The real reason why sales are down

I’m seeing a lot of news articles with accurate data.  My issue is that I think most are drawing the wrong conclusions.

Most seem to want to make you think the sky is falling in real estate because sales are down.

You know who needs to care about the number of sales?  Appraisers, realtors, mortgage people.  Those of us who make money on each transaction.

As a buyer and/or seller, the number of sales isn’t really important to you.  What you care about is supply and demand-the ratio of buyers to sellers in the market.  If there are 3 buyers in the market and only 2 listings, then we have a seller’s market.

I am seeing a lot of articles stating that sales were down in November of 2018 versus November of 2017.  Of course they were.  It happens every election year.  The market pauses until we see which set of morons we will be stuck with.

The ones that really bug me are the ones that say the affordability crisis will hold the market back.  I think they have it backwards.

Sure, we have an affordability issue.  Many people can’t afford to buy a house with rising prices and interest rates.  All I know is that every house under $200k in this town seems to go very quickly, which allows that seller to buy up to their next house and that seller to buy up to their next house and so on.

Back when the market was terrible, I said that it was like a baseball game where the bases are loaded.  The seller on first base needed a buyer without a contingency to buy their house so they could buy the 2nd base seller’s house, who could buy the 3rd base seller’s house.  The first time buyer needed to hit a home run and push all those sales through.

Back then a buyer had a ton of choices for their next home.  The issue was selling their old one.

Today, no buyer really has a huge selection of houses.

For that reason, I think our current market is the opposite.  There are a ton of first time buyers eager to hit a home run and push all those deals through, but what is happening is that the person on 3rd base doesn’t like home plate and has decided to just stand there until they feel like running.

The buyers with the most selection are the people buying their pinnacle home.  The one they stay in forever until they begin to downsize.  These are mostly Gen Xers.  They are in their 3rd base home, which is probably a fairly large home in the $250-350k range.  They want to move up to the $400-600k range, where there are plenty of houses for sale.

Their only problem is that most are just tarted up versions of their current house.  These buyers aren’t getting a better house, a bigger house, or a bigger yard.  They are just getting prettier finishes.  They find the houses in this price range, well, boring.  And we have a TON of them for sale.

So what do these Gen X buyers do?  They wait for the right house to hit the market.  Since they already have a nice house, they are in no hurry.  Because they aren’t in a hurry, that means the people looking to buy their house are in the same position….all the way down to that first time buyer eager to bid their heart out on their first home.

And, that is where we are today.  Sellers wanting to sell but not finding anything they want to buy.

Best way to get top dollar for your house

I don’t really know how to say this without upsetting some of my realtor friends, but most of the current marketing trends are just hype.

Many agents are doing weekday open houses.  Like a Tuesday or Thursday from 5-7.  Often the house sells before the open house……and if the listing had hit the market that day, that is the exact time buyers would be scheduling their showing anyway.

Many agents are doing these “Coming Soon” listings.  After making everybody wait to see it, the house sells the first day on the market for full price.  Imagine that.  Just like every other new listing that is priced appropriately.

Some say that these are the best ways to expose the listing to a market that is already hungry for new listings, and at a time when there is a shortage of houses for sale.

Here is what I say is the absolute positively BEST way to know you got top dollar:

You put the house on the market late on a Friday.  Why?  So the listing gets fed to zillow and all the other real estate sites in enough time to get on every buyer’s radar but is too late to be shown that night.  Why again?  Because more people are available to look at a house on the weekend than they are during the week.  Why do you want that?  Because you want every buyer to not only see your house, but to also see every other buyer flocking to your house.  Nothing motivates a buyer more than seeing people coming and going during their viewing.

You show the house all weekend.

And this is where the rubber meets the road.  You tell all the agents that the seller is not making a decision until Sunday evening and to submit their client’s highest and best offer.  That gives time for the house to be seen by every interested buyer.  More interested buyers means more offers.  More offers means a better price and/or terms.

 

 

It was fun to be me this week

I kind of like the crazy days.

It’s been a busy week for me.  I’ve sold 3 houses, have 9 pending sales, and have been out with several new buyers.

This time of year always reminds me of that scene in Bambi where all the animals come out on the first day of spring.  I’m meeting new people and seeing old friends.  The days are getting longer and I am close to being back in shorts.

 

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Many of my past clients are calling to say they are thinking of moving.  Several of my past clients and friends have referred their friends or family to me.

I had one especially busy day this week.

I had to show a new construction home to a friend who has used me 3 times so far.  There was not a lockbox on the model home, so I had to find another model home with the same key, then return that key after the showing.

Then I had to rush to Winchester to see a house a friend and past client may sell.  It was out in the country in a beautiful setting.  I took my little M Roadster.  Back roads from Masterson Station to deep in Clark Co.  Lots of fun.

The whole time I was at that house, my phone was going crazy with texts and calls.  One was an agent telling me she was sending an offer on a listing of mine.  I already had an offer so I had to tell the other agent we were getting a new offer.

I check my email before pulling out of their driveway.  17 emails.  One was a new client who was referred to me from her daughter, who has used me a couple of times.  They were ready to make an offer on a house I had shown them in Clark Co the day before.

It was already well past dinner time and I had to get some work done, so I did the only thing that made sense.  I got a pizza and ate it in my car while I returned calls, texts, and emails.

 

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I’ve never eaten pizza in the dark, nor in such a small car.  All I can say is that I am glad the interior is black and I was wearing a red shirt.

I got home, wrote the offer for the Clark Co property, worked on the offers for my new listing, and finally got done about 10:PM.

This weekend looks pretty calm since I crammed about 3 days worth of work into that one day.  Saturday is Cars and Coffee, then Sunday I am going for a long drive in the country with some other car enthusiast friends.

The busy days make the not so busy days even better.

Glad it is almost spring!

5 things buyers & sellers should know

As we kick off the 2018 real estate season, here are a few things buyers and sellers need to know:

Buyers:

  1.  Make your best offer the only offer you write.  Everybody wants a deal, but the odds of you getting a bargain are slim.  You want to give your best offer because the market moves fast.  Plan on negotiating with the seller and odds are somebody else will make an offer while you and the seller are going back and forth.  This is especially true if it is a new listing.
  2. Get preapproved.  You want the seller to want to deal with you.  In a slower market, they would have to deal with you even if they didn’t feel like it.  In a fast market, they know there is always another buyer out there.  Don’t make them wonder if you can buy their house.
  3. Don’t write a letter telling the seller about yourself.  Most of the time when I have gotten those, we have multiple offers and the seller never gets around to reading it until after they have sold the house.  And do you know what most of them say to me after reading it?  “If they loved the house that much, they should have made a better offer.”  You want your offer to stand out?  Let the seller pick the closing date if you can, or do the type of inspection where you can inspect it but won’t ask for any repairs.  The seller will find that much more exciting that seeing a picture of you with your dog.
  4. Don’t ask for anything that wasn’t included with the house.  Sellers think it is strange that you went shopping for their personal items.  Also, if you write stuff that wasn’t offered in the listing that the seller doesn’t want give up, you force the seller to counter your offer without those items.  Meanwhile that gives time for another buyer to make an offer.  You might lose the house because you were trying to get the sellers coffee table or patio furniture.
  5. Don’t try to rush the seller.  If it is a new listing, odds are they are getting multiple offers.  The saying is the squeaky wheel gets the oil, but in real estate that just means you are annoying the seller.  Most agents know that if you are annoying now, you will likely be annoying throughout the entire process.  Think of it like a job interview.  The seller has a big decision to make and is going to decide based on how you present yourself through the offer and your actions.

 

Sellers:

  1.  Usually your first offer is your best offer.  When I was a new agent, I was told this and really didn’t believe it, but 13 years experience in all types of markets tells me it is true.  I might alter the saying to say the first “Reasonable” offer you get is usually your best.  Occasionally I do see these crazy buyers who must be watching reruns of real estate shows from 2007 when sellers were desperate to sell…..but they aren’t living in reality.
  2. Don’t feel rushed.  Buyer’s agents like to do things like give you 3 hours to respond to their offer.  They do this hoping to get the house before anybody else does.  The truth is in this time of having more buyers than houses, that buyer isn’t going to walk away.  Only a few times in 13 years have I seen where a buyer has two houses they want and needs a fast response because they want to buy their 2nd choice house if it doesn’t work out with you.  They usually will wait though since your house was their 1st pick.
  3. Think about what is most important to you.  Everybody wants the most money, but sometimes a slightly lower offer that closes sooner, or lets you stay in the house for a few days after the closing, is appealing.  Also, think about what you will accept before you get an offer.  Most sellers don’t think about this until they get an offer and they have a lot of stress trying to process it.
  4. Don’t over price your house.  Your house will eventually sell for what it was worth.  Starting out with a realistic number accomplishes two things.  One, it makes the process go faster.  That means less time cleaning up your house and having to leave for showings.  Two, you create a bit of a frenzy when it is a new listing.  Buyers flock to new listings.  They are afraid of losing it and will likely make their strongest offer.  Once you get past that new listing period, buyers know there isn’t a risk of another offer and will try to negotiate more.
  5. That surround sound system you are so proud of?  Leave it off during showings.   It isn’t as important to buyers as it is to you.  Don’t stink up every room with Glade Plug-ins.  Buyers think you are covering an odor.  People with allergies just want to leave your house.  The average person can only hold their breath for like 40 seconds, and that is not enough time to see your house.  Keep your house the cleanest it has ever been.  Seeing those dried up specks of toothpaste in the sink is sort of like looking at used cars and seeing coffee stains around the cup holders or a french fry under the seat.

 

Happy buying and selling!

Why one house sells fast and another doesn’t

I sold two houses yesterday.  Been a while since that happened.  Always fun.

One was a new listing of mine and the other was a house for one of my buyers.

Two totally different situations.

I put my listing on at a competitive price.  Not so high that it would scare off buyers, but just a bit over the recent sales with the hope that somebody would be afraid of losing the house and pay full price.

Four showings the first day and three offers.  The first offer was a little under the list price.  The next offer was the list price.  The next one wasn’t the list price.  The people who made the first one raised their offer and got it….but they came close to losing it.

The first people should have thrown out their highest and best offer right off the bat.  It would have saved them from potentially losing it.  For me personally, it would have meant eating a warm dinner.  It was taco night and I love tacos.

When a new listing is priced right in this market, you should always make your best offer.  You want to send an offer that the seller just wants to sign.  Going back and forth takes time, and time is what other buyers need to prepare their own offer.

The other house I sold had been on the market for quite some time.  Nothing was wrong with it at all.  The only problem was the price.  The seller started nearly $30k over what the sale price will be.  They reduced it slowly all winter.  My buyers almost didn’t look at it just because of the price. We made an offer.  It was countered.  We countered.  They countered again.  We went out and looked at more houses.  They came back at a lower price and it all worked out.

I really think that if this house had been listed at a realistic price, it would have sold quickly and probably for more money.

Two houses in Lexington.  Two totally different outcomes.  Price makes all the difference, even in a hot market.