In the comments of the last post, we were discussing the thought of making an offer on a house that you haven’t seen. It is definitely more personal when you are looking at a primary residence – so let’s start with an investment property!
The intent of this video is to give you enough ingredients to be able to calculate the cost of repairs, and hopefully determine if this property pencils out for you, prior to visiting in person. Buyers are checking comps in advance, and just need to estimate repair costs on any property, right?
As the listing agent, do I worry about verifying that buyers have seen the property?
On vacant properties – No.
Why?
Because on vacant houses, listing agents don’t know if ANY of the offerors have seen it – unless I stake out the property, slumped down in my car across the street, Rockford-style. Yes, I would prefer if buyers have seen it, but when asked, every buyer’s agent says, “of course”.
I’m going to assume that NONE of them have seen it, and instead I’ll provide ample evidence to give everyone the most thorough experience of what you are buying, before you go.
Try it out for yourself – those who follow the blog have already seen this house a few times, here is the final cut – plus for those who need to see it, we’ll make that easy too, by conducting open house late in the afternoon during the first day on the market (in effect, our actual stake-out!):
Less people are considering investment properties especially now that they are talking about removing the Mortgage Interest Deduction.
So much uncertainty.
I appreciate your avid participation here over the years Thaylor, but can you put down the neg-a-juice for a minute?
I’d be much more interested in your thoughts on whether this video format could help make home-buying easier.
Would you feel comfortable making an offer after seeing a 9+ minute video tour, knowing that you have a contingency period to check out everything in person?
We use videos for our out-of-town buyers with great success, and I think it could revolutionize the industry if agents would get off their butts.
Good idea about showing the electrical panels, I might suggest also the gas meter and water meter, partly to show the state of the entrance. Was that the water meter below the electric panel? In a rehab situation perhaps more shots of the foundation so one can see the state of the basic structure like the one you showed on a rubble foundation, where likely you might have to redo the whole foundation.
Another thought, in looking does the house of that vintage have knob and tube or more modern wiring? Given that insurance companies are saying re-wire or no insurance now, it would be a good thing to know, but it probably would have taken a ladder to show that in an attic view.
Jim, I have made offers sight unseen in the past and for me the video would definitely have been a big help for me.
I think the video method could be particularly effective for an out of town buyer looking for a very specific and/or rare property.
One downside that I see, however, is that without physically looking at the property it can be difficult for a buyer to come up with the correct offer price. If they offer too much and then are let down by the actual physical tour, then there is not much that can be done except cancel the contract even though the buyer might have been interested at a lower price. On the other hand, they may not offer enough even though it is truly their dream property and by outbid by another buyer who has had the advantage of seeing the property.
Video tours are very effective for bread and butter, commodity subdivision houses. I have bought several through an agent I trusted to look the house over thoroughly. Threw a couple back when the inspections turned up problems that were not obvious.
I don’t have the expertise to price a project house from a video. Lots of potential problems that can’t be seen here and too much speculation about what could be done with the mess of a garage and the potential for a second story. I would want to take my local contractor through the house with me before I considered writing a check. It would be necessary to see the City building and planning department records and have a chat with those folks as well.
Oh, yeah, I forgot about your other question. In Phoenix there is an electronic record of every Supra key that opens the lock box on the house. You know the lock box has been opened when the showing agent updates their key. I’m sure you use something similar in San Diego.
Opening the lock box does nor guarantee the buyer has seen the property, just that the agent’s key has been used. Many listers insist the buyer state he/she has seen the property. This is supposed to avoid cancellations by unknowledgeable buyers. Listers insist on this where a lot of bids are being thrown at the property amd they want to get a firm contract during the initial frenzy.
Taking a buyer’s or agent’s word for it, plus $4 will get you a cup of coffee. Of course they are going to say or sign in writing that they’ve been there – we’re talking about realtors!
My point is to provide ample evidence (plus open house) that they get so excited they might actually go look at this one!
I think this house has been re-wired, but yes good point, I should have shown it. There are several open spots where you can see the modern conduit going to 3-prong outlets.
Having a 100 amp service in a 1928 model is a good start, but not a guarantee that it’s been re-wired.
I am the listing agent for this property.
If I’m representing you as a buyer, and doing a video tour for your exclusive use, my commentary will be very specific to your needs, and much more critical in general.
Let’s face it – the reason you don’t see more videos of houses for sale is because agents have nothing to say. They just want to take your order.
Some people might be confident and comfortable buying a house from watching a video. But I would guess that these people are a rarity or have in the past had business with that realtor or company.
Whilst I enjoy watching your videos and following you on your travels Jim. I think that you are possibly missing a opportunity by not using more tech in your listings.
Many camera’s (Sony Nex 5 etc etc) can create on the fly, very high definition panoramas. That would allow potential viewers the opportunity to zoom in on details missed on the original video. You can also use these photos in your videos if you wished.
Making a panorama is as easy as setting the camera, standing in the center of the rooms and doing a pirouette whilst firing off the shutter. It will take a little practice but is easily done.
Then there is also the 3d method of filming and photography which has really come along in recent years. But that is another kettle of fish altogether.
Personally I think the biggest benefit to both you, the buyers and sellers is the saving of time. People will be in a better position to eliminate locations that would not suit their needs.
Also I very much doubt that there are many people in your position Jim that have the balls and confidence to shoot from the hip and say what they see.
Forgive me in advance if you already practice what I have said. As personally I tend to follow you for a quick glimpse of my old haunts and as my personal canary in the mine (excuse the pun).
Photographs are a big help in deciding whether or not to look more closely at a property. It is surprising how often one sees shots of messy kitchens, scattered toys, laundry on the floor, etc. It looks as if they do not want to sell. I have bought property based on photographs, but I would rather look at it before making an offer.
Thaylor Harmor…. the mortgage interest deduction will not be eliminated for investment properties. With an investment property, mortgage interest is a business expense. It’s treated the same as property repairs, taxes, and advertising.
At a minimum a video is a great process of elimination tool. In most cases a list price isn’t super flexible. Probably 90-95% of deals happen with +/-10%. A video plus a spreadsheet to a potential investor with how the property pencils out with expected repairs 10% lower than list, 5% lower than list and at list would probably give an investor enough info to submit an offer sight unseen. The biggest unknown might be accurate rent. $1100/month vs $1250/month can make a huge difference on how something pencils out.
People probably aren’t going to buy their first home sight unseen but investors will and already do.
All 9 of my rentals were bought (deal signed upon inspection)without seeing them. I would spend so much time finding a dream property only to discover the stubborn ass seller wouldn’t negotiate. I find 80% of what I’m looking for then write offers. I do the shotgun approach until I get an eager seller. I would say on average I need to write 20 offers before I get a great deal. I look for GREEDY REALTORS that want the double commission and will push their naive / dumb / eager seller to take my offer. Just my M.O.
Here’s an idea that would work.
1. Do a 10 minute video
2. Provide a certified Inspection Report to those considering an offer.
As long as the Realtor and Inspector weren’t in cahoots investment buyers would feel much more comfortable.
I paid for an inspection report not long ago and it was worthless. After making an offer, do an inspection and bring out trades people to give you an idea of costs to repair/remodel. Then negotiate with the seller for credits.
I appreciate the feedback – thank you!
Actually doing an inspection as a seller makes a lot of sense. I did so when I sold a house, partly it told me what passed code when the house was build 28 years ago would not pass modern code. (For example GCFI outlets, which I put in the house) (Actually I had the contractor get the inspection)
Jim:
My two cents re this…
If I were purely an investor…absentee landlord, buying a rental property…my perspective might be different vis a vis the video walk-thru and purchase.
However, if I am going to occupy the property, my view might be skewed to elements such as the neighborhood, view (you showed that), what is next door/adjacent, family features of the property. I think your concept is a good one, but might have to be tailored a bit for the target audience.
Emailing or uploading your video to the web (youtube?) for your out-of-town buyers is nice. Even better, you can use webex or gotomeeting and livestream your tour. You can have a real time conversation with buyers, save the tour/discussion and provide that url for your buyers to view again and again.
Jim, You already got me interested in this property the first time you showed it, but we live in the general area of the property, I’m not a long distance investor. I actually love the neighborhood with all the noise, occasional crime, hookers, pimps, cops, loud banda parties, kids screaming fun in jumpy’s in the front yards every other weekend. But I don’t think the location has high market value and I am not a seasoned RE investor, so no idea how a long-distance investor would view it. Video shows the property well but how can it convey the neighborhood? But, I’m still interested. Cheers to you.
What about using Skype for a “live” video of the property? I do not have much experience with the system to know if it would be of value. Perhaps someone knows if Skype would work for this.
Just watched the edited video: very helpful.
Great – go see Richard today between 4-6pm!
I’m thinking that the advanced version of video marketing assistance would be a 3-5 minute brief tour, and then for those who have further interest, do another 10-15 minute video of all the small detailed stuff.
I want to livestream blog, stand by, we’re working on it.
Facetime on a iPad2 or GoogleTalk on an Android tablet would be a realistic option for a real time tour although there would be some quirks to work through. You could FaceTime/GoogleTalk on a smart phone too. The issue with a live video conference is you’re going across mobile networks so you’d probably want to be on a next gen network although you could do it on a 3G connection. Of course as many people know cell phone coverage isn’t always great inside of a house. The HTC Thunderbolt on Verizon’s LTE network supports video with Skype.
It’s doable now and will probably get better over time.
Cool idea Jim. I like it. If I had any skills I would put in an offer right now!!!
Having a floorplan image would help put the video in context of the larger house. From the video, sometimes, you can lose sense of direction, which a floorplan would help in regaining.