Real estate marketing is a visual arts business.

Sure, they’re shopping for homes in a certain location, a certain price range and number of bedrooms, usually.

But when there are 15 homes that fit their criteria, the photos of the particular homes are one of the first — and most important — differentiators. The photos — more than anything else – either succeed or fail in getting that buyer to take the next step and make an appointment to see the home.  

That’s why I use HDR editing for all my real estate marketing photos. HDR is exclusive to digital, bracketed photography. It stands for High Dynamic Range, and the way it works is this:

• First, I compose the shot with my Canon Eos T2i mounted on a Manfrotto tripod.
• I then manually set the camera to take 3 bracketed exposures of the same shot. The first photo is properly exposed for the general light conditions in the space I’m shooting. This is where most would stop and move onto the next shot, but I have two more photos to take first…
• The second photo is of exactly the same subject, but this one is purposely under-exposed. By itself, it ends up quite dark, but is actually harvesting a few elements of the overall composition that we’ll want to use later.
• The third and final photo is over-exposed, and it looks really bright by itself. Again, though, there are elements of that shot, colors and such, that we will pull from later.

With those 3 shots of that one subject, I then upload them to a software program that combines, essentially, the “best” of each one into one super dynamic photograph. I’ll spend some time editing it further, tweaking any number of a few dozen different variables, until the light, shadow, color saturation and overall quality are just right.

One of the amazing benefits of this type of photography is that I can properly expose for a room’s interior, AND for the view out through a window. With just one image taken for the room’s light level, the view outside often looks like a nuclear explosion. That’s not how the eye would see it, and it leaves you wondering what’s outside.

Click on a few of the HDR photo thumbnails below, and tell me if you think HDR would help get your house more noticed by potential buyers.

[View with PicLens]

Does that sound like victory to you? Then why am I calling it a failure?

Here’s what happened:

This was not a real estate sale. It was something I witnessed in a retail store, a local Bellingham outlet of used building supplies called the ReStore.

The ReStore collects used but use-able building materials, organizes them by type, then sells them for a maximum of 50% of new if it’s mint. Less if it’s not.

The Buyer in my story was shopping for a set of bi-fold doors, and there were perhaps 60 to 80 sets to look through. I was nearby, so I watched him browse for a good matching set, then eventually score some nice ones.

When he brought them to the counter to pay, he pointed out that one was marked $14, and the other — totally identical and obviously part of the same set — was marked only $5. I haven’t priced new bifold doors like these ones anytime recently, but I’d guess this was 1/3 to 1/4 what he would’ve payed for new ones. They were essentially perfect, so it was what I’d call a “very good deal.”

The Buyer pointed out the price difference to the clerk, and said that he wanted both doors for $5 each.

Now, having looked through the bi-folds myself and with a very good sense of how they were pricing them, the $5 price tag was clearly an error. Every other door of comparable (mostly lesser) quality in the rack was at $14. Just getting the one for $5 would’ve been a good discount, and a “very, very good deal” for the set.

The clerk countered his $5-for-both statement with, “I’ll give you both for $14 total.”

This was a gracious gesture, in my eyes. Buy one, get one free.

The Buyer wouldn’t have it. He put up a fuss. And here, where he just opened up a can of bad-ass on the clerk, is where I saw failure creeping in.

Negotiation isn’t about beating the other person so you’re the winner. Unless you’re a cop and all you want is a name, or a confession.

Negotiation, in its highest form, is about two people reaching “fair.”  

The bi-fold door buyer beat down the clerk to eek out a few more bucks’ worth of savings not because he couldn’t afford the whopping $14 total for a $60-or-more doorset. He did it because in his mind he “deserves to win” and damn any sellers who stumble into his path on his way to continual victory.

Here’s the small kicker: How’s it going to play out on his future trips to the ReStore, now that he’s pegged a “chiseler” – the guy who chisels his way to a below-what’s-even-fair price point?

Here’s the big kicker: Anyone who goes through life chiseling away at every seller with a “Must WIN!” attitude instead of a “Yeah, that’s a fair deal for both of us!” attitude, is going to feel like they’re always broke, never have enough, are always getting taken advantage of, and that everything’s in limited supply so better grab mine before it’s gone, and screw you.

That kind of sounds like hell, huh?

That guy may’ve gotten the price he wanted, but seeing as how he’s not a cop, and the ReStore isn’t a bad guy holding out information, that was a failed negotiation as far as I’m concerned.

This is the list  recommendtions I deliver to the seller of what they should do to best get their house ready for the market.

It’s different every time, and not just because every house has a different set of “issues” or maintenance areas that could use attention.

It also differs because the seller’s story and goals and motivation are different in what they want to — and sometimes what they ‘can’ — achieve prior to listing.

It’s standard that I’ll recommend a universal de-cluttering of the house. “Get rid of 3/4 of your stuff!”  It’s practically boiler-plate at the top of my action plans.

It’s also standard that I’ll suggest they fix any damage areas, from major rot down to minor sheetrock flaws and nail-pops. Buyers put an unreasonably high price tag on repairs, and it dings their comfort level. We want to keep them pleased throughout their tour.

Oh, and wash the windows….

And clean the carpets….

And organize the garage….

But as with everything, there’s a line that we don’t want to cross. And here’s the #1 criteria on how we set that line, especially in this market: We don’t want to get into raising the listing price because we’ve made radical improvements to the property.

Let’s say you’ve got a visible, ugly cut in the vinyl flooring in the bathroom. It REALLY needs to be replaced.

“Great!” the seller might say. “I’ve been wanting to do Italian marble in there, with radiant heating, and we may as well put in a steam-room shower while we’re at it, don’t you think?!

“NO!” I’ll always answer. “We want it to be new, sure. Clean, of course. Without the need for repair, obviously. But if you throw ten grand at it and then expect to pull ten grand back out because of it… forget it!!!”

We don’t want to push our price point higher right now, not in this market. We want to be the cleanest house on the block, of course. But we want to keep our price as competitive as possible, and that means holding off on the aesthetic capital improvements. They’ll cost you money now, you’ll expect to price the house for more, that will reduce its chances of selling, and you’ll ultimately lose out.

Don’t become un-sellable. Here’s the formula: clean, un-damaged, without the need for repair or maintenance, and affordable. Work with what you’ve got, and hold off on the upgrades for now, OKAY?

414 Bayside Rd. in Edgemoor is a very special house.

The neighboring homes have fetched prices as high, recently, as $3.3 million. And for good reason: some of them are litterally like castles.

414 Bayside could easily fit right in with its 5 Bedrooms, 2 baths, 2888 total square feet, 2-car detached garage, full-length deck and patio, and tens of thousands of square feet of incredible landscaping potential.

A year or so ago, it came on the market at $1.2 million. It was too hard for buyers then to justify spending that amount of money on a house that is liveable — of course — and is built with some of the best craftsmanship an highest quality lumber ever put into a house — sure — but needed a $150,000 to $200,000 update, the style of updating that homes in Edgemoor require and deserve.

Yesterday, we re-listed it at $799,900. You can see more photos and read more information at www.414Bayside.com.

At $799,900 a buyer can invest the full amount of a remodel, have a luxury estate on the water’s edge in the highest end neighborhood in Bellingham, and still be into it for well under $1M.

One other feature worth mentioning is the private cove directly in front of the house, with acces to Bellingham Bay through the BNSF train trestle. The current owners have, in the past, moored a 26′ boat in the cove, and would slip easily out into Bellingham Bay and back again to their own private harbor. That’s a VERY unique feature in Edgemoor. Look again at this satellite image to see what I mean.

I’m opening the house to the public today from 11 a.m. to 1 p.m. Come by and see it. Walk the grounds. Check out the yard between the house and the shoreline that’s big enough — and level enough — for a full size tennis court WITH bleachers! Or a vineyard. Or an orchard.

Bring your agent, your builder, your designer, your friends… and bring an offer. What an opportunity this home is for a buyer looking for a project.

Yesterday, I published a post

When I first started writing it, I’d titled it something like “5 Ninja Tips to Go Faster.”

But as I wrote the content, I realized the tips were really not that “Ninja“. They were pretty basic things, actually. So in the end, I changed “Ninja” in the title to a more appropriate “Not-so-Ninja“.

There are a bunch of “Not-so-Ninja” tips to a successful home sale, too. Here are 5 off the top of my head:

1) Erase yourself. By that I mean remove your You-ness from the house. Unless you’re famous like on a Brad Pitt level, the buyers of your home aren’t interested in your stuff, your clothes, your smell, your family reunion photos, your magazines, none of it. Anonymize your house, inside and out, so the buyers can visualize themselves there, not you.

2) Un-wear-n-tear it. My own family’s house is not quite two years old. We bought it new. But since Hayden, our boy, is a very energetic and exuberant 2-year-old, there’s a LOT of wear and tear. He’s taken a spoon to the sheetrock here and there. Our carpet has as many flavors as our fridge. There are probably more legos in our heating ducts than in Hayden’s toy box. Now, if we were going to sell the house, do you think I’d leave that wear and tear? Heck NO. A buyer sees dings in the sheetrock and they think the roof is shot and the foundation is crumbling.  Do your best to un-wear-n-tear your house for a faster sale.

3) Insist on GREAT photos. In the Multiple Listing Service where agents and buyers both go to find properties to look at, us Realtors are limited to 500 characters of text. That’s nothing. But we’re allowed 15 photos, and they speak VOLUMES about the house, so they better be good. Make sure your agent is capturing your house in a good light with good photos. If they’re mediocre or downright bad, have them take different ones or hire a pro to shoot it. Good photos drive traffic to the house, and traffic begets a sale.

4) Leave. That’s right, get out of your house. Ideally, you can just move out and the house can be marketed as vacant. But if you do continue to live there, be GONE during showings. Not upstairs. Not in the yard. G-O-N-E. Why? Because with you there the buyer is going to feel nervous, restricted from talking freely, afraid you’re listening and might take a comment out of context. Those are NOT the emotions you want a buyer to feel when looking at your house. So just go. You need to get out more anyway, don’t you?

5) Clean. You cleaned up your house to prepare it for listing. Great. Clean it again. Keep cleaning it. Wash those windows again. Pick one a day and wash it, and just rotate around the house doing one every day. Work on the yard during the listing. Rake out the beds and add some beauty bark. De-moss the lawn. Trim the hedges and plant some bright flowers. If you keep loving your house and yard even as you have one foot out the door, the buyers will feel that and it’s a good feeling, and that’s the goal with buyers.

Do even 1 of these Not-so-Ninja tips and you’ll be ahead of the game. Do all five and you’ll be well on your way to a successful sale!

Profitable websites, profitable brick-and-mortar stores, profitable lemonade stands…

1) Generate traffic — I mean bring people in through the front door.

2) Convert — I mean get some of that traffic to buy.

3) Repeat.

Selling a house is no different. The model that works is to get the product — the house — as prepared as possible (as much as your story allows), market the $*&# out of  it to bring traffic in through the front door — and I mean buyers, Realtors, neighbors, the mailman… anybody who might know somebody who might be right for your home — until one of them converts (from shopper to buyer.)

MOST of that traffic is not going to convert. That’s normal in every business. But that doesn’t mean that traffic isn’t useful. That traffic can be surveyed to find out what the world thinks of your product, and if and how the product should be tweaked to get it to convert.

It’s called “feedback.”

I’m a ruthless feeder-backer. When I get a call from an agent — or sometimes right from the seller — I LOVE LOVE LOVE giving 100% objective (in my mind) insights into why I don’t think they’re converting. About once a week I’ll have an agent respond, “That’s the best feedback I’ve ever gotten.” My recipe is simple: I tell it like I see it.

NOTE TO AGENTS: My apologies if you’ve asked for feedback and I haven’t gotten back to you yet. You’re in sales, ask again. And again. I’ll give it to you, I may just be busy or you didn’t leave your number. Ask again. And again. Repeat.

Typical feedback usually goes something like:

• The kitchen was too small.
• The yard would be too much work.
• We only noticed the mess, and the buyers were just turned off.
• They need a bigger garage.
• The house was too rough, and they don’t want a fixer.
• It was too dark.
• The cigarette smoke smell was too strong.
• It seemed like the neighbor’s dog would be a problem.
• The owner’s presence was just too distracting, so we left.
• Even though they really loved it, they just want to keep looking.
• They’re afraid the view might get blocked one day.
• It’s just too much house.
• There’s not enough parking.
• They really want to hold out for more of a Craftsman style.

And so on… Some of these things can be addressed on their own. Did the “too dark” house have all the shades and doors closed? Can you,  the owner, be persuaded to go out for a walk during showings? Can an extra parking spot be created?

If the same piece of feedback comes back and again and again, that glitch may very well be worth addressing, and they don’t always take money to do that.

But as the title of this post touches on, every one of those feedback bits listed above REALLY starts with three invisible words. Go back and read through the list again, but this time start EVERY sentence by saying out loud:

“At this price…”

• At this price, they need a bigger garage.
• At this price, the owner’s presence was too distracting.
• At this price, they just want to keep looking.
• At this price, there’s just not enough parking.

If your traffic is good, and you’re not converting, and you’ve made all the material fixes your story allows, and you’re still not selling… remember this post, and remember the 3 words: “At this price…”

You know what you have to do.

The ticker is ticking away.

If you’ve been waiting patiently for that perfect house in the perfect neighborhood, you may very well be in luck! Come up to the Columbia neighborhood this afternoon between 1 and 4 p.m., and visit with me at 2406 Henry St. It’s the final open house before the end of the tax credit!

This gem is fresh on the market. It’s clean and beautiful. It sits on a an amazing, extra-large lot with one of the nicest lawns and garden areas in all of Columbia.

It’s 2 bedrooms with a nice den that could be a 3rd bedroom, has hardwood floors, a super bright living room, mudrooms front and back, a walk-in pantry, and glass French doors — south facing at that — that lead to one of two new Trex decks and the dream yard I was talking about.

You can find out a lot more about the house and see more photos at www.2406Henry.com. And even if you’re not house-hunting but love a great chocolate chip cookie, drop in anyway. I’d love to visit, and the cookies will be hot and fresh!

See you there!

[View with PicLens]

Remember back to 2005

And you thought to yourself, “But… you’re only 15 years old!”

Well, it was that easy back then. We know now that it was all the fragile skin of a giant bubble, and a lot of those professional investors will be in recovery-mode for many, many years to come.

But there were also a lot of them who made a ton of cash, weathered the downturn (or even thrived from it) and are still working it today. Some of them are making ridiculous piles of cash, even now.

The topic of today’s post is CAN YOU NOW buy a house in Bellingham, fix it up, turn around and sell it, and make a profit? Let’s go one step further and qualify the concept of “profit” by saying it’s got to be worth the effort. That’s a subjective measure, I understand, but let’s set a net profit limit of 10% of gross sale price. So if your gross sale price is $300K, you gotta turn (pre-tax) $30K after all expenses.

For a 10% profit, and considering that it costs about 10% to sell a property* (see note below) you’re going to need to buy the property, hold it, and fix it to sell again for no more than a total of 80% of final market value. For truly professional investors, that margin would be considered EXTREMELY risky. 60% is more common for hardcore, sophisticated investors.

*NOTE: By the time you pay agent fees, excise tax, title and escrow and other closing costs, kick in some $$$ for odds-n-ends repairs after the buyer’s home inspection, and taking a little hit on the list price, 10% cost to sell is a safe number for a really decent property in this current market.

So let’s say you tie up a property at a price that, with all repairs and holding costs, you’re into it for a MAX of 80% of market value. Next question: How liquid is the home’s neighborhood market? Is it Columbia or Alabama Hill? Sunnyland or Sudden Valley? That’s pretty important. A few months of extra holding costs and one price drop and with that thin margin, it’s bye bye profit.

Back to the hypothetical: Let’s say you find the property, and all it needs is a paint and carpet remodel, landscape clean-up and new roof. All easy, fast stuff to get done. Next question: Can you get a loan on it? Let’s assume you’ve got 700+ credit, lots of work history with W2’s to back it up, 25% down — a good start. How many other properties do you own? Some banks draw the line at 4, so be prepared for that rejection if your portfolio is rich.

Hard money? Yeah, it’s still out there, though it’s gotten a lot harder to find. If your financials are good and the property is a slam dunk, you can get a private loan for 3 points up front and 10% interest, 30-year amortization, 1-3  year balloon. Loan to value depends on the property. If you’ve tied it up for closer to that 60% range, you can get 100% loan to value. The private money lenders know the business, and they’re going to want to REALLY know you or know the property. If you botch it up, they want to take ownership of it with room for them to fix your mess and make their money.

To be continued…

In the recent post

And yes, it does come off more often than not without a hitch.

But when a step is missed… or worse, when one of the dance partners just crumples to the floor in a heap… well, let’’s just say we really get to see what everybody’s made of.

Here are a few missed dance steps or dance-floor stumbles I’ve experienced in the past couple years, and the respective outcomes:

Tale #1: Three home sales – all tied to one another in domino fashion – looked like they would fund and record on Friday, and everybody would be moving in over the weekend. But the IT gods were not smiling that day. The Whatcom County Recorder’s Office computer system was down, and they had no way of hand-recording the documents. Nobody got to move in that weekend. End result: The sales all finally recorded the following Tuesday.

Tale #2: A sale in Sudden Valley required for the buyer’s Alaskan home to close first. The Alaskan buyer’s lender made excuse after excuse, and the extensions were stacking up month after month. Then the news broke: the lender and her husband had committed double suicide, allegedly having extorted tens of thousands of “application fees” from their clients. End result: the Alaskan buyer switched lenders, and our sale finally closed after 5 months of extensions.

Tale #3: First, the buyer fought off multiple offers to get the deal. The appraiser then called for multiple work orders before they’d fund, so in came an army of contractors. When the work was complete, the seller THEN decided they required multiple bids to ensure the work was fairly priced. Meanwhile, the buyer’s (big box) lender handed the file down, down, down through multiple hands, with no one person claiming responsiblity. Extensions mounted. Then, escrow — a private law firm required by the seller — announced ONE HOUR before buyer’s signing that they wouldn’t generate deeds or tax affidavits. (Note: that’s like an auto mechanic taking your money to fix your car, then announcing they don’t have any tools). End Result: Sale closed after only 2 extensions, and the lender having to pay out on their proudly-marketed “Closing Guarantee” program.

It’d be downright impossible

Finding some papers on a dresser or walking into a particularly aromatic “roommate’s bedroom” is one thing. But coming upon the scene in the photo above — located in the backyard of a Bellingham short sale —  immediately conjurs images of an operation of such a scale as to be the subject of an HBO sitcom!

This property’s been listed for a long, long, long time. It’s a great property in many regards: great location; great park nearby; great neighborhood; great bones; great window package. It’s a bit distressed inside and needs a good $50K to realize its potential.

But is it possible that the stack of pots and gallons of fertilizer have scared off ALL potential buyers for well over a year now? Do most people see marijuana grow ops the same as meth labs?

My answer: no way. Not only are they two totally different animals (meth production indeed CAN and often does poison a house beyond repair). Whereas dope is a plant. The worst effects I’ve seen of small grow ops (I’ve never encountered one of the scale this one looks to have been) are improperly ventilated rooms that end up with a localized sheetrock mold problem. That’s an easy fix.

I don’t think it’d hurt to haul this garbage to the dump, but I don’t believe in and of itself it’s keeping the property from selling. What’s keeping it from selling is the Big P. Price. Get that price “mellowed out, maaannnn,” and the long run without an offer will go up in smoke in no time!