When it seems like it was meant to be

I sold a house this week that I wanted to tell you about.

The buyer is a first time buyer who was sent to me from two separate past clients. She works with a client who has become a friend of mine…..Thanks David! Her mother works with another friend who has used me before too……Thanks Doug! I don’t have this happen often when somebody is asking for realtor references and I get mentioned twice. It always makes me feel twice as good that somebody would take their time to connect two people they care about. Close to 100% of my work is getting referred to new people or people coming back to use me again. That is why I don’t ask for reviews and don’t advertise. I just don’t need to do either to attract new work!

The buyer was going to be in the super tight $150ish market. There is almost nothing ever for sale and when something hits the market, you are competing with cash buying investors who sometimes don’t even look at the house before making an offer. This was going to be a tough one.

Right after I started working with this buyer, I get a text from another client who was wanting to sell their house.

The sellers are past clients who I have thoroughly enjoyed working with several times. They bought a house to rent many years ago and it was time to part with it. The sellers did a lot of work to it themselves and it looked really good. The price point was going to be around $150k, which is very hard to find in the current market.

I just knew this was the house for my buyer. I mean, I had recommended it to the sellers when they bought it so I could certainly recommend it again to my buyer!

I told the sellers what I thought it was worth. I told them that I had somebody that was interested in it. I also told them that they could put the house on the market and possibly get a little more than the price range I thought it would sell within since you never know what a desperate buyer will do in this market. They liked the idea of me managing the entire transaction and keeping it simple, so I showed it to my buyer. Of course she wanted it. It was a gorgeous home in one of the most desirable neighborhoods in her price range.

The buyer is happy she didn’t have to frantically make an immediate decision and that she got a great house. The sellers are happy because they know I am managing the whole transaction and made it so easy for them. A win for everybody.

I seem to be having this happen several times a year now. A seller will tell me they are wanting to sell soon and then shortly afterwards I have a buyer tell me what they want and they describe exactly the house my seller has. Happens the other way too. I will have a buyer tell me what they want and then I will have somebody tell me they are ready to sell the exact house the buyer described. It’s sort of cool when this happens. It makes me feel like I am a small part of a bigger story.

What is being a realtor really about?

You’d think it would be about houses, but it is not.

You’d think it would be about the market, but it is not.

You’d think it would be about knowing what a house is worth, but it is not.

You would think it would be about marketing a property for sale, but it is not.

You would think it would be about showing houses to buyers, but it’s not that either.

All of these things are important, but they are not what being a realtor is really about.

It is about guiding people to make a good decision using all of the things above. I often describe my job, when asked, as “Talking people into making a good decision and talking them out of making a bad one.”

In the future, realtors might not even be needed for a buyer to view a house. People may end buying real estate like they do anything else online, or there will be an app to open the lockbox on the front door without a realtor. In the future one of two things will happen: Technology will make tools like Zillow’s Zestimate more accurate, or people will broadly accept them as being accurate. Either way, realtors won’t be needed to determine market value.

It all comes down to helping people make a good decision. There are tons of tiny decisions in buying or selling a house that can have huge consequences. Money can be lost. Time can be wasted. Stress can be compounded. Since most people only buy or sell a house a few times in their lives, often they don’t know the difference between a good decision and a better one. It is easy to make a good verses bad decision. Good verses better requires some knowledge and experience.

A realtor friend and I often chat about what we having going on. It makes us both better realtors I think. He had a situation where he had two offers on a listing. One was slightly better than the other, but the people with the slightly worse offer really wanted to live in that specific neighborhood. Do you go with more money and risk losing those buyers if the home inspection didn’t go well? Do you go with the slightly less offer where you know the buyer is less likely to walk away because they have to have that specific neighborhood? I told my friend to go with the higher offer. My thinking was that if the higher offer people walked away after the inspection, which is usually within 10 days, the other buyers who wanted that specific neighborhood will still be around. Best of both worlds.

Since the market is so hot right now, I am seeing lots of sellers saying a neighbor or a somebody they know is interested in buying their house before it gets listed. My advice to anybody today is to put the house on the market and try to get at least two offers. Today’s buyers are used to fighting to get a house. Get two or more buyers competing for a house and YOU as the seller will always come out the winner. Also, a buyer wanting your house because their parents or grown children live on the street will ALWAYS be there too. That buyer is not just looking for any house in your price range. Being close to mom, dad, grandma, grandpa or grandkids is what makes them want your house. They may or may not pay the most for it, but they are not out actively looking for any house in your price range all over town.

Another thing I am seeing more of is the opposite end of this where a buyer thanks me for my time and tells me they have bought a house from a friend. I had somebody this year with a friend who was selling their house by owner. My client bought it. The house had been on the market for quite a while. In today’s hot market, not selling fast is a sure sign that something is wrong. When buyers decide to wait for the next new listing and pass on your house, can you imagine how difficult it will be to sell the house in a cooler market? This is where the whole good verses better decision starts to have big consequences. People who make poor choices as a buyer typically don’t realize they made a poor choice until they go to sell the house. I saw plenty of that from Great Recession sellers who told me they went over the asking price in multiple offers when they bought the house that they were now selling for less that they owed on it.

So, being a realtor is really about using your experience and knowledge to help people make the best decisions possible. There is nothing that feels better than knowing your seller got the best deal possible, or that your buyer landed a house that will always be easy to sell when that time comes.

How COVID will affect what people want in a home

It won’t change a thing.

I don’t know about you, but all the news I have been reading is saying buyer’s wants have shifted due to quarantining. They say people are wanting a place to work from home, wanting bigger houses, wanting great outdoor spaces, and a less open floor plan.

I personally think that writers of such stories don’t know much about real estate and just have to write something because that is their job.

When have people not wanted a bigger house? When have they not wanted a better backyard? When have they not wanted a home office? Okay, the wanting a less open floor plan is something that has been emerging for the past few years but isn’t really possible in a smaller house. To do a less open floor plan you need a big enough house so it doesn’t feel like you have a bunch of super small rooms. People may covet these features a little more right now, but it definitely is not a new trend in housing.

I think the biggest effect COVID has had on what people want in a home is simple……..to just find one they like, pay at least the full list price, possibly waive inspections, and take advantage of incredibly low interest rates. Beyond that, the buyers of average priced homes are not all that picky.

Kicking a buyer to the curb made my seller $10k

My seller was impressed that I sold his house so fast.

Big whoop.

Just about every house sells fast these days. back in 2008-2011 was when selling a house fast was something to brag about.

Today, I think the most valuable thing a realtor can do for a seller is helping them pick which offer to accept and taking some strategic steps to keep the deal glued together…..or strategic steps to easily get into an equally good contract should the one you have fall apart.

So, the house I am talking about was priced at the tippy top of the market. It got a ton of showings and the only offer we got was from somebody who had a house to sell. People with a contingency have to come in stronger than a buyer without one, so getting no other offers and a full price one from this buyer is a sure sign we got 100% the full market value.

The offer was contingent on the buyers selling their old house. I never like those, but I don’t mind them if I can get the buyer to accept an immediate kickout clause. A kickout clause is when you can keep the house on the market, but if some other buyer makes an offer the seller wants to accept, the first buyer has to be given the change to get the house if they can buy it without having to sell their old house. Usually the time period for the first buyer to either put up or shut up is 24-48 hours. Naturally, a lot of buyers and their realtors don’t like to show houses with kickout clauses. It can be heartbreaking if the first buyer actually can remove their contingency and buy the house. BUUUUUUUT, with an immediate kickout clause, the seller can enter into a contract with the new buyer and all they have to do is tell the first buyer they just lost the house. It is the best of both worlds for the seller. You get to keep the buyer who is paying top dollar for your house and you get to keep looking for a better buyer. There is nothing to lose.

There is a third great thing about having a contingency contract with an immediate kickout. It is called leverage. One reason I advised the seller to accept the offer if the buyer would do an immediate kickout clause was because I wanted to be able to tell future buyers that we already had a full price contract with the immediate kickout.

Well, a few days later, we did get an offer that was about 95% of the list price. I told the other agent that we had a full price offer on the table with an immediate kickout, and her buyer would need to go full price in order to make the seller kick the first buyer to the curb. They agreed to it. Without the presence of that first buyer’s contract, I would have had no leverage to get the new buyers to come up $10,000.

I more than paid for my own commission by strategically positioning my seller to get the most money.

Will the election affect the real estate market?

Every four years I get this question.

I am probably going to disappoint a lot of readers, but it just doesn’t work like that in real estate. It sure can affect the stock market in the short term, but the real estate market is a lot different. That’s because your house is your home and the stock market is just about making money. People always want to move and will do so whenever they feel comfortable that they can.

The past few elections, the popular vote has been about 50-50. That means half of the voters are happy and the other half are not. With such an equal split, it isn’t going to change much…..the only possible change could be which 50% of the voters feel more confident about buying a house. Also, the roughly 50% of Americans who don’t vote have already shown us that they will be unfazed by which guy gets in office.

About the only direct, immediate change these elections have on real estate is leading up to election day. Historically, the month or so beforehand has been pretty slow as everybody waits to see who wins. Then a few days after the election, things get back to normal. I’ve got a new listing that I could have put on the market today but I am going to wait until later this week. I am sure it would sell today since the market is strong and the house is at a price point where there aren’t any listings. I want to wait for multiple offers so I can get the best terms for my seller. I guarantee you that whatever buyer gets this house, they are going to be happy regardless of which guy wins today.