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Developing a Strategic Inventory Management Program

Developing a Strategic Inventory Management Program. Panel: Gil Carlson, Unirisc Cindy Mulhall, Encana Julie O’Halloran, Canadian National Railways Barb Kalydy, TheMIGroup Gail Reinhart, TheMIGroup. Strategies to Keep Home Out of Inventory Inspections Repairs Home warranty

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Developing a Strategic Inventory Management Program

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  1. Developing a Strategic Inventory Management Program Panel: Gil Carlson, Unirisc Cindy Mulhall, Encana Julie O’Halloran, Canadian National Railways Barb Kalydy, TheMIGroup Gail Reinhart, TheMIGroup

  2. Strategies to Keep Home Out of Inventory • Inspections • Repairs • Home warranty • Marketing the property • Strategies for Marketing an Inventory Property • Re-evaluation of the property (e.g., repairs/improvements) • Maintenance • Marketing plan (including staging and Home Warranty) • Pricing Strategies (including incentives)

  3. Inspections • General home inspection at a minimum; additional inspections required for certain areas, e.g., pest, septic, radon • Full disclosure in the US, not necessarily in Canada (Buyer Beware) • May be used by Realtor to market property • Ensures corporate client does not acquire a home with issues that must be fixed prior to resale

  4. Recommended Repairs • Recommended or required repairs: • Potential insurance and lender issues such as roof/furnace beyond life expectancy • Safety & Health issues (e.g. mold, radon, electrical) • Water penetration • Structural • Latent defects; a defect not discoverable upon reasonable inspection of the property, e.g., inadequate wiring behind walls, asbestos, Chinese dry wall • Transferee should provide any warranties or service contracts for major systems

  5. Home Warranty • Covers deficiencies found after purchase is completed on major systems, e.g., central heating, interior plumbing, roof • Valuable selling tool that helps protect the buyer from the unexpected costs of major system and appliance failure during first year of home ownership • Canada • Home inspection is NOT required but items must be in working condition at time of closing • Coverage begins on inspection date and continues for 90 days • Not yet typical in Canadian mobility policies • Typical cost – $300 - $400 CAD • Recent study shows that homes with warranties sold in 16% less time and for a better price

  6. Home Warranty (cont’d) • United States • Typical closing cost requested by purchaser in most home sale transaction • Normally a concession by the seller and not an entitlement within the mobility policy • Typical cost - $350 - $500 USD • Benefits • For the Seller: • Home ‘stands out’ to perspective buyers • Eliminates ‘call backs’ when problems arise after closing • For the Buyer: • Peace of mind from unexpected repair costs of major systems or appliances

  7. Marketing the Property • Careful review of appraisals; ensure appraisers have taken market conditions, location, etc. under consideration • Broker’s Market Analysis; two if possible • Marketing restrictions • Impact of severing acreages to meet program criteria • Property should be in good condition, neat and tidy

  8. Your House As Seen By

  9. Yourself

  10. Your Buyer

  11. Your Appraiser

  12. Your Lender

  13. Your Tax Assessor

  14. Strategies for Managing Inventory Property • Re-evaluation of the property • Maintenance • Marketing plan • Pricing Strategies

  15. Assessing the Property for Resale • New appraisals • Change in real estate agent • New Broker’s Market Analysis • Review factors impacting property such as location, condition, price • Set expectations!

  16. Assessing the Property for Resale • Location • Is there something unique about the location? • How was the location marketed and to whom? • Condition • How does it compare to the competition? • Is the interior in neutral colours? • Is the exterior inviting or does the property look abandoned? • What were the original agent’s recommendation when the property was first listed? • Price • What is the current agent’s recommendation? • How many showings; any second showings? Any offers? • Were there any incentives offered during the listing period?

  17. Repairs and/or Improvements • Depends on the requirements for repairs within the corporate mobility policy • Full disclosure in the US gives the prospective purchaser all the information regarding required repairs • If only structural and safety repairs required, some minor repairs may be left to negotiation with the prospective purchaser: • deferred maintenance/cosmetic issues • broken window seals • loose toilets, leaky faucets • replacement of deteriorated wood trim • damaged siding, eaves, etc.

  18. Ongoing Property Maintenance • Vacant property insurance • Landscaping/snow removal • Utilities • Property taxes • Mortgage payments • Ongoing management by Realtor

  19. Marketing Plan • Review with current Realtor • Staging • Buyer Incentives • Realtor bonuses

  20. Price Reduction Strategies • Review pricing strategy every 30 – 45 days • New BMA/BPO every 60 – 90 days • Depends on: • Time of year • Current sales activity • Realtor/buyer feedback • Based on client culture – price slashing vs other strategies

  21. Thank You!!

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