Tuesday, July 29, 2008

Selling a home quickly – a Realtor’s input on current challenges

I have been asked by quite a few homeowners this year about home value relative to landscaping as they are preparing to put their home on the market. I decided to do a little research and better understand what is happening in the current Cleveland Heights and Shaker Heights housing market. With the SunNews reporting recently that the Heights area has lost between 8-9% of its population base there are a lot of homes available on the market.

I had an informative conversation with
Kevin Cahill, an agent with Keller Williams Realty of Greater Cleveland, who specializes in residential Heights area homes. Cahill shared his insights with me about some of the challenges that sellers face in the current housing market.

“One of the biggest challenges facing a seller in today’s market is the length of time the house sits on the market. As the length of time on the market increases, so do carrying costs for the owner. The ability to make a quick sale in this market provides the best opportunity to capture the homes real value and to cap the outgoing cash flow required to own and maintain the property.”

A report generated late June from information available through the MLS (Multiple Listing Service) indicated the following average market times for homes in the
Cleveland Heights and Shaker Heights market for the previous 90 days. The report includes active, closed, contingency and pending listings.
$150,000 to $300,000: 95 days average on market with 362 listings
$301,000 to $450,000: 97 days average on market with 120 listings
$451,000 to $700,000: 119 days average on market with 85 listings
$701,000 and above: 112 days average on market with 35 listings

Cahill commented that he does not believe the MLS statistics reflect the actual market conditions. “I believe the average market times are actually higher – closer to 50% longer than the MLS indicates as it does not account for expired listings or those homes that are relisted which therefore do not reflect the true market time.”

If this is accurate, then for homes in the $150,000 to $400,000 price range with an average market time of about 95 days, the real average would actually be closer to an average of 143 days on market, or nearly five months.

Cahill explained the financial impact: “Let’s use the example of a $250,000 home – with a cost of ownership not including utilities and maintenance costing the owner $2,000 per month. If this home would typically sit at least six months on the market, cutting the market time to twelve weeks would save the owner $6,000, or about 2.5% of the home value.

“In today’s market the goal is get the house to sell faster than anyone else’s. Sellers need to have a strategy.” Cahill shared.

When asked about the factors that would shorten the length of time on the market, Cahill said, “To get on the low side of the average number of days on market there are two factors – price and condition of the home. These two factors will open up the pool of potential buyers, thereby attracting more qualified and likely buyers for the property.”

Cahill explained how buyers today use the internet and how time on market is affected. “Prospective buyers are looking at listings online to determine if they want to make an appointment to see the home. Photos that reflect an attractive, appealing front fa├žade will get more activity. Once the prospective buyer sees the condition of the home, and it is priced appropriately for the market, the market time can drop fast.”

I asked Kevin what impact landscaping has on the sale of a home. “I generally recommend that sellers put in as much time and effort on the landscaping and the interior of the house as they can afford. Spending money on specific projects to get a house ready for sale is worth it – including the landscaping if necessary. It’s going to impact perception, which impacts the number of showings and also the buyer’s opinion of value.”

I asked Kevin his specific thoughts on landscaping and how sellers should approach getting their house ready for market.

“Homeowners don’t always have the cash before the sale to do the work that might be necessary to make the house competitive in this market which contributes to longer market times. Each scenario is different – each house has different needs. Sometimes landscaping isn’t the highest priority if the living room has shag carpeting or there are other more obvious drawbacks to the home. Although basic maintenance goes a long way to making a house more marketable and this includes the landscaping.”

“Most homebuyers will identify initial qualifiers like location or neighborhood, price range, bedrooms, baths and certain key amenities. Good landscaping is generally not defined in the initial search criteria; however the curb appeal gets the home shown more quickly and frequently than other homes that are being considered.”

Thank you Kevin for taking time to discuss the current housing market and how quality landscaping can affect a homes time on market and value.

Sunday, July 20, 2008

When a customer complains

I've written previously about how I don't believe a business intends to provide poor customer service. They don't start off the day with a goal of loosing customers or pushing them away. But unfortunately poor service is all too prevalent.

As a business owner I cherish feedback from my customers. I feel fortunate when I get it because I know that the customer did not have to share their feelings with me. Why then do I hesitate to share my experiences with other business owners or managers when I know how valuable the feedback can be?

At times the complaint is meant to illicit an immediate response - as in, "Waiter, there is a fly in my soup." I'm asking for an immediate response to my problem. But not all problems with service are as obvious to see and easy to fix like a fly in the soup.

I believe that we are a polite society for the most part and in many cases people tend to avoid conflict. Reporting poor service to the business owner or manager can be uncomfortable. If the person in the business is receptive to hearing about the problem then we can at least be satisfied that someone heard what we had to say and may act on the feedback for the better. When the person who receives the feedback or complaint is either not engaged or appears disinterested and worse yet is defensive, it discourages us from going out our way in the future to share again.

I heard someone say once that when a customer complains they are looking for an excuse to continue to do business with you. That comment has stuck with me since the day I heard it. I realize that my choice to share my experience with a business owner is my way of gauging their responsiveness to my needs. I don't expect them to jump up and down for me or be perfect in their service delivery, I know mistakes will be made. What I'm gauging is whether or not they care about what I'm telling them. I'm determining if they are aware of the problem and if they accept this as normal or if they want to make changes.

I know that we have lost customers who never bothered to tell us the reasons we lost their business. Others have commented on frustrations they experienced and we lost them because I failed to respond in a manner they believed to be acceptable. The old saying that only 10% of your customers will complain if they have a problem may be true. Regardless of the percentage - I wish more customers would tell us when something is wrong or not to their liking.

Ever sit at a restaurant and the manager comes by and asks, "Hello. Everything okay with your dinner this evening?" This question elicits the standard response, "Yes, everything is just fine thank you."

If the manager really wanted to know your thoughts he might say, "Good evening. I'm sorry to interrupt. I hope you are enjoying your dinners. May I ask, is there anything we could have done this evening to have improved your experience?" Now this question opens dialogue and invites the customer to offer a suggestion or constructive feedback without feeling as if they are complaining. The customer is at ease and is more likely to be honest.

We began asking our customers this very question and I am thankful we did. I appreciate the suggestions and feedback - it provides us with the information we need so we can make your experience with Lawn Lad a more positive one.

Thank you for caring and taking the time to give us feedback on your experience.

Saturday, July 12, 2008

Say Plant Phenology ten times really fast

Okay, so maybe saying Plant Phenology ten times really fast isn’t the most productive use of your linguistic skills, but if you did want the challenge – wouldn’t it be nice to know what Plant Phenology is?

Simply put, phenology is the study of the timing of recurring biological events from season to season – for both animals and plants. Plant development each spring, from bud development to leaf emergence to spring flower are all timed in sequence based on environmental factors that can be measured and used to predict when these events will occur.

Why is this so important? Those who are observant, and most gardeners and landscape service providers know which plants flower first in the year. Most everyone knows that spring has arrived when the forsythia is blooming. What’s interesting to know is that
white pine weevil insects also emerge at about the same time. So, those interested in managing potential insect problems proactively can use a tool like a Plant Phenology chart to know that when the Japanese Pieris is in full bloom, that the white pine weevil emergence will be coming soon.

The actual dates that each plant emerges from year to year is not tied to a calendar we keep on our desk. There are seasonal fluctuations which affect the timing on the calendar from year to year – so we can’t say that on April 1st we should be looking for white pine weevil. By using the Plant Phenology chart we can use the flowing of plants as visual indicators of when we can expect eggs to hatch or adult insects to emerge of certain insects which allow us to monitor pest populations to see if some action is required.

Okay – wow, that sounds like a whole lot to take in. For most homeowners using this tool is not necessary as you may depend on a professional to manage your landscape. But for those gardeners who are continually frustrated and feel as if they are a step behind because you can’t constantly monitor for insects and catch them all – a tool like this is invaluable because it allows you to be proactive.

It is important to know that the plant phenology chart available for each area is a guide and may fluctuate from plant to plant and from area to area. Because plant and insect development is based on growing degree days (GDD), a measure of the accumulated number of degrees over the average baseline, the actual temperature measurement varies from area to area and may even be affected within an area due to microclimates. The age of the plant, moisture of the soil and other factors can also affect the timing of certain biological events.

Ohio State University Extension office provides a plant phenology listing that is updated with current growing degree day information by zip code.

More information can be found
here about how GDD are calculated and some of the challenges that may occur when using this tool. The June 19th edition of the Buckeye Yard and Garden Line newsletter addressed GDD - the issue is located here.

Thursday, July 3, 2008

Memories of Staycation 2008

We’ll a holiday weekend is upon us – here is to a great Independence Day holiday. With summer upon us it’s time to pack the car and head off on a trip to enjoy time away from school, work and the hectic pace of everyday living. I have fond memories as a child of our summer camping trips – except perhaps for the part about sharing the back seat of the family station wagon with my brother and sister – there was never enough elbow room.

I asked some friends about their vacation plans this summer and I’ve heard more about shorter trips, close to home trips, and staying at home this summer “trips” – or what I’ve heard some refer to as a “
staycation”. It seems as if travel is lower on the list of priorities this year. Perhaps it’s the price of gas and travel, or in general people’s perceptions of the economy and wanting to keep a tighter rein on the budget. Regardless of the reason – it seems that staying home this summer is a likely alternative to lengthy travel and vacation plans.

I recently had several customers ask me about making changes in their yards because they were going to stay home this summer and they decided to invest the money into their landscapes and homes so they could enjoy it this season and for years to come.

Whether the investment is made in the home or the yard, it makes sense to invest the money where you will get continued enjoyment and value. Recently I installed some additional low voltage lighting into my landscape and it has certainly increased our desire to stay out in the yard quite a bit longer. More than ever we are enjoying our yard late into the evening hours. I’m looking forward to cooler temperatures this fall, when days are shorter and the lighting lets us extend time outside as long as we like.

I suspect that rising consumer prices and a slow economy with uncertainty ahead has created tighter budgets and therefore has caused many of our customers to evaluate how and where they spend their money. While spending on landscaping projects has slowed compared with years past when people had more discretionary money to spend, people are still investing in practical projects that make their yards more livable and enjoyable.

According to the 20th annual 2007 Cost vs Value study conducted by
Hanley Wood, LLC featured in Remodel Magazine, exterior home projects recapture approximately 70 – 80% of the cost of the project in increased home value. For example, an exterior wood deck in the Cleveland area brought 71.4% recovery rate in home value. Brick and stone patios serve the same function as a deck and are more common in the Heights area than are wood decks.

What does this mean for us locally? I believe our customers recognize the importance of good landscaping and how it positively affects their quality of life. While larger more comprehensive projects have been put on hold or are being phased in over time in smaller segments, there are still a number of selective projects that our customers are doing to make their yards more livable.

The top three projects this year appear to be drainage, lighting and patios. While I wouldn’t have predicted the number of requests for these projects this season – in hindsight it is not surprising that these three projects are odds on favorites this summer for most frequently requested project. Each of these projects is associated with access and usability of the yard. Poor drainage prevents the area from being used, and lighting extends the useful number of hours that a family will spend outside, while a patio carves out an area for congregating and enjoying the views.

Improving your surroundings and making the space more livable is quite practical. And I think our customers are being more practical with how and where they spend their money – helping to make the staycation just a little bit more memorable this year.

Happy Independence Day!