Tuesday, April 15, 2014

Five ridiculous things Buyers or Sellers say that you hear as a Realtor

In the Real Estate world, Realtors need customers. We need buyers as well as sellers. We know that in sales the 80/20 rule will normally apply where 80% of your business comes from people who use 20% of your time and visa versa. Its just part of sales 101.

For first-time (okay, sometimes second-time) sellers, the process of getting their home sold can be a bit of a mystery. Most sellers are well-intentioned, but in the midst of what can be an emotional or overwhelming experience, sometimes agents may hear a handful of seller sayings that in retrospect and out of context, can seem crazy and out-of-touch, and—yes—even ridiculous.

As an agent, tactfully correcting these sentiments is par for the course. So, here are some of the most common seller sayings, I've heard and some smart insights and troubleshooting tips to keep them from running a successful sale afoul.

1. “But I spent X years or $XX on that!”
One of the biggest perks of home ownership is the ability to customize the home to the personal needs and wants of the owner and their family. One homeowner may find that a soundproof mediation room is a necessity, while another may think that the installed slide in the kids’ room is a wise investment. Sometimes it can be difficult for sellers to understand that while they may value (both emotionally and monetarily) a home feature, potential buyers may not always value that feature in the same way—and that means that they may not be willing to pay for it.

I recently had a client who spent a lot of money in his kitchen. Nice stainless steel appliances, granite countertop, nice island working space and he wanted exactly what he paid out of it. Ever heard of depreciation? Can you sell your car for what you paid for it? The kitchen and the car have miles on them, they need to be sold for a percentage of their value in today's dollars.

So what do you tell a seller who thinks that a particular so-called “enhancement” means that the home is worth more than the current market dictates?

Remind the seller that while some home improvements can increase the value of the home, many should be looked at as features that enhanced their quality of life while the owner lived in the home. But, when it comes time to sell, it comes time to let it go. Emphasize that the enjoyment of those special features was the return on investment. If an eventual buyer also happens to love them, fantastic! But sellers can’t approach the home selling process expecting every buyer to share your value system and pay through the nose for them.

2. “We just need to find a buyer who understands my tastes.”
There are certainly occasions, with rare properties, where there is truly a narrow niche of buyers that will have to find, understand and appreciate a property. In cases like that, with acreage, converted warehouses, horse properties, and the like, this saying is not ridiculous at all.

But this saying is ridiculous when it is uttered by the owner of a home with potentially wide appeal as a reason for not staging or preparing their home for sale, or in the effort to avoid neutralizing highly personal design and decor choices.

If you have a client who is reluctant to make these necessary adjustments, remind them that the goal is to maximize the home’s appeal to a broad segment of ready, willing and able buyers who are willing to pay top-dollar for the home. Why should a seller limit their ability to get the most offers possible?

There are two strategies to take here:

A. Take the seller around on an open house tour to show them examples of sellers who staged their home appropriately and those who kept the home as is and ask them which they feel is more prime for a top sale.

B. Work with your sellers on a Plan B ahead of time. Agree on a time period (30 days, for example). If the home is still on the market, explain that it will be time to course-correct and stage the home.

3. “I want to price it high, so I have room to come down.”
Now, in all fairness—there’s a time and a place for this. By that I mean that there are certainly local markets where it’s very much standard practice for buyers to expect to come in below asking, and sellers can price their properties a few thousand dollars higher than the target price point without killing their deals. Sometimes explaining to a seller when this strategy is appropriate can help them see why now may not be that time.

Explain that if other sellers are pricing appropriately and the seller’s home is priced too high over what the market will bear, many buyers won’t even bother trying to negotiate down. Rather, they’ll go find a home with a more realistic price, they’ll wait until the seller lowers the price or they’ll wait until the home has been lagging so long they sense the seller might be desperate, and will swoop in with a lowball offer.

Even in a relatively hot market climate, the aggressively priced homes get the most buyer traffic and, accordingly, get the most offers. In turn, these bidding wars drive the eventual sales price up. Overpricing it might actually sabotage success.

4. “That offer is an insult— I won’t even dignify it with a response.”
For sellers, a home represents a massive investment of money, time, hopes and dreams. It probably also represents personal tastes, style and some precious memories.

But once it’s on the market, sellers need to get a thick skin and decide not to take anything personally.

Let your seller’s know that if someone offers to pay many thousands of dollars for their home, it’s not an insult, even if the offer is far afield from what they are willing to sell the home for, or from what they believe it is worth. They might be deeply misguided, and not yet experienced enough in the market to know that the offer was unreasonable. Or they might just love the home and be going for it, even though it’s really outside of their personal resources.

Finally, they might actually just be trying to get the seller to come down a bit on the asking price. Some buyers see making a very low offer as part and parcel of negotiations.

In any event, home sellers should always respond to an offer made by a qualified buyer. Remind your clients that they can always respond with what would be appropriate counter. They might be surprised at how even a very low offer can come together with a respectful, reality-based counteroffer and a little negotiating.

5. “I need $X to get the home I want and take my Australia trip—let’s list the place for that.
There are lots of respectable strategies for setting a list price, but all of them have their basis in one thing: data. Pricing can be the toughest conversation of all to have with sellers. Be firm: The market sets the home’s price. Not some desire for a big vacation. The ultimate value is based on what a qualified buyer is willing to pay for it—not what the seller “needs” to move.

A million dollar listing I recently had, I had to dump the seller, he would not listen in the end, the property was over priced, not getting traffic and he then had the audacity to ask me for the picture I paid for to list the property. I said no, he thinks he can do a swap of a home with someone who has a condo and he is going to market the property better "so he says" than what you can find on MLS. Sometimes you just have to let people do the crazy stuff they want to do, because they think they know best. Sometimes you are just pouring money down the drain with crazy buyers and sellers.


Sunday, April 6, 2014

Some local data here in Jacksonville

Each month, I like to educate folks about some of what we are seeing in some zip codes of Jacksonville. I do live in 32205, the Riverside Avondale areas of Jacksonville, but I cover and go anywhere I need to help my customer. Here is some information on March sales in a few zip codes:

The 32205 zip code remained below its 12-month average sales volume this week as sales dropped 6.1% to hit 31 homes sold over the last 30 days. In comparison, the nearby 32210 zip code had 52 sales in the same time frame, the most of all neighboring zip codes.

 Prices are falling in the 32205 zip code, and this period the median price of all sales fell from $135,000 to $95,000. The 32205 zip code is a definite buyer's market, due to a big eight months of inventory left and aided by the dip in sales.

Mortgage rates fell this week to 4.31%, signaling that it's probably a good time to think about locking up financing.


Sales fell this week to 52 homes sold in the 32210 zip code market over the last 30 days. However, a six-week positive trend for contracts was extended, with 85 pending transactions in the same time frame.

Potential buyers should note that prices are coming down in the 32210 zip code, and for this period the median sales price slid from $72,000 to $70,500. The 32210 zip code is a definite buyer's market, thanks to a big seven months of inventory to choose from and a pullback in sales.

It is still a buyer's market aside from all the hype you hear from the national media. You can still find a great deal on a house and a good mortgage rate, below 5%. If you know of anyone looking to buy or sell in the Jacksonville area, please ask them to contact me.


Sunday, March 30, 2014

Overpriced Listings - My latest story here in Jacksonville, FL

My blog post for the day and week is really about the choices we, as Realtors make when we take on over-priced listings. Sellers can really be difficult when listing their house. After all, they are interviewing other Realtors who are throwing numbers at them and I have yet to meet a homeowner that did not LIKE a higher number for their property than a lower one. This is the case of a story here in Jacksonville, FL.

So when you are interviewing for the opportunity to 1) spend money on a listing, 2) see prospects through the door at open houses, 3) manage somewhat unreasonable expectations on the part of a seller, add this to all the other buyers and sellers in your pipeline, you have a real challenge ahead of you. There are only 1440 minutes in a day and if one client consumes most of those minutes, you really have a fun job.

So my experience this week was with a client who was referred to me by another Realtor in my office. She needed help to get this listing sold and as it happens, the other Realtor is dating the owner of the property. Warning Signs should bounce off you when that happens. NEVER mix Business with Pleasure. Emotions are too powerful when discussing money.

So we meet with the owner and discuss what his options are, 1) the only homes selling now are those that are foreclosures in your neighborhood, 2) your house is old and needs updating, 3) are you ready for a lot of people to come though and see your house. Well, the owner did not like hearing that "HIS" decorations were old and tired, or that he would not get top dollar as compared to other bank-owned properties selling at a lower price, and during the last few months, the owner was short and curt with people walking through the property.

What do you do? You suck it up for the listing period and you do what you can, all the while the little light goes off in you head saying "I told you so, I told you so, I told you so". When you have been selling Real Estate for as long as I have, almost 10 years, you know who are going to be your good prospects and your SUSPECTS. Owners do not understand that marketing the house for sale takes Time and Money, and unless it is the best thing someone sees, it will probably sit for 90-120 days, as evidenced by the Days on Market in our area averages.

So the buyer comes back at the end of the listing term and says he is 1) unhappy that the home has not sold, 2) he plans to send direct mail postcards to people with condos where he would like to live with the "hope" they want to swap out their oceanfront condo for a house in a subdivision, 3) he would like to take over negotiations with the people who have expressed interest in the house, and cut me out of any commissions, 4) work with a Realtor who knows his area "better".

Since his property was a million dollar plus listing, we spent thousands of dollars marketing the property to people who subscribe to luxury magazines in far away places like the Northeast, where they are known to have 2nd homes in Florida. We also spend money on local TV listings and featured open houses as well as travelled back and forth to the property to be onsite with prospects since the owner wanted someone there to trust. In the end, the owner is unrealistic in their expectation. There are still rows and rows of unsold homes in the subdivision, his house is overpriced, we never received an offer, because he would not reduce it to more of a market price.

One of a Realtor's questions to the homeowner during the period of interviewing should be "Are you prepared to lower your house price, if we do not receive an offer within the first 30 days, 60 days, 90 days?" this gives you an idea of how much a person needs to sell the house. How motivated they are to move elsewhere. You need to know before spending $$$ whether the owner is a prospect or a suspect. Do NOT allow this to keep you up at nights thinking about the money you are throwing down the Money Hole!

Good luck everyone, there are so many good people out there who will listen to YOU, the Realtor, the professional. But there will always be others who think they know more than you.


Sunday, March 23, 2014

Berkshire Hathaway HomeServices Great Press this week

So we are sitting in the Berkshire Hathaway HomeServices Convention Standout2014 and we are just about to sit in for the Reba McIntyre show and what does Earl Lee tell us? He says that Harris Poll has recognized Berkshire Hathaway HomeServices as the number one real estate BRAND in the country. Add that to the following information, makes for a very nice week!

Seeing as though we are only one of a couple of companies that Warren Buffett has allowed to use the Berkshire Hathaway name in their brand is huge. Anyone see GEICO using this in their name? No need, they have the Gecko. Anyone see Coca-Cola using the BHHS brand? No need, they are their own brand. Anyone see Wells Fargo needing the BHHS brand? Nope, they have been in banking long before the iconic Buffett has been in business. So why would he put his beloved name on Real Estate?

No one really knows, but with so many other companies out there and over 1 million real estate agents, it is nice to know and see that Berkshire Hathaway is in the Real Estate business and while they are only in 33 states now, and no overseas yet, they have a long way to go and a lot of growth ahead. 

When you see the Cream and Cabernet signs, you can rest assured you have the brand of Berkshire Hathaway behind you AND you have Warren Buffett behind every transaction. We are happy to be a part of the Berkshire Hathaway family of successful businesses. Looking forward to an amazing 2014 and beyond. A brand that will only get stronger with time!


Friday, March 21, 2014

Is this the type of response you receive from your Realtor?

Hey, Realtors are overwhelmed again, does your Realtor look like this nice lady above? If you are an investor, bidding on HUD or REO properties, you have to bid on 10 to receive a yes on 1. How many Realtors do you think have the patience for this process?

My research shows that many Realtors get into this business because they see $$$$$$$$$ signs, sure there is good money to be made, but you have to have a discipline. I started almost 10 years ago and it was not easy, I started out asking anyone and everyone if they knew someone who was interested in buying or selling Real Estate. And 9 years later, I am in the top 5% of all Realtors in Jacksonville, FL

Remember that as easy as it was to become a Realtor, so can it be easy to lose customers. Just because it takes 10 no's to get to 1 yes's does not mean that you need to cut and run from investors. All good businesses are based on action 1, action 2 and then repeat, or as in the case of shampoo, Wash, Rinse, Repeat. Just by adding that one little word, Johnson & Johnson made a killing on shampoo, by getting people to repeat. Brilliant!

I work with investors, yes they are demanding and they change their minds, but they have a discipline and they follow it, or.......they lose money. I don't know any investors who work that hard, just to lose money. They might as well just donate money to charity. They know what they need to do to make money. A good Realtor will be able to anticipate what the investor wants or likes based on the discipline. Once the investor trusts you, stick with it, as they want to be with someone who understands them. Here is a great article from Biggerpockets.com on using a Realtor. H/t to Brandon Turner and Joshua Dorkin for building a great site by Investors, For Investors.


Wednesday, March 19, 2014

Harris Poll did a little poll of thousands of customers in the real estate industry and Berkshire Hathaway proved to be #1

Berkshire Hathaway HomeServices named Best Real Estate Company in 2014 by Harris Poll

I know alot of people look at polls as who is number one in college football or basketball or some other college sport, but what about who is the most trusted and valuable brand when it comes to the purchase and sale of real estate? Berkshire Hathaway HomeServices announced recently that Harris Poll has awarded all of the BHHS affiliates with the distinct honor of being the #1 ranked Real Estate Firm in the country for 2014.

More people trusted the BHHS or Prudential brand than any other real estate company. Trust is a huge game changer because you have to trust your agent when you are making the largest transaction in your life, for most people. All that money on the line can cost more, IF you do not have the right professional to assist you with your transaction.

To receive this honor is quite a reward. To be seen by our customers as the BEST Real Estate agency in, the world is astonishing, since there are BHHS affiliates in only 33 states and there has not been much if any movement to go overseas.

Congratulations to all at Berkshire Hathaway HomeServices and thank you to Florida Network Realty for allowing me to do what I love to do with my amazing and fantastic customers.


Tuesday, March 4, 2014

Real Estate: Uneven US Housing Recovery Will Last For 5 Yrs +

Hey, some great Real Estate news, yeah! I can dig a recovery of 5+ years, maybe that will make up for the last 5 years of misery in properties. Right? Here in #Florida, they are expecting our GDP to double in 2014 from what it was in 2013. So go from 1.6% to 3.0%, which would be huge, I could stand to enjoy that ride! Anyone remember the Wild Ride from Disneyworld?

The US housing sector is likely to experience an uneven recovery over the next 5+ yrs, with some local markets coming back faster than others, according to a study released Wednesday.

By 2018, the median price of single-family homes will be close to the highs reached in 2006 before the national market meltdown, according to the study from the Demand Institute, a nonprofit think tank operated by The Conference Board and Nielsen. But there will be winners and losers.

Among the 50 largest Metro Areas where housing prices are expected to appreciate between years 2012 and 2018, the Top 5 will see rises on average of 32%, while the Bottom 5 will average gains of only 11%

The cities expected to report the largest increase in the median price of a previously owned single-family homes are Memphis, Tampa, Jacksonville, Milwaukee and St. Louis.

Those with the lowest projected price appreciation are Washington, DC, Oklahoma City, Denver, Minneapolis and Phoenix.

“The strength of the local housing market is among the most telling metrics that helps us assess community health and well-being,” said Louise Keely, chief research officer at the Demand Institute and co-author of the report.

As for States, the 5 likely to see the strongest gains in median prices are New Mexico, Mississippi, Maine, Illinois and New Hampshire.

Those with the lowest are Minnesota, Virginia, New York and Alaska. The study includes Washington, D.C., on its list.

The report is based on an 18-month research program that included an analysis of 2,200 cities and towns in the United States and interviews with 10,000 consumers.

Markets that experienced the biggest run up in prices during the bubble, and subsequently the deepest drops  have a much longer road ahead to regain their prior peaks, the study found.

For instance, in Nevada, prices will likely be 45% below their 2006 high by 2018, in line with their 2002 level, the study said. Nevada was among the states that experienced the largest price appreciations during the boom and the hardest fall. Property values dove 60% from Peak to Trough.

The study predicted that the national median price for an existing single-family home will rise at a much slower rate in the coming years than in 2013, when prices advanced 11.5%. The study sees prices growing at an annual rate of 2.1% between years 2015 and 2018, as supply and demand begin to even out.

The double-digit price increases of the past 2 yrs are not indicative of future trends since they were largely driven by investors snapping up distressed homes to meet surging rental demand, the study said.

In contrast, it predicted that the main driver of demand in the next 5 yrs will be the formation of new households.

As the US economy strengthens and employment rises, potential buyers will find entry into the market is easier.

It is unlikely that everyone who dreams of owning a home will be able to make it a reality. In the next 5 yrs, the group predicted about 4 million households will fail to realize their current purchasing or even rental aspirations.

Wow, 4,000,000 applications to go through and process for those on the mortgage side. Amazing! Come check out my new website soon, http://www.riversideavondalerealestate.com, find out what your home is worth and as we rise in values, see if you would like to expand into a new house!