Posts Tagged ‘Home Sellers’

Yesterday Coldwell Banker held a meeting in Charlotte to give their area agents additional information about the effective use of all the technology that they make available to agents and their clients in marketing and buying homes.  I attended and added some useful tools to my repertoire.  I’m a pretty “techie” guy for my age- my bride says I spend too much time on computers- but I continue to just be amazed at all the cool tools we have available to us.  When I started in the business ten years ago, our technology uses were pretty much summed up with basic cell phones, a simple agent web site and understanding how to use email.  I was quite familiar with all of those things then, but little did I know how much more would be added to the tool kit!  Ever since then, keeping up has been kind of like trying to drink from a fire hose.  Social networking, blogging (!), texting, virtual tours, QR codes, Google tools, computer tablets plus many more technologies all have come about as important or potentially important tech tools that agents must evaluate, learn and apply in order to make the most of their time and efforts in effectively working for their clients, both buyers and sellers.

If you’ve kept up with digital technology over the last 20 years, you’ll notice that there is always a constant stream of tech goodies coming on-line that the developers absolutely guarantee will be the answer to everyone’s prayers.  “They’ll transform your life for the better.  They’ll save you time.  They’ll enable you to leap tall buildings with a single bound! (dating myself)”  Of course, also if you have the perspective of looking back on those 20 years, you’ll understand that some of these goodies catch on, and other flame out of existence pretty quickly.  Case in point- when’s the last time you drove by a “Talking House?”  The folks selling this stuff to real estate agents are constantly coming up with new gadgets.  Back when real estate was booming, they could sell plenty of shiny things to new agents who’d hope that their investment would pay off with lots of new business.  Most often it wouldn’t, and many agents spent plenty, made little, and eventually dropped out of the business.  But back then, there were plenty of newbies coming along to replace them.  Now, not so much.

The point here is that it’s good for us agents to keep up with technology and use it when it benefits our clients.  Thankfully, Coldwell Banker United, Realtors, my company, makes a large investment in providing tools which are actually useful and the training on how to effectively use them.  It gives us a great advantage over many other companies and agents.  However, there’s no technology that can provide experience, good judgement, good negotiating skills and knowledge of all the pitfalls to avoid that defines a good real estate agent.  When you’re thinking about using the services of a Realtor®, please do find one who uses lots of technology to your advantage, but remember that it all comes down to a contract handled by agents with good people skills and knowledge of real estate law that helps all parties achieve their real estate goals.

Come to think of it, if you’re in the area and need some help on real estate, just call me!

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Several weeks ago I was driving to Raleigh to attend a meeting of the Board of Directors of the NC Association of Realtors.  About an hour into my drive, I got a call from a reporter from The Statesville Record & Landmark, Donna Swicegood (I know, but I was using my “Bluetooth” earpiece).  I knew Donna from my days managing a Century 21 real estate office in Troutman.  We met while both serving on the board of the Statesville version of Crimestoppers, so it was good to hear from her. 

Donna had been assigned to work on a special supplement called Investing in Our Community, and one of the articles she was writing focused on the local real estate market.  She proceeded to ask me some questions about the local real estate market and the advisability of purchasing real estate right now.  Of course, no self-respecting real estate agent would ever generally advise against buying.  But also no self-respecting real estate agent would advise someone to buy when it was not in their best interests, given their particular circumstances.  The fact is that in every market, up or down, there are people who need to sell and people who need to buy in order to reach some specific goal in their plans.  It may be because their family is growing, they’re moving for a job change, or the kids have flown the nest and they want to down-size.  All kinds of people have all kinds of stories and reasons to do what they need to do.  It’s the role of a good Realtor® to understand what people need to accomplish and help them get it done.

So with that in mind, I answered Donna’s questions and looked forward to seeing the results in print.  The overall thrust of my comments were that if you have a desire or need to buy real estate, I don’t think prices are likely to drop substantially from where we are now, so waiting for lower prices is risky.  The risk is that even if prices go a bit lower, interest rates, which are still historically low, may very well start back up, wiping out any savings on mortgage payments.  The economists just can’t predict with any accuracy what will happen in the next 6 to 12 months, but one thing we do know right now- housing is relatively affordable compared to years past, so trying to time the market may not be wise, particularly if it makes sense in terms of your housing goals.  Our area continues to be a popular destination for people who want to move from other parts of the country, and we’re starting to see some positive indicators on the economic front.  As demand picks up, so eventually will prices. 

You can read the entire article here: R&L Special Edition 5-1-11 Suther Quotes

Thanks to Donna Swicegood for the phone call and interview.

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A recent post from this blog discussed the need for sellers to be realistic and aware of the market in which they’re selling and the nature of their competition.  Today, I visited a couple of new home sellers at their models and came away with some competitive information that real estate property re-sellers should keep in mind.

In the Mooresville subdivision of Wellesley, Lennar is one of several builders who’ve recently come into the subdivision that was struggling after previous builders pulled out.  They are building homes in the 2,200-2,900 square foot range with double garages, quarter acre lots and they’re designed and built for energy efficiency.  They are also very well-appointed with few options since they’ve chosen to include most of the options buyers prefer.  Right now while they’re aggressively marketing their inventory homes, the homes are priced at $75-$79/sq. ft..  They say that their prices will be higher for future homes, but their published future prices are still only about $10/sq. ft. higher.  And those prices include Lennar’s paying 2% of the sales price toward closing costs.

To put this in perspective, I did an MLS search for Mooresville resale homes in the 2,200 to 2,900 sq. ft. range that are similar in terms of construction, size of lot, type of neighborhood, etc. that have sold in Mooresville since last July.  The average price per square foot for those resale homes was $84.22.  Of course, there are many variables that make this $/sq. ft. calculation quite approximate, but sellers should still see this as a wake-up call.  Most buyers are looking for the best value for their dollar, and new construction is always appealing to many because of the promise of no maintenance issues for a considerable time into the future.  When pricing properties, sellers should get information such as the above from their listing agents to help them understand the market into which they’re hoping to sell their properties, then price their properties appropriately.  By the way, for those resale properties mentioned the Sale Price to List Price ratio was 96% based on the last list price.  For many, if we looked back at the original list prices vs. the eventual sale price, that percentage would be much lower.

Later in the day, I talked with some reps from Eastwood homes about their prices and selling tools.  One interesting thing they’re doing is offering to help renters buy out their leases.  Since there are plenty of people who are renting now due to various circumstances who would like to get back into home ownership, and unexpired lease terms can get in the way of a sale, I thought that this solution was quite good.  As a seller, would you be willing to do that?  Might be just the ticket to make the sale happen.

New home builders have bought land at very good prices, and that’s allowing them to sell their products at very aggressive prices.  That’s all part of the market that sellers (and buyers) should recognize.

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In the real estate business, buyers rely on their agents to provide lots of information to help them with their choices.  When they finally choose a property on which to make an offer, they particularly want two important pieces of information.  One is knowing what their alternatives are.  In other words, what properties are in competition with the target property.  They get that in their initial property search.  The other piece is knowing what other buyers have paid recently for similar properties.  Almost every buyer wants to know this because they don’t want to pay too much, with “too much” being based on those similar sales.  Agents look in the records of recent sales to provide that information to the buyer.  These pieces of info, plus other details about the useability of the property, tax bills, financing options, etc. are what the buyer and agent use to come up with a target price for the property in question.

Sellers sometimes have difficulty grasping these fundamental facts.  Instead, they base their decision on what they want to sell their property for on things like what it would’ve sold for a couple of years ago, what they need to get to pay off their mortgage, what they need to get to buy the next property, or what some relative or neighbor told them their property “ought to be” worth.  The fact is, the buyers in the market don’t care a whit about any of that (see buyers information desires above).  They are just looking for a property that will meet their needs, and one that they can get at a price based on the recent and current market.  If I had a dollar for every time I’ve heard a seller say, “well, I’m not going to give it away!”, I’d have a nice little nest egg.  They just don’t get the fact that the buyers don’t care.

The dilemma I face with sellers like this is that to tell them the truth is often to cause them to look for another Realtor who will tell them what they want to hear just to get the listing.  They do this because they’ve seen plenty of times when a seller will list at too high a price, but will eventually wear down and start dropping their price until it maybe sells after a year or more on the market.  In some cases, because the market is soft, buyers will “low ball” offers just to see what kind of good deal they can find, and tired sellers will sometimes take the deal.  The trouble with that approach is that when prices are continuing to fall, the seller ends up taking less than they would’ve gotten if they’d priced their property realistically with the then-current market, effectively shooting themselves in the foot.

So, is honesty the best policy?  I think so due to what I understand is my fiduciary duty to do what’s in the best interests of my clients.  Do I lose business because of it?  I guess so.  Is that “being honest to a fault?”  Maybe, but I think for me, it’s worth it in the long run.

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The Housing Opportunity Foundation, the charitable arm of the Charlotte Regional Realtors Association, recently held a workshop for Realtors on foreclosure prevention.  Many might think that is an odd thing for Realtors to pursue, but it really isn’t. It’s true that we won’t have a chance to sell a property that avoids foreclosure, but we Realtors have some very good reasons to help people avoid that calamity.

Years ago, when we were working on a market analysis for a prospective seller or buyer, we would occasionally see foreclosures among the other similar properties that had closed.  They were rare enough that we didn’t put much weight on them to influence our recommendations on market price.  Nowadays, foreclosures are such a large part of the real estate market that we, and lenders’ appraisers, can’t avoid considering them as a substantial part of the market.  That part continues to drag down the overall prices of houses currently on the market.  It also does great damage to neighborhoods that otherwise might be thriving.  Sellers of non-foreclosure homes have great difficulty adjusting to the market that is so heavily influenced by these foreclosures.  In order to compete, they must drop their prices far lower than they’d like.  Foreclosures are so much on the minds of buyers that I’ve had several begin their conversations with me with “find me a foreclosure”, asking me to ignore the rest of the available homes.  This is not a good idea since there are some very good deals to be had from non-foreclosure sellers who know they have to compete with these foreclosures and short sales.

Our industry gurus say that we still have at least another year of heavy foreclosures ahead. Realtors are trying to do everything we can to help people avoid them.  At our workshop we heard from many providers of free guidance for people who might be facing foreclosure.  Of particular interest was the presentation by Tami Hinton, Director of Consumer Affairs of the NC Office of the Commissioner of Banks.  She provided two web sites that have tons of info on how to get help and guidance to avoid foreclosure.  The sites are www.fightncforeclosure.org and www.ncforeclosurehelp.org.  If you or someone you know may be facing this problem, these sites can be of immense help.  If the problem is addressed early, very often it can be worked out for the homeowner to stay in the home.

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Perhaps you’ve read all the gloom and doom reports in the news (or on TV, internet, smoke signals, etc.) about how the housing market is still in the tank and heaven only knows when it will come back.  I just wanted to put a little perspective on all these reports showing statistics that indicate that our real estate market has still not turned around.  Those stats do have some bearing as an indicator of the condition of our overall economy, but they shouldn’t be interpreted as being a reason to stay out of the real estate market if you have a good reason to buy or sell.

The fact of the matter is that when someone needs to sell property, there are people out there willing to buy it.  When you see that sales are off 25% from last year, that means that there were still millions of houses being sold during the period.  The buyers are getting great deals and the sellers are giving up more than they’d like, but they do close real estate sales.  What’s more, when the seller goes on to buy another property, they likely will make up for their initial “loses” in the low price they pay for the next property, and they’ll get a remarkably low mortgage rate, too.

What it comes down to is if you’re a buyer or seller in the market, the statistics can inform you about how much competition is out there and what prices will be prevalent, but the stats don’t tell you that you can’t make a deal on real estate.  I’m working with buyers right now who want to move to the Lake Norman area.  They are ready, willing and able, and I can show them the local numbers showing what’s been selling and at what price in order to help them come up with a reasonable offer.  Same for sellers who really want to sell.  We can come up with numbers from our local market reports that prove that at the right price, properties will sell.  Sometimes it takes awhile to find what that price is, but in most areas, there will be willing buyers.

A little patience and a positive attitude go a long way in this business.

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I withdrew one of my Iredell County listings today by mutual agreement with my seller clients.  We had put the house on the market last spring, and priced it according to what little history was available in the community for similar houses.  We agreed that if the house didn’t get some showings, the sellers would agree to lower their list price.  Time passed, and we did get a few showings, but no offers.  It tried to get them to reduce their price to get more traffic through the house, but they felt at that point that they couldn’t do it.  In the meantime, houses in their neighborhood were being sold as foreclosures or short sales for much lower prices than what we would have previously expected.  Those sales have pulled the “comps” down to the point where our listing was getting no attention whatsoever.  The sellers don’t have to move and decided to just pull the house off the market and wait for better times.  I cautioned them that per the economic gurus’ recent statements, those good times will be several years into the future.  One economist said yesterday that the glut of foreclosures will not be absorbed by the market until sometime in 2013.  Of course, things can happen that the economists don’t foresee that could improve the picture sooner than that, and I hope they will.  I’ve seen that happen in the past, but it’s not something you can count on.  Real estate sales prices in our area continue to be soft and continue to drop in some areas.  If you don’t get ahead of that curve with your list price, the market will ignore you.  It’s a tough lesson, but true.

This is a time when sellers who need to sell and are able to sell can find buyers, but at much lower prices than in the past.  If they do that and then become buyers of their next home, they can come out “smelling like a rose” because they’ll buy the next house at a similarly low price and at 50 year low interest rates.  If you don’t need to sell or the numbers don’t work for your sale, then you may as well stand pat.  It serves no value to the seller or the listing agent to try to market a property that is priced above market.  Marketing has its limits, and no amount of marketing will cause a person to pay a too-high price when there are better valued alternatives available.

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