#1) CLEAN IT UP: This sounds too simple to be of any use but many REO listings get an initial cleaning/trash out and then no one ever objectively views the property again through a "buyers eyes". If a property has been sitting on the market for many months, it is time for another sanitization. Southwest Florida in particular is a haven for bugs, lizards, frogs and the like. Somehow they manage to get into empty homes and make it their final resting place. Showers/baths seem to be their favorite location. Nothing is less appealing then opening a shower door to find a mummified lizard or frog. As parents, we know that we view any potential home purchase as a place our children will eventually occupy. Some images, while easily cleanable, will forever stigmatize a property in many minds. We recently had a beautiful waterfront listing that sat vacant for many months. As the third, and final, (Thank Goodness!) Realtor we approached the listing as if it was just hitting the market. Upon entering the premises, we were assaulted by a sewage odor that overwhelmed the senses and required a nose/mouth cover in order to proceed with viewing the property. This was simply due to gas build up in the traps and a basic plumbing flush out rectified the situation. But imagine the dozens of showings that viewed the property in that fashion. Do you think you would envision your family living there?
#2) TELL THE TRUTH: Don't try to make a mongrel into a pedigree. Buyers will take the defensive position if the sales approach is nonsensical. Give them credit for being intelligent. The days of uneducated buyers are long over. If the property is a wreck, then market it as a wreck. Nothing is more aggravating then going into a listing that was overstated on the MLS remarks. I believe strongly in the "reverse psychology" approach when we are dealing with a listing in major stages of disrepair. When we get sign/ad calls on these types of listings we proceed to list everything we can think of that's wrong with the property. Ending with "But the price is right!" The buyer then begins to do something amazing!!! He actually starts to defend the property. More often than not, once we actually show the property, the buyer will say something like: "Gee, it's not as bad as you made it sound!" Isn't that more sensible than someone expecting a diamond and finding a rock?
#3) GET BACK TO BASICS: The cost of re-appraising or getting another BPO opinion is minimal in the scheme of carrying/maintaining a vacant property. No individual broker or appraiser can see every aspect affecting the subject property. Perhaps there is some negative in the neighborhood that's been overlooked. While appraisals will always have their rightful place in the successful marketing of REO properties, local Brokers often have a better "finger on the pulse" of what or why buyers may not be finding this property appealing. Most good REO Brokers will be happy to provide a BPO for you at a nominal consulting fee even if they know they are not getting the listing. Click on our home page: "Order a BPO" and we will be happy to assist you in Southwest Florida. If you need an opinion out of our area, see our links to the National REO Brokers Association (NRBA) and REONetwork.com.
#4) RAISE THE PRICE: What???? Is that a typo??? Did you read that correctly? Absolutely. This is one approach that has to be used sparingly but has worked for us in the past. While many of our clients don't want us to advertise the fact that the property is bank owned, once a serious buyer is on the line this information becomes inevitable. For many buyers/investors the mention of "bank or corporate owned" is like waving a red flag at a charging bull. Sometimes we get the frustrating feeling that we can price the property at $1.00 and they will still offer 50 cents. This approach works best in upper priced REO (bottom of the market usually always sells). Upscale buyers are sometimes more educated and are in less supply than low end/first time buyers. They've also been around the block a few times and paying the asking price or close to it just doesn't sit well with them. We once had a listing in the $300's range that every appraisal and BPO clearly stated was easily worth the asking price or more but the darn thing just would not sell. We kept getting offers $20K-$30K below the asking price, which based on its appraised value, were completely unacceptable. Finally, we suggested a price increase. After resuscitating our client, (who had never had a suggestion like that before), the property sold quickly. Yes, you guessed it: $20K-$30K off the NEW asking price, right where our client needed it to be.
#5) HIRE THE BEST: Nothing, but nothing, substitutes for experience. No one can have expertise in all the vast facets of real estate sales and marketing. There are some realtors that solely operate in environmentally challenged properties, to give an idea of how "niche-y" practitioners have become these days. If you have a difficult asset to move, make sure your Broker has a GREAT DEAL of experience in handling REO and a lot of general experience in the industry doesn't hurt either. Some companies hand out REO listings to the agent who happens to be sitting in the office when their phone rings. High levels of bureaucracy usually result in watered down accountability and minimized incentive. Having owned, operated and affiliated with several 100% commission firms in our careers, we know we're probably not objective in this area. But common sense would dictate that sales agents on 100% or high % commission programs are more likely to be experienced and motivated to sell listings vs those companies that cut and water down the commission incentive by unending "referral and department fees" and fractured accountability. Make sure that the sales agent who is ultimately accountable for the marketing of your REO asset also has the most to gain or lose!
IN SUMMARY: Have a back-up plan. No one individual broker or firm can handle an entire area. We recognize this fact and encourage our clients to cultivate several excellent brokers within a given market area. In fact, we would be happy to recommend a broker if we feel we are unable to service a particular listing or client.