Wednesday, August 20, 2008
Price Home Right the First Time
Dear Sue
My real estate agent keeps suggesting that I lower the price of my home. I know that my price may be a little high but I think if a buyer really wants my home he will make an offer. I need room to negotiate.
My friends agree with me. My best friend just sold his house. He said he priced his home a little high but he ended up getting what he wanted.
I think it is just common sense and good negotiating strategy to price your property higher than your bottom line.
What do you think, Sue?
Savvy Sam
Dear Sam
There are different strategies for different markets. When markets are trending down, over pricing can be disastrous. Thinking that one should price their home above the market in order to have negotiating room is a mistake. If one prices their home too high in a declining market the price that a willing buyer is willing to pay sinks lower and lower.
Consider the following statistics furnished by the Placer County Association of Realtors.
There were 2195 home sales in Placer County in the last six months. 1011 of those sales were on the market for 30 days or less. That is over 46%! Those sales received 99% of their asking price. In other words, the sale price was reduced by 1% of the asking price.
There were 385 Properties sold within 31 to 60 days. Those properties sold at 96.5% of the asking price or 4.5% less.
241 properties sold in 61 to 90 days. Those sold within 95.9% or almost 6% less than the asking price.
190 properties sold within 91 to 120 days for 94.2% of the asking price. Or over 6% less.
368 properties on the market for 120 or more days sold at 93.72% of asking price or 6.25% less.
While there are always exceptions, I cannot stress enough the importance of pricing your property to sell when it’s first put on the market. As the statistics show, the longer time on the market equals the less money one ultimately receives.
The primary reason is that distressed property sales have dominated the market driving prices downward. Placer County real estate is currently losing about 2% per month in value. While sales may be up prices are down.
Buyers rule. Placer County presently has approximately 2300 properties available for sale. Buyers are not making quick decisions because they have several choices and they fear that they may pay too much.
Buyers that are looking are always watching for new listings. That is why all new listings have the most showings in the first three weeks. Once that “golden window” is closed sellers have to rely on new buyers coming into the market noticing a listing for the first time. Buyers love to say, “It just came on the market and I was so lucky to see it first!” Not, “Oh boy, I was so lucky to find it. It was on the market for 100 days!”
Pricing your home to sell is a matter of good Home $$s and Sense.
My real estate agent keeps suggesting that I lower the price of my home. I know that my price may be a little high but I think if a buyer really wants my home he will make an offer. I need room to negotiate.
My friends agree with me. My best friend just sold his house. He said he priced his home a little high but he ended up getting what he wanted.
I think it is just common sense and good negotiating strategy to price your property higher than your bottom line.
What do you think, Sue?
Savvy Sam
Dear Sam
There are different strategies for different markets. When markets are trending down, over pricing can be disastrous. Thinking that one should price their home above the market in order to have negotiating room is a mistake. If one prices their home too high in a declining market the price that a willing buyer is willing to pay sinks lower and lower.
Consider the following statistics furnished by the Placer County Association of Realtors.
There were 2195 home sales in Placer County in the last six months. 1011 of those sales were on the market for 30 days or less. That is over 46%! Those sales received 99% of their asking price. In other words, the sale price was reduced by 1% of the asking price.
There were 385 Properties sold within 31 to 60 days. Those properties sold at 96.5% of the asking price or 4.5% less.
241 properties sold in 61 to 90 days. Those sold within 95.9% or almost 6% less than the asking price.
190 properties sold within 91 to 120 days for 94.2% of the asking price. Or over 6% less.
368 properties on the market for 120 or more days sold at 93.72% of asking price or 6.25% less.
While there are always exceptions, I cannot stress enough the importance of pricing your property to sell when it’s first put on the market. As the statistics show, the longer time on the market equals the less money one ultimately receives.
The primary reason is that distressed property sales have dominated the market driving prices downward. Placer County real estate is currently losing about 2% per month in value. While sales may be up prices are down.
Buyers rule. Placer County presently has approximately 2300 properties available for sale. Buyers are not making quick decisions because they have several choices and they fear that they may pay too much.
Buyers that are looking are always watching for new listings. That is why all new listings have the most showings in the first three weeks. Once that “golden window” is closed sellers have to rely on new buyers coming into the market noticing a listing for the first time. Buyers love to say, “It just came on the market and I was so lucky to see it first!” Not, “Oh boy, I was so lucky to find it. It was on the market for 100 days!”
Pricing your home to sell is a matter of good Home $$s and Sense.
Labels: Auburn, auburn real estate, seehometown, seesue, sue thompson
Wednesday, August 13, 2008
An Old Pro’s Market Perspective
Dear Sue
Everyone is talking like this is the worst real estate market we have ever seen. Some even liken it to the Great Depression of the 1930s.
Having lived through the Depression as a boy, I can tell you it is not even close. During the Great Depression 40% of US banks failed. Depositors lost everything. There was no such thing as a federally backed deposit. Investors jumped out of windows. Farms and factory’s went bankrupt. Unemployment was at a staggering 25% in 1933. It is 5.5% today. Shantytowns and breadlines were everywhere.
I remember the men down on their luck coming to our back door for food. My mother fed the poor men we all called “hobo’s”. We all knew in those times that anybody could be begging for food.
We have experienced REO markets during every real estate cycle, approximately every ten years. Good businessmen plan around downturns because they know they are inevitable. Conservative homebuyers live below their means and plan for down turns as well.
Back in one of the “other” downturns, many cycles ago, I was working for builder George Holstein in Southern California. I was in charge of marketing. We had been selling homes at the Eastmont tract in Orange on a land contract. (You experienced agents know what a land contract is.) I think we were asking for $95 “to move right in!” The contract was for 3 years at which time the buyers would be required to get the necessary bank financing and pay Mr. Holstein off. The contracts just covered the loan payments that Holstein had with the bank. His goal was to just cover his carrying costs. He figured that he would get some of the homes back on the “drop dead date” (due date) in about three years when the original land contracts were up.
Three years later the folks who couldn’t come up with the financing started moving out. Some of the homes were in terrible shape but as history repeats, they were worth much more than the original price. As planned, Mr. Holstein cleaned them up and resold them at a profit.
During the period of the many move-outs, we ran ads for “Mr. REO.” We didn’t have a sales office so we borrowed a little RV trailer from our sign painter. We had him paint the trailer bright yellow and parked it on a side street close to the project.
Our ads directed people there. It was staffed by an old real estate agent named Rollie Jones, AKA Mr. REO. It was working well until one night the Orange police took the trailer and impounded it in their yard. The trailer contained MR REO’s sales contracts and paperwork. We got it out and continued the Mr. REO campaign but without the yellow trailer.
You buyers out there need to get off the fence. Interest rates are starting to creep up from 5.5% to almost 7% in the last year. Every percentage point is worth a good $100 more per month on $100,000. Get online and check out the rent vs. mortgage comparison charts. They should be easy to find.
Markets go up and markets go down. When they are on their way up people think it will never stop. When they are going down people think it will never stop. But it will. It always does.
Three years from now this market will be looked upon as a fun and challenging time!
Sign me
Mr. Seen It All
Sue says, "Listening to the Old Pro is a matter of Good Home $$s and Sense!"
Everyone is talking like this is the worst real estate market we have ever seen. Some even liken it to the Great Depression of the 1930s.
Having lived through the Depression as a boy, I can tell you it is not even close. During the Great Depression 40% of US banks failed. Depositors lost everything. There was no such thing as a federally backed deposit. Investors jumped out of windows. Farms and factory’s went bankrupt. Unemployment was at a staggering 25% in 1933. It is 5.5% today. Shantytowns and breadlines were everywhere.
I remember the men down on their luck coming to our back door for food. My mother fed the poor men we all called “hobo’s”. We all knew in those times that anybody could be begging for food.
We have experienced REO markets during every real estate cycle, approximately every ten years. Good businessmen plan around downturns because they know they are inevitable. Conservative homebuyers live below their means and plan for down turns as well.
Back in one of the “other” downturns, many cycles ago, I was working for builder George Holstein in Southern California. I was in charge of marketing. We had been selling homes at the Eastmont tract in Orange on a land contract. (You experienced agents know what a land contract is.) I think we were asking for $95 “to move right in!” The contract was for 3 years at which time the buyers would be required to get the necessary bank financing and pay Mr. Holstein off. The contracts just covered the loan payments that Holstein had with the bank. His goal was to just cover his carrying costs. He figured that he would get some of the homes back on the “drop dead date” (due date) in about three years when the original land contracts were up.
Three years later the folks who couldn’t come up with the financing started moving out. Some of the homes were in terrible shape but as history repeats, they were worth much more than the original price. As planned, Mr. Holstein cleaned them up and resold them at a profit.
During the period of the many move-outs, we ran ads for “Mr. REO.” We didn’t have a sales office so we borrowed a little RV trailer from our sign painter. We had him paint the trailer bright yellow and parked it on a side street close to the project.
Our ads directed people there. It was staffed by an old real estate agent named Rollie Jones, AKA Mr. REO. It was working well until one night the Orange police took the trailer and impounded it in their yard. The trailer contained MR REO’s sales contracts and paperwork. We got it out and continued the Mr. REO campaign but without the yellow trailer.
You buyers out there need to get off the fence. Interest rates are starting to creep up from 5.5% to almost 7% in the last year. Every percentage point is worth a good $100 more per month on $100,000. Get online and check out the rent vs. mortgage comparison charts. They should be easy to find.
Markets go up and markets go down. When they are on their way up people think it will never stop. When they are going down people think it will never stop. But it will. It always does.
Three years from now this market will be looked upon as a fun and challenging time!
Sign me
Mr. Seen It All
Sue says, "Listening to the Old Pro is a matter of Good Home $$s and Sense!"
Thursday, August 7, 2008
Ask Miss Real Estate Manners
Dear Sue
We have sold several homes. Our least favorite part about having our home for sale is the inconvenience and disruption in our lives.
We hate going to all of the trouble of getting our house ready for a showing, only to have the agent not show up with their prospective buyer.
When we had our old house on the market in Southern California we would get home late and not find any business cards even though we knew that someone had been in our home. It was a very creepy feeling. One time we even found our back door unlocked.
Is this lack of consideration common or is this experience unique to us? Is there a way to prevent these kinds of things from happening to us again?
Dreading Dana
Dear Dana,
I was a guest speaker on a panel for the Women’s Council of Realtors at the Placer County Association of Realtors yesterday and realtor courtesy was a hot topic.
Everyone agreed that the lack of manners between agents and clients was an issue in our industry and agents needed to be more conscious of social grace, respect and courtesy.
When you put your house on the market discuss your concerns with your agent. Let your agent know what you expect in the way of courtesy and etiquette.
Some real estate agents are so focused on the buyer that it appears that they forget about the needs of the seller’s. When showing properties, agents could request a block of time. Asking for a specific time is often unrealistic. For example a morning block of time may be from 9AM to noon. The afternoon block could be from 1 to 4. The key is that the client’s expectations are managed thereby reducing frustration and disappointment.
It is important to realize that it is impossible to predict what a buyer is going to want or do. He may want to alter the “showing” course. Selling is a process, not a series of appointments.
When an agent drives up to a home with a buyer, the buyer knows immediately that they are or are not interested in seeing it. If a buyer is not interested in seeing the property I think it is important that the buyer’s agent leaves a note on the door and follows up with a phone call.
It may be that the first house on the showing tour list is the one the buyer wants and they don’t want to see any other homes. It is the agent’s obligation to call the seller’s that are expecting them and explain the situation. The seller may not like hearing it but he will certainly respect and appreciate the courtesy.
There are no professional training classes for how to show a home. Because there isn’t maybe the seller’s need to formulate their own written guidelines or special instructions such as, please remove shoes or leave the thermostat at 80 degrees. Please lock all doors except laundry room. Please turn off all the lights. Don’t let the cat out. Backyard dog is friendly (or not!)
Make nice cards and place them in appropriate locations through out ones home. Make them fun if possible. For example; Please remove your shoes while doing your tours…this carpet that you’re walking on may soon be yours………………………….
Simple courtesy is a matter of good home dollars and sense.
We have sold several homes. Our least favorite part about having our home for sale is the inconvenience and disruption in our lives.
We hate going to all of the trouble of getting our house ready for a showing, only to have the agent not show up with their prospective buyer.
When we had our old house on the market in Southern California we would get home late and not find any business cards even though we knew that someone had been in our home. It was a very creepy feeling. One time we even found our back door unlocked.
Is this lack of consideration common or is this experience unique to us? Is there a way to prevent these kinds of things from happening to us again?
Dreading Dana
Dear Dana,
I was a guest speaker on a panel for the Women’s Council of Realtors at the Placer County Association of Realtors yesterday and realtor courtesy was a hot topic.
Everyone agreed that the lack of manners between agents and clients was an issue in our industry and agents needed to be more conscious of social grace, respect and courtesy.
When you put your house on the market discuss your concerns with your agent. Let your agent know what you expect in the way of courtesy and etiquette.
Some real estate agents are so focused on the buyer that it appears that they forget about the needs of the seller’s. When showing properties, agents could request a block of time. Asking for a specific time is often unrealistic. For example a morning block of time may be from 9AM to noon. The afternoon block could be from 1 to 4. The key is that the client’s expectations are managed thereby reducing frustration and disappointment.
It is important to realize that it is impossible to predict what a buyer is going to want or do. He may want to alter the “showing” course. Selling is a process, not a series of appointments.
When an agent drives up to a home with a buyer, the buyer knows immediately that they are or are not interested in seeing it. If a buyer is not interested in seeing the property I think it is important that the buyer’s agent leaves a note on the door and follows up with a phone call.
It may be that the first house on the showing tour list is the one the buyer wants and they don’t want to see any other homes. It is the agent’s obligation to call the seller’s that are expecting them and explain the situation. The seller may not like hearing it but he will certainly respect and appreciate the courtesy.
There are no professional training classes for how to show a home. Because there isn’t maybe the seller’s need to formulate their own written guidelines or special instructions such as, please remove shoes or leave the thermostat at 80 degrees. Please lock all doors except laundry room. Please turn off all the lights. Don’t let the cat out. Backyard dog is friendly (or not!)
Make nice cards and place them in appropriate locations through out ones home. Make them fun if possible. For example; Please remove your shoes while doing your tours…this carpet that you’re walking on may soon be yours………………………….
Simple courtesy is a matter of good home dollars and sense.
Labels: auburn real estate, hometown realtors, seehometown, sue thompson
Subscribe to Posts [Atom]
