The Blood Sport of Home Selling

Selling a home has always been a competitive event. It has now become a blood sport.

Too few buyers, mortgage requirements geared to glean only the most credit worthy of applicants and appraisers that examine a home's value with the precision of a jeweler require buyers and their agents to form a closer alliance and develop new strategies to get a property sold.

To this end my networking group here at Coldwell Banker is developing pre-listing packages for Sellers. Home Stagers will be giving the entire home a close look for its visual appeal and making suggestions for any needed enhancements/ facelifts. Handymen will take care of the small need-to-do items that plague most houses that can block a buyer's view of anything else. Licensed Inspectors will perform a whole-house check that will turn up any major problems that can be taken care of before the house hits the market. Housekeeping would also be offered. All of the services will be made available at special rates for our clients.

We'll still have quite a fight on our hands to successfully market a property. But, we won't be entering the ring tripping over our shoe laces.

Clients form plans that work

Despite this week’s up and down, round and around economic news from D.C and Wall Street, clients appear to be forming their own plans.

Keeping it simple, seems to be their way of finding a home and affording it: Just enough room, best neighborhood possible and conveniently located. Making long-term plans for any purchase, these folks are serious and savvy enough to know quick appreciation is not on their “must haves” list. They have friends whose short term views have led to misery and hopes of someday just getting back to “square one”. No, today’s clients seem to be looking for homes, not mere “financial instruments”.

Maybe my clients still recall the tortoise and hare from childhood bedtime stories; or, was it the Three Little Pigs? ( 3 Little Pigs)

Buying Multi-family properties...

These past few months I've been paying particular mind to the inventory of multi-family homes on the market. It's becoming a far different market for investors than it was during the 1999 -2006 years. In 2005 I advised all of my clients holding onto these properties, hoping to achieve further gains, to get out - sell them immediately. Keep in mind that most of these properties were speculative "investments": the monthly incomes were less than the carrying costs. The clients balked at first, feeling that the longer they held on the higher they could sell the properties for. They finally saw the wisdom of not living in a house of cards and sold to other speculators who were not so well advised. The market still went up…for a few months… and then the bottom fell out. My clients still thank me.

Now, we are entering different times. Speculative properties have been sitting vacant or only partly rented for some time and often have fallen into disrepair. But, a new wave of investors are now coming back. Not looking for quick turnarounds or "Flips", these are serious buyers looking for a return on their investment and making sure the cash flow is enough to also improve and maintain the properties.

With inventories high, interest rates lowering and more folks considering renting for various reasons, today's investment buyer is looking for it all: location, price and return. They also want to know where their money is - unlike putting it into some investment fund operated by "Uncle Bernie".

It's time, again, to call some of those old investors… Are you there?

Zombie Marketing

Usually, when we say someone has "expired", we mean dead. Done. Fortunately, for a great many folks hoping to sell their homes and properties, that is not the case. The trick, though, is bringing the dead back to life.

Let's face it, this is one tough market in which to sell a home. Buyers are not plentiful and the competition is strong. Tell me, then, why are some homes being marketed just as they were back in the bad old days. Back then, when Buyers would kill to buy an overpriced property, agents often would only have to stick a sign in the ground and both they and their Sellers would sit back waiting for offers. Hello, 2009.

Most agents are again practicing their craft and conducting business as it should: Determining the real market value of a home, getting it prepared for the market and then launching the marketing campaign. The market value of a property has nothing to do with how much was paid for it, how much a Seller wants to get for it or how much it means in sentimental value. Once a house is placed for sale… it is a commodity. The market determines the value just as it does with stocks, cars or bread. Agents are there to interpret and anticipate what the market is doing and act accordingly to sell the commodity they represent.

Yet, many homeowners - the Sellers - are still not getting it. They continue to place their properties for sale with an agent that will tell them what they want to hear. The agents then hope the Sellers adjust the price as time goes by and that the marketing takes care of itself. Thus, the "Expireds".

In approaching homeowners whose homes had been on the market but did not sell - Expired - as it were, there is one and only one question I initially ask: Do you really want your property sold. If the answer is, "Yes", we proceed further. For then only do we both know that whatever needs to be done, will be done. Then begins my "Zombie Marketing" - bringing the dead back to life.

Goodnight Babsie

Last night Aunt Faigela and I decided to not cook but to get a bite to eat at a nearby restaurant. Nothing extravagant, just a simple meal - not even desert, thanks to our latest diet. Having these very occasional no-frills nights out gives us both a break from the routine and a chance to just talk. What promised to be a nice night out almost turned into something else: panic.

Babsie, the waitress, took our order. Babsie is a long time member of the staff at this restaurant and we've gotten used to her rather dour manner. Half-way through our meal she came to our table and asked how everything was. Fine, we answered. Then Babsie started talking about the economy, how no one could afford a house (music to my ears you can be sure). As a matter of fact, said Babsie, even eating out in her restaurant was a luxury no one should or could afford anymore. But, said Faigela, we felt the value we received was good: very decent food at a moderate cost. Yes, countered Babsie, but it's still too expensive, no one can afford it anymore.

After finishing our meal - yes, we did enjoy it - we paid up. Before leaving, I glanced around at all the other waitresses. Each was counting on the paycheck and tips generated by folks like us that, while being sensible and frugal, still chose to ignore the Babsies of this world.

Thank goodness Babsie doesn't have a television audience. But, then again, maybe she does.

Waiting for Spring

These past couple of weeks or so there seems to be a bit more interest by Buyers. Everyone is seeking a bargain, of course, but enquiries about different types of properties have come across my desk with more frequency.

I'm mostly hearing from three types of Buyers: Those working on a limited budget, those seeking foreclosed properties and those seeking investment properties.

Budget conscious Buyers are doing their homework - getting their mortgage pre-approvals in order before the search begins. There is so much inventory right now they have choices. Banks are hungry for their business if they are qualified Buyers. The Coldwell Banker Mortgage division is very competitive and many locally based banks (those not caught up in the flim-flam mess) are doing a relatively brisk business, too.

Foreclosure bargain hunters are a mixed-bag. There are those looking that know that some properties that may fit their needs might just happen to be foreclosures. Others are under the impression that banks are giving the properties away. Not so. Fair market value still rules. That is why banks, once they take over a property, have it appraised and then put into the Multiple Listing system ASAP. They, like every Seller, want the most attention given to a property as possible. Those late-night infomercials offering "special lists" of foreclosed properties are, for the most part, print-outs of multiple listings information and/or lead-ins for taking courses to "make it rich with no money down" in today's real estate market. Right! Switch channels and the same company may be selling potato peelers or Commemorative Inaugural Coins.

Bottom line: Foreclosed properties sell for market value, often need work and rarely are move-in mansions selling for pennies on the dollar.

Next are the investors. Unlike the "investors" of the 2000-2006 era, these are serious, practical folks. They are seeking both residential and commercial types of buildings and there is plenty for them to choose from. Those contacting me are given the "Rule of Ten" talk (see past articles). For the first time in several years, I am again advising my clients to look at investment property.

The one question that each type of Buyer asks me is this: "Should I wait until spring to see where prices go"? My answer is this: By following this method of buying a home or investment you may be waiting until a lot of other Buyers make their move. If you have the ability to buy now, figure what you think the market price may be in 4-6 months and make an offer based on that. A savvy Seller just may say, "Yes".

Lessons from the Butcher

Working my way through the isles at the local Stop & Shop today turned out to be both relaxing and instructive. I love looking for mark-downs and using coupons for the essentials. For me, it’s like finding buried treasure or a couple of dollars in the pocket of just-washed jeans – an unexpected surprise.

Most times I shuffle through the store concentrating on what I need to pick up and little else. At the big stores, much of the time, the employees seem as anonymous as we are – both of us just doing our jobs. That’s the trouble with the big guys. The store promotes their branding so much that we forget who actually runs the place. Lately, I’ve tried to get to know the folks at the supermarket a bit more, even if just to say hello or thanks. Sure, I know Ellen; and Donna is a familiar face. But the others…?

Today was different. I found a few bargains, but came away with much more.

The meat department had lots of good sales going on today. Maybe Wednesdays are The Day. Tired of chicken, I decided to look for something else. A sign advertised boneless pork chops at only $1.99 lb., but the bin was empty. The butcher was busy in the back (at this market lots of what goes on is very open to the public’s scrutiny – a good thing) so I got his attention and asked about the special on the pork. No problem, just give him a few minutes and he’d have some more packages made up for me to select from.

So, it turns out there was no shortage as I had feared – just an unexpected demand. As a matter of fact, said Oscar, the butcher, because there was so much pork available right now they could sell it for less than chicken. Same thing with some cuts of beef, he said. No, prime rib wasn’t on sale for $1.99 lb. but, then, again, the demand for prime rib had slowed recently. Only a few of his customers asked for it. Oscar figured it had something to do with the economy. But, was the bargain stuff any good, I asked. Sure, said Oscar, and, because it’s not so expensive the whole family can enjoy it or you can have a few friends over for dinner. So, I can do more for less? Yep, and you can add some seasonings and make your own “specials”. So, by not buying the fancy stuff I can still eat well and not go broke? Yeah, haven’t you heard of supply and demand, man? I have, Oscar. Thanks for the tips.

Now, could this apply to buying a house: avoid the high-end fancy stuff, get down-to-earth prices on solid, decent homes and add the right touches to make it your own? In the words of Oscar, Yeah, haven’t you heard of supply and demand?

Good buy or good bye!

This morning several brokers and I previewed some of the newest offerings of homes just listed for sale. It was surprising, in a way.

With some Buyers beginning to make serious enquiries about properties as well as getting a firm picture of their financial health and abilities, now should be the time for Sellers and their agents to put their best foot forward.

What was visible today were homes still being over-priced and / or homes not even close to being ready for market.

With inventories of housing of every description being plentiful, Sellers must price their home on current values - not on wishful thinking. If not, Buyers are more than willing to wait until the right home comes along at the right price.