Market Trends

Top Prodcers meet to discuss the market

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It is hard to believe it was the second Thursday of the month already…time and summer sure fly by fast!  Here is what the Top Producers in real estate had to say this month.  If you have questions you would like me to pose to them, please let me know.

Negative news is everywhere.  Some websites even post good news one day and negative news the next.  How do you handle it and when will it stop?  Tell people to look at time frame of ownership – long terms hold will have fluctuations no matter what the investment is – stocks, gold and housing.  Show stats of our area being number one in appreciation month over month.  We are seeing incremental price increases in lower prices.  The news is reporting what is true across the country, we are just jaded because our prices are stable, unemployment is low, and pay rates are low plus they can’t sell houses.  Use the bad news to get price reductions.  Talk about the “cost” of money today and how great rates are compared with other years.

The government will come to an agreement on the deficit so we don’t lose AAA status, rates will stay low and the dollar won’t devalue.  Both sides of the aisle on Capitol Hill will do the right thing and make it happen because if they don’t, we all lose.

Control your closings – select the title company to get information on the lender when agents fail to give you Form 100 – removing financing contingency.  The bottom line is too many agents are not familiar with the contract or the process.  Agents need to be educated and then educate their buyers.

Interest rates have increased recently, have you seen any effects on the market?  Everyone agrees that nothing has really slowed down.  The market remains stable.

Where is the market?  Contracts have slowed down in Loudoun and Prince William counties, agents are busy listing houses and trying to find where the prices should be on their listings and trying to find buyers.  Townhouses are selling well in Western Fairfax County – singles are lingering on the market.

Appraisals are problems for some not for all right.  Appraisers are still coming from outside the area to and are appraising properties low – herein lies the issue.  We need market specific appraisers every time.

What are you going to do the second half of the year?  Some agents are hiring coaches for the second half of the year, focusing on new home construction, and one is bringing in vendors to open houses to provide gift cards to agents who attend.  Others are calling their sphere more frequently and generating leads this way.

The discussions today were lively so it is better to attend if you qualify then just by reading the notes.  Get it?  Got it?  Good!

Now, go sell something!

 

It’s going to be a long and busy summer!

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As we head into the dog days of summer, I thought you may be interested in reading about the Northern Virginia real estate market as well as some national real estate news as well.  Let’s dive right in!  The Fox Gate development at the doorsteps of Loudoun County received its’ approval to begin development.  Fox Gate is located between Pleasant Valley Road and Tall Cedars Parkway, encompasses 27 acres which will offer 1.2 million square feet of office, retail, hotel and civic space along with 110 residential units. 

Apparently Bechtel, the country’s largest contractor – the contractor building the Silver Line – is secretly looking for up to 300,000 square feet in Loudoun County.  Obviously, this is a huge home run for the area as Loudoun boasts a 26% vacancy rate on commercial properties and Fairfax County has 16% in the areas where they are searching.  Forbes ranks Bechtel as the third largest privately held company with just under $28 Billion in revenue with 52,700 employees – not too shabby!  Here is a great opportunity if you know of anyone who works there to do some relocation business.

Also, locally our market is seeing the same market we were in last year as far as numbers are concerned.  For the first week of July, active resales were 7,379 this year versus 7,534 last year.  We have a 2.3 month’s supply of houses for properties that went under contract the previous 30 days both this year and last.  The rental market is virtually the same with a one month supply this year and a 1.2 month supply from last year.  I have to say it to remain consistent.  If you aren’t working with investors, holding investment seminars or obtaining a designation to help investors, you are missing out on a huge opportunity.  We will discuss more reasons why later.  Houses that settled the last 30 days have a 2.7 month’s supply of houses – last year it was a 2.5 month’s supply, a difference of 300+/- houses.  I think the difference here is short sales and the changes in the bank’s stance in regards to their handling of them.  We are seeing the banks counter the prices way above what is realistic based upon market conditions, asking for interest free loans and even the requirement for sellers to bring cash to the table.  Agents need to set the expectations for our sellers so they know that these options are serious possibilities and keep these deals together.  Obviously the pricing piece can’t be overcome easily but the other two options can be discussed upfront to help keep deals together.  Additionally, Chase recently announced that they are not in the short sale business, they are in the foreclosure business so be on top of your Chase owned loans.  Distressed properties make up 15.5% of the active inventory this year versus 19.9% this year.  Foreclosures are down this year versus last year as the foreclosure process is taking longer and inventory continues to be slow to get on the market.  Buyers continue to be price sensitive and are looking for the “perfect” house so continue to encourage proper pricing, staging and even prelisting inspections to get your listings in the best light for potential buyers otherwise, they will sit on the market.  Pricing properly is even more important in the outer counties and localities as new home prices are attractive in areas closer to the beltway.  Therefore, new home sales continue to post strong numbers as their pricing is competitive today and the buyers get to select how they want their houses to be decorated.  Our friends from Van Metre will share their success with us shortly.

There have been several good articles posted recently to help buyers realize now is a good time to buy along with the Housing Secretary Shaun Donavan stating it is unlikely housing prices will drop further and a noted now was a good time to buy.  He also mentioned officials must find ways to provide access to home ownership without requiring a 20% down payment.  Additionally, Warren Buffet posted his Five Real Estate Tips which include: 1) Housing prices increase in value over time especially as the dollar becomes worth less.  2)  Buy low, prices are down due to the housing bubble and appear to be at the bottom and you can never time a market.   Also, remember, you make money when you buy – not when you sell.  3)  Don’t wait too long to take advantage of low prices – if you wait for the robins, spring will be over.  4)  Smart home ownership has 3 elements – fixed rate mortgage, affordable payments and a long term hold.  5)  Buying a dream home can be a nightmare – don’t let your eyes be bigger than your wallet – go with the fundamentals previously discussed.  And lastly, pending home sales rose strongly in May which was the first time contract activity was up over the previous year since April of 2010 and we all know the reason for that was the expiration of the tax credits.  Let’s continue this trend into the second half of the year!

The things to look out for to carry us into the second half of the year are number one, jobs.  If jobs don’t get created then consumer confidence will stay low and housing sales will suffer. Number 2 is  underwriting guidelines for mortgages cannot get stricter, they need to be relaxed as the pendulum has swung a little too far.  In 2009, 23.5% of loans were rejected, in 2010, 26.8% of loans were rejected which is not a good trend.  If underwriting continues to become more difficult home sellers and buyers will be hurt and the ones who will benefit will be investors.  Investors typically pay cash plus, if buyers can’t get loans, they become renters and the rental market becomes stronger.  Remember, you need to be working with investors. Number 3 is distressed property numbers need to remain low which may be difficult.  CoreLogic estimates that 10.9 million or 22.7% of home owners with a mortgage are underwater at the end of the first quarter – 2.4 million home owners have less than 5% equity so this puts a total of 27% of the nation’s mortgage holders at risk.  The foreclosure process is now taking an average of 400 days which is twice as long as it took in 2007 so distressed properties will be in our market for the foreseeable future.  Number 4 is rates need to remain low allowing more buyers to be able to afford homes – Leslie Wish knows all too well how an increase of 1% in rates can knock down the potential number of buyers in the buyer pool.  And lastly, number 5 you!  You have to be active in the business, speaking with people – not just emailing, blogging, texting and attending trainings – you must physically speak with people on the phone, at networking events, open houses, at the pool, at your kids or grandkids sporting events anywhere you can get belly to belly with people.  You need to make it happen by spreading the word about how market is different from what they read in the papers or see on TV.  Get busy getting busy!

Now, quickly some fun stuff.  Zip Realty is no longer offering buyer rebates.  They have closed offices in 12 markets and have shed 700 agents.  They will continue to offer sellers a 1% listing credit in the 23 markets they are staying in but after posting losses of $12.9 million in ’09 and $15.5 million in ’10 they are finding it increasingly difficult to remain profitable – duh!  In addition to these losses, they will experience even more as their transactions are down 12.2% this year versus last…who could be next??  Perhaps it could be Redfin – we shall see!

Take this information and share it with your clients and demonstrate to them you are the expert in the business.  Get it?  Got it?  Good!

Now, go sell something!

 

What have people been asking about the market lately?

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There a few topics being reported by the media recently and we have been asked about as real estate professionals as well.  One is “is there going to be a double dip in housing prices?” another is “has your market hit bottom and how can you tell?”, “where are the foreclosures?” and “what do you see is happening in the market?”

Let’s answer these one at a time.  First, is there going to be a double dip in housing prices?  The answer is yes and no.  It depends upon where you live.  If your area continues to lose jobs, houses continue to languish on the market, foreclosed properties and short sales dominate your housing sale’s landscape, yes your market has a very good chance of seeing a double dip in housing prices because, unfortunately, these are all recipes for housing price declines.  As a nation, we have seen the overall housing prices drop 33% from their highs which is even worse than the depression era when housing prices decreased 31%.  Conversely, if you have job growth, brisk housing sales, and the housing market is not riddled with distressed properties, you will see stable to increasing prices.  It is a simple formula – jobs equal a strong housing market, no jobs equals a lousy housing market and consequently price declines.

The next one is, “has your market hit bottom and how can you tell?”  This one can be answered very much like the first one.  Are jobs coming back or have layoffs stopped?  Are people moving back into your area?  Are sale signs turning to sold signs?  How are the inventory levels on houses for sale?  With this question, be sure to take careful consideration of whether the houses were removed from the market or actually sold.  How are the days on the market?  What is the month supply of houses?  If these areas mentioned are flat or decreasing, you have seen the bottom or are getting close to it.  You are almost there if you are not already.

The last one is more difficult to answer, “Where are the foreclosures?”  We have been told on numerous occasions that banks are sitting on inventory waiting to release them on the market but fail to do so because they don’t want to take the losses on their books all at one time.   We have heard stories of the foreclosure process taking in excess of 400 days in certain states and evictions in others taking up to 900 days.  There are in excess of 6.5 million people 30 days late or more on their mortgages.  We don’t know how many will cure, how many will default or even specifically where they are but it has been reported that a majority of them are in the sand states.  The sand states make up Nevada, Arizona, California, and Florida.

Most everyone you hear from in the media, speak with or read about all concur that we need the housing market to come back so the economy can recover fully.  It seems to be a growing consensus amongst our Realtors that the media needs to help grow consumer confidence in the housing market and get the economy back on track.  In one of my upcoming blogs, we will discuss mortgage reform and its impact on the housing recovery.

It is time to understand the housing market so you can intelligently discuss this with clients, acquaintances, and others you meet.  Get it?  Got it?  Good!

Now, go sell something!              

You’ve got to do more to get more!

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Sales is a tough job, no doubt about it, especially today in real estate.  You hear, read and talk about with others that in the real estate business, it is a numbers game.  If you want more results, you have to do more activities, talk with more people, hold more open houses, make more calls, and basically, just do more to get more business.  While this is true, it is only partially true. 

You need to have quality contacts to truly have an impact on your bottom line.  You need to provide value to those you speak with and earn the business or else your bottom line won’t change.  You must engage others buy asking about them, their families, their business, etc. and take an interest in them before you talk about you – basic relationship building. 

In addition, it is not just enough to say you are in real estate and business is unbelievable, you need to have an “elevator speech” about the services you provide, the information you share, and how you are different than others in the business.  If you don’t, why would your business increase?  Holding more open houses, knocking on doors, calling more FSBO’s or expired listings won’t get it done – you need to build relationships.  You need to add value to those you speak with to earn their trust and in turn, you will get the opportunity to grow your business through referrals. 

You need to know what is impacting our business and how that is impacting both buyers and sellers today.  Yes, today because the real estate market changes virtually daily.  How are property values and why is now a good time to buy and conversely, why it is a good time to sell.  How do the low rates effect payments at loan amounts of $250,000, $300,000 or $500,000 and what is the difference if rates go up 1%?  What are house values in your neighborhood, your town, and county for all categories of houses – condos, townhouses, and single family homes?  How many properties are for sale?  What are the month’s supply of houses and what does this mean?  Is it a buyer’s or seller’s market?   What price ranges are hot, who is buying in those price ranges and why?  How is the rental market locally?  How are their prices?  What is their month’s supply?  If you had the answers to these questions, do you believe you would be perceived as an expert by those you encountered and hence, obtain more business? 

You have to know the real estate business, the numbers and the trends.  Where is the market headed and why?  Give your opinion and be able to back it up with facts.  Watch videos, read blogs, read newsletters, network with others in our industry and absorb what they are saying and develop your conversation strategy based upon what you have learned to earn more business.

As previously mentioned, you need to increase your activities but you also need to improve the quality of your conversations.  You need to become an expert in the business.  If you only increase your activities or only gain knowledge and don’t share it with others, you won’t have the same business building results if you do them in concert with each other.  Get it?  Got it?  Good!

Now, go sell something!

Control your destiny or someone else will!

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You are in control of yourself, your life and all that you do in it.  How do you move past the current situation you are in today?  Get educated – learn all you can about your industry or one you want be a part of and become the expert.   It doesn’t take much.  Read for one hour per day in the field you wish to learn.  One hour per day turns into one book per week.  One book per week becomes 52 in one year.  You tell me if you read 52 books on one subject and can’t become an expert, I will tell you, you are wrong.  Most people don’t read one book in a year.  Learn what you have read and apply it to the real world situations you encounter.

Those who know and do more than others in any walk of life earn more respect, get more recognition and go further in their careers.  And, guess what?  They earn more money.  If you want to change where you are in life, you need to change your attitude and regain control of your thoughts, desires and where you want to be.  As the saying goes, “if it is to be, it is up to me”.   So become positive and optimistic.  There are so many negative people in the world and there is so much negative press on the television, in newspapers, etc. and they all want company.  My advice is to avoid these people.  Look at every opportunity as a learning experience and as an opportunity.  Not a problem.  Become solution oriented and you will get results and become even more optimistic and positive.  If you smile more – this too will help you so start with this simple task!  Hang around positive forward thinking people and learn how they handle situations and remain optimistic.  It is a learned skill – teach it to yourself.

Stop blaming others, the economy, the industry you are in, the government or any other excuse.  You determine where you end up in life.  There are countless numbers of people whom have come from every walk in life with every opportunity presented to them and it is the ones who take advantage of what is presented and makes the most of the experiences that gains the most from them.

Other people get tired of hearing negative responses to everything said or about everything that happens around them.  Take the time to figure it out for yourself.  Do something about your current situation.  Don’t be a victim and become a success story and share your story with others.  Life is a contact sport, become a part of it and direct yourself to where you want to go and reap the rewards.

Again, you control your destiny.  Make the most of your time – do what makes you the most productive, consistently and you will get results.  Get it?  Got it?  Good!

Now, go sell something!

What’s up with Gateway? News from our Quarterly Meeting

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The Lorton office is progressing quite nicely – we should be officially open the week of the 10th along with the help of the county.  Feel free to stop by anytime for a visit as we are getting settled in with the technology, and finishing touches.  Hope to see you there soon!  Since this time, we have received our Occupancy Permit – great job to Brett for seeing this difficult process all the way to fruition – it was extremely frustrating and tenuous.

We have a great opportunity to potentially sublease some of our space in Chantilly.  The landlord has a need for the space coupled with KHov’s desire to give up some space so if you see activity over the next month or so, you will know what is happening.  In addition to relinquishing some space, we will be extending our lease for an additional 10 years.

For those of you unfamiliar with the changes at RE/MAX, RE/MAX has changed their name to RE/MAX, LLC.  What does this mean to you?  It puts our Independent Contract Agreements out of date.  In addition, it refers to RSN which is now RE/MAX University, it references Web Roster which is now on Mainstreet and some other minor changes.  Therefore, we have a 3 page revised agreement that we need you to sign to bring us into compliance with the headquarter company.  Kate will be sending out the agreements for you to sign – please do so at your earliest convenience.  Thanks!

The free trip to Vegas is moving along nicely for some – not so much for others!  Joe Doman is in the point standings lead as he has participated in the most trainings, charity events, etc. so far.  You still have time to catch up as the contest doesn’t end until the end of the year.  For more details on how you can get to Vegas on us, please let me know!

Please remember to sign your paperwork on listings and buyer agreements!!  As is the case every quarter, we need to discuss paperwork.  Please be compliant so we don’t need to have this covered next meeting!

We are putting together bowling teams for RPAC for each of the offices.  Please let us know if you can make it out on the 16th of June to Bowl America at Fairfax Circle. We’d love to see you there!

Gary Plaag of Couragio Consulting helped us all tremendously with our presentations thanks to Kathy Worek giving Gary her listing presentation.  We were all amused and educated at the same time.  For more details on how Gary can help you get better results, call him at 703-858-6162.

Now, go sell something!

 

Who really knows if the price is right?

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Price 

If you follow real estate at all, you know that there are 3 pricing indexes that get quoted fairly regularly – S&P Case Shiller, FHFA, and Corelogic HPI.  Are they good for tracking home prices as a buyer or seller?  My belief is no – a professional Realtor is your best option.  All of these indices are flawed from what they track, to the timeframe in which they use to track data, to what their data sources encompass, to how much weight is given to price points and to what areas are used to gain their pricing policies.  Why is this important to know you may ask?  Well, it is where your clients, sphere, and potential clients hear in the media about housing prices.  You need to be able to speak intelligently about them and convey the true story about housing prices.  By doing so, you will position yourself as a trusted resource in real estate by providing value to those whom you know.  Now, let’s take a closer look at each pricing model so you can give the right advice when you are helping a client buy or sell a house.

Here is what you may not realize about the S&P/Case Shiller Home Price Index:

  • The index was developed for Wall Street to hedge the housing market, not as a monthly consumer metric
  • Based on a 3 month moving window of closed sales which washes out the annual seasons in housing
  • Lags contract signing dates by 5-7 months
    • Translation:  Q1 2011 report = Q3 2010 Contracts
    • Based on prices, not sales activity where sales activity may be trending
    • Comprised on single family sales only.  Excludes: condos, co-ops and new development sales
    • Only represents 20 cities nationwide
    • Washington DC covers a large area of which includes:
      • Calvert, MD
      • Charles, MD;
      • Frederick, MD
      • Clarke, VA
      • But these areas also included:
        • Warren, VA
        • Jefferson, WV

This is NOT what most readers of the Washington, DC data understand the coverage area to be.

The CSI reported with a two-month lag and is based on three months of data.

  • For example, data released in January 2011 was for the three months ended November 2010 (November, October, and September 2010).

 Understanding the FHFA HPI:

  • The House Price Index is based on transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac – only. All mortgage transactions on single-family properties are included – refinances included but no condos, coops or multifamily are considered.
  • Conventional mortgages are those that are neither insured nor guaranteed by the FHA, VA or other federal government entities.
  • The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancing on the same properties.
  • A full release is provided every three months – not exactly timely.
  • The HPI includes indexes for all nine Census Divisions, the 50 states and the District of Columbia.

The best of the rest – CoreLogic.

The CoreLogic HPI provides a multi-tier market evaluation based on price, time between sales, property type, loan type (conforming vs. nonconforming), and distressed sales.  The CoreLogic HPI is a repeat-sales index that tracks increases and decreases in sales prices for the same homes over time, which provides a more accurate “constant-quality” view of pricing trends than basing analysis on all home sales. The CoreLogic HPI provides the most comprehensive set of a monthly home price indices and median sales prices available covering

  • 6,507 ZIP codes -  58 percent of total U.S. population
  • 611 Core Based Statistical Areas -  86 percent of total U.S. population
  • 1,119 counties -  83 percent of total U.S. population and
  • Located in all 50 states and the District of Columbia.

 The CoreLogic HPI is published on approximately a 5 week lag from the end of the data collection period.

How does the FHFA HPI differ from the S&P/Case-Shiller Home Price indexes?

  • The S&P/Case-Shiller indexes only use purchase prices in index calibration, while the all-transactions FHFA HPI also includes refinance appraisals.
  • FHFA’s valuation data are derived from conforming, conventional mortgages provided by Fannie Mae and Freddie Mac. The S&P/Case-Shiller indexes use information obtained from county assessor and recorder offices.
  • The S&P/Case-Shiller indexes are value-weighted, meaning that price trends for more expensive homes have greater influence on estimated price changes than other homes. FHA’s index weights price trends equally for all properties.
  • The geographic coverage of the indexes differs. The S&P/Case-Shiller National Home Price Index, for example, does not have valuation data from 13 states. FHA’s U.S. index is calculated using data from all states.

As you can see, it is nowhere near how we value properties but it is where most of Americans get the idea of housing values.  We have more accurate, up-to-date information that we can provide clients.  Let your clients know why these indexes are made available – CSI, for Wall Street and hedge funds;  FHFA HPI, to track valuations on Freddie and Fannie products to assess risk;  and lastly, CoreLogic’s HPI, for banks to assess risk when lending money.  None of them are used to determine the value of a home when selling or buying – let others know the facts and become a source for valuable real estate information.  Get it?  Got it?  Good!

Now, go sell something!

Watch out for scams!

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Agents, title companies and sellers beware.  There is a scam that is out there that is hurting our industry.  If you receive a contract from, hear or read about buyers from out of the country that are looking to pay cash for a house, that want to settle quickly, want to use your “reputable” settlement company and have never seen the house, run fast as you can from this situation.  They will promise to wire the funds to your title company or the real estate company once the contract is ratified – usually late on Thursday or on a Friday – conduct a home inspection through a friend or relative over the weekend, then void the contract and request their funds be wired to their account by Monday or Tuesday at the latest.  What is the problem you ask?  The wire transfer is counterfeit and everyone gets caught in the middle and the buyer receives money that was never theirs from the title company or real estate office.  In some scenarios, they will say their country won’t allow them to wire the funds but will have their friend or relative drop off a certified check.  These funds too are counterfeit and the funds should not be released to the buyer unless verified they are valid funds.

What can you do to prevent this you ask?  First, make sure they have seen the house – not just pictures on the internet.  You wouldn’t buy a house this way and only a very few select people would – military or investors being ones that come to mind.  Also, do as we do, Google the buyer, the buyer’s agent and the lender on every case.  See what you can find out about them.  See if they are on social media sites like Facebook or Linkedin.  Learn all you can about them.  In addition, check DPOR and see if there are any outstanding violations with the agent at the state level as they too may be in on the scam.  Conduct your due diligence – ask to see “proof of funds” from a reputable source and Google the source if you are not familiar with them.  And lastly, don’t accept the contract until the funds prove to be valid which can typically take 3 to 4 days of deposit into an account.

Here are examples of what other agents are receiving from the web.  They may take on different forms of these emails so be on the alert.  Some agents believe this to be a scam to sign up for Docusign but it is really a scam to get money.

One agent received a lead through Realtor.com

Att. Please i will need an offer on this,

Thank you very much for the email, I would like to purchase this property MLS # 4214263, located at 15380 Little Stone Way Alpharetta.  The indicated price is $613,000.00 Please note my offering price is $600,000.00 Please send me the contract for this property and the following phrase should be added on the contract.

1. I will want to close on 12th June, 2011

2. I want to put down $30,000.00 Earnest money

3. I want to put contingency on inspection on the contract.

I and my wife will be buying the property and the buyers name should be. Leo Thang and Jiao Thang. Our address is 4645 Jane Street, Toronto Ontario Canada M3N 2K9

Please forward me a purchase contract agreement via docusign format, their website is http://www.docusign.com/ or any other electronic document I don't have access to a printer or scanner here therefore I can not sign and send it back in PDF format I am in a remote area now and i will like to do the signing myself on behalf of my wife.

I would also like to use a reliable title company for the closing. Kindly advise regarding this issue.

Thanks for your understanding. I await the purchase contract agreement as soon as possible.

Regards,
Leo Thang
Tel;003463236828

And some just receive leads through email…

Larry Sabo – Realtor in California

Dear Larry Sabo,

Att. Please i will need an offer on this,

Thank you very much for the email, I would like to purchase this property MLS # 116400, located at 3403 Beaver Brae Dr South Lake Tahoe, CA 96150.The indicated price is $659,000.00 Please note my offering price is $640,000.00 Please send me the contract for this property and the following phrase should be added on the contract.

1. I will want to close on 13th June, 2011

2. I want to put down $30,000.00 Earnest money

3. I want to put contingency on inspection on the contract.

I and my wife will be buying the property and the buyers name should be. Leo Thang and Jiao Thang. Our address is 4645 Jane Street, Toronto Ontario Canada M3N 2K9

Please forward me a purchase contract agreement via docusign format, their website is http://www.docusign.com/ or any other electronic document I don't have access to a printer or scanner here therefore I can not sign and send it back in PDF format I am in a remote area now and i will like to do the signing myself on behalf of my wife.

I would also like to use a reliable title company for the closing. Kindly advise regarding this issue.

Thanks for your understanding. I await the purchase contract agreement as soon as possible.
Regards, Leo Thang

As you can see, Leo Thang is just one person attempting this across the country – there are sure to be others.  Become educated on the red flags, stay on alert for anything unusual similar to this situation, and keep yourself and your sellers from becoming victims of a scam.  Get it?  Got it?  Good!

Now, go sell something – legitimately!

 

What’s up with our market?

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There are home buyers out in Northern Virginia but they are savvy, price sensitive and condition critical.  As we have seen in the papers, read online, and heard on the news, the rest of the country is experiencing a double dip in home prices, and waves of foreclosures are going to hit the market spiraling prices even further.  All of this has made buyers in our area become very cautious and has lowered consumer confidence nationwide. 

Why do you ask are they this way?  Well, most of them are from someplace else and they have seen streets riddled with real estate signs, are from areas that have a 41 month supply of houses versus our 3.1 month supply of houses or have friends and relatives who have been unable to sell their house in other parts of the country.  This has an impact on their buying decision here and yes, they hear our area is different and understand the underlying reasons why our market is strong but they are still looking for “a deal”.  They scrutinize each property looking for excuses not to buy them versus finding reasons to buy them.  When there is a home that offers the right price (often below market)  that has been staged (painted in neutral or trendy colors, new carpeting and de-cluttered), in perfect condition (no broken window seals, leaky faucets, etc.) and in a great location (backing to trees, end of cul-de-sac, etc.) they swarm on this property like vultures.  Many times we will encounter multiple offers on these types of properties and see them escalate above list price.

If you are a seller and your home hasn’t sold, what should you do?  Lower the price – it is the least common denominator and makes up for many areas where the home may be lacking such as in condition or location.  Get the home staged, by a professional.  You could also offer a higher commission to the buyer’s agent as an inducement to sell your house.  Many sellers or listing agents are offering a lower commission as many buyer agents have accepted lower commission rates in the past few years  as a result of short sales and foreclosures (banks) only paying a lower fee so paying more can set you apart from the competition.  Be ready to negotiate to get your house sold.

If you are a buyer, what do you do?  You should be ready to be in competition if you are looking for the perfect house at the perfect price and be prepared to include an escalation clause with your contract.  As was mentioned early, these properties are typically seeing multiple offers that go above list price.  Buy a new home – pick your own colors, location, and avoid the competition.  Many builders have adjusted to the market and are priced to sell.  Make an offer on an almost perfect house and see what happens.  Often times, as homes stay on the market and sellers have many visitors with no contracts, they tend to be more reasonable with what the market is telling them in regards to pricing.  The idea for buyers is to just buy.  The housing affordability index hasn’t been this high since 1979!  Interest rates are at their lowest level this year and prices are reasonable plus, we have jobs and stability in our market place.

If you need to sell, this is a great time to do so.  If you are a buyer, you shouldn’t delay – prices and rates are not going to get lower in our area making this an opportunity of a lifetime.  Contact your RE/MAX Gateway professional today and get packing!

Don’t just survive…thrive!

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Here are some strategies to help you not only survive but thrive in today’s market as shared by RISMedia panel members.

Provide a newsletter that has helpful tips whether you do it or you pay for a service, get a monthly, informative newsletter or market update to send to your sphere of influence.  Don’t let someone else be the buzz in your client’s ear.

Explain the numbers, your knowledge of the market and get the business – you have to educate yourself on market trends so you know what to say so you can differentiate yourself from other Realtors.

How do you answer the question, “how is the market?” – What’s your answer?  Think about this, become an access point for relevant up-to-date information to everyone you encounter.  Don’t just respond – it’s unbelievable or I’ve never been busier or it’s great and I’m never too busy for your referrals.  Provide them with information.

For sellers

Ask questions and listen when you are on listing presentations:

  1. What is it you want to do?
  2. Why is this move happening?
  3. How soon do you want to act?
  4. Who is responsible for making decisions?
  5. What has to happen to make this happen?
  6. What is plan B if the house doesn’t sell?
  7. What is the worst case scenario?
  8. What is the best case scenario?
  9. Tell them, we want to get you the highest, most realistic price.

The market is not reacting to your price so we are now getting closer to your plan b – is this ok with you?

Take professional pictures and use full screen photos on the internet.  Buyers go to the internet first so you have to make the best first impression on line.

Position yourself differently in the market place.  When listing the house you will be merchandising, staging, and pricing the property to sell.

For buyers

When working with buyers, use the housing affordability index to motivate buyers to buy.  Housing affordability is at its highest point since 1979.  If you are working with Millennia’s state, there has never been a better time to buy a home since your parents bought their first home.

Only work with committed people

Don’t do it for the money…Educate the buyer or seller and focus on their goals and the money will follow…

Commit to make a difference in someone else’s life.

Excellent tips to build urgency in buyers:

Remember, it is always about the consumer:

  • Convert wants to needs
  • Lifestyle marketing – appeal to the lifestyle of the buyer you are looking to sell to.
  • Ask “right” questions to learn more about them, their needs and to better serve them.  Schedule a buyer interview to set yourself apart.
  • Younger Consumers want Community – build urgency through the ability to be in their community – bike to work, coffee shops, environmentally friendly buildings, free Wi-Fi, etc.

Know why your people buy.  In a recent survey of home buyers and their Realtors – look how they answered these question of why they bought.  85% of Buyers bought for appreciation.  89% of Agents who sold them their houses said appreciation wasn’t a reason why they bought.  Get to know your buyers and their reasons for buying and the referrals will follow.  Don’t and they won’t.

For you to think about

You set the temperature for your future – don’t be a thermometer and respond to the temperature.

If you are not already on Linkedin – here are some reasons why should be:

Seven Reasons for utilizing Linkedin:

  1. Highest household income of any social site
  2. 45% are household decision makers
  3. Can import/export contacts
  4. Professionals involved in this site, not kids, college students, etc.
  5. Social way of contacting professionals
  6. Target “groups”
  7. It can be automated

Continually ask yourself and assess yourself by asking:

On a scale of 1 – 5, 1 being the lowest and 5 being the highest, how would you rate yourself on the…

  • Use of technology
  • Prospecting
  • Sales skills
  • Negotiations
  • Average sales price

Get with a coach or mentor and work on the areas you need the most improvement.

Important things to keep in mind to grow your business

  • Build Your Skills
  • Shift your mindset
  • Agents cause their own market
  • Show up and use what we provide
  • Hold up a mirror and ask – are you doing all you can?
  • Become intentional about leads

Now that you are armed with a few additional pieces of information, take the time to implement one or two at a time to make yourself a better listing agent, buyer agent or business person.  Get it?  Got it?  Good!

Now, go sell something!