Andrew Wetzel's Musings

May 11, 2019

Flipping Real Estate: A Different Form of Investing

“Flipping” is a trendy way to “invest” in Real Estate.  TV shows and infomercials advertising FREE SEMINARS are everywhere!   I suspect that many people are making lot$ of money telling others how to flip houses and wonder how many of these “coaches” have done even one flip.

Flipping expands on the old mantra: buy low; sell high and adds a critical “make it or break it” step.  Unless you are lucky and can buy something below market value and then sell it without doing any work, you have to renovate flips to make money.  Therein lies the unknown.  You paid a specific amount and there is likely a ceiling on your eventual selling price:  you have to fill in the blanks!

The old-fashioned way of investing, buying rentals and becoming a landlord, has lost some of its appeal to many for a variety of reasons although there are still opportunities.  Flipping allows you to get in and then get out, hopefully with a return that justifies the investment and risk.  Some flips will be homeruns while others will be singles.  Serious flippers do volume and can handle the ups and downs.  Many stop after trying one.

Flipping is a multi-stage, interconnected AND interdependent process. You have to check all of the boxes to make it work.  Success requires hiring a competent agent to identify, negotiate and acquire opportunities, access to money, the ability to properly evaluate what a property needs to maximize interest, the ability to complete the work in a cost-effective manner, the ability to RATIONALLY assess an eventual selling price and patience if the rehab and/ or the marketing take longer than expected.  If you use your own funding, this may be easier than paying someone else although using an equity loan as some do has inherent risk.

While many have done quite well, others have failed, some miserably.  If you overpay, under-evaluate what is required, overspend on the rehab, over-estimate a selling price and/ or pay too much for your “seed money”, you will have issues.  The market itself introduces a degree of uncertainty so timing is important although not a science.  A number of incomplete renovations always end up on the active Real Estate market looking for someone to finish the job.

This is truly NOT the time for inexperience, empty promises OR false expectations!

HIRE WISELY: we are not all the same.

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May 4, 2019

Multiple Offers: To Disclose or Not?

Real Estate offers many opportunities to peer into the personalities of people with whom we work.  Sometimes what we find is not what we expected.  As a professional I have laws and a Code of Ethics to guide me as well as my integrity and value system.  My clients have the same except for the Code of Ethics, of course.  One topic that brings this into focus is that of “multiple offers”, meaning that more than one buyer is actively interested in buying the same piece of Real Estate.

Some buyers are so interested in a specific property and so willing to compete for it with others that they will plunge into the deep end of the pool to do whatever they can to win.  They may start with their “highest and best offer”.  Others, despite being interested, are either risk-averse or perhaps distrusting of others when told there is competition.  Some may wish to avoid competition to prevent over-spending or they may need to meet a deadline for finalizing a move (meaning that they cannot go back-and-forth).

One of my favorite analogies is comparing buying and selling Real Estate to “playing poker”:  each party wants to know more about the other than is readily obvious.  Buyers may want to know whether there is competition for a specific property.  Some people, including licensed agents, may think the answer a matter of courtesy or simply being honest.  However, the PAR listing contract is the governing document.  The language in paragraph 13 (“Additional Offers”) states that “Unless prohibited by Seller, if Broker is asked by a buyer or another licensee(s) about the existence of other offers on the Property, Broker will reveal the existence of other offers”.  A separate matter is whether the actual terms are confidential or not.  Absent a signed “confidentiality” agreement, the terms of an offer should not be considered confidential.

Let’s assume that the word “existence” means written, executable offers and not the mere expression of interest from someone.  If the seller permits this disclosure, the listing agent must say “yes” or “no”:  they have to answer truthfully!  If prohibited from answering the question, the agent must respond with words to the effect that they are not authorized to answer the question.  Is providing knowledge about competition in the seller’s best interests?  How important is the “if asked” aspect?

One of the primary reasons that a seller should hire a professional is to rely on our knowledge and insight.  The Internet and your friends and family may or may not provide a great deal of data and information but a professional can put it all together.  I tell my seller-clients that I assume that I AM PROHIBITED from making this disclosure and discuss my thinking with them.  I may ask them to change that later but I have never had a seller disagree.  Which is more likely:  a buyer will make an offer when they know there is competition OR a buyer will walk away when they do not know?

Taken literally, if not prohibited from answering the question, a listing agent would have to disclose the existence of low offers which may not interest their seller-client.  Does that make any sense?

Unfortunately, many buyer-agents do not even ask if there is competition.  I am told that many listing agents are allowed to disclose the existence of other offers and think it a great strategy but should they disclose that without being asked by the buyer’s agent?  Many buyer-agents do not even make the effort to confirm that a property is still available.  Bright MLS allows listing agents 3-business-days to update the listing status so an “Active” property may not really be available.  Can a buyer be harmed by their not knowing that someone else purchased the property?  At the very least, time was wasted preparing an offer.  Even worse, perhaps their showing should have been canceled!

Strategies may differ but it must be noted that the seller is the boss and makes the decision about disclosing.  An experienced agent can advise but is compelled to abide by their client’s wishes.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same.

Bright MLS Quarter 1, 2019 Housing Report

Bright MLS has released their Residential Market Report for single family homes for the first quarter of 2019.  In today’s podcast I will discuss the results for Delaware County Pennsylvania.  If you would like information about this or any other County in the Delaware Valley, please contact me.

The report compares the current results to one-year ago, same quarter.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market so, whether you may be looking to buy or sell, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market.  Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables.  I posted an article on that topic on my web site AndrewWetzel.com that offers several ideas to consider.

My second point is that, unfortunately, all Real Estate statistics involving sold data is stale.  While a sale may be settled or closed today, the real question is when was the offer negotiated?  Typically sales take 45 to 60 days to close so the market today may be different.  Up-to-date information is important!

As far as the statistics, 1099 properties were settled this year with an average “selling price” of $264,674 and a “median” selling price, meaning that half of the sales were higher and half were lower, of $200,000 compared to 1224 settled last year at an average price of $247,389 and a median price of $190,000.  The CDOM or “cumulative days on the market” for settled properties dropped to 81 from 85.  The underlying data shows a wide range of results among the 49 different municipalities in Delaware County.

Which number is more meaningful, median or average?  We can debate that but what really matters is how your property or one that interests you compares to those appraised and settled with similar location, features and condition.  Appraisers rely on nearby settled properties so average or median pricing loses some validity but may provide insight for both the short term and the long term.

What about the properties that did not sell?  Many came off the market and remain unavailable.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their market and/ or they were poorly marketed, meaning that some buyers may not have known that a house was even available to purchase.  Of course this may well depend on the ratio of buyer and sellers so there is more to this than raw statistics.  If a market has a lot of inventory, some buyers may not be willing to even look at houses priced high compared to the rest of the market.  While sellers may be open to negotiating their price, many never get the chance to do so.  I will happy to discuss specifics with you.

It is worth noting that the weather, despite minimal snow, was somewhat harsh early in 2019 which slowed activity although that has changed in many markets.  The overall economy is doing well with some adjustments here and there.  Pushing statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it.  There are opportunities out there.  As with the stock market, it is very difficult to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  I am a phone call or email away and getting started is easy once you take action.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY.  We are not all the same.

April 24, 2019

Why is the Initial Marketing Time so Critical?

Your house just hit the market after weeks of planning and cleaning and dreaming about how it would all turn out!  Would you get full price, any unusual requests or conditions, would you be able to find a new home that made leaving your present home easier to handle?  Everything seemed possible.

Then NOTHING HAPPENED!  The market essentially yawned.  What does this mean?

Even though getting your home on the market created so much anticipation and disruption in your life, let’s look at the other side of the equation.  You dipped your toe into an already churning market with however many prospective buyers already looking and evaluating and making decisions.  Whether you are in a buyer’s market or a seller’s market, there is a good chance that you will not see every prospect looking for a house like yours but you would like to see as many as possible.  Of course there is no way to know how many are looking right now so let’s take a broader look at what is possible.

How many buyers will enter the market tomorrow?  How many have already decided to make an offer on a specific house or are currently negotiating one?  How many have given up, deciding to wait for whatever reason?  You may be able to appeal to any of these, including buyers already “under contract”, as long as they like what you have and they have a way to end their current process.  However, your listing MUST be able to be found in their search results or they will not even know it is For Sale.

Let’s go back to my original point.  I would argue that the current number of prospective buyers is greater than the number who will enter the market in the next few weeks.  So, if none of them makes an offer, what do you do?  Perhaps some will come to see your house and do nothing.  They could change their mind later if they were getting their finances in order and/ or evaluating the overall market before taking action.  Or not.  Perhaps one of more will make overtures that could become promising if your agent knows how to handle that opportunity.  Or not.  The real question is how long do you wait before taking action to increase your odds for succeeding?

You can wait for the market to re-form or you could attempt to hook a buyer already looking but not committed to a house.  How do you do that?  If you are satisfied that your house is being properly marketed, meaning that, other than the price, it will come out in the proper search results, the price has to be a concern.  If you think that your competition has more to offer than your house you could wait until they all get contracts.  Of course, new competition will present itself.  It always does.

Patience is a wonderful thing and I respect sellers who are patient but, at some point, unless a seller decides to remain in their present home, something has to change.  You cannot keep doing the same thing over and over and over again.  A seller has two controllable variables:  the agent they hire and their asking price.  Sometimes changing agents is good as it provides a different perspective.  Changing your price requires a strategy and it may affect your overall plan, especially if you are buying another house.

A price reduction has to accomplish one of two things:  it either has to motivate a buyer who knows about your house but has not made an offer OR it has to re-position your house to a new group of buyers.  Pricing is important and taking a reduction just for the sake of taking one, especially if marketing is THE real problem, only serves to lower your proceeds and perhaps impact your options.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

Why I Enjoy Being a REALTOR®

After working in retail for a number of years I decided to make a change.  Like many, I was fascinated with Real Estate and made plans to get my license.  I did three things to prepare myself for the adjustment.  First, I started reading books about sales and then about Real Estate.  I read 12 books on sales and then 4 about working in Real Estate.  I stopped when the books got redundant and I felt that I knew enough to move forward.  Second, I selected 4 different Real Estate companies to contact and interview.  I found two of them interesting even though I was not yet ready to make a commitment.

The third step was time consuming but critical:  I wanted to try a sales position to make sure it was something I could enjoy before pursuing a career in Real Estate.  While many of us think it too easy to get licensed, it does require investments in time and money so I wanted to be prepared.  After becoming comfortable in sales, I was ready to commit to a Real Estate company.  The rest is history.

I took an extra step and became a REALTOR® which means that I belong to local, state and national REALTOR® Associations and subscribe to a formal Code of Ethics.  I have also taken many courses and earned several designations and certifications to improve my knowledge so that I can better represent my clients.  I consider myself an advisor or consultant rather than a salesperson.  As an Associate Broker I am allowed to call myself that whereas a basic licensee is not.  I work for sellers and for buyers, advising them and helping them reach their goals.  I view our relationship as a partnership although they get to make the decisions.

Like many, I had a mixed perception of “sales people” and did not want to use persuasion to convince people to do things that were not in their own best interests so that I could earn a living.  Sadly, I see people in different sales positions whose only goal seems to be to make money.  This can be especially problematic in Real Estate given the costs involved and the impact on people’s financial situation.

As a seller agent, I have enjoyed helping sellers move on in their life, many times helping sellers who had tried and failed to sell with one or more other agents.  Listing contracts typically “expire” as a result of over-pricing and/ or poor marketing.  People move for a variety of reasons and they need to determine whether the selling price or the length of time before selling is more important to them.  I have helped sellers who wanted larger or smaller homes, wanted a better neighborhood or school district for their children, were tired of dealing with tenants, who were selling estates of family members as well as other reasons.  I can assist a seller with the preparation generally required before we market a home and make it available for showings and offers.  There are many more details along the way than most sellers realize just as there are a variety of reasons for selling Real Estate.  All agents are not the same!

As a buyer agent, I have helped many purchase their first home, their next home or an investment property.  This can be very interesting if they are selling one property to buy another.  I enjoy showing people houses where they can begin a new chapter in their life or continue on their path.  Having children involved can make it more fun.  There are times when their children do not want to move and there are times when seeing children excited about their new adventure makes the process very fulfilling.  When people buy a home they are buying a lifestyle, making it a very important decision.

Helping clients these days is more complicated than it was during my first few years.  The Internet has changed things and it often adds confusion to the process.  It helps sellers by exposing their properties to the public and allows buyers to shop online for houses to consider.  It can be a great tool but it has its limitations, primarily for buyers.  Many buyers start the process by searching online to identify houses to consider buying.  That can be fun but it can lead to their paying less attention to the preparation required to make a formal offer to a seller.  Some buyers start by contacting a number of listing agents and looking at a number of properties.  Many can get overwhelmed.  Choices are great but can cause confusion!  A serious buyer needs to “position” themselves to be able to make a formal offer to a seller.  This is especially true in a competitive market.  Timing can be everything.

A buyer needs to get pre-qualified with a reputable lender to arrive at a price range for them to consider and determine their wants and needs, including locations.  Their plans will likely evolve but there should be a starting point.  If their market is competitive, any delay in preparing to make an offer could pose a problem.  Some buyers will find themselves unable to obtain the financing they need to make a purchase; others may need to do some work to get financing.  If they find out either after falling in love with a house that can be devastating not to mention being a waste of their time.

Even if there is only a slight delay in getting financing, that may allow a competing buyer to close an offer before they are even in a position to make an offer that a seller will respond to.  My best advice is to get pre-qualified and hire an exclusive agent before spending too much time “shopping”.  I also tell my clients that it may be best to ignore most of what you read online as most information is very general in nature and may have little relevance to any individual house search.

As with retail, I enjoy interacting with people and helping them navigate an endless variety of circumstances.  Unlike retail, selling Real Estate requires a longer interaction.  We establish deeper relationships with our clients than with a retail customer.  That being said, too many confuse the two types of purchases:  buying Real Estate is NOT a retail transaction.  Even if financing is not needed, a Real Estate purchase may take a few weeks and will generally include a number of “contingencies” that must be met to keep the process moving forward.  There are typically several points where either party may change their mind.

I believe that, despite the influence of the Internet or perhaps because of it, our role is more important than ever.  A professional, ethical and knowledgeable Real Estate agent was always expected to educate their consumer.  Today, I find that I often have to uneducate them as far as showing them that what they think they know may not be accurate and could be holding them back.  So much of the information the public relies on is incomplete or wrong.  While they may have access to date and information, I can provide knowledge and insight.  This does not always sit well with our clients.

I have seen a lot over the years.  In addition to working with buyers and sellers, I also teach other REALTORS®, I mediate disputes between agents or between buyers and sellers and I sit on hearing panels making decisions about possible violations of our REALTOR® Code of Ethics.  You cannot make up the things I have seen.

I have been protecting and promoting the best interests of my clients since 1996 and always tell people that, when you are planning to sell or buy Real Estate, there is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY!  We are not all the same!

Bright MLS Quarter 1, 2019 Housing Report for Delaware County PA

Bright MLS has released their Residential Market Report for single family homes for the first quarter of 2019.  In today’s podcast I will discuss the results for Delaware County Pennsylvania.  If you would like information about this or any other County in the Delaware Valley, please contact me.

The report compares the current results to one-year ago, same quarter.  As with all Real Estate statistics, two things are true.  First, the performance within individual zip-codes can and will vary significantly from the overall County.  Real Estate is local and results can vary from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate market so, whether you may be looking to buy or sell, please contact me for details about your areas of interest.  I can provide current information and keep you informed about the evolving market.  Deciding whether it is the right time to sell or buy is a personal decision typically involving a number of variables.  I posted an article on that topic on my web site AndrewWetzel.com that offers several ideas to consider.

My second point is that, unfortunately, all Real Estate statistics involving sold data is stale.  While a sale may be settled or closed today, the real question is when was the offer negotiated?  Typically sales take 45 to 60 days to close so the market today may be different.  Up-to-date information is important!

As far as the statistics, 1099 properties were settled this year with an average “selling price” of $264,674 and a “median” selling price, meaning that half of the sales were higher and half were lower, of $200,000 compared to 1224 settled last year at an average price of $247,389 and a median price of $190,000.  The CDOM or “cumulative days on the market” for settled properties dropped to 81 from 85.  The underlying data shows a wide range of results among the 49 different municipalities in Delaware County.

Which number is more meaningful, median or average?  We can debate that but what really matters is how your property or one that interests you compares to those appraised and settled with similar location, features and condition.  Appraisers rely on nearby settled properties so average or median pricing loses some validity but may provide insight for both the short term and the long term.

What about the properties that did not sell?  Many came off the market and remain unavailable.  Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their market and/ or they were poorly marketed, meaning that some buyers may not have known that a house was even available to purchase.  Of course this may well depend on the ratio of buyer and sellers so there is more to this than raw statistics.  If a market has a lot of inventory, some buyers may not be willing to even look at houses priced high compared to the rest of the market.  While sellers may be open to negotiating their price, many never get the chance to do so.  I will happy to discuss specifics with you.

It is worth noting that the weather, despite minimal snow, was somewhat harsh early in 2019 which slowed activity although that has changed in many markets.  The overall economy is doing well with some adjustments here and there.  Pushing statistics aside, what are you planning to do?  Real Estate is generally a long-term investment unless you are looking to fix and flip it.  There are opportunities out there.  As with the stock market, it is very difficult to pick the best time to make a move.  All you can do is get the best available information, determine what is in your best interests and then start the process.  I am a phone call or email away and getting started is easy once you take action.

There is no time for inexperience, empty promises or false expectations!

Remember:  HIRE WISELY.  We are not all the same.

Multiple Offers: To Disclose or Not?

Real Estate offers many opportunities to peer into the personalities of people with whom we work.  Sometimes what we find is not what we expected.  As a professional I have laws and a Code of Ethics to guide me as well as my integrity and value system.  My clients have the same except for the Code of Ethics, of course.  One topic that brings this into focus is that of “multiple offers”, meaning that more than one buyer is actively interested in buying the same piece of Real Estate.

Some buyers are so interested in a specific property and so willing to compete for it with others that they will plunge into the deep end of the pool to do whatever they can to win.  They may start with their “highest and best offer”.  Others, despite being interested, are either risk-averse or perhaps distrusting of others when told there is competition.  Some may wish to avoid competition to prevent over-spending or they may need to meet a deadline for finalizing a move.

One of my favorite analogies is comparing buying and selling Real Estate to “playing poker”:  each party wants to know more about the other.  Buyers may want to know whether there is competition for a specific property.  Some people, including licensed agents, may think the answer a matter of courtesy or simply being honest.  However, the PAR listing contract is the governing document.  The language in paragraph 13 (“Additional Offers”) states that “Unless prohibited by Seller, if Broker is asked by a buyer or another licensee(s) about the existence of other offers on the Property, Broker will reveal the existence of other offers”.  A separate matter is whether the actual terms are confidential or not.

Let’s assume that the word “existence” means written, executable offers and not the mere expression of interest from someone.  If the seller permits this disclosure, the listing agent must say “yes” or “no”:  they have to answer truthfully!  If prohibited from answering the question, the agent must respond with words to the effect that they are not authorized to answer the question.  Is providing knowledge about competition in the seller’s best interests?  How important is the “if asked” aspect?

One of the primary reasons that a seller should hire a professional is to rely on our knowledge and insight.  The Internet and your friends and family may or may not provide a great deal of data and knowledge but a professional can put it all together.  I tell my seller-clients that I assume that I AM PROHIBITED from making this disclosure and discuss my thinking with them.  I may ask them to change that later but I have never had a seller disagree.  Which is more likely:  a buyer will make an offer when they know there is competition OR a buyer will walk away when they do not know?

Taken literally, if not prohibited from answering the question, a listing agent would have to disclose the existence of low offers which may not interest their seller-client.  Does that make any sense?

Unfortunately, many buyer-agents do not even ask if there is competition.  I am told that many listing agents are allowed to disclose the existence of other offers and think it a great strategy but should they disclose that without being asked by the buyer’s agent?  Many buyer-agents do not even make the effort to confirm that a property is still available.  Bright MLS allows listing agents 3-business-days to update the listing status so an “Active” property may not really be available.  Can a buyer be harmed by their not knowing that someone else purchased the property?  At the very least, time was wasted preparing an offer.  Even worse, perhaps their showing should have been canceled!

Strategies may differ but it must be noted that the seller is the boss and makes the decision about disclosing.  An experienced agent can advise but is compelled to abide by their client’s wishes.

There is no time for inexperience, empty promises or false expectation!

Remember: HIRE WISELY!  We are not all the same.

March 25, 2019

Data Integrity: How Accurate is/ was your Property Listing?

Filed under: Buying,Ethics,Hiring an agent,Marketing,Price,Selling,Technology — awetzel @ 5:42 PM

What is “data integrity”?  It means that the data we collect, store and report is accurate.  What do I mean by data?  It could be the status of a property listing (is it available to see and buy? Has it been put under contract?  Has it settled?), the price, the type of property and its features.  I want to relate the importance of accurate data to three different groups of people, all part of a sale.

Let’s start with buyers.  A seller needs a “ready, willing and able” buyer to complete a sale.  Whether a buyer hires an agent to search the MLS or they search online, the expectation is that properties matching what the buyer is looking for will appear in their search results so they can evaluate whether to take the next step or they will not know a house is even available to consider.  If they cannot find it in their search results, they will not see it and they will not buy it.  Even worse, a listing agent may not know there is a fixable error and ask the seller for what may be an unnecessary price reduction which reduces their proceeds and still not make it any easier to find the property in search results.  I have many examples and will share two.

  • Early in my career a buyer identified two possible elementary schools for her daughters to attend. She drove the neighborhood and found a “For Sale” sign on a house, called me for information about the house and asked me to search the area for homes like the one she was fortunate to find.  I found several other houses for the family to consider but the one she saw was not in my search results.  The listing agent had entered the wrong zip code.  Imagine if she had not seen the yard sign and the house had remained on the market unsold.  She would have missed seeing the house they bought and the sellers may have been asked to lower their price.  By the way, the family is in the same house many years later;
  • A frustrated seller called me. His property had been on the market recently and his listing contract expired without a sale.  He called me to see what I could suggest.  I looked up the property, discussed it with him and quickly found a major error:  the MLS showed the house as having a single bathroom.  He said it had two full baths.  People searching for two full baths did not know his house was available even after he reduced his asking price.  This is sad and avoidable.

In addition to limiting the number of available houses for buyers to consider, which could lead to a buyer not seeing their best options, errors will affect a market analysis.  Buyers usually want to know what comparable houses have been selling for before they make an offer.  Houses that are not accurately listed as well as those whose statuses are not correct could impact a buyer’s perception of what to offer, perhaps causing them to lose a sale.

Similarly, a seller looking to price their house according to its location, features and condition may be relying on incorrect or incomplete information.  Their house could sit on the market unsold or they could accept less than they should have.  Over the years I have seen a number of houses not properly reported as being sold.  Instead, the listing contract expired or the agent withdrew it from the market making it look like the property did not sell which is often interpreted as meaning that the price was too high.

The last person this misinformation can impact is the appraiser.  They evaluate selling prices based on reported comparable sales.  They can only rely on what is reported even if it is inaccurate (how would they know?).  In addition to the status, appraisers rely on pictures, features and the public remarks to try to identify the prior sales most like the house they are appraising.  What is the cost of inaccurate information?  If it falsely appears that a buyer paid too much, the process may stop unless the seller lowers their asking price OR the buyer comes up with more money OR they somehow work it out.  Mortgages are based on a percentage of the appraised value so errors matter.

To conclude, data integrity is a BIG deal.  Many of my seller clients were unsuccessful with one or more agents before we met.  Many of their property listings contained at least one error and there were often errors serious enough to prevent a sale.  In many cases I was able to improve their chances simply by adjusting the marketing to enable potential buyers and their agents to actually find their property in their search results.  It is like a “Google search”:  how many inaccurate entries do you see before getting the result you were looking for?  You may give up or never find the best answer for your search.

Today many buyers start their searches on the Internet before contacting an agent which only magnifies the potential damage as they may not be as proficient identifying listings as a professional is.  People rely on our training and our experience which is why a higher percentage of consumers use our services than ever before.  I do not mean this to sound like a commercial but this is what we do.

Of course there are times when price may still be an issue especially if the length of time on the market needlessly scares buyers into thinking there is something wrong with a house.  Either way, a seller should not have to suffer a financial loss because their agent failed to do their job.  In  addition, many of my clients say that they never saw their MLS sheet with a prior agent or searched online to see how their property information looked, if it was even there.  Some said that their agent never gave them a copy of their printout and that may be true as I suspect that many know they have not generated a good listing printout.  Many listing printouts, in addition to being incomplete as far as features, lack pictures or offer only a few bad ones, some taken with cell phones, and have no public remarks section or have a poorly written remarks section that is boring, incomplete or loaded with bad spelling and poor grammar making them hard to read.

The MLS syndicates the information on your listing printout to the major search engines we all know as well as thousands of others.  If the MLS is not done well this only magnifies the problem:  “garbage in; garbage out”.  Your printout is literally like a resume.  So, unless your house is on a well-traveled street exposing your “For Sale” sign to lots of traffic, the MLS and Internet may be the only ways anyone will know you want to sell.  Does that make you feel comfortable?  What is the cost of delaying your plans or being asked to accept less money than you should?  What does your printout look like?

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

Another Spring is Here: What are your plans?

Filed under: Buying,Hiring an agent,Marketing,Selling — awetzel @ 5:31 PM

We moved our clocks forward and Spring is here.  Are you planning to make a move this year?  Every year around October I see the same thing again and again and 2018 was no exception.  Many sellers took their homes off the market, apparently adjusting their plans:  some delaying them, others perhaps giving up entirely.  That is obviously their choice but I always wonder why so many owners decide to remain in a house they were willing to leave.  Many of those properties are still off the market.  What is the cost of not selling or delaying your plans?  Let me offer a few thoughts.

Perhaps some think they cannot achieve their financial goal so they give up even if only temporarily.  Price is NOT always the issue when a house sits on the market unsold.  I have seen and helped many frustrated owners by simply adjusting the marketing.  I use the term “Google search” to demonstrate this point:  buyers and their agents must be able to find YOUR house in their search results.  Unfortunately many MLS listings are inaccurate or, frankly, so pathetic that people cannot identify all of the houses that really match their needs.  Even worse, the listing agent may not realize what is really going on and ask for a price reduction when one is not needed.  How much does that cost?  How does that impact your plans?

Buyers are out looking every day of the year, even if only online.  While there is no guarantee that your house will sell if it is on the market, it will not sell if it is not.  If buyers and agents cannot find a house in their search results, they will not know it is available so they will be unable to schedule a showing and it will sit unsold.  Sellers who keep their houses on the market when others do not will increase their odds even though fewer buyers may be looking at any particular time of year.

I fully understand that selling Real Estate can be inconvenient even if a property is vacant.  Agents you do not know bring buyers they may not know (and who may not be qualified to buy) into your house and look at your stuff.  They come when they want, perhaps late, and impose on your lifestyle.  Showings are a must but we can do a better job managing them.  It gets worse if you have a lot of activity with no offers or low offers but showings are a vital part of the process regardless of what is in the MLS and online.

The two busiest selling times are Spring and Fall.  Now is the time to plan for Spring.  Of course the reasons people buy their first or next home are varied but these are the best times so frustrated sellers often take their homes off the market until the next “best” time comes which is also when they will have the most competition.

When October arrives many of us think about the upcoming holidays and we want to enjoy time with our families.  Many sellers do not want showings during those months which is a shame because houses tend to look their best inside during those months.

Whether you are thinking about selling for the first time or if you have taken take time off, I encourage not to wait too long to resume the process.  The earlier you start the better.  My suggestion, if you have not already committed to an agent, is to call me so we can discuss the market, your house and your plans.  I will give you honest advice with no obligation.  If you plan to buy another home I can also provide information about areas and houses that may interest you.  All I suggest, respectfully, is that you make a decision that works for you.

I can help you now or in the future, whichever works for you!

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

How Sellers Sell Real Estate: Who is the Typical Seller?

Today I want to discuss the 2018 NAR or National Association of REALTORS Profile of Buyers and Sellers.  The report comes from a survey using 129 questions mailed to over 155,000 home buyers who purchased a primary residence between July 2017 and June 2018.  7191 were returned.  The focus of this podcast will be buyers who sold one home to buy another.  This was a national survey so your market may be quite different.  Real Estate is local:  there is no national Real Estate market so please contact me for information about your local market.

  • NAR has been collecting seller data since 1985 when the typical owner remained in their home for a median time of 5 years. In 2018 that number was 9 years which suggests that buyers may want to think long-term about their investment.  What appears to be a solid investment today may look different later.  Unfortunately, I still see sellers who paid more for their house than it is worth today and that can delay being able to sell it;
  • Sellers between the ages of 18-34 typically sold within 4 years while those over 75 sold after 17 years;
  • The median selling price was 99% of the final asking price. If you are an owner whose house is not attracting serious interest, meaning offers, this is important to know.  Many buyers think they are better at negotiating than they really are and are hesitant to start with their “best offer”.  In a very competitive situation they may not get a second chance.  On the other hand, a buyer may prefer to make an offer on a house closer to its market value to avoid having an appraisal issue or risk losing their second choice to another buyer when their offer on a house expires.  Whether a listing agent should disclose the existence of other offers is debatable but this should only be done when a seller allows it.  In some markets and with some buyers, competition may be welcome.  In others, not so much.  Sellers may also think themselves better at negotiation than they really are so they need good advice from a trusted and respected representative.  Ego can be a terrible thing to overcome.  Last point, showings are nice but they do not guarantee a sale;
  • 13% of houses purchased sold for more than asking price with 26% achieving the asking price and 24% selling for 95% or less than asking price;
  • The typical seller was 55 years old;
  • 68% were repeat sellers while 32% were selling for the first time;
  • 70% who purchased another home stayed in the same state; 16% moved to another region; 14% stayed in the same region but a different state;
  • 44% bought larger homes; 29% bought a similar size; 27% down-sized. The age of the seller strongly correlates with these statistics;
  • 50% bought a newer home than they sold; 28% bought one the same age; 22% bought an older home;
  • 47% spent more than their selling price; 27% spent less;
  • The most common reason for selling was that the house was too small (15%), followed by moving closer to friends and family (14%) and job relocation (13%);
  • 29% of first-time sellers cited size as being too small whereas repeat sellers cited moving closer to friends and family (17%). Selling is an expensive proposition so having to move in the short term because you outgrew a house or simply needed more space can be costly;
  • 91% of all sellers used a Real Estate agent with only 7% being a FSBO. 91% is the highest result recorded despite the presence of the Internet.  The % of FSBOs has steadily declined since 2000 even though the Internet was thought to have helped with exposure;
  • The median selling time for all sellers was 3 weeks. There is a correlation between the % of the final asking price achieved and the length of time it takes to sell.  While it can be a distracting obsession, many buyers look at the “days on the market” as an indicator of a home’s desirability and may avoid homes that are simply over-priced although they have no issues.  Houses that sold within 2 weeks or less achieved 100% of the final asking price whereas houses on the market for 17 weeks or more achieved only 94%.  Keep in mind that many houses are reduced in price to attract attention so looking at the final asking price as compared to the selling price is only one part of the story.  Sellers determine the asking price but buyers determine the value.  If nothing else, easy access to the Internet has allowed buyers to competitively shop meaning they at least know what is on the market although relying on valuation algorithms is risky.  Houses tend to get the most activity within a week or two of hitting the market.  Once the current supply of buyers knows a house is for sale and no one buys it, something has to energize and existing buyer or other buyers have to start their search;
  • 44% of sellers used buyer incentives to attract interest. The top two were home warranties and closing cost assistance.  These are not guaranteed to get the job done and should be discussed at the outset;
  • 64% of sellers were “very satisfied” with the process; 25% were “somewhat satisfied” and 12% were dissatisfied;
  • The overall median selling price was $259,900. Remember that this is a national number.  The median selling price for FSBOs was $200,000; for agent-assisted sales it was $264,900 and for FSBOs who eventually used an agent the median selling price was $227,900.  This clearly shows the advantage of hiring and paying a professional.

The bottom line is that this can be a very confusing process.  This NOT a retail transaction!  It is typically costly enough without making expensive mistakes.  Unless you do this regularly, I respectfully suggest that you trust a trained, experienced professional.  Whether you want to trust your most valuable asset to someone with little experience or someone who has a long track record is up to you but any professional is likely to know more than an average seller looking to save a few dollars.  I understand that signing a formal contract with someone, even if recommended to you, is quite a leap of faith.  Most of us can offer options to increase your comfort level.  After all, we want to make sure that you “fit” with us as well.

Selling Real Estate is unique compared to most typical purchases:  not only is it much less frequent than other purchases, it typically involves multiple steps, each offering its own challenges.  If you would like to discuss selling or buying or if you have any thoughts about this, please contact me.

There is no time for inexperience, empty promises or false expectations! 

Remember:  HIRE WISELY!  We are not all the same!

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