inNew York, florida, wherever it
is.
Now we've sold it and we saw itdropped out and it's back on.
We're really interested.
But what's wrong with it?
It's natural, and make sureyour price drops are in place.
(16:39):
Talk to your agents.
Like, how many showings shouldI be seeing?
If they're experienced, they'llknow.
There's a reason we lost 84% ofagents last year.
Reason we lost 84% of agentslast year.
That's crazy.
We lose agents because they'restruggling.
It's hard out there, right?
They're struggling.
You've got to pay a lot ofmoney for photos and all that
(17:00):
good stuff.
Just because you were sellingall the homes two years ago
doesn't mean to say you'reselling them now.
It's different.
So just make sure you've got anagent with experience.
Thank you guys so much forallowing us to capture that
today and help other people inthere.
What would you say to peoplethat are selling the house out
there?
Tell them all.
So this is Denise and Al.
(17:20):
We're not going to give theirlast names so you can stalk them
or anything?
What would you say to sellersout there having heard this
today?
Well, definitely take advantageof the certified, pre-owned
From Florida.
I've never heard of it.
You've educated us and it allmakes so much sense.
When we get back down toFlorida, we're going to do the
(17:41):
same.
Speaker 2 (17:41):
Yeah.
Speaker 1 (17:42):
And we discussed earlier that if you were looking
so you looked at 12,.
You're going to look at anothercouple here today.
You'll have looked at about 14.
If two of those were equal toall the others or you know,
somewhere in the you've got fourthat you're looking at that you
really like If two of them werecertified pre-owned, which
would you be more likely to putthe offering on?
(18:02):
Well, definitely the one that'sCPO.
It's a no-brainer, right.
Which means that seller wouldhave spent $1,200.
Or even just, if you're tighton money, just get the
inspection.
Sellers Like it's $400 to $600,depending where you are in the
country.
Just get the inspection.
Because you just heard it fromthe home sellers here that are
(18:25):
going to CPO their home and howthey would prefer a CPO home.
It's a no-brainer.
Once you've heard it, you can'tunhear it.
Thanks, guys.
Speaker 2 (18:33):
You're welcome, thank you, thank you Thank you.
Hey everyone, it's Rowena Patton at the Real Estate
News Radio, your friend in realestate, realestatenewsradiocom.
I just had a conversation withAlan and Denise, some wonderful
buyers that are coming in fromFlorida, and we took them around
a dozen homes yesterday.
They have their home for salein Florida and I was talking to
(00:25):
them about the importance ofknowing the entire strategy and
how it all works.
Any agent with experience willdo this for you and I'll get on
Zoom with you and do it.
We did it on Zoom in Florida.
They came here, we showed themhomes.
They're retiring here Veryyouthful retirees.
We can't wait to help them.
And they were asking about whatwas going on with the market in
(00:47):
different places and they werea little concerned get this
listing agents that theirlisting agent hadn't asked for a
price drop when their househadn't sold and now it's at 50
days.
So it was kind of aninteresting conversation and
they allowed me to share it withyou.
So, alan, you had that question.
(01:08):
Ask me that question again,just for clarity.
Speaker 2 (01:13):
So we live in Florida and I guess my question is why
are they doing so much buildingthere when the price
Affordability index and.
Affordability is just not youramount.
Speaker 1 (01:34):
So you got a couple of things going on.
Let's talk about South Florida,right.
So we're talking about SouthFlorida now.
What is different about SouthFlorida in terms of who buys
homes there, is it?
I mean, yes, there's some NewYorkers coming in, there's some
Texans coming in, there's someDCers coming in, there's some
Virginians coming in.
We get that, but what'sdifferent about South Florida in
terms of the buyer makeup?
(01:54):
If you walk down the street inMiami, do you see more Spanish
signs or less Spanish signs inthe rest of the country?
Speaker 2 (02:02):
I would believe more.
Speaker 1 (02:03):
That's because so many, so much of the money
coming into South Florida isfrom South Americans and wealthy
people around the world.
At this point, right, it's amarket where we bring a lot of
buyers from a lot of differentplaces.
It's quite unique in that.
So we've also had the SouthFlorida issue of the condos,
(02:24):
where we had surfside collapseand that sent HOA dues through
the roof and all of the newrestrictions that have been
brought in where the inspectionshave to go.
For Now, just full disclosurehere, people who are listening
on the radio show, I am not anagent in South Florida, but I
did used to live there and Iknow a lot about what's going on
(02:45):
and you two can correct me ifI'm wrong here but a lot of new
restrictions and laws came inwhere now any building over two
levels so three levels and up incondo buildings have to be
inspected and they have to makerepairs and that's having
special assessments happening,especially on the older
buildings that are drivingpeople out of the condos.
(03:05):
So a lot of these new buildingsthat you're seeing going on are
condo buildings that don't havethose issues, right.
So which is actually hinderingthe problem.
But let's talk about nationwidethe National Association of
Home Builders, which you know isthe big association of home
builders, have just seen thelowest score in confidence since
(03:26):
they started scoring.
Home builders and this isnationwide are very unsure about
what is happening in the market.
When you see you knowClermont-Juglar 1860, 7 to 11
year cycle most of the countrycrested two years ago.
We've just been bumping alongthe top.
Some notable states in thenortheast are still having price
increases, but for most of thecountry, specifically Florida
(03:50):
and Texas and Arizona are seeingprice reductions.
Now that's getting everybody alittle bit nervous, but it takes
a little while to makeheadlines.
So if you look at my, you knowI've got a great shift chart on
this.
We bump along the top and thenwe go into the first stage,
which is denial.
Last year we're in denial Likeyou had celebrity agents going
oh, home prices are always goingup, don't worry about it.
(04:12):
Whereas now you're starting tosee headlines oh, this terrible
stuff is happening here andterrible stuff is happening
there, and people are startingto get the message, which is why
we're seeing price cuts throughthe roof.
We're seeing higher level ofprice cuts than we've seen in a
decade or more sometimes inhistory, since they first
started being recorded.
Price cuts mean that in a fewmonths those houses will close
(04:36):
at a lower level, which is goingto push prices down even more.
If you're selling now in any ofthese markets where there's a
decline, get out now, especiallyif you've been sitting for a
month.
Do certified, pre-owned Talk toyour agents.
Get the inspection.
Get the appraisal.
Price it just below appraisal.
Get two.
If you're not happy with it.
Slip it in a drawer.
(04:56):
If you hate it, keep going.
If you can hold it out for 10years, hold out for 10 years
Because Clermont-Jouglas 7 to 11year cycle.
It will most likely be worthmore.
Does that kind of put it in anutshell, or do you have any
more questions on that?
Speaker 2 (05:11):
No, I think you've answered the question.
So the developers, with all thebuilding that they're doing,
they're going to have to holdout either 10 years or they're
going to have to do the pricecuts.
I guess that's what I'm takingaway from the conversation.
Speaker 1 (05:25):
You are so spot on.
So here's the thing You're nowgoing to have think about it.
You're coming in from New Yorkbecause finally you want to
retire and get out of New York.
Everything that's happening inNew York right now, a lot of
people don't agree with that.
They don't want the grocerystores run by the government and
you know the whiteneighborhoods being taxed and
that's a direct quote, obviously, from the new New York mayor
(05:48):
that won the primary.
So a lot of people you'reseeing like it's making
headlines right now veryprominent people are moving to
Florida and a lot of them willmove to South Florida.
So now they're looking at aluxury condo.
We've got a lot of condos thatare cutting their price, cutting
their price, cutting theirprice because they tend to be
older buildings.
Even the newer buildings arebeing hit by this.
(06:09):
So there's actually one in FortLauderdale that just had a
$100,000 assessment.
The building's only 10 yearsold, which is driving people out
right Because they can't affordthe $100,000.
They finally bought theirretirement condo.
So now people coming in fromnew york, people coming in from
california, people coming infrom around the world, because
obviously it's a much moreinternational market.
(06:32):
Now they've got a choice.
They buy a brand new condothat's had a price cut.
Because there's so many of them, the market gets flooded.
Sometimes builders are stillbuilding and they're going, oh,
we're fine in our market.
Talk to agents around thecountry like, oh, we're in a
special place, nothing willhappen.
Well, yeah, I'm in a market inAsheville, north Carolina, where
(06:53):
they said that.
I was also in Miami where theysaid that it pretty much happens
everywhere.
Slowly but surely now you've gotthis buyer looking at a brand
new condo Everything's brand newand it's more modern inside.
Or they're looking at a20-year-old condo that's had a
big price cut.
It just depends on where theirmoney is.
Now you've got lots ofcompetition.
(07:14):
It's simple supply and demand.
You know, if you were lookingfor a house now which of course
you are you're looking for ahouse in the beautiful mountains
and you're looking at a housethat's been on the market for
300 days.
You're going to get that housefor a better price most than a
house that's been on for sevendays.
You are most likely looking ata house that's more modern,
that's got a more modern, it'snatural, a more modernized
(07:35):
kitchen, that's got the thingsthat you want right, but
generally more modernized andnewer is going to win out If
there's a much more highersupply.
Florida we've doubled thesupply in the last couple of
years.
North Carolina in most marketswe've doubled the supply in the
last couple of years.
North Carolina and most marketswe've doubled the supply.
We've gone into what we call abuyer's market.
The buyers have the power.
(07:56):
The problem is, the buyers thathave the power are normally
also selling something right.
So you've got to balance thetwo out and just strategize
between them.
But it's not all bad news.
The bad news is we lost 84% ofagents last year because they
saw this coming and they werestruggling and didn't know what
to do.
There are lots of things you cando.
If you're selling, get out now.
(08:18):
What I mean by that?
Don't just drop the price andyou know.
Get out and oh, run for thehills.
Oh, we're in the hills actually.
So that works well.
Make sure you're certifiedpre-owned.
Get the inspection, get theappraisal, talk to your agent
there.
Have me talk to them if youneed to.
Certified pre-owned has beenaround for 40 years with cars.
Every dealership has them.
Most people would prefer to buya certified pre-owned car, pay
(08:40):
10% more for it, because wedon't want to buy an $80,000
lemon off Craigslist or not thatthey're all lemons, sorry't sue
me craigslist or facebookmarketplace.
We prefer to buy that.
I brought this to the market in2007.
I have a best-selling book onit.
It works.
Any buyer would rather buy acertified pre-owned house.
Any buyer's agent that'srunning around you tell me,
(09:03):
katie, you were running around12 houses yesterday.
What would you be suggesting toyour clients that we're talking
to right now if two of thosehouses were certified pre-owned?
Wouldn't that?
I mean Alan and Denise, you cantell me too?
Wouldn't you sway more to thosehouses that were certified
pre-owned?
Speaker 2 (09:22):
Sure, definitely, definitely.
Speaker 1 (09:23):
Of course.
So let's get your housecertified pre-owned Now it makes
sense as a buyer.
Your perception as buyers wouldbe the same as anywhere else
and katie's run around showingme 12 houses and another few
today.
It would be natural for anybuyer's agent to get.
It's the right thing to do foryour, for you as the buyer,
because she's protecting you asthe buyer.
(09:45):
Getting to into a home that'salready been inspected.
You know you're getting into ahome of a decent value.
Maybe it was an agent thatstarted a week ago, or their
sister or a friend that just gotthe real estate license.
I'm not knocking anyone.
I'm just saying obviously somepeople have more experience than
others.
I know there's a lot of agentsout there that sit down with
sellers and the seller says Iwant 750.
(10:07):
And they go well, we think it'sonly worth 720.
Well, I want 750.
They're scared of losing thelisting, so they list it as 750.
It's called buying the listing.
We have a term for it.
It's called buying the listing.
And then a month later they'llcome back and say you've had no
showings, we need to reduce theprice because they want the
listing.
They're scared of losing it,right?
So when you make sure you'vegot a great agent out there that
(10:29):
tells you the truth based onfacts, not just their opinion,
because their opinion is oh,I've got this handful of
listings and this is what'shappening and I'm a great agent
that sells lots of homes for thelast 10 years.
Whatever it is, markets changeall the time.
It's not about what I sell asan agent, it's about what the
market is doing.
What are the price cuts goingon in that market?
(10:52):
Is it now 40% instead of 20% ayear ago?
That shows nervousness in themarket from the sellers.
That means as a buyer, you canget a great deal and, thank
goodness, you guys are buyingright and you're buying a bit
less.
So you're going to be dollarsin and you're moving a market
where it tends to go down alittle bit less.
I hope I answered yourquestions on the builder side.
(11:13):
Do you have any more questionsfor me on, like, the intricacies
of how this all works?
Do you feel like you'll takeanything away from this that
you'll?
Speaker 2 (11:22):
you know.
Yes, definitely, We've taken alot of a lot away.
Speaking with you is veryeducational.
I wish our realtor back homewould go into that much detail
and, like you say, it soundslike they just are buying the
listing, not really giving us agood breakdown on.
(11:45):
The CPO was never brought upand a few things haven't brought
up.
But we will definitely meetwith them when we get back and
discuss things in that nature.
Speaker 1 (11:55):
My sellers are educating their listing agents.
I love it.
Here's the thing.
So they weren't necessarilybuying the listing.
They were in the mindset of ayear or two years ago.
Two years ago, we were stillgetting multiple offers in Fort
Lauderdale.
You're in a beautiful area,still getting multiple offers in
Fort Lauderdale.
You're in a beautiful area.
You know everybody wants tomove there.
You've got a fantastic house,fantastic lot.
(12:15):
A lot of agents got in.
If you got in in the last 10years as an agent, think about
this for psychology.
All you've done is put a signout, done great pictures, drones
and put a lockbox on, put it onthe MLS and it sells.
You've not learned in the downmarket.
So I advise anybody that'slistening to this have an agent
that got their license in 2006,2007.
(12:37):
They experienced that downmarket.
They know what to do.
Serp Strategic IncrementalReduction Plan reduce it $100 a
week.
Everybody out there is going isshe nuts?
It scoots out on the searches.
It keeps it fresh, right andone of the partners the husband
or the wife, or the husband,husband, wife and wife, whatever
the makeup is doesn't care thatit only dropped hundred dollars
(12:58):
.
It's scooting it out in thesearch again and keeping it
front of mind.
There's one make sure if youhaven't had x showings, your
agent can tell you.
Your agents, when they listedit at that price, by the way,
they should have said, have saidto you if you don't have X
showings and it's probably, youknow, I don't know four showings
in the first month, they'llknow by what's happening in
their market.
Maybe it's six showings, maybeit's 10 showings.
(13:19):
If we have an open house, wedon't get 20 people through.
Whatever it is, I want you to,that's what I would say to you.
I want the two of you to agreeto drop it by 5%, 2%, whatever
it is.
I want us to do a drop for theincrement.
So if you, let's say, youhappen to be at 750, drop it 25
because it drops you into thenext category.
And then, on the MLS, say,$10,000 below appraisal.
(13:44):
That was the magic thing I did.
Okay, so between 2008, between2012, 2015, at the bottom, I
doubled my volume every singleyear.
I'm not bragging here, I'm justtelling you because these
things work right.
I was the rookie of the year,didn't know what I was doing for
the biggest international firmat the time internationally.
(14:06):
And I didn't know what I wasdoing because I was doing things
differently.
You've got to do thingsdifferently in this market.
I want everyone to hear that.
So, as a seller, get itcertified, pre-owned.
If your agents won't do it,first of all get a different
agent.
But you know, find a CPO agent.
I can help you with that.
Get your appraisal, get yourinspection.
In fact, before you sit downand interview agents, it
(14:27):
wouldn't be a bad idea to dothat because at the end of the
day, you're paying for it right,because you're getting an
accurate measurement as well.
You're getting a floor planfrom the appraisal.
Is it a snapshot?
Yes, but that's a wholedifferent discussion.
Put priced below, list it justbelow appraisal, even if it's
$1,000, put price belowappraisal.
Ding, ding, ding.
We all look at it as humanbeings and it says sale.
(14:51):
Think about Black Friday.
They're silly sales, but itjust makes you want to go look
right and then do the inspection.
You don't have to fix everythingon the inspection.
If it's something serious, whatwe call a material fact,
disclose it.
If you've got money, have ahandy person come in and most
states you can do that.
They don't need to be licensed.
Maybe you're're handy.
Put the cork behind the sinkthat's missing, fix the, the
(15:12):
hinge on the kitchen cabinetthat's not working.
Quite right, inspectors have toearn their money.
40 to 60 items on the inspectorreport, 60 page report.
That's why they drop out athird of the time.
Cpo reduces it to seven percent.
It'll cost you about 1200 bucksto do the whole mccoy unless
you've got wells and set ticketand all that good stuff, massive
insurance policy.
(15:32):
The average buyer, especiallyin this market, three to five
percent.
They're going to ask you whenyou're under contract with them
for repairs because they've gotthis 50 page report.
Put it right up front don't getunder contract until your
listing agent sends that.
They're going to send you acontract signed.
Get your listing agent to sendthem the inspection report to
(15:55):
the buyers and say, listen, wetook this into account when we
priced the house, so we wantyour buyers to look at this.
In 3,500 transactions I've hadone pull out.
You want them to pull out ifthey're going to, because you
don't want them to be the 32percent that pull out due to the
inspection and appraisal,primarily when you're under
contract.
Why stigmatize listing?
(16:16):
You do not want to stigmatizelisting.
Drives the price down.
Everybody calls me and sayswhat's wrong with that house?
My buyers really wanted it, orthe buyers call us.
What's wrong with that house?
We see it fell out.
We were watching it for a while.
We couldn't sell our house inNew York, florida, wherever it
is.
Now we've sold it and we saw itdropped out and it's back on.
We're really interested.
But what's wrong with it?
It's natural, and make sureyour price drops are in place.
(16:39):
Talk to your agents.
Like, how many showings shouldI be seeing?
If they're experienced, they'llknow.
There's a reason we lost 84% ofagents last year.
Reason we lost 84% of agentslast year.
That's crazy.
We lose agents because they'restruggling.
It's hard out there, right?
They're struggling.
You've got to pay a lot ofmoney for photos and all that
(17:00):
good stuff.
Just because you were sellingall the homes two years ago
doesn't mean to say you'reselling them now.
It's different.
So just make sure you've got anagent with experience.
Thank you guys so much forallowing us to capture that
today and help other people inthere.
What would you say to peoplethat are selling the house out
there?
Tell them all.
So this is Denise and Al.
(17:20):
We're not going to give theirlast names so you can stalk them
or anything?
What would you say to sellersout there having heard this
today?
Well, definitely take advantageof the certified, pre-owned
From Florida.
I've never heard of it.
You've educated us and it allmakes so much sense.
When we get back down toFlorida, we're going to do the
(17:41):
same.
Speaker 2 (17:41):
Yeah.
Speaker 1 (17:42):
And we discussed earlier that if you were looking
so you looked at 12,.
You're going to look at anothercouple here today.
You'll have looked at about 14.
If two of those were equal toall the others or you know,
somewhere in the you've got fourthat you're looking at that you
really like If two of them werecertified pre-owned, which
would you be more likely to putthe offering on?
(18:02):
Well, definitely the one that'sCPO.
It's a no-brainer, right.
Which means that seller wouldhave spent $1,200.
Or even just, if you're tighton money, just get the
inspection.
Sellers Like it's $400 to $600,depending where you are in the
country.
Just get the inspection.
Because you just heard it fromthe home sellers here that are
(18:25):
going to CPO their home and howthey would prefer a CPO home.
It's a no-brainer.
Once you've heard it, you can'tunhear it.
Thanks, guys.
Speaker 2 (18:33):
You're welcome, thank you, thank you Thank you.
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