A Surfing Realtor's Sales Secrets

South Bay real estate agent Leo Nordine specializes in selling foreclosed houses, and he sells a lot of them -- as many as 300 a year. He doesn't schmooze, he doesn't stage, and he doesn't wear shoes in the office. So how does he do it? Sales tips from the Surfing Realtor:

Pricing: "You've got to price it so it's the best deal in town. There are 10 houses for sale for every buyer right now."  Appraisals and comps -- recently sold houses in your neighborhood -- are overrated.  It doesn't matter what houses were selling for a year ago or three months ago -- the "solds." What matters is the "actives" -- what's for sale in the area right now, whether your house stands out, and how your price compares. "The 'actives' are cheaper than the 'solds' right now. Don't even look at the 'solds.'"

Clean House: "An empty house is the easiest house to sell. Staging is so stupid -- it only makes sense on a multimillion-dollar house. And cluttered houses just don't sell in this market."

Get the Word Out: Don't worry about reaching buyers -- worry about reaching buyers' agents. "Join a minimum of three or four MLS services."

Don't Be Shy: In your listing, find a lot of positive things to say about the house, and take lots of flattering photos. It makes a difference.

Photo Credit: Malibu Surfing Assn.

Comments

[Dan]

Back to basics selling... Now THAT'S refreshing! Now let's go surfing!

[Adam]

Great advice!

[Cal]

Pricing is so fundamental and it seems many agents just simply get it wrong. It is funny to see 10 similiar houses sitting on the market for 2 months at 749k and a 11th house of similiar characteristics come on the MLS.. at 749k.

Note to sellers, the stuff sitting active on the MLS is the stuff that hasn't sold. You can either join them or do what it takes to get sold.

[war]

yea...these don't exactly seem like "secrets". This guy sounds like a good realtor but I think that it says something when common sense is seen as something "secret" in the real estate industry...pretty pathetic.

[formerlahomeowner]

Listing prices are still ridiculously high, including REOs. What this market needs is a 30-50% price slash across the board. Maybe it's just me but does every household in LA make $200,000 annually to afford the $600,000 house?

[LA Expat In Arkansas]

Thanks- I just whacked 30k off my "asking" price making my 5 acre horse ranch w/ views and pool a STEAL at 399k.www.sharpMLS.com/110899
I'm not used to a slow market and one thing I don't get is that 60 million people are expected in California in the near future, wouldn't all that demand drive UP real estate values? They don't call it the Golden State for nothing.

[Travelingman]

I'm in the $200K bracket (combined with wife) and we are choosing to rent since prices are just too inflated and unreasonable

it's really about price today for many middle class buyers who are becoming priced out.

I like Leo's suggestions on selling. The more prices fall, the more it gets back to some balance

it amazes me when i hear LA will never drop 50%, what that ignores is that prices went up 100-150% in 5 years.

look at what's happening with the rating agencies now? if they re-grade, and less investors go to the whole CDO space, what do you think happens to the residential lending market?
The Wall street guys will make money if it goes up or goes down. if their funds lose big time, they'll just sue the lenders. the little people/average homeowner can can scream, shout at congress, etc but at end of day, if there is a fall-out, Wall Street will be fine,

the correction won't likely be minor and even most of wall street, including bill gross from pimco is being bearish

Well, at Leo will be busy.

[Kaye Thomas]

Prices dropping in the LA area by 50% sounds so good..but most people wouldn't like what that would mean.. Prices escalated because of market pressure.. interest rates dropped to the lowest level in 50 years which made buying an alternative to renting for the first time in years in California.
If prices drop as much as people "dream about" it would be due to some very bad economic news in the area.. as in the 90's the local economy would have to tank; people would be out of work and unable to find new jobs. I don't think that is what most are dreaming of happening.. but unless you have a major recession with huge unemployment and associated problems don't expect to see the market take a major dive anytime soon.

[Linda Slocum]

These "tips" are pretty common sense stuff.

I disagree with the "no staging" rule. While a top-notch staging job is overkill for many homes, some minor staging in the main rooms can be very helpful. Moving around some furnishings and adding an accent piece here and there can improve a home's overall appeal.

For vacant homes, many buyers have a hard time imagining the house will look like with their furnishings in it. A table in the dining room and a bed (even if it's a blow-up bed) in the master bedroom can help buyers to get a feel for how large the rooms are compared to their own expectations.

[Cal]

"Prices escalated because of market pressure.. interest rates dropped to the lowest level in 50 years which made buying an alternative to renting for the first time in years in California."

It is amazing to me that a real estate professional still doesnt understand the fundamental reason behind the growth in California prices since 2002-2003. The fundamentals (population, income , interest rates) simply do not support the price growth. It is "something else" that caused prices to jump, once you understand what that "something else" is you can see why people expect prices to fall.

[www.BetterVillage.com, XYZ, PDq.]

Spell it out Cal... they can take it...

[Cal]

Well I was hoping they would sit there and think about it :P

But the only way a housing market can expand (or contract) above or below fundamental demand is solely based on the expansion or contraction of credit.

We have never in our history had such a great expansion of credit and now we are contracting off of those insanely loose standards. The housing market in California (at most levels) is essentially just a reflection of the secondary market for mortgages.

We now have a situation where interest rates have gone up, credit spreads have widened (the riskier mortgages charge a higher premium), 100% financing is much more limited, lack income verification harder to come by, a high number of existing home owners extracted equity, the economy slowing, a high amount of supply on the market, a high concentration of 100% financing and a large number of ARM resets all coming home to roost in one fell swoop.

So if the credit expansion was in fact an expansion (not a bubble) these factors effects should be limited. Since the credit was based on solid fundamentals. If this was instead a credit bubble and that bubble has burst, then the housing market has a long way to fall.

Basically, now we get to see if those people can really afford their homes or not. Pass the popcorn.

[www.BetterVillage.com, XYZ, PDq.]

Perfect storm, tipping point, train-wreck, multi-vehicle vehicle pile-up on the 405, tsunami. If it's a tsunami, I think the real big wave surfers realize it can't be ridden - and it *does* feel like a tsunami (water is draining away slowly and ominously from the shore; birds chirping frenetically; horses stamping nervously in their stalls at the polo club.) But, I don't think we should be sitting here eating popcorn - even those of us that might be able to currently. And I *don't* think we should be waiting 17 months to find out if the messiah has come. So what do I propose? I'm not that smart.. I propose that we put together a panel of *very* intelligent and *very* caring people who have a *proven* track record of solving problems. There is way too much political noise out there to figure out who might have the right answers for the long run national interest. Pipedream? ...and please no comments about "dancing fairies"... this is ringing especially hollow.

[Cal]

That intelligent and caring panel would have to decide who holds the bag for many many billions of dollars of mortgage losses and somehow make it stick.

These are adults making adult decisions in an open market, the correct answer is let the market equalize itself. If you dont let that happen you are going to a whole host of unintended consequences.

You simply cant have a popping bubble without people & businesses taking losses. The rationalization of the mortgage market IS A GOOD THING. The fact that people will have to live with the consequences of their decisions is something apparently people are supposed to feel bad about. These people have a home and a mortgage and made the decision to have both, where is the problem? People have to take responsibility for their actions.

[www.BetterVillage.com, XYZ, PDq.]

We've had plenty of loss so far and my numberless crystal ball tells me we're in for plenty more. True, panel should decide who to leave holding the bag, and my feeling is that it's mostly the responsibility of those who emptied the bag in the first place. Cal, you seem to be arguing for a [completely] free market, which has been nice in theory, but in the real world our "free market" is manipulated with ease. Maybe in 200 years, if people don't have to worry about eating or a roof over their heads, they will have the luxury of being grown up and educated and be able to compete effectively in a free market, but until that happens, overly intelligent, aggressive, successful people will be busy being so "successfull" that they will continue to horde until they finally figure out that hording so successfully might not be in the best interest of their children (mouthfull, but hopefully you get my point).

"Where is the problem"? - the problem is that despite getting slapped in the face with past depressions, recessions, and hyperinflation - we have a very short memory (even the "grown-ups").

You probably view what's happening right now as a "correction." What goes up must come down, etc. Right? I hope you are right. If not, let's get that panel moving so that if you're wrong we know how to mitigate the damage *for everyone*.

[Roger Moore]

"So if the credit expansion was in fact an expansion (not a bubble) these factors effects should be limited. Since the credit was based on solid fundamentals. If this was instead a credit bubble and that bubble has burst, then the housing market has a long way to fall."

In practice it's probably a mix of some bubble and some real changes in the credit market. Yes, lenders went way overboard in believing that things had changed permanently. But at the same time, new derivatives like CDOs really have changed the way the market works.

While the market is going to retreat from where it is now, it's foolish to expect prices to drop all the way back to pre-bubble levels-- even adjusted for inflation and real income growth. The only way that they're going to go down that much is if there's a fundamental change in the local real estate market that makes Southern California a much less attractive place to live.

[Pat]

Thanks to this, I started looking at www.nordine.com to see the residential listings. A couple weeks ago, there was a listing in Malibu for $999,000. Now, this same house is listing for $1,100,000. This does not seem to jibe with his advice on pricing. What's the deal?

[Cal]

Pat, the Original List Price was 1.1, then he dropped it to 999k, then increased it back to 1.1

It is possible the bank made improvements to the property and decided to price it more aggressively. I bet if you shoot him an email and ask he'd tell you why the pricing has changed.

The seller controls the price, not the realtor.

[Ragnar]

I agree with Linda. Scale is lost on a lot of people, especially with floor space. It's very helpful for a buyer to have a reference point, even if it's something simple and familiar like a queen bed, couch or dining room table. In a market like this, sellers need to make their homes as desirable as possible. Helping a buyer see how their stuff will fit the space can certainly help in may situations.

[www.BetterVillage.com]

The mls sheet is used by realtors as a credibility builder. It has the information printed out in quasi-code, and when people see things printed out, they tend to go "oh, ok, that looks official."

If the list price was $999,000 a couple of weeks ago, Cal's explanation is quite credible. $1.1M minus $101k is indeed $999,000. However, the mls sheet (printed apparently from pro.themls.com) says the following:

a) List Price $1,100,000
b) Old List Price (OLP): $1,100,000
c) 68 days on market.
d) Reduced $101,000

Problem is... the impression is left that it was listed at $101k MORE than $1.1M, and then reduced to $1.1M. MLS trick or "booboo." If we see a pattern of such booboos, it's more than a booboo.