Tuesday, October 8, 2019

Selecting an agent



When a whole lobster was presented at the table of a restaurant, the customer noticed there was only one claw on it.  He asked what happened to the lobster and the waiter said, maybe he lost a fight with another lobster.  The customer replied to the explanation by saying "then, bring me the winner."

There are approximately 1.3 million REALTORS® in the U.S.  The July 2019 Existing Home Sales annualized about 5.4 million units with a listing side and a selling side that totals 10.8 million transactions.  That means that the average number of units sold per agent is 8.

In any given market, 20% of the agents are selling 80% of the homes.  260,000 agents are selling 8,480,000 or an average of 32 transactions sides.  Some markets are dominated by 10% of these successful agents selling 90% of the market.  If that were the case, 130,000 agents are selling 9,720,000 or an average of 75 transactions sides.

The question you should ask yourself is who do you want representing you in the purchase or sale of the largest asset that most people have?  Do you want an average agent, or do you want a powerhouse agent who can provide you the best advice, avoid issues that can cost time, and maximize the results that you expect and deserve?

Finding the right property is listed as the most difficult experienced by buyers (56%), according to the Home Buyers and Sellers Profile, together with the paperwork (20%) and understanding the process and steps (16%) makes these the most important areas of expertise needed when evaluating your agent.

An agent provides valuable services for buyers and sellers during the transaction that can make a difference in finding the "right" home or buyer, negotiating the best terms, and closing on time.  The answers to the following questions can help you decide who to work with in your next purchase or sale.

  • Describe your experience in real estate?
  • What are your personal sales stats compared to the market? (For sellers, list price to sales price ratio, days on market; for buyers, average # of houses shown and closure rate)
  • Describe your strategy to accomplish my needs?
  • Do you have references and/or reviews?
  • What makes you different than your competition?
  • Can you help me find the other professionals and vendors?
  • What is your fee and who pays it?

For more information, download the Sellers Guide and Buyers Guide.

Tuesday, October 1, 2019

Price It Right the First Time



The Internet has empowered all buyers with information and home buyers are no exception.    The amount of information available to public includes details on size, condition, sales history, current inventory, recent sales, photographs, videos, school info, drive-times, entertainment and much more.

When a seller realizes that buyers are educated with facts, it becomes unlikely that they will pay more than a home is worth. 

If a home is priced too high in the beginning, it may stay on the market longer than normal which could adversely affect the ultimate sales price.  It is a natural reaction from people, personally or professionally, to assume that something must be wrong with a home that doesn't sell in a reasonable time for that market.

The seller is entitled to maximize the equity in their home and pricing it properly in the beginning is the best way to achieve that.  Overpricing can reduce buyers activity because they assume that the best homes are purchased soon after they are offered for sale and if one has been on the market longer than normal, there must be a problem with it.  Similarly, sales associates may come to the same conclusion.

After buyers have seen a few homes in a certain price range, they begin to expect similar amenities in each home they look at.  If a home is overpriced, it will not compare favorably with the other homes that are being viewed.  Sometimes, the buyer may even think that another home could be a bargain because it offers much more for the same price as the overpriced listing.

Shopping the market means looking at the homes that meet a buyers' wants and needs and selecting the one that gives them the most, whether it is in price or amenities.  The overpriced listing doesn't compete well, and it extends the market time.  There is a documented study that shows that the longer a home stays on the market, the lower the price will be.

It is essential that a seller receive factual information to price their home to compete favorably in the current market.  Some of the obstacles can include:

  • Failure to objectively compare the current and sold homes with theirs
  • Neighbors who mislead the seller as to how much they got for their home
  • Fear of making a mistake and thinking they can start high and always lower the price
  • Loss of perspective because the seller is emotionally involved
  • Expecting the home to sell for more than fair market value because they need the money
  • Agents who will accept a listing at any price in order to tie up the property until the seller realizes the price is too high

What a seller paid for the home or the cost to rebuild it today do not affect market value.  Neither does the amount spent by sellers on certain improvements that were made for their own pleasure and enjoyment.

It is unrealistic to expect a buyer to pay more than market value for a home.  The seller sets the price of a home but the buyer determines the value.  If the home is priced properly in the beginning, it is more likely to sell for a higher price, in a shorter period and with less problems.