Friday, October 14, 2022 / by Laura Larson
Change your attitude. Our company's philosophy in sales and marketing is "You have to meet your audience where they are."
This fact should be well ingrained in your selling consciousness at this point. It serves as a reminder that not everyone in your audience is the same as you.
Neither You Nor Your Customer
Making a sales strategy, looking at it, and saying, "Yeah, I'd buy that!" is fairly typical.
However, you must comprehend your product from the perspective of your target customer in order to present yourself as the strongest seller. Your own point of view may be slightly or significantly different from this. You must push yourself outside of your own thoughts when marketing. You must imagine yourself in the shoes of your potential customer, who probably has nothing in common with you.
In other words, if you think the house is "unsellable," that means you are viewing it from a personal perspective—the reason you wouldn't want to buy it. And you are completely correct that it WOULD be "unsellable" to someone like you if you just concentrate on selling the sale to an audience of consumers that think, act, shop, and buy like you.
Don't try to sell you the product. Find the purchasers who would be interested in that house. Position the buyer who would value the benefits of the goods you are selling—in this case, a house—into the market.
Change Your Mentality
You need to let go of the restrictions you imposed on that residence in order to accomplish this. Change your perspective so that you start to perceive it as a house that is very marketable. Think beyond the box and come up with some people who might be interested in the property despite its perceived "defects"—or, even better, who might not even see those things as flaws and might even see them as assets.
Now, we are not discussing pricing problems at this time. A price can always be altered. Therefore, the solution is as simple as changing your mentality regarding the amount of profit or loss you are willing to endure if you are judging a house to be "unsellable" solely based on the pricing issue.
We are addressing more general concerns that may make a home look unappealing or like a possible problem (for reasons of location, condition, rehab gone wrong, etc.).
Let's discuss how a property's perception impacts its value, during negotiations, equity, and success. In addition, I'll give you a little spin on the notion of "unsellable" and explain how it behaves differently depending on how you change the angle from which you view the idea.
The Forgotten Carriage House's Story
A real estate property that had been up for sale for almost 12 years was discovered by an investor we know. If you visited the property, it would be clear why it had been listed for so long (yes, you did read "12 years").
In the past, it had been a carriage house, a phrase used to designate structures where actual carriages were kept (essentially a garage for horse-drawn carriages). The coachman frequently resided above it in a living space. The actual horses were typically kept in a separate barn structure.
The phrase is now used to designate structures on a property that served as extra living space for a variety of uses.
This specific carriage house was formerly a part of a much larger estate. Various developers had bought up portions of the estate throughout time, and numerous neighborhoods had been built there. However, this carriage house had been overlooked.
Therefore, it remained a dilapidated eyesore outside all these gorgeous communities of different ages for decades.
When the previous owner eventually passed away, the property was not inherited. It was once again owned by the city, where it was left on the books for a very long period. The city eventually made the decision to move through with the sale of the property. On a website run by the city, they placed a sale ad for it. It remained there for 12 years.
This period saw the property deteriorate to the point of total ruin. The investor regularly passed the home while driving, considering several creative renovation ideas each time.
But he ended up on the city's website after becoming curious about the house and trying to find the owner. He put in a bid
Here is the initial position on the idea that anything is "unsellable."
The city had come to perceive the property as "unsellable" as it had been listed on the city-maintained website for 12 years, but in reality, they were not thinking imaginatively about how to advertise it to attract an acceptable buyer. As a result, selling actually got harder and harder as time went on. Their belief that it was "unsellable" led them into a vicious circle whereby they suppressed their creativity and, consequently, any novel potential.
How to Benefit from "Unsellable" as a Buyer
He was able to exploit the city's own unfavorable impression of the property in his negotiations since they had come to believe that the carriage house was "unsellable." As a result, he agreed to buy the house for less than 5% of the asking price.
This person thought the house had "great potential," not that it was "unsellable."
He was indeed correct. He paid $1,800 for it.
It was simple to obtain finance for a thorough renovation at that price and with a sound plan for the building. He brought along a companion. They made modifications to the existing home to create a successful, multi-unit short-term rental building in the middle of the city.
Tim paid 244 times more for the house than it is currently worth in equity. At this time, the carriage house is worth $440,000.
The residence also generates more than $100,000 in profit annually as a short-term rental.
All this is from a "sellable" piece of real estate.
Understanding the City's Mistakes
The lesson the city's experience serves us is that once you give anything a label, you will respond to it and treat it accordingly. Avoid making the same errors that the city did.
The city made the following mistakes in judgment after designating the carriage house as "unsellable" and acting in accordance with that perception:
- They based their estimation of the value of the property on constrained assumptions.
This made them oblivious to the property's prospective worth.
They consequently determined that the property was "worthless" as a result.
- It nullified whatever attempt they may have made to successfully market the property.
- Which therefore made it possible for an investor to purchase it at a bargain.
- Their ability to see the property as a possible source of profit was constrained by the "unsellable" label they gave it.
Putting "Unsellable" in its place
We are taught to approach the property with fresh eyes by the example of this experience. List all the advantages and disadvantages of the house and the neighborhood's yard in great detail.
Always be unbiased. Be specific as well. And, be on guard. Your chances of discovering the hidden marketing pearls you might otherwise miss increase as you become more specific.
Be open to expanding your perspective and venturing outside of yourself as well. Invite a friend, advisor, or coworker who you know can always see the positive side of things. Positive and unconventional thinkers will inspire creativity (and if you don't have someone like that in your life, try creating those relationships).
With them, stroll the grounds. Clear your own path. As they speak, pay attention.
Don't raise issues if they mention that they enjoy a particular feature of the property, such as the yard or the house! Why do they enjoy that particular feature or item? Examine what value or benefit that particular detail brings to the home for the buyer.
So, pay close attention to the "cons" or drawbacks on your list. Your genuine creative power switch turns on at this point. Consider EVERY "con" in your list with an open mind and a positive perspective. I really do.
And if any of those "cons" really baffles you, call on your optimistic friend once more—you could even consider making them a partner.
Whatever the cause(s) of your perception that your property is "unsellable"—whether you believe it to be in an undesirable location, that someone passed away there, that there are condition issues (deferred maintenance, pet odors, water damage, mold, lead), that there are not enough amenities, that it has awkward architecture, that it has outdated appliances or decor, or any other "unsellable" feature—let go of thinking of it as a restriction.
You Have a Choice
Stop mistaking obstacles for barriers when they are really hurdles. Jump over, around, under, or perhaps just slam through it. But keep an eye out for the chance. In marketing, we say to "discover the hook." Locate the take. Locate the slant. Find the opportunity, in other words. Keep your mind active and your imagination running. The appeal of real estate investing lies in the fact that one person's shack might be another person's castle. It all comes down to perspective. You can alter your alternatives if you alter your attitude!