Think your prospects need to sell their home before they purchase a condo? Think again. In episode 11 of Condo Artist: The Other Side of Real Estate, condo sales strategists Uri Vaknin, Shahn Douglas and Mark Bunton explain why we sometimes need to toss conventional real estate thinking out the window.
Empty nesters are one of the fastest growing buyer demographics for condominiums, and it’s often these buyers who have a difficult time selling their existing homes of so many years. In this enlightening episode, Uri and team first explain the psychology of “right-sizing” vs. down-sizing, then analyze why the traditional process of selling a home first is not always the best.
Uri tells the story of The Brookwood Buyer, and how a simple change in approach would have given an affluent buyer complete control over her real estate transaction, rather than the stressful, rushed experience it became.
Uri and team then explain exactly how to go about changing conventional wisdom, including:
The goal of changing conventional real estate wisdom is to give your clients total control over the real estate process, including when and how they move. This will ultimately result in a fantastic, faster, and much less stressful condo buying experience for all involved.
Uri Vaknin 00:16
Welcome to another episode of Condo Artist: The Other Side of Real Estate. I’m your host, Uri Vaknin, a condo sales strategist who has developed and sold out 1000s of condos in Atlanta, Las Vegas, Florida, Detroit, Texas, Nashville and all across the United States. Each week I along with my co hosts and colleagues, Mark Bunton and Shahn Douglas, will bring you the latest insight, best practices and sales techniques to sell out more condos faster, no matter the market. At times, we will delve into architecture, design and urban planning, as they pertain to condos and condo living. I am an admitted podcast junkie. But in our search for podcasts about condos, we all realize that there really weren’t any out there. Throughout this series, you will get to know more about me, Shahn and Mark and our 53 years of combined experience in the world of condos. One of the things that has become glaringly obvious to us is that most people, including real estate agents, buyers, architects, and even condo developers don’t fully understand condos, this podcast will pull back the curtain on the world of condos. This episode of Condo Artist: The Other Side of Real Estate is called Changing Conventional Wisdom. If we all know one of the largest demographics, buying condos today are empty nesters who are looking to right size from their current homes into a condominium. Shahn, what do we mean by right size?
Shahn Douglas 01:58
Well it’s a term that we I think, have coined the phrase of using when when people that are coming in from a single family home. A lot of people use the term downsizing. And we feel that kind of puts down he buyer it’s derogatory. Some say right sizing makes them feel good.
Uri Vaknin 02:18
I don’t know a single man who wants to downsize anything.
Shahn Douglas 02:22
Exactly. So right sizing is a play on words that actually makes the buyer feel like they’re making the right decision. Because as we all know, a lot of times these people who lived in their homes for 40 years, it’s hard to let go. So to say downsize is a little bit of a bar and say right sizing makes them feel like they’re making the right decision.
Uri Vaknin 02:44
Well, it’s also it really, truly is writing the size of their home. They you know what they come in, if they say, you know, we’ve got the big family house, they’ve got five bedrooms, and you ask them, How many of those bedrooms do they use? They’re like, well, we use our master bedroom. And every now and then we wouldn’t we have guests, and then you ask them about their living room and your formal living room and formal dining room that you know, we really use those except for maybe Thanksgiving, but we really just need a great room. So it really is getting the buyer into the size home that they really need, which is the right size. So the conventional wisdom today is you sell your home, and then you buy your condo, but we’re trying to explain to our listeners, and this is for real estate agents. And for buyers who don’t really understand, you know, the process or confused by this, because as you said earlier, Shahn, a lot of these people have lived in their homes for upwards of 40 years. And so they haven’t really purchased a home in a long time. And so we are trying to change the conventional wisdom to the fact that people should actually buy their condo first, and then put their home on the market. And, you know, the reason we’re actually all here in Las Vegas, is because we figured out how to do this. And we figured out how to teach our agent how to do this, not here in Las Vegas, but of all places in Nashville, Tennessee. And we were working on a condominium community, a boutique condominium Community called, Bellemeade court and the previous company that worked on this beautiful condo community. Keep in mind Belle Meade, which is a neighborhood that it was in. It’s kind of like the Beverly Hills of Nashville, old beautiful stately homes on the state size a lot really gorgeous. And so they the current the owners of the condo development at the time, you know, came to us when we were with The Marketing Directors because they wanted to make a switch because one they were selling so slowly. But also they realized that every contract that they were getting was a contingency to sell their home. And so what I did you know, during the period that they were vetting us to take over the listing is I looked at all their current contracts, I looked at the buyers names and the addresses, and I did top searches. And lo and behold, what I learned in every single case, except for maybe one, and that one case was actually a country music singer, which is kind of interesting. I’m not gonna say who it was, but Dolly Parton? No, without Dolly Parton. But you know, if it was I would, I mentioned it, I would have bought a condo there myself. But what I saw was that each of these people actually lived, you know, within a couple of miles of the condominium community and had lived in their homes, that I think the shortest period of time was, like 15 years. And in some markets, which what is really cool is you can tell by the tax records, how they purchased their home, whether or not they use a mortgage or cash. And sometimes in markets, you can even tell how much of a mortgage they took out. And so if you separate by the number of years it’s been since they bought the home, you can tell that either these people had their homes completely paid off, or mostly paid off. So what we did was we taught our agents we did a really intense training module on how to change the conventional wisdom that these buyers should buy their Kinder first and then further home, and that’s what we’re going to talk about, but you know, me I like to tell stories. And so you know, another story was around the same time and this was like 2010 2011 we were selling in Atlanta, Georgia, a condo building called the Brookwood. And the Brookwood was this beautiful condo building and coming out of the great recession of the developer had been foreclosed on, on and in new ownership and the condos were being sold for roughly about half the price per square foot that they were being sold for pre recession. And you know, I would attend each of the sales meetings each week and hear the names of the people came in and I recognized a lot of them because this was a really beautiful building with a concierge and amazing finishes and to
Mark Bunton 07:22
Peachtree Street address and one of the nicest areas in Atlanta. Buckhead I think that we actually it was called sobu at the time in a beautiful condo high rise, there’s so much we could say about the Brookwood
Uri Vaknin 07:35
beautiful building. And it also had the floor plans that really appealed to empty nesters. And so one day I saw when the agent talked about when the buyers and of course I knew the buyers name, she was one major art dealer and he was also what I would call the doyenne of the art world in Atlanta. Her husband had died recently, not recently, he actually died a few years prior. And they had built this house. They use one of the top architectural firms, the top designers, they spent years designing and building this modern house. It was exquisite one of the finest houses in Atlanta. And she had an art collection that rivaled you know any great collection in America a contemporary art collection. And she kept on coming in to look at the building. And she came in and found her first home. The first or first choice she loved it was a large three bedroom with a high floor. But she said she wouldn’t go under contract until she sold her home. Keep in mind, I knew her collection for art collection. One of her paintings was or an individual painting of hers was more expensive and entire condo. And so and I knew she not only had the cash, but you know, the house was basically paid off. But she had the her home listed for too high of a price. It was also a you know, a difficult home to show, you know, by appointment and all that you can imagine. And so she wouldn’t write a contract until she sold her home. So she came in another time a few, like a month or so later. And her you know her first one and only home had sold. And so she picked us a second choice. And then, you know, about a few weeks went by or a couple months went by and then she came back to look at the home that she’d selected her second choice. And guess what that home sold? And we were trying to convince her like why don’t you just you know we’ll even take a contingency in this case but you know, and then we kind of kind of try to tell her you know, you have the money once you buy the house. And then she finally on her real estate agent who listed her home convinced her to list the home. I you know what the market would Bear in Atlanta, although her home was absolutely exquisite. At that time, people weren’t really used to contemporary home in Atlanta. So what happens is, as soon as she was priced where it needed to be listed, and also, on the time, it was closer to like beginning of the end of the school year, a family from New York, I believe the the father had just been relocated to work with Coca Cola. And they needed to get their kids in the school district and needed to buy a house and move in, came in, offered her cash, what she wanted, wanted to close very quickly, like in a couple of weeks, and she said fine, but I’m going to need a month to move out after the closing date. And they said, No, it’s cash closing, we take possession that day. Now, if you know anything about most cities is besides probably New York or Los Angeles, she had a multi million dollar art collection. She had also built this house and design with house want to be on the cover of magazines. And now she had to come back in a day. Well what she had to do, so she had come back to the Brookwood. So not only was her first one and only home sold, then not only our second choice sold, now her third choice was sold. So she had to pick her fourth choice. And she had two weeks to move. It’s nearly impossible to move an art collection like that in Atlanta in a two week period. So here’s this woman who was literally the doyen of the art world, she was the mistress of her domain, she was in charge of everything, she controlled her life down to the tee. And now a stranger came in and uprooted her entire life to a stranger basically dictated when she was going to move. And so if he would have just purchased beforehand, and made that move slowly. And then what also happened was she had no real plans of what how she went to design her new condo. But she was no longer able to do that. And she also didn’t want to move twice. So now she had a hurry up, you know, paint the condo, whatever color walls or whatever, and, and literally move within a few week period. And she wasn’t by any means a young woman. She was extremely vibrant. But she wasn’t a young woman. And so she had to, you know, and do all this by herself because her her husband had passed away. So I tell this story, because I think this really fully illustrates, you know why people should buy their condo before they actually buy their house. I mean before they sell their house. I think it’s really important story that illustrates this.
Shahn Douglas 13:02
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Uri Vaknin 14:24
This is the concept of you know, I’m changing conventional wisdom. Obviously, it’s not going to work in every case. But if you typically have an empty nester, it most often will work. You know, we talked about that in one of our earlier episodes, where we had the buyer who came in in the full Balenciaga outfit and they said there to sell their one of their million dollar homes on so it really takes work on the part of the agent to really sort of do some investigative work and to ask some really hard questions and even hard questions, you know, like how long have you lived in your home you know, as How much more if you paid off your mortgage? If you haven’t, you know how much is your more how much of your mortgage is remaining. And so in some cases, when they don’t have the cash to buy the condo, there are obviously other ways to do it. You could take pull out an equity line of credit from your home and use that money to pay for your new condo basically cash. And then when you sell your house, you pay off that Equity Line. And a lot of people may say, I don’t want to go through all that hassle. But let’s talk about hassle. So they say the three most traumatic things in life are death, divorce and moving. And so why do you want to make one of the most traumatic things in our lives even more difficult if you have the means to do so? And why would you want to take your control over your one of the biggest events in your life, your move and hand it to someone else?
Mark Bunton 16:02
Well, probably because that’s what conventional wisdom tells me.
Uri Vaknin 16:06
Right? So we got to change it. And that’s what this podcast is about is we have to figure out how to really change buyers idea and mentality around when they sell their home and buy a condo, you don’t want a stranger controlling your move, your time of your move, and you know, all that you want to be in control of that you want to be, you know, the master of your own or mistress of your own destiny, um, especially when it comes to your home move. Right? Absolutely. But what do we also know being in this real estate business every single day, real time and we see what’s happening. So if you want to sell your home, beforehand, you live in your home. If you have pets, you’ve got pets dlF. And when I’m a real estate agent, and I am searching for home listings for a buyer, you know what, what are the top things I’m searching for?
Shahn Douglas 17:13
Maybe how easy it is to access the home, exactly
Uri Vaknin 17:18
how to show the home. So it says by appointment only. And I understand that today in the world of COVID things have changed a little bit. But if COVID Thank God you know we have a vaccine. This too shall pass. And in many markets in America, this hasn’t stopped anything. But if it says by appointment only, and I know I have my buyers only for a short period of time, guess where that home is going on the list of homes I’m going to show bottom at the bottom of the list because you know whenever you have to set up an appointment, what inevitably happens when you’re setting up a bunch of appointments with buyers and listing agents, something goes wrong because let’s say the buyers you know see a house and they want to spend more time in the house and then you’re going to be late for your listing appointment or the appointment with the listing agent. And so it just becomes really problematic. So you know what you what most real estate agents do is they will get the easiest homes to show first and not because they’re not doing their responsibility to their client. But especially in markets where they the buyer demographic is coming in from other feeder markets like in Las Vegas right now. For example, a lot of our buyers are coming in from California and they’re flying in for the day or the weekend. Or you know Shahn would we work down in Florida you know people would fly in from you know Wisconsin or whatever for a long weekend to look for a condo, right? So would you want to do is you want to you know optimize your time with them and be efficient with your time. You don’t want to get bogged down in trying to figure out appointments But who will tell him So first and foremost, you know having a home that’s easy to show is so important. But when you’re living in the home that doesn’t work very well right. So that right I like a houses that are vacant but yet fed up like a show home so faster. And for more money.
Shahn Douglas 19:28
Can we call that staged?
Uri Vaknin 19:30
It’s staged but it may not be staging maybe that you know if your original furniture that you know when you bought your condo on. Another story is and I actually talked about this couple before too. When we were selling the artisan in Atlanta, Georgia, the couple was when they bought the condo and they were they used the term downsizing and I then turned around and said right sizing and they loved it if you’re exactly right because both for kids are going off to college. We don’t expect them to come back after college. And we really want to have a home that is, you know, right for the size of our family and for the way we live our life now. And so they originally were looking around to make sure that all their furniture would fit. I said, Why do that? I said, pick a few key pieces. Tell your ask your kids, if they want a few pieces of furniture, I’m sure they love some furniture to get their households started. And then do what I call, you know, when when the empty nester sells the family home and buys the condo, I call that carry the second honeymoon. If you know when you get married, you move in together, you buy your furniture, you buy a home, you know all that kind of stuff. And to make this a second honeymoon, where Yes, of course save some pieces of furniture. But this is your chance to live a new lifestyle. And what was funny was that couple at the artisan, they wound up keeping just their dining room table, and they got rid of everything else. And so when they went to sell their home, they were actually able to stage most of the home with furniture. But there’s another thing is so when you are showing a home that someone is living in, what is the first thing that the buyer prospect is looking at,
Shahn Douglas 21:21
there’s probably multiple things that I would think of just how organized the home is or how clean it is.
Uri Vaknin 21:27
When they come in, you’re looking for stuff, the stuff, you’re right. So when a buyer goes into the home, you know, the first thing they really look for are, you know, if the home has moved in, they want to see photos, they want to look at who live there, they want to see they I can identify with those people if people like them. And a lot of people oftentimes will discount a home, if they’ve decided that they don’t like the people who live around them. It’s really weird. Although I may know that the home is actually perfect for them and price and size and location, all of that. That is the first thing that people look for. After that, you said it, Shawn, they look for stuff. If your closet is even a bit messy or cluttered or stuffed, guess what they think in their head, subconsciously, this home has not been well maintained. And so having all those things actually hurts the value of your home, the inability to show it easily. And it looking like it’s a lived in home on if all those things are removed, people will add value to the home or actually not deduct value from your home. And I say faster to sell because more people will see the home if the home is easy to show. So those things are two really key things about, you know why you should buy your condo before we sell your house. So what’s the other big thing that people have in their homes that can cause problems with selling animals, animals, cat for dogs, and we all love our cats and dogs. And we all think our cats and dogs don’t smell because they don’t smell with us because we’ve lived with them for so long. And even if we’re as clean as we can be, I can’t tell you how many times I have walked literally I bout to show open up the door to a house and show the buyers to home that I know is going to be perfect for there. As I said a minute ago, you know price point, size location, you open up the door and you smell cat. And they would smell cat. And they would say you know what, we don’t have to go any further. I don’t need to see the house. I’m never gonna get rid of that smell. whether that’s true or not is not the point is the point is that they smell it. And if they’re not a cat person, they’re going to be turned off by that. And the other thing is when you do have pets, you know your your beloved pet may be really sweet to you. But I know I have two Dobermans and they’re the sweetest dogs in the world. But when you come to the house, you think that they’re gonna Maul you to death because of the way they bark. And they’re just saying hello. And even if they recreated that is not a positive experience for showing a home. So, you know, for all
Shahn Douglas 24:22
I had one escape when I was showing a home once and it’s it’s not really fun to have to go chasing after the animal when you’re trying to share the home.
Uri Vaknin 24:34
We have so many stories like that. And so you know what the real point of this is, is and then also if you if you do buy the condo first. You get to do all the things right? You get to design your your new condo, you get to pick the furniture that you want for the condo, and the timeline and timeframe that you want to do it. Then you can beautifully set up your home and make it perfect. You know, staging it, make it look like a show home for sale. And then when you do remove a bunch of stuff from your home, whether in your closet in your basement, what does that also reveal, it might reveal a bunch of things that need to be repaired that you hadn’t seen, because it was covered up by your stuff. And so if you wait until the home goes under contract, and then they do their home inspection, what happens to that Oh, whoa, inspection report.
Mark Bunton 25:37
It comes back with a lot of stuff on it. And, and you go back into negotiating again, and can also turn somebody off. Exactly.
Uri Vaknin 25:47
And even if they’re minor items, the longer the inspection report is, the more turned off the buyer gets, even if they’re minor items. So why not do your due diligence up front, and get all the small things out of the way? And then so that you can, you know, not have to worry about that as well. And then you can touch up the home and make it look perfect. You can’t do that when your house is full of furniture and full all your stuff, can you
Mark Bunton 26:19
I I also think, after listening to this, that, that all of this stuff is about being proactive and controlling your life and controlling how things happen. You’ve brought it up earlier, as about as opposed to some real estate agent dictating what’s going to happen for you. Because you’re looking to them with their experience in the industry of you know, how should I do this, what’s the best way to do this when maybe it’s not? Well, you can swing to mortgages or, or to house payments for a while.
Uri Vaknin 26:53
It’s not even swinging to mortgages, it’s most oftentimes, it’s getting the equity out of your current home. I mean, we’re really proud of talking here mostly about empty nesters, because, you know, the other end of the spectrum of the demographic of buyers are usually young folks, for condos, and they’re coming from rental properties. So this is really focused on people who are coming from houses, and who have some equity in their homes. But what’s also interesting is what we’ve what we’ve learned is that if you do buy your condo, before and then you put your house on the market, you actually sell your home, I said already, you know you sell it for more, but you also sell it faster. And some of the reasons why you do sell it for faster is because one you already mentally moved out, you don’t have all that emotional connection tied up to the house. And you know, you just pointed you said at one point Mark about how even the most rational people when it comes to their home sale and home purchase, something happens all rational thinking goes out the window. And so when you are already mentally moved out, you can make more rational and, and better decisions about your selling your home. You know you’re not going to get insulted by people’s lowball offers, you’re going to be more willing to negotiate. And but what’s what’s also really interesting is then your real estate agent who’s got your home listed. And we’re assuming that you will definitely have a real estate agent to list your home because you should always have a real estate agent list your home and not try to do for sale by owner or try to do it with some sort of, you know, discount brokerage because there is a true value to having a real estate agent, especially you know, when they can teach you and guide you like we’re guiding you today on this podcast. But when they know that you have already bought a condo, and oftentimes they may have already helped you buy that condo, so they know that one they have a motivated seller. And what do you do when you have a really motivated seller by motivated seller I mean, they have a real reason to sell their home. And they typically have a very realistic about their pricing. You know, as a real estate agent, what most real estate agents do at that point, they work harder to sell that home, they become a more motivated real estate agent. So they work harder to get it but to get you deals to market the home the agent spend more money on marketing your home, and then when you do get an offer, you know what? You become more rational and you actually figure out how to make a deal happen if you’ve
Mark Bunton 29:34
Cut your ties sort of so to speak.
Uri Vaknin 29:36
Exactly. You’ve already moved out of the home you’ve cut your ties to the previous home and you don’t have all that emotional baggage.
Shahn Douglas 29:46
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Uri Vaknin 30:38
Listen, so let’s give some really good pointers because I know some of our listeners were concerned about, you know, our podcasts being one of war stories, and not giving as much as real pointers. So if you have a buyer who comes into your sales center, you know, if you if the and there they are, you know, pre right retiree, the retiree, or they’ve lived in their home for a long time, ask the questions, you know, ask the qualifying questions. How long have you lived in your home? Do you still have a mortgage? If you do have a mortgage? How much is it? How much you think your home is worth. And then if you have their address,
Mark Bunton 31:17
I think it’s this a good place to point people back to our podcast about T.I.R.E.
Uri Vaknin 31:24
buyer, knowing your buyer, and under tire, which is timing investment requirements, and experience, this is the investment part of it. We know what, what is their financial situation. And you want to ask these questions because you want to help them make the right move. Because even if you’re trying to sell them a condo, you’re going to sell them a condo better. If you can convince them that by buying the condo now and selling their home, once they’ve moved out, they could sell their current home faster. And for more money, they’re going to trust you. Because this is expert advice. And this is really key. And so if you are the real estate agent trying to sell them a condo, and you have their home address, you can look look them up, we have to search the tax tax records, see how long they’ve lived in that home. And in some markets, you can even see what their mortgage was. And you can assume you can buy 90 years have gone by pretty much guess how much they have left on their mortgage, then if you’re working with a preferred lender, you can make sure that your preferred lender has a program that can either do what’s called a cash out, you know, Equity Line from their current home. Back in the day they use of bridge loans there, there are still some bridge loans coming back. But there are ways to do this, if you know they don’t have the cash. But if they have the cash, the number one thing to remember is that if you sell a home that is taking but yet is staged or It looks like a show home, you are going to sell that home faster. And for more money. Mark, you had some great points that you want to bring up.
Mark Bunton 33:14
I’m listening to everything that we’ve been talking about, I think it’s the thing that pops out in my mind the most is as a real estate agent is because could control what’s going on control the transaction control. You’re either your buyers or your sellers. You’re the one that’s had the experience and and the knowledge to to provide this this what would you call it opportunity or, or bucking conventional wisdom to make things easier for your clients?
Uri Vaknin 33:45
Well, and if you’re the buyer, you want to control your own destiny. I mean, like we said earlier, you don’t want someone else to be controlling. You know, when you move and how you move, you wouldn’t be able to control that yourself. And so that’s key. And for, you know, as I stated earlier, and I go back to this, and I and I need this wholeheartedly, is that when you are by, you know selling the family home, kids have moved out and you’re moving into a condo is truly your second honeymoon. And if you do this, right, it can be a second honeymoon. If you do it wrong. It could actually make things worse. So, you know, it’s a strange phenomenon, that, you know, people don’t get this in the real estate industry. But we see this every single day, and we’re in it and you don’t want to be like that. You know that art dealer who wound up not just buying her fourth choice, her fourth choice. This is an individual who got everything she’s ever wanted in her life and controlled her own destiny she had by her fourth choice and her entire moons and the move of her entire article action was dictated by a perfect stranger, she else by somebody else, she lost complete control over one of the three most traumatic things in life, on move. And if you pay attention and listen to the expertise and experience that we are sharing with you today, you can make that move a much easier process. And so we have to change conventional wisdom for that if the buyer is financially where has financial wherewithal to buy the condo First, there are so many reasons why they should do that from the personal, like being able to design their own home. And Mark, as he said, you know, move at their own timeframe, you know, maybe they don’t want to move all at once. Maybe they want to try pieces out, see what works and what doesn’t work, you know, but then also to be able to make sure that when they do rent, they’re ready to put their home on their market. The home is truly market ready. It’s ready to be shown at anytime.
Mark Bunton 36:07
I think that’s the biggest takeaway from this is, you know, selling your house on the on the opposite side of this everything. You know, it’s empty, you cut your ties, there’s no pets. It’s it’s a very generic, so to speak of your personal stuff. And you don’t have to have an appointment to see it
Uri Vaknin 36:27
exactly that that appointment only will kill every deal. I mean it every time I see it, you can you can look at homes that have been on the market for too many days for that market. They’ve been listed for sale for too many days. And I can almost every time, it says by appointment only. And they’re the ones who get to sit on the market. So Shawn, do you have anything to add to this, this discussion?
Shahn Douglas 36:56
Not all the points we’ve made have been very, you know, thorough, and hopefully, listeners out there have picked up some nuggets. I think that one of the best ones that you talked about was just what you just mentioned about the listing and the showing and not having that be hard for agents to access. So you’re able to get people through through your home. But as we all know, it is a challenging thing to do when you’ve lived somewhere for so many years. And so I think these are really great tools for people to have to help them move right size into
Uri Vaknin 37:33
a condo. Exactly
Mark Bunton 37:35
right. And and you know, agents and sellers and buyers can piggyback off of the success that we’ve had using these methods to you know, to sell that have been successful at it.
Uri Vaknin 37:46
So thank you very much for listening to another episode of condo artists, the other side of real estate, and this week we spoke about changing conventional wisdom. Hopefully we’ve changed yours today. Until next time, this is Uri Vaknin, Mark Bunton and Shahn Douglas. Thank you. Bye bye