Monday, February 19, 2007

Sellers! It's not your market!

I’ve been touring a lot of homes the last several weeks, in all price points. Working mostly as a buyer’s agent allows me to see what impresses a buyer and, more importantly, what decidedly doesn’t. So I’m taking a break from Buying 101 to talk to sellers:

It takes three weeks longer to sell a home now than it did a year ago. Inventory, at 6.2 months, is higher than it’s been since 2002. With lots and lots from which to choose, a seller needs every advantage.

There are five factors that go into selling a home: Price; Location; Economic Environment; Condition; and Marketing. Note a listing agent has complete control only of the last: his or her greatest responsibility is to use knowledge to assess the others before any marketing takes place. If not, the old axiom applies: nothing kills a bad product faster than good advertising.

Location and Economic Environment – interest rates, local job market, etc. – are pretty much fixed, but both affect the most important consideration, the right Price. Listen to your agent, and be realistic! Twenty percent of the homes I’ve been in since the first of the year the prices are, frankly, delusional; thus selling prices 20% below the original listing price are not uncommon. In almost all those cases, the final price would have been higher if priced right from the beginning.

[I’ll cover this more in later posts, but when picking a listing agent do not pick one just because the comp was the highest, and by all means don’t pick the one that leaves the price entirely up to you.]

Condition. Unless you’re selling a fixer – and have priced it accordingly – make the obvious repairs before listing! Paint, inside and out if necessary. A few thousand dollars spent here can mean many more on the other end. Clean up the landscaping. Polish the appliances, get rid of clutter, clean carpets, get rid of clutter, clean windows in and out, get rid of clutter, deodorize pet and smoking smells, get rid of clutter: you’re selling your home, not your porcelain frog collection. If the home is already vacant – and sometimes even if it’s not – have it evaluated and staged by a professional stager. It can make all the difference, worth every penny.

Marketing. After everything else is in place and, in the real estate vernacular, your home ‘shows easily’, the agent’s responsibility becomes getting as many showings as possible. Make sure there are a full complement of photos – MLS allows eight, but individual sites allow as many as 99 – and make sure they’re good photos; pictures of empty bedrooms don't sell a lot of real estate. Virtual tours will show up not just on the MLS, but other web sites as well. Make it as easy as possible for agents to show: use a lockbox, be flexible, avoid serious restrictions. And, while buyer’s agents should not consider it a factor, make sure the buyer’s agent commission is in the norm, currently 2½ to 3 percent.

Do all this, and you’ll be a full step ahead of half the homes I’ve been in this week…

Wednesday, February 7, 2007

Home Buying Process (4) Selecting/Viewing Homes; Decision

1. Where’ve you been?

Sorry, busy. Love those buyers!

2. Right. May we start looking at homes now?

Soon. You’ve determined one of the two most important aspects in buying, a price you can comfortably afford. Stick to that price range. Looking at half-million dollar homes when you’re in the $300k range produces little but inflated expectations.

The second most important: location. Even if you’re not new to the area, focus on those things most important to you – schools, commute time, walking distance to shopping, crime rate, neighborhood turnover, etc – get recommendations from your agent and drive through those neighborhoods to see what feels best. Narrow it down to a few and prioritize, remembering that location also determines price. You may have to sacrifice some of one for more of the other.

3. …Now?

Not quite. Broadly prioritize needs: size, yard, bedrooms, baths. At this point don’t get too picky, otherwise you may miss something.

Your agent will have an internet search engine – either directly from the MLS or a more sophisticated map based system – that can give you current listings in the price and neighborhoods of your choice. Study them. Narrow it down to seven or eight; your agent will likely have suggestions based on conversation as well.

4. To the car??

Yep, armed with two things: patience and a notebook. If you have a camera even better, or ask your agent to shoot photos for you. Take your time, take notes, and by all means talk about what you like or don’t like about what you’re seeing. That’s part of the agent’s learning process.

Under no circumstances see more than ten homes in a day; they’ll all start looking the same. Process the notes over tea soon after you’re done.

In the meantime, a good agent will be watching you and listening to what you’re saying. After that first day a good agent can have a good enough idea that he or she can be previewing homes for you and making informed recommendations.

Then: continue as long as necessary and you’ve found the home you want, not one that will simply do.

5. How do I tell the difference?


6. Wow. Cryptic. Explain?

Home buying is equal parts right and left brain, intuitive and rational. I’ve seen a number of people rely too heavily on the latter, talking themselves into liking a home because it has check marks by all the requirements, but no real connection. They end up in a house, not a home, and move as soon as they get the chance.

On the other hand, too much “Oh, I just LOOOOOOOVE IT!” can lead to overlooking problems that may exist. Not good either.

Make the connection – believe me, your agent will know when you do – then rationally weigh all the contingencies. There’s nothing an agent likes to hear more than “We just love it.” at the end of a year or two.