Tuesday, April 24, 2007

How Effective Is A Home Tour?

It depends.  Here are a few different scenarios.....

  1. High-End Luxury Homes.  Tours in this type of real estate market might be the most effective.  When selling a high-end luxury home, security issues are quite important.  Not only are their items in these homes that are extremely valuable, but the owners of these homes are sometimes rather sensitive to public scrutiny.  It helps to have other agents who work with this type of clientele to have a good idea of what type of inventory is out there, so that when a luxury home-buyer calls them, they know which homes will most likely suit their needs without going through the hassle of showing the buyer's every home within their price range.

  2. Typical Homes.  Tours in this type of market are amost a complete waste of time.  Here's how most tours work.  A lender or title company sponsors the tour and offer to coordinate the event.  They contact all of the listing agents who have properties listed in a certain geographical area (usually a zip code) and offer to put up to 10-12 houses on tour.  The rule of thumb is that, as an agent, if your house is on tour then you must be present for the entire tour.  The reason being is that typically the only agents participating in that tour are the other listing agents with homes on tour.  They want me to visit their home, and likewise, I want them to visit my home.  And that's all great, we get 10-12 agents through the house, providing their thought and feedback on the condition of the home and the price.  But what's the real benefit?  A)  Well they might have a buyer.  The odds of one of the 10-12 agents with listings in that same area having a buyer that would be interested in the house are very slim.  And if they did have a buyer interested in that area, they would have already shown them the house through the Multiple Listing Service.  B)  Well, they can offer us some feedback on the house and the price.  Feedback on the condition of the house is probably the most beneficial aspect of a tour (I'll touch on this aspect in a minute).  But feedback on the pricing of the house?  The last tour that I did I had agents telling me it was overpriced, underpriced, about right, you name it.  And here's why.....odds are they don't know this area well enough to know how the home is priced.  As I mentioned before, most tours include a rather a large area, sometimes an entire zip code.  So unless they've spent the time and actually pulled a CMA and analyzed the data for our particular subdivision and my listing in particular, they're simply not educated enough to offer an opinion that really matters.

  3. Not-So-Typical Homes.  As an agent, many times sellers aren't very easily convinced that their home needs a little bit of work (paint, carpet, clean-up, etc.).  And it may take the opinions and comments of 10-12 agents to convince the seller that their agent isn't just giving them busy work.  So as the listing agent you do everything that you can to try and get the seller to see the light.  If that doesn't work put the house on tour and then discuss with them the opinions of the other agents on tour.  This might persuade them enough to spend the time, money and energy to make the necessary adjustments to the condition of the home.  When you've lived in a home for so long you tend to overlook the minor cosmetic things as just part of your home.  Sometimes the nick in the wall, or dent in the door, or the little stain in the carpet represents a memory of an experience they've had in that home.  But when a buyer steps inside they want everything to be in tip-top shape.  They're trying to envision themselves living there, and if the first thing they have to do when they move in is spend time, money and energy on getting the home ready for them to live in, they'll probably find another home to buy.

So for the typical home that is in good condition tours are a waste of time in my opinion.  I want agents who have buyers to be touring my listing, not other listing agents who only have listings in the area.  So how do you get agents with buyer's to tour a listing?  Put it in the MLS, representing the home in the best way possible with the maximum number of pictures with a very thourough description and wait for the buyer's agents to do their job.  If the home is priced right it will get shown to the buyers looking in the area.

-Steve Nicks