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 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)

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

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

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

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

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

Your House As Seen By Your House As Seen By

Yourself Yourself

Your Buyer Your Buyer

Your Appraiser Your Appraiser

Your Lender

Your Tax Assessor

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

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!

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?

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.

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

Marketing Plan Review with current Realtor Staging Buyer Incentives Realtor bonuses

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

Thank You!!