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Don't Sell As-Is: The $50K Cash Secret · Market Ready

• 0:00
  Here's the problem. As soon as we got there, COVID hit and everybody started tightening
• 0:04
  down. That very program that I went there for got really pulled back because that was just a
• 0:10
  nice thing to have. Yep. And I went through the next year with that company and I realized, ooh,
• 0:16
  this was really important to my folks. And it kind of got shrunk as soon as I
• 0:21
  got over here. I was still looking for another way to get this done.
• 0:26
  I got a call from our Regional VP at Keller Williams and he says,
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  Hey, we want you back. What's gonna bring you back? And I said,
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  I need this program at Keller Williams. We've got to have this. This is essential.
• 0:38
  Every listing has a story. This is the Market Ready Podcast.
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  One of the best parts about doing a podcast like this is you get to talk to not only
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  amazing agents, but you hear some of the most fantastic stories. And this week I am
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  absolutely psyched to be talking to both Eric and Rob Smith, part of The Rob Smith Team.
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  And the big question that arises is how do you get a home market-ready when it's been rented
• 1:05
  out and the owners haven't actually seen it in 10 years? You have no idea what you're walking into.
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  Let's get into it. Rob, Eric, how are you? Thank you so much for being with us today. Great. How
• 1:18
  are you, sir? How are you? Good. Good. Good. Good. Nice to meet both of you. Really quickly, just 30
• 1:22
  seconds or less, why don't you just tell everybody your business and where you're based out of?
• 1:26
  All right, we're with Keller Williams Realty Intown Atlanta. I am the team
• 1:29
  leader team leader and the agent. Eric, I'll let you introduce yourself.
• 1:34
  Yeah, my name is Eric. I'm the listing manager and operations manager for The Rob Smith Team.
• 1:41
  Beautiful. So walk me through this. You get a phone call from some folks
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  that you've worked with for many, many years, right? And they tell you, Hey,
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  look, we've got a rental property. We think we wanna we're ready to to sell this thing,
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  but we haven't been in the house in 10 years. So, you know, just reach out to
• 1:58
  the tenants living there and go give it a gander for us. Did I get that right?
• 2:02
  Yeah, pretty much. So I've known these folks for a good twenty years and they
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  started amassing a lot of you know, just rental properties in a particular area in Atlanta,
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  and they want to sell a couple of them, or maybe one out of the two. They say, Hey,
• 2:16
  go call the tenants. We haven't been there 10 or 15 years. Just tell us which one doesn't
• 2:20
  look the worst. And we'll go with that one. So I figured, Hey, you haven't seen it in 10 or
• 2:26
  15 years. No telling what the tenants have just kind of taken the liberty to do during that time.
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  So we go out there and we take a look at both of these things and anything and everything
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  that you could probably imagine that they have done to it or hadn't cared for it or you know,
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  the various, you know, it it was kind of like both of them were sort of different
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  versions of Noah's Ark. So, like, you know, all kinds of critters running in and out and
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  water coming everywhere, water bubbling up from everywhere. It it was kind of interesting. So
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  that's the interesting thing, you know, that that I get to go do when I first walk into a house.
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  I try to really ask a lot of questions before we go because I have this, you know,
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  I tell people I'm like the worst agent in the world when it comes to my facial
• 3:10
  expressions. You can kind of tell what's going on behind my eyes. And if I see something crazy,
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  it does that. So I have to ask a lot of questions before we go so that I can kind of manage,
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  you know, how I react when I go in. And in this one, I needed a lot of questions
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  answered before I went in because there were some things I really wasn't expecting to see.
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  So after that visit, you know, we get with Eric and Eric's really good about
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  really going through things top to bottom. We'll do a couple of things. After we get
• 3:44
  with the seller and we tell them what's going on and we agree to work together,
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  we're gonna do two major things. One is we're going to have a full on pre-listing inspection by
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  a certified home inspector. Basically, we're gonna do the same thing that the buyers are gonna do.
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  We're going to do the same thing the sellers did 15 years ago when they bought the property,
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  but we're going to pick up where they left off. Second thing we're going to do is Eric is going
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  to go do a curb-to-curb walkthrough of that entire house and he's going to have it all on video. He
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  starts at the front and says, here we are at such and such property address. Want to spin around and
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  tell you what the neighbors look like. We're going to look better than all of them. Let's go. And he
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  just talks and walks and he rates everything one, two, and three. Ones, you got to do them.
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  Twos, you still need to do them, but we know time and budget may run out. Three,
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  go for gold. If you're going to Home Depot or Lowe's and picking up a couple of those things,
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  just pick up a third and throw it in that corner. And we have some clients do the
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  entire list. Some just want to concentrate on the ones. He merges this with his key findings
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  from the inspection report. And that's how he puts his plan of action together for the
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  sellers. And he'll spend a good hour with them on the phone, prioritizing this list
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  going top to bottom. Obviously the first question has to be, what's your budget?
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  And when we found when we find out what their budget is, what they can spend,
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  we kind of go above and below that and say, here's what can happen. But let's
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  concentrate on the money you can spend to make your biggest bang for your buck. We want a dollar
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  fifty, two dollars, three dollars return for every dollar spent. And if we can't do that,
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  we're only going to spend the money if it means we're not gonna get any
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  offers unless we spend that money, even if it's a dollar-for-dollar return.
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  So that's kinda how we look at it and we applied that
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  same situation to these two houses we went into.
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  Jumping back for a quick sec, you said you were wildly surprised by certain things you saw when
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  you walked into that house. What what were some of those things that gave you that wild surprise?
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  I'll let you take that one, Eric.
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  Yeah, so this had been lived in by some renters. It shared the values of the homeowner, but
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  it was still a rental. And they tended to be a lot more forthcoming about the condition of the
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  house than the owner. You know, the owner had his rose-colored glasses on. This is the house that
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  again he hadn't really seen in 10 or 15 years. The first thing that the renters let us know was
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  that there was water in the basement. Whenever there was a hard rain, there would be a good
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  inch of water on the basement floor. There were some issues with the air conditioning as well.
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  Luckily this was under a ton of trees and so it wasn't terribly hot. But in the middle of the
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  summer, the air conditioning only really cooled one part of the house. It didn't go upstairs,
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  it didn't go to any of the bedrooms. and so we had to work on getting the HVAC system
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  completely retooled so that it worked in the whole house. Now these people were,
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  I don't want to say homesteading, that's a little bit of an exaggeration,
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  but they were certainly living off of their land.
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  They had all sorts of fruit trees and nut trees planted, which was, you know,
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  the renters actually shared the same values of the owners who originally had planted these things,
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  which sounds great in practice, but the front lawn was a complete garden. You couldn't even
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  see the house from the road. And so there were you know, on top of that, there was just the
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  fact that they were renters. You know, it had been lived in. There was a couple of, you know,
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  deferred maintenance items. There was some painting that needed to be done,
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  there was some some cleaning that needed to be done on the floors, things of that nature.
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  That's the best, most politically correct thing ever. There were some deferred maintenance items.
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  Some deferred maintenance items, yeah.
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  Yes, yes. I I can only imagine what some of the deferred maintenance items there were and
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  what that looked like. So what does one do when you've got renters, though, and you have to make
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  something look you know market-ready and and get it up to snuff? What is the what are the
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  problems that you come across then getting something market ready when there's renters?
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  Well, one of the things we definitely have to do is make sure that we don't interfere
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  with the renter's lease. We absolutely want to make sure that if we're going to start any kind
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  of preparation while the renters are still there, we want it to be in the last waning days or weeks
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  of their list of their of their lease. And we usually tell the sellers, let's just wait until
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  they get out. It's fine if the renters want to help us facilitate getting getting us in
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  prior to their lease ending, but we don't really want to interfere with them. But if
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  you want to motivate them to help us get ready and we want to start work before they leave,
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  you need to make it worth your while and turn them into property managers. You need basically
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  hire the renters for a different job, right? So we usually take that first approach. Let's let's
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  let them get out and then we'll start our work. And that's basically what happened here. We went
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  in to get a couple of quotes while the renters were still there, but once they were moved out
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  Eric went through the pre-listing inspection and Eric went through their list of curb-to-curb
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  walkthrough items. And he came up with a budget that he proposed to them where he said,
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  we've got to get the basement done. We've got to get the HVAC figured out. You're
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  fine on the first floor, but whoa, you don't even have any air conditioning
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  or heat on the second floor. And those were this was like a two-floor duplex,
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  really. You had a different renter pod upstairs than the one on the first floor.
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  One HVAC system was serving both of them. And it was only serving about it was only giving about
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  20% efficiency upstairs. And then of course the landscaping was a disaster. That had to
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  be a completely different animal to take care of. And then once all of this stuff was done,
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  cleaning the house out and interior painting it top to bottom was top priority. There were
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  a lot of other things we could do. I mean, we could have spent double their
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  budget what they spent, and I think they might have even had the money to do that.
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  But we find that nice breaking point where we say, you know what? Given what
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  we're going to give the market, I don't think it's worth it to go past A, B, or C, you know,
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  level here. So let's stop it at this certain point, put it out there, and it met their goals,
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  right? We put this thing on the market for $700,000. We could have put it on for $800,000
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  if we had done $50,000 more work, and it probably would have we probably could have gotten it.
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  Would have taken three more months to get it and we weren't headed toward a market where
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  we were certain that the high price point was going to pan out very well. Would have taken us
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  also three times longer to sell it. So we have to put all of this stuff, our knowledge of market,
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  our knowledge of the micro market, like what's going on there. We also have to
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  know almost exactly who is going to buy this. We're gonna call every single seller or every
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  single seller's agent around that house that has something similar. Tell us about your listing.
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  What kind of offers are you getting? I see you just went under contract. You've got
• 10:23
  multiple offers? How many? Five? That means four people are still looking and our house
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  might be perfect. Tell me about those people. Can you give me any details about those offers?
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  So we really try to go and figure out who the buyer is before we have our sellers pull
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  the trigger on spending any money once we've got everything in front of them.
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  Only then do we make our best recommendation because you can spend twenty, thirty thousand
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  dollars wrong, like very, very easily if we don't have that conversation. Some of the most
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  uncomfortable conversations are when we in the past had made recommendations for sellers to do
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  this or that, they spend all their money, they max out their credit cards, they've got 25% percent
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  interest, you know, hitting them every month, they're just paying the minimum, and we're still
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  on the market after 40 or 50 days. And they say, Rob, we're gonna have to do a price reduction?
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  I literally am throwing $25,000 out the door of everything that I just spent? We learned early on,
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  have those conversations with the agents who understand the market of the moment.
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  Don't just look at past comps. Look at what's going on right now as we're getting ready to
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  go back to Sherwin Williams and buy paint and hire the HVAC contractors to come take
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  things out. And then let's hurry up and get it done. We do not want our process
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  to take any more than 30 days. If we have something that takes more than 30 days,
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  we just tell our sell sellers, there's a caveat here. It's going to take a long time
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  to get this stuff done. And I don't know what the market is going to look like when we're
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  done. So let's be really frugal about this. And if it's going to take longer, then fine.
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  Don't hold my feet over the fire when we kind of get up there and you say, I want to price it at
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  that. We try to predict what's going to happen. We always try to do that to manage our expectations
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  and our sellers' expectations. So yeah, that's just a little bit about how we go about it.
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  Eric, what from your you're you're really sort of in the trenches with a lot of the
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  listings and things like that. What are the most common mistakes that you see people make
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  these days when it comes to getting house market- ready?
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  I think they think about what's trendy and what they want, and they don't think about making a
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  home neutral and what everybody wants. People get really obsessed about the features, the
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  special features that they put in their houses. They love the specific tile that they picked or
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  they love their unique taste in decoration, for example. But I think what most people want is a
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  neutral space in which to make their own. I think some buyers have even or some sellers have even
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  been offended when we've gone through and made these suggestions about what to do to the home.
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  And we aren't trying to make any sort of personal statement about your s taste or
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  about your style. We just know what sells and we try and sort of aim you in that direction.
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  What if you think about some of those things,
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  what are the what are the things that you see current day that you would say these
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  are sort of standard practice when it comes to making them neutral for current buyers?
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  Yeah, I mean the first thing is paint. A nice creamy white paint color just looks
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  really crisp. It photographs really well so that your listing pictures are gonna look really nice.
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  It reflects a ton of light and so staging furniture tends to look
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  really good in there. Some of the other things are, you know,
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  if you have if you have something that's really offensive in terms of like, you know, some sort of
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  really shiny you know, fixtures or or knobs on your cabinets. There's
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  ways of sort of neutralizing that. If you have great furniture to begin with,
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  a lot of times rather than staging, people just need to edit down. People could have
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  great furniture, but maybe there's too much furniture in a space. You know,
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  furniture in hallways that make them look narrower or furniture on stair landings that
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  make that feel narrower. A lot of the times we can just walk through and make suggestions about
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  what furniture to edit in or out of a space. Maybe we take a picture that's
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  hanging in a bedroom and we put that above a headboard because it fits better there.
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  It photographs better there. and it just moves the listing a little bit more quickly.
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  So i if you think about currently what you're looking to do in terms of helping
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  people better understand the benefit and value, talk me through a little bit how
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  y'all decide you know, if these folks say they have a budget, don't have a budget,
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  whatever that may be, how do you help people from a financial perspective in
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  terms of being able to do certain things depending upon their different situations?
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  You know, it's there's a couple or three different things that we might do. So we
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  have a first of all, one of the great things that I believe that we try to do
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  to help sellers see the big picture on what's going to happen from their first
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  phone call or their first hand raise to say, Hey, I'm interested in selling,
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  all the way to the closing table is we don't just have a listing agreement. We actually have about a
• 15:13
  50-page document that takes our sellers through the entire process and tells them all about
• 15:19
  the various ways we're going to be helping them get to the closing table, including
• 15:24
  getting the property evaluated for what repairs and what cosmetic updates are needed,
• 15:29
  all the way to negotiating with buyers and then negotiating any repair requests
• 15:34
  that they may make so that we don't upend the deal, get the appraisal taken care of,
• 15:37
  and then get to the closing. The other thing that we have, and that this is part of our listing
• 15:41
  agreement, is we have a menu of services that go above and beyond kind of like our standard
• 15:47
  the standard set of services you might expect a listing agent to do. So when
• 15:51
  it comes to things like covering staging, covering all of your pre-listing inspections
• 15:57
  that we recommend in today's world to do on a lot of these older houses in Atlanta,
• 16:02
  the entire project management that Eric will do. So if you have a seller that's out of town,
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  they haven't been to their house in 10 or 15 years, Eric will literally be boots on the ground
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  getting the contractors in, evaluating their work, getting estimates. He's not going to do the work,
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  of course, but he's going to make sure that it's getting done. He's our project manager.
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  And then we have this thing where we say, hey, it's just going to be
• 16:26
  X percent more on compensation. So where real estate agents may say, like, hey,
• 16:31
  it's 3% for my side or 6% commission. We would say this particular service starts at X other percent.
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  Half a percent may be for project management, half percent for a mild staging project, a full percent
• 16:48
  extra of your sales price for the full-on staging. Backyard has patio furniture in it, front porch
• 16:52
  has a swing, the whole nine yards. So we can cover that from an upfront cost standpoint. We also can
• 17:02
  get some vendors to delay some of their invoices if they know, they've worked with our team before
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  and they say, Rob and Eric, they're gonna sell this thing. I'm gonna get my money in 30
• 17:12
  days. We'll just have the vendor forward their invoice to the closing attorney when we well,
• 17:18
  right before we close. The third thing, and I think one of the things that have been
• 17:22
  the thing that's been really mostly helpful that just gives everybody a
• 17:25
  peace of mind is the Keller Williams Sellers Edge product, where our sellers can get up to
• 17:31
  $50,000 in help doing everything, staging, painting, structural concerns.
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  Maybe even moving expenses. And it's just this really nominal interest rate. And
• 17:43
  then Notable sends the invoice plus what little interest has accrued to the closing
• 17:48
  attorney. And then they just pay the invoice off from there. It's very, very easy breezy.
• 17:52
  Sorry, just for point of clarification,
• 17:53
  so Notable is the is the backend provider for that Keller Williams product.
• 17:58
  That's correct. Notable's the backend provider for that Keller Williams product.
• 18:01
  So Keller Williams has white-labeled it as Keller Williams Edge or Keller's Edge,
• 18:05
  I believe. And I just know that the Notable financing company is the backend of that. We
• 18:10
  were part of a brokerage before that had that and was really, really happy to see them come on board
• 18:15
  with Keller Williams and bring that same product up a level or two to our company. We've been
• 18:19
  waiting for that for a long time and it's just worked like gangbusters for our seller clients.
• 18:24
  Before we wrap, I wanna touch on two things because I I think what you just
• 18:28
  described was incredibly important was the value and benefit to current
• 18:33
  consumers these days to have a menu of services.
• 18:37
  Mmhmm.
• 18:37
  And, you know, I I a lot of the agents that I work with I talk to
• 18:42
  pretty extensively about how we don't do a great job at understanding consumer needs.
• 18:47
  You know, there's a lot of conversations out there about agent panels, and we all attend agent
• 18:51
  panels. We've all been to 500 agent panels, agents sitting on a stage in a microphone telling us,
• 18:55
  you know, all the great, glorious things they've done to grow their business. And I always ask the
• 18:59
  same question to agents. Okay, cool. How many agent panels have you been to in your time in
• 19:05
  real estate? I don't know, like hundreds. How many consumer panels have you attended?
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  Consumer panels.
• 19:12
  Yeah. Zero. Zero. Yeah. And nobody seems to find that strange or interesting,
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  that there's literally nothing there from a consumer perspective, even though that's the
• 19:23
  population that we work with. So one of the things that I talk to agents about is how do
• 19:27
  you learn from the consumer world, right? And so in your case, what you're saying is look,
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  you've learned through the business, through working with people, that there's a series of
• 19:35
  services, and I think this is fantastic. Something I recommend to to the folks that I work with too
• 19:40
  that there's a series of services that we can offer you, right? But it's all based dependent
• 19:44
  upon need. Not everybody has the same need. So in order for you to create differentiation in
• 19:49
  the business model that you've developed and to serve clients and consumers better, you know,
• 19:53
  that option that you're providing there, I think is fantastic. And then to have some financial
• 19:57
  support behind that in a couple of different ways is really unique. And I think that's the points
• 20:01
  of differentiation that separate great agents from agents. And I think it's a very easy thing.
• 20:06
  I'll tell you. So on that point, right before COVID hit in 2019, I was being pitched by another
• 20:14
  brokerage here in town that had just come to town. They were really growing nationwide. And the
• 20:21
  opportunity for the brokerage through a financing company to pay for sellers prep was the number one
• 20:29
  thing I was attracted to if I were to go to that brokerage. And they were really pitching that.
• 20:33
  And the amount was huge that my sellers could do. It was getting to be a big deal.
• 20:38
  I was having deal after deal after deal become more complicated and completely just falling
• 20:43
  apart because my sellers, even though we advised them on what they needed to do,
• 20:47
  just didn't have the money to make this stuff happen. Right?
• 20:50
  Right. Right.
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  They didn't have credit cards. They didn't have like just tons of cash in the bank.
• 20:55
  They would have taken care of their houses if they had if they had this kind of money,
• 20:58
  right? So here's what I did. All right, along those same lines of going to the consumer panel.
• 21:03
  I called 10 of my sellers that I was currently working with or that was
• 21:08
  about to list their property, and I said this thing. Hey,
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  you've gotten a listing appointment from me. You've gotten the presentation. If my
• 21:16
  identical twin brother came in right after me and gave you the exact same presentation that I did,
• 21:22
  but they gave you this awesome program where you could have all of this money
• 21:28
  to take care of your listing prep items and then send the bill to the closing attorney
• 21:33
  and take it from your proceeds, would you have gone with my twin brother or would
• 21:37
  you have gone with me? 7 out of 10 said I would have gone with your twin brother. That's when I
• 21:42
  decided to leave a decade and a half of Keller Williams and I went to that other brokerage.
• 21:48
  Yep.
• 21:49
  Here's the problem. As soon as we got there, COVID hit and everybody started
• 21:52
  tightening down. That very program that I went there for got really
• 21:57
  pulled back because that was just a nice thing to have.
• 22:01
  Yep.
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  And I went through the next year with that company and I realized,
• 22:05
  this was really important to my folks. And it kind of got it kind of got shrunk as soon as I got over
• 22:11
  here. I was still looking for another way to get this done. And I got a call from our Regional VP
• 22:18
  at Keller Williams and he says, Hey, we want you back. What's going to bring you back? And I said,
• 22:22
  I need this program at Keller Williams. We've got to have this. This is essential.
• 22:27
  You guys have put your trust into your agents in getting this job done. This other company,
• 22:33
  all they need to know is is the agent are you going to sell this or not?
• 22:36
  They're not running a credit check. They're not, you know, taking these people through
• 22:40
  the ring or they're not going through 30 days of underwriting for like, you know,
• 22:44
  tens of thousands of dollars. They're looking at the listing agent who has this relationship and
• 22:48
  they're saying, Are you going to sell this house or not? All they need to hear is a yes, boom,
• 22:51
  here comes the money. I said, I want you guys doing the same thing. As soon as they said yes
• 22:57
  I moved back to Keller Williams and it's been beautiful ever since.
• 23:00
  Well, on that note, I couldn't have landed that plane any better myself on that spot. But thank
• 23:07
  you, Rob and Eric, for taking the time to be here. Fascinating stuff. Really impressed with all
• 23:11
  the work that you put in and all the things that you're doing, to again meet customers' needs where
• 23:16
  they're at, and again, create incredible points of differentiation for those. So thank you both for
• 23:20
  taking the time to be with us today. Great stuff and wishing you the best for the rest of the year.
• 23:26
  Thank you.
• 23:27
  Thank you.