Costly Seller Missteps

by John Rice

Well.  I sold another house today.  My people had wanted to see another house yesterday, but the seller’s were putting in new carpet and didn’t think the house “Would show at it’s full potential.”  While I am sure it was no where near as nice as the one my people bought, what if they had seen it, and found something they liked about it?  Well, there are no ‘what if’s’ now.  We know that my people bought another house and that seller is probably enjoying their new carpet tonight.

That mentality never has really set right with me.  I mean, any agent knows that most of the time the buyer doesn’t ever come back to see the house.  A lot of the time it turns out just like this did. 

I enjoy playing with statistics.  Lets look at the chance the seller had of selling that house to us yesterday.  We were looking at 4 last night, so I guess there was a 25% chance that we would buy it.  Since we couldn’t see it, that gave the others  a 33.33% chance.  Since we didn’t get to see it, there was, you guessed it, a big fat ZERO percent chance that we’d buy it.  If it were your house, which is better?

I had another thing happen today that made me scratch my head.  I am previewing houses for a client.  I’ve been using my high-def camcorder to film the houses, then e-mail the movie to them.  I wanted to see one tomorrow in Georgetown.  The listing agent told me that the seller didn’t want to drive home in the middle of the day to put up her dog for ooooooonly an agent to preview it.  Hmmmmmmm, could this be a sign that we have a cranky seller?  It sure doesn’t leave a good taste in our mouths, especially since my buyer ASKED me to preview it. 

Sorry if this post comes across like I am whining a little.  I’m really not.  I guess the point of this all is that a seller really needs to show the house when somebody wants to see it.  It is in their best interest to do so, and that is always my advice to my sellers 🙂

Why I won’t spend this $35

by John Rice

I was totally LOL when I checked my e-mail this morning.  I had been “Invited” to attend a conference that promised, for a mere $35, to tell me the secret of what buyers want out of their realtor today.  It was funny to me because 1)  You would think ANY realtor should already know that, and 2) because what a buyer (and seller) want hasn’t changed to make it any different “Today” that yesterday.

I don’t know what this conference will teach agents, but here is what I would expound on it I were the keynote speaker:

1)  You must care about your clients.  That is something that can’t be taught, and can’t be easily faked.  If you don’t really care about them, then you should get out of the business.  In fact, if you don’t care, you’ll probably go out of business!

2)  You must know the market and your town like the back of your hand.  Otherwise, what good are you.  You may be able to fool somebody once, but they aren’t going to send their friends and family to you.  People come to you because you (should) have knowledge that they don’t.  My dad told me when I was a kid that to be successful in business you have to do something that the customer doesn’t know how to do, doesn’t want to do, or doesn’t have time to do.

3)  The client wants you to make it all about them, and that’s the way it should be.  You’re only there because of them.  Your interests ARE their interests.

4)  The client wants your attention………..WHEN THEY WANT IT.  I got a call from a nice, but busy agent last night.  He wanted to show a listing of mine that had been pending for over a week and had closed about 3 hours earlier.  I really felt sorry for the buyer because his agent is running about a week behind, scheduling listings that his client obviously wanted to see a week ago.  This means quickly responding to calls, e-mails, texts too.

5)  The client wants your patience.  This is a huge decision to them.  One that they will have to live with long after you cash the commission check.  They don’t want to feel rushed, or that you think they are being too picky.

I could go on for a lot longer.  Basically I would say that there is no new gimmick out there that can replace being an honest, knowledgeable, caring local expert.  I would tell them to view the transaction from the clients standpoint, rather than their own.   I would tell them to hone their knowledge of their market rather than taking the responsibility to remind everybody of day light savings.  I would tell them that substance is more important than style.

I’d tell them all that, but I think a lot of agents would want their $35 back!

What do you think??

How is the market?

by John Rice

That is a question that I have been asked a lot lately.  I guess I could spout sales figures, average days on market, average sale price, compare this YTD to 2009 YTD,  and other numbers.  It sure would make me look smart I guess.  But I won’t because I don’t think that tells us the story behind the numbers, which is far more interesting, relevant and important.

See, the average days on market really tell us just that.  The houses that have sold very quickly or took forever to sell have a lot of say over what that number will be.  The same thing with the number of sales.  It is us realtors that find the number of sales important.   Buyer’s and seller’s really care about if the market is balanced or not.  For example, if there is one house for sale and there is only one buyer, that is a balanced market……Of course it means that there are a lot of Realtors submitting resumes all over town,  but the market would be balanced.  Again, the same thing with average sale price.  It has come down in the past few years not really because of depreciation, but because the more expensive houses that previously brought the average number up weren’t selling that well.

So, how is the market?  Again, that depends on who you ask.  I had my best year EVER last year, and my phone is ringing.  To me it looks great!!  To the agent that spent most of last year sending people post cards to remember to set their clock either backwards of forwards, they would say it is bad.

So, “Is he ever going to answer the dang question?” is what you must be thinking.  Okay, here goes:  If you are a seller who is willing to work to make your house look attractive, and are realistic about the price, congrats, it is a good market for you.  If you are a seller that doesn’t want to put any effort into selling your house and are pretty inflexible, then I predict the sign in your front yard will rust away before you get a contract.  For buyer’s, you have less selection than you have had in the past several years, but you weren’t really going to buy those houses that were over-priced and didn’t show well anyway, so the fact that there are less of them really doesn’t matter to you I guess.

I think we are going to see a good year.  People with jobs are now acclimated to the economy.  Living in a sour economy is just normal now.  The shock has worn off as long as you have a job.  Life goes on and part of grown up life is buying and selling houses.

Also, people just aren’t looking at their home as an ATM machine any more either.  People are viewing their home as, well, their home.  Because of that, buyers are really conservative with the amount they offer.  NOBODY is willing to over pay.  The old school boom mentality was “So what if I over-paid by $10,000 in a bidding war, I’ll get that back in appreciation within the next year.”  I still think people are willing to pay full “Retail” for a house, but they definitely want to make sure they pay no more than that.  (That makes it good for me because smart people have started viewing the Realtor’s wisdom as critical again, after years of viewing us mainly has somebody who opens the door and cashes checks.)

Here is another fact that holds true across all price ranges:  The best houses in every price range have always and will always sell quickly and for top dollar.  As long as their IS a market, the best house will always be the one that sells.

So, how is the market?  It is cautious.  It is alive and well.  It is pretty balanced up to about the $250k point.  Lexington is a town with 2 strong markets:  The people buying/selling houses in the under $150k range, and those moving up to the $200-250k range.  And most of all, the market is realistic these days, which to me is a good sign of it’s health.

When LOCATION isn’t enough

by John Rice

I had to take a different route to get to my kid’s school today since I had to park and go inside.  So I’m at a light at the end of a very prestigious street and I see this house that is for sale.  I’ve recently been in it, so that is how this all came about.

See, this house is on the corner of a street full of very old and grand homes.  It is one of those streets that has the huge old awesome houses where the rich people lived when it was new, and  still do.  This house is at the very end of that stretch of houses.  Beyond this house you start to have commercial zoning, smaller houses, and even some houses that have been chopped up into student housing.  It has location…..in theory.

This house has something else working against it too.  Like I said, the houses on this street are very grand.  The street has elaborately detailed houses of architectural significance…….This house looks like a giant farmhouse.  It has wood siding, simple architecture.  It really looks like something from a Norman Rockwell painting, just jumbo sized.  It doesn’t really fit in with its surroundings.

Then there is the fact that it has a tiny back yard, which is taken up by the 2 car garage that practically sits on the street.  When I parked there, my car hung out over the sidewalk.  And when you are in the backyard, you don’t feel like you are even in this nice neighborhood, you just feel like you are on a busy, loud corner.

Now that I’ve run though all that, let me tell you a little bit about the recent history of this house.  It sold for $400k in 2006.  Somebody spent a fortune on it, then tried to sell it less than a year later for $679,900….then $649,900…..then $599,900………then $437,000………then $380,000.  They even tried to auction it at one point with no success.  Now, you may be thinking that it was just a declining market, and that may have had some effect, but the real issue here is that the house just wasn’t right, despite having “Location, Location, Location.”  I am sure when they listed it for $679,900, that the comparable sales for that street supported that price……..again in theory.

So, I guess my real point here is that you really need to step back and take a look at what all is going on with a house before you make an offer.  Does it fit well with its surroundings?  Is it on the edge or in the middle of its defined neighborhood?  What negatives does it have?  All those things have market value.  See, when a realtor or an appraiser look at the comps, they don’t put a value on things that are more of a vibe issue  ( I do though!!)  If two houses were the exact same side by side and one had a really steep driveway, which one are you going to buy if they are priced the same?  What about one that has power lines running over the backyard?  Backs to apartments?  You’d pay less for an identical house with any of those negative features, and YOU are the market, even though on an appraisal they would be worth the same.   (Maybe I’ll blog about the difference between market value, appraised value, and tax assessment value sometime!)

If I had been the buyer’s agent for this house, I would have told him that even though this house seems to have location, it still has plenty of things that just aren’t right, and those things are going to make it worth much less that the comps.  I am sure he has learned all this now, but he has been foreclosed and the house is back on the market, this time for $285,000. 

If you ever buy a house with a big negative, you’ve really got to buy it right so you have some room to sell it right when that time comes.  The negatives may not bother you, but you need to know about them before you buy because one day you will need to sell.