Buyer’s Remorse Often Follows a Seller’s Market Frenzy!

I have read several reports about recent buyers developing “remorse” after moving into their new or “next” home. This is obviously sad but, as with past “seller’s markets”, it was predictable. Seller’s markets and buyer’s markets BOTH have their “downside”. The recent (and perhaps lingering) “seller’s market” is no exception.

Some sellers may regret having sold too quickly while others over-played their hand, expecting a better offer to come along. There is no guarantee of that happening! When the market cools, many owners are left owning a house they wish they had sold. When an owner wants to sell and buy, regardless of whether they need to sell to buy or are able to own/ “carry” two houses, the process gets a little more complicated. How do the two markets compare as far as price appreciation and “timing”? That is a topic for another day. My focus here is on the buying side.

Some buyers have regrets as well. When the number of buyers exceeds the number of houses available for purchase, emotions can lead to some “creative” ways to compete. Then, when cooler heads prevail, buyers may wonder what they did!

Let me look at that from two perspectives. If anyone would like to talk privately about their situation and how I can help them, please contact me at your convenience.

First, let me address this from a REALTOR’s perspective. We are advisors; the client/ buyer is the decision-maker. We “protect and promote” our client’s interest above all else. However, what can we do when our client does not follow our advice and wants to buy a property that we think may not be the best for what they have told us are their “needs and wants”? Some buyers want to hear our thoughts; others do not!

We have to be careful to avoid “steering” a client towards or away from something they think they want to buy. We must do as they ask and hope they don’t blame us as some may do when they find that their choice was not the best. That being said, a bad choice is not likely fatal, meaning it can be addressed.

Second, from the “new owner’s” perspective, what do you do if you find yourself in a predicament? Can you resell the property? That depends on market values and when you bought it: has the market continued to rise or has it bottomed out? Can you afford a financial loss? If there are repair issues, was there a property disclosure issue? Unfortunately, if you find that a house does not meet your needs or if something “better” comes along, that is the chance every buyer takes.

Going forward, the best I can do for any buyer-client is provide the game plan that has worked for me for 26 years and hope that my clients do the planning and preparation that their biggest asset and largest investment demands. This is NOT a “retail transaction”. For better or worse, there are typically a number of “steps” that provide the opportunity to revisit and reconsider the decision to buy.

Buying Real Estate is, at its core, an emotional decision justified with logic. People will do as they will do. I have found myself assisting a number of sellers who told me that they never should have bought their house. I have helped buyers struggling with which house to buy, some of whom wanted to “jump in” before they were really prepared to move forward.

Overpaying for a house often works itself out over time. Buying without seeing a house first may be able to be undone before settlement. Buying without inspecting? That may be hard to overcome! Hopefully a buyer has not combined any two or even all three of these “risks”. Easier said than done: a “frenzy” can cause some to make bad decisions.

Hiring a professional with experience, training and education should provide the knowledge and insight required for such a big decision. We have done this before.

As I always say,

There is no time for inexperience, empty promises OR false expectations.

HIRE WISELY: We are NOT “all the same”!

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Bright MLS December 2022 Delaware County PA Residential Housing Report

Showing Time, using Bright MLS statistics, has released their Local Market Insight report for single-family homes in Delaware County Pennsylvania through December 2022. If you would like more information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my website, http://www.AndrewWetzel.com. I am only a phone call, an email or a text away! I respond promptly to all inquiries.

The overall Real Estate market continues to be affected by wildly fluctuating economic news and, to some extent, lingering impacts of the pandemic. The economic news, specifically inflation and threats of a recession, has substantially elevated the mortgage rate and made some buyers apprehensive, wondering if this is the “right time” to buy. Inventory levels have increased but many sellers seem to think there is still a “sellers’ market” throughout the County. Some areas are still experiencing competition while others are not. Many buyers refuse to pay full price if they still wish and are able to buy.

The economy is an “uncontrollable variable” and consumers will evaluate it and the interest rate however they wish. The popular phrase these days is “date the rate and marry the house”. This means that you may be able to refinance the interest rate later if it declines but the focus should be on getting the best house for your needs and wants. Of course, there is no guarantee that the interest rate will decline in the near future and it may rise even higher. Overpaying and/ or buying the wrong house can be very costly. What is a buyer to do?

As far as pricing, supply and demand typically suggest that prices should decline when inventory rises or activity decreases. This is not guaranteed in Real Estate unless a seller really wants or needs to move. Some houses are still getting well above the “asking price”.

Generally speaking, price reductions are now a more frequent occurrence with some properties taking multiple reductions to generate interest. The downside of that may be two-fold. First, I see many of what I call useless/ senseless price reductions. By that I mean that they do not re-position the house to attract the interest of a different group of buyers. What then is the point? Second, if a specific house is not exactly what a buyer or group of buyers is looking for, they may sit and watch how low a price may go before doing anything. Pricing requires a strategy or purpose.

The good news is that I am hearing less talk of a “bubble” although pricing does suggest a market  “correction” as we shift away from a “sellers’ market”. Whether it swings to a “buyers’ market” or reaches equilibrium remains to be seen? As they say, your results may vary so all you can do is plan, prepare and act based on YOUR needs and wants. While sellers adjust to the “current normal”, whatever that is, buyers have to decide whether to wait and hope for further price reductions and/ or lower interest rates.

As is typically the case, you cannot “time the market”:  selling and buying are personal decisions, typically emotional ones justified with logic. As always, your experience may differ depending on your location and how you have been personally impacted.

As always, this report compares current year-to-date results to one-year ago, same time period. Given that this is a December report, we get to compare 2022 with 2021. 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 any more than there is a national weather forecast so, whether you may be thinking about selling or buying, 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, some of which you have no control over. I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale. This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date MLS “settled” information. Even then, while a sale may be reported as having settled or closed today, the real question is when was the offer negotiated? Typically, financed sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated. Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 7747 new “For Sale” listings through December 2022 compared to 9242 through December 2021, a decrease of 16.2%. There were 6983 “closed” sales through December 2022 compared to 8193 through December 2021, a decrease of 14.8%. These are obviously huge changes. The median selling price through December 2022 was $300,000 compared to $272,000 through December 2021, an increase of 10.3%. The decline in the number/ inventory of newly listed properties impacted the number sold while substantially increasing their selling prices. Again, this was County wide and may not reflect your experience.

The number of currently available properties (532) is above one year ago (467). The Days on the Market (DOM) (24 now vs 20 for YTD 2022) and “Sold to List Price” ratio (97.9% now vs 100.8% YTD 2022) show the evolving market. The MSI (Months of Supply) is 1.3 months, up 54% from one year ago. The increased inventory combined with pent-up demand has created our current market although the impact of higher interest rates, even if historically low, remains to be seen. Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County. What happens going forward?

Generally speaking, low inventory levels in some areas produced multiple offers and a frenzy among buyers, some of whom are already regretting hasty buying decisions. How many bought “sight unseen”? How many overpaid? The current, slower-paced market allows for more “contemplation”. Many now own homes whose current “market value” is less than what they paid. As uncomfortable as that may make some feel, especially if they have found that a house does not really meet their “needs and wants” or that there were unknown issues that have surfaced, at least we do not appear to have the shaky financials that led to the “bubble”.

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 or planning to move within a short period of time. There are always 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. Getting started is easy once you take action. Now is the perfect time to plan for 2023.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation. Please do not wait for what you think is a better or the best time to start. Buyers look all year long and can only see and buy properties that are available to see. Based on what you need and want or what you know, is waiting something you would consider?

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

HIRE WISELY:  We are not “all the same”!

2022 Profile of Home Buyers and Sellers: Highlights

The National Association of REALTORS (NAR) has published its annual report. The report is based on surveys of recent home buyers including those who sold one property to buy another. The survey consisted of 129 questions mailed to 153,045 recent home buyers. These reports began in 1981 with just 59 questions and are intended to provide insight into consumer behavior, specifically their needs and expectations.

The reports are as unique as the economic, social and demographic environment. The time period covered ran from July 2021 through June 2022 and was impacted by a number of major events including a Real Estate market in transition.

The highlights are broken down into several characteristics.

Home Buyers:

• 26% were first-time buyers, the lowest share ever recorded in these reports, down from 34%
• The typical first-time buyer was 36 years old, up from 33, and the typical repeat buyer was 59, both all-time highs for these reports
• The share of unmarried couples buying was higher than reported previously
• 22% of all buyers said that their primary reason for buying was to own their own home; the number rose to 62% for first-time buyers
• 86% of recent buyers used a Real Estate professional; 10% bought directly from the owner
• 49% used an agent to help them find the right home.

As you will see as I continue, several factors have been adversely affecting buyers, especially first-time buyers.

Homes Purchased:

• 12% bought new homes with 41% of them looking to avoid renovations and mechanical problems
• 88% bought previously-owned homes with 31% of them looking for a better price
• 79% bought detached, single-family homes
• The median distance between the recent purchase and their prior home was 50 miles, up from 15 miles as reported between 2018 and 2021
• 49% cited the quality of the neighborhood as the most important factor in selecting a location; affordability and proximity to family and friends were both cited at 37%
• The typical purchase was at the full asking price while 28% spent more than the asking price
• Typical buyers expected to live in their home for 15 years; 28% said they would never move

The Home Search Process:

• 47% started by searching online; 18% started by contacting a Real Estate agent
• 96% of buyers used online tools in their search
• Typical buyers searched for 10 weeks, up from 8 weeks, and looked at a median of five homes plus another four they only viewed online
• 86% found their agent to be a very or somewhat useful source of information
• 91% were at least somewhat satisfied with their home-buying process

As I have seen in other reports, delaying contacting a professional may have an adverse effect on buyers especially if they learn that financing requires them to do some work to “qualify”.

Financing the Home Purchase:

• 78% of recent buyers financed their purchase, down from 87%
• The typical down payment for first-time buyers was 6%; 17% for repeat buyers
• 47% used their savings for their down payment. 38% of repeat buyers used the proceeds from the sale of their home; 22% of first-time buyers used a gift or a loan from family or friends
• 26% of first-time buyers cited saving for a down payment as the most difficult step in the process
• 88% of buyers viewed a home purchase as a good financial investment

Home Sellers:

• The typical seller was 60 years old, up from 56
• 21% sold to move closer to family and friends; 11% sold due to retirement; 11% said that their neighborhood had become less desirable
• Sellers typically lived in their home for 10 years, up from 8 years
• 41% bought a larger home; 32% bought the same size home
• 39% used the same Real Estate agent to buy as they used to sell
• 86% used a Real Estate professional; 10% sold on their own, meaning without representation
• The median final selling price was 100% of the asking price, the highest since 2002
• The median time on the market was two weeks, up from one week
• 91% of sellers were at least somewhat satisfied with the selling process

FSBO Sellers (meaning For Sale By Owner or Unrepresented Sellers):

• 10% of sellers sold without representation, up from 7%
• 6% of suburban sellers sold without representation while 13% did so in rural areas
• 50% knew the buyer of their home
• FSBO homes typically sold for less than Real Estate agent-assisted sales. FSBOs sold for a median price of $225,000 compared to Real Estate agent-assisted sales at $345,000.

Sellers who do not use a Real Estate agent typically do so to save the commission. Given the wide disparity in results that merits a conversation. That being said, some sellers say they needed to save the commission to make a move. Their choice but I respectfully suggest that all sellers think about it.

This is a lot to digest. How closely these results may reflect your feelings and experiences will vary. Selling and buying Real Estate is a personal decision, often an emotional one justified with logic.

Remember, when it comes to selling or buying what is likely your biggest asset and your largest overall investment,

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

HIRE WISELY:  We are not “all the same”!

Sellers, Does Disclosing Multiple Offers on Your Property Make Sense?

That depends. What is your strategy, meaning what do you think will happen?

The Pennsylvania Association of REALTORS Listing Contract has a clause that states in part, “Unless prohibited by Seller, if Broker is asked … Broker will reveal the existence of other offers …”. Broker could mean Agent since the contract is really with the Broker.

This “conversation” should take place at the time the listing contract is being signed so that there is no misunderstanding about what the parties have agreed to do. Frankly, I am not sure that all agents really discuss what the seller is signing, that all agents completely understand the listing contract or that every seller really understands what they are signing or that they really care as long as their property gets sold. My experience as a mediator and serving on Professional Standards hearing panels has shown time and again that a number of sellers and buyers claim that they did not understand what they signed. The agents may have done their job or not. Electronic signing can make this more problematic as people rush to execute contracts and get properties on the market and under contract. How sad! Real Estate is typically our biggest asset and largest investment. Mistakes can be very costly!

At the very least, this MUST be discussed before there is any interest in a property or there could be a problem especially if the seller thinks their agent acted unethically. Absent discussing the paragraph, the “default” position as stated is that the agent has been “authorized” to disclose whether or not there are multiple offers. If asked, the answer could be yes or no.

Many buyer agents will call to ask if there are offers “in hand” or “other interest” in a property before preparing an offer; some will even call to ask before scheduling a showing. In “hot” seller’s markets these instances will increase. Why is this a concern at all?

From a buyer or buyer agent’s perspective, they may not want to waste their time pursuing a house that may be unattainable as doing so may result in their missing out on their “second choice” if a seller has or is about to sign another offer. Our multiple listing service requires that the listing status be changed within one business day of executing a contract but a lot can happen in that time. Listing agents may have advertised a due date for offers that others assume valid only to find that something was signed sooner than expected. Real Estate sales are a “moving target”. Even if I answer your question now, the answer could change.

As far as the disclosure, some buyers may be willing to “compete” so thinking that there is competition may cause them to make their “highest and best” offer at the outset. On the other hand, some may decide not to compete. Are they entitled to know anything short of an agreement of sale being signed? No they are not unless the seller grants that permission.

What should a seller do?

As far as how to respond to inquiries about “multiple offers”, a listing agent MUST have a conversation with their seller client about how to handle inquiries. We cannot lie and we cannot divulge the answer without our seller client’s permission. We can tell others that we are not authorized to answer the question, which may make others think there is competition. How they handle our response is up to them.

I do not like to disclose that we have other offers but I believe that there is a time and place for doing that. Telling others that there are no offers makes no sense, does it? Whatever other agents and sellers do, throughout any given year, I see MANY listings expire, meaning that the listing contract ran out before getting an offer signed, or get canceled, meaning that the seller and agent decided to stop working together such as when the seller decides not to sell, that advertised in their “remarks” section that there was a “multiple offer situation”. That adds a “twist”:  the listing agent is answering the question without being asked. Did the seller authorize that? The fact that these houses did not go “under contract” and sell can mean that multiple buyers thought them priced too high. Did that disclosure help the seller? Did it deter any serious buyers who may have offered enough to convince a seller to sign a purchase offer? There is no “one size fits all” answer.

There is no guarantee that, regardless of the type of market or the amount of competition, a buyer will have a “second” chance when making an offer to buy Real Estate. If they really like a house they may want to consider making their best offer at the outset. Should a buyer offer “more” if there is real or perceived competition or “less” if there isn’t? Shouldn’t they base their offer on HOW MUCH they like and want to own a house and what they can manage financially?

A market analysis is helpful as is concern about an eventual appraisal if financing is involved but why should a house be “worth more” because someone else may like it? Suppose money is “no object”? Here is the underlying question:  what is the point of making an offer on Real Estate? I believe that the goal should be to lock it up to exclude other buyers. A buyer can do a number of inspections to see if there are any “material defects”. If their interest changes, they can request repairs or credits or even terminate a sale. I do not take any of these lightly but I do feel for buyers who misjudge the market and miss out on what may have been the best house for their needs and wants.

One interesting point of contrast is that a seller may entertain any number of offers, of course they can only sign one, but a buyer can really only pursue one house. I have heard of buyers making multiple offers but that can blow up if not handled properly.

My job as a listing agent is to “protect and promote” my seller client’s best interest. They rely on my experience, training and education even if we disagree about how to manage this specific topic. As I mentioned, I do NOT like to disclose the existence of other offers generally speaking but that can change when it suits our strategy. Let me share the possibilities.

Let’s assume we have a buyer agent with a buyer interested in making an offer. When the agent calls me to ask if there are any offers, which I presume to mean “in writing” and not a mere expression of “interest” which means nothing and does not always result in an offer being written and presented, if I do not know my seller client’s thinking, absent this paragraph in the contract, I would have to say that I have not discussed that with my client, which may lead some to think there are offers or not. Either of those could hurt my client.

Suppose I have at least one offer in hand and I disclose that. Will their buyer decide not to compete or could that make them try to win? Who knows? However, having one or more offers in hand does not guarantee that a seller will sign one or even be interested in what they may have offered. Suppose I have multiple offers but all are well below the stated asking price or have contingencies or conditions that concern the seller? While that could help me convince the seller that the price is too high, what sense does it make to tell buyer agents that we have offers in hand if none are going to be signed?

The life of a listing agent would be easier if every listing had quality multiple offers to review and if telling someone that they have competition compelled them to do their best to “win” but

human beings are unpredictable. In reality, an offer can even be retracted before being signed and returned, which we call “execution and delivery”. As I often say. It is never over until the seller has the buyer’s money and the buyer has the seller’s house keys.

Here is what I suggest and my seller clients have generally agreed with my thinking:

First, I do not want to disclose whether or not we have other interest or offers in hand.

Second, when I receive an offer, after doing what I need to do before presenting it to my seller, I will look at the recent and upcoming showing activity and review any feedback I may have received. I need to think about whether anything else might be coming in. If I think there is, we need to stall to allow that to develop. However, purchase offers have expiration dates and I never assume they are flexible. Waiting for an offer that does not materialize and letting one “in hand” expire makes no sense. Some buyers will just move on to another house, especially in a competitive market.

Third, if I have received at least one offer that a seller is strongly considering signing and someone inquires about the existence of any offers in hand, I will ask my seller for permission to report that we do have other offers. I won’t specify the number or disclose the details. Worst case, the caller does nothing and we are no worse off. Best case, they bring us an offer that is better than what we already have in hand. Absent a concern about an “appraisal”, before signing the latest offer, to be fair, I ask my seller for permission to let the other agents know that there is competition and ask for their buyer client’s “highest and best” offer. My thinking is that it would only be fair to let everyone now know since the latest offer was prepared with that knowledge. I have heard complaints about agents who were led to believe that a seller was going to sign their offer but changed their mind when a better one came in. We need to be conscious of what we say and do to avoid any misunderstandings. A buyer may be selling their house and have an offer they would sign if they knew they had a house to buy. Imagine signing an offer only to learn that the house you wanted to buy was sold to someone else!

Do I have to go back to those who took the initiative and brought offers in already? I don’t think so. If none of those agents ever asked the question, that is on them. If they did ask, regardless of how I answered, they should not assume or expect me to keep them up-to-date as the situation changes. Again, Real Estate is a moving target. The seller is my client and I work for them.

As I often say, this is NOT a “retail” environment. The asking price is not necessarily the final price and the purchase of Real Estate typically requires several steps allowing either party the opportunity to “change their mind”. It can be like a “roller coaster” and that aspect can wear on the parties or their agents.

This is especially true when the market is not “in balance”, meaning that sellers or buyers have a decided or perceived advantage. Our REALTOR Code of Ethics requires us to be honest, meaning that we cannot lie although our not being permitted to disclose something could adversely affect another agent’s client. I try to be “fair” meaning that I am treating all parties “consistently”. The public, including my fellow agents, deserve nothing less regardless of what they “expect”.

There is NO TIME for inexperience, empty promises OR false expectations!

HIRE WISELY: We are NOT “all the same”!

Buyers, Does It REALLY Matter If a Listing Has Multiple Offers?

That depends. How would that information affect your level of interest?

As long as a property is “still available” to bid on and you know if a contract signing is imminent, you have a decision to make. Even then, there is no guarantee that, regardless of the type of market or the amount of competition, a buyer will have a “second” chance when making an offer to buy Real Estate. If they really like a house they may want to consider making their best offer at the outset. Should a buyer offer “more” if there is real or perceived competition or “less” if there isn’t? Shouldn’t they base their offer on HOW MUCH they like and want to own a house and what they can manage financially?

A market analysis is helpful as is concern about an appraisal if financing is involved but why should a house be “worth more” because someone else may like it? Suppose money is “no object”? Here is the underlying question:  what is the point of making an offer on Real Estate?

I have taught the Accredited Buyer Representative core course and offered my opinion that the point of putting a house “under contract” is simply to lock it up so that the buyer and seller can go through the process of seeing if transferring the deed works for both parties. When a house goes “under contract” before a buyer can make an offer or their offer gets rejected that opportunity does not exist. There may be no “second chance”. First impressions may doom an offer even if there is no competition. Not to minimize the process of buying or selling Real Estate but both parties likely have one or more chances to reconsider their interest in closing a sale. This is not a retail transaction.

Of course, we are dealing with human beings. How they respond to real or perceived “competition” will dictate whether and how they react when they learn about a house they like. If they reach a “meeting of the minds” with a seller will they come to think they paid too much? Home inspections and appraisals can help “correct” that. Do they have remorse, wondering if they bought the best house for their “needs and wants”? I have specific ideas about how to approach “the search” to help ensure that a buyer will have minimal if any “second thoughts” but, in reality, other houses will keep coming on the market. Whether sales contracts fall through or new houses become available, they can tantalize a buyer who is not fully committed to a house they have under contract. I have had buyers want to view a new listing or one that came back on the market while in the inspection contingency phase. I remind them about our search and how they arrived at the decision to make an offer on the house they now have under contract. I also tell them that we have no idea how much other interest the new listing may have, what it will take to get a signed contract, what may have led to its being back on the market or what inspection issues may exist. A “bird in the hand” ….

Is there anything worse for a serious buyer than NOT getting the “best house” under contract? Competition is what it is. Others may be in a better position to buy what you want to own. If you start looking before you are prepared and organized, you may be forced to watch others buy the house you liked and wanted to own. All any buyer can do is “know their limitations” and act accordingly. An experienced, trained and educated professional can help! The Real Estate market is constantly churning and that can frustrate even the most serious buyer.

As far as how to respond to inquiries about “multiple offers”, a listing agent MUST have a conversation with their seller client about how to handle inquiries. We cannot lie and we cannot divulge the answer without our seller client’s permission. We can tell others that we are not authorized to answer the question, which may make others think there is competition. How they handle the situation depends.

I do not like to disclose having other offers in hand but there is a time and place for doing

that. Telling others that there are no offers makes no sense. Whatever others do, throughout any given year, I see MANY listings expire, meaning the listing contract ran out, or get canceled that advertised in the “remarks” section that there was a “multiple offer situation”. The fact that these houses did not go “under contract” and sell can mean that multiple buyers thought them priced too high. Did that disclosure help the seller? Did it deter other serious buyers who may have offered enough to convince a seller to sign a purchase offer?

Frenzied markets typically result in buyers and sellers having regrets, especially if they failed to plan and prepare as well as they might have. Did sellers wait too long to put their houses on the market or to sign an offer, thinking prices would continue to rise? Did they sign one too quickly? Did buyers jump too quickly, perhaps thinking they paid too much? Do they wish they had bought a different house or waited to buy? Did they wait only to find that nothing nicer came on the market? There is no perfect house search!

Some sellers have told me they settled to quickly or waited too long and felt that they had missed a better opportunity. I have read a number of articles about buyers having remorse. Whether they feel that they overpaid or jumped too quickly only to find that a better choice came along is a shame! They may not be able to sell for what they paid or recover their costs. Real Estate is likely our biggest asset requiring our largest investment. Mistakes can be very costly!

There is NO TIME for inexperience, empty promises OR false expectations!

HIRE WISELY: We are NOT “all the same”!

Bright MLS June 2022 Delaware County PA Residential Housing Report

Showing Time, using Bright Multiple Listing Service statistics, has released their Local Market Insight report for single-family homes in Delaware County Pennsylvania through June 2022. If you would like information about this or any other County or any specific municipalities in the Delaware Valley, please contact me or visit my website, AndrewWetzel.com. I am only a phone call, email or text away! I respond promptly to all inquiries.

We are at the halfway point for 2022 and the Real Estate market continues to be affected by the lingering effects of the pandemic as well as recent economic developments, all of which have added uncertainty to what is generally considered a long-term decision involving our biggest asset and our largest investment. While many of us contend that our present circumstances should not be confused with the “bubble” we experienced some 15 years ago, it is difficult to really assess what is going on as information ebbs and flows. More about that later in this report.

The pandemic caused many sellers to stay off the market, dramatically reducing inventory levels and creating an inventory shortage. While many buyers delayed taking action, the easing of the pandemic released pent-up demand for housing shifting the “supply and demand” ratios. In many areas, the result was a huge advantage for sellers. Complicating this were several underlying factors.

On the “supply” side, housing starts are down, complicated by supply-chain issues driving up lumber and other costs, a general shortage of existing housing as the number of overall households has been increasing and a drop-off in foreclosures due to a moratorium that will be changing. Do not be surprised by what may look like a sharp increase in foreclosures as there is about a two-year supply to manage.

On the “demand” side, millennial buyers have entered the market looking to buy. In addition, a significant number of investors are buying in bulk, typically with cash and limited contingencies, solely for the purpose of using them as rentals. Those purchases are estimated to consume about 25% of the inventory. Unfortunately, many of these purchases include properties that generally appeal to first-time buyers. The competition for them has driven up prices and prevented many new buyers from becoming homeowners. As long as rental income remains strong, these investors will continue to acquire properties. The irony is two-fold. First, rental income remains strong as many are unable to purchase their own homes which creates competition. Second, the elevated rental pricing is preventing many from saving for the down payment they need to obtain financing. I am not sure there is a way to change this in the short term.

Interest rates, while still considered historically low, have risen in recent months putting pressure on monthly payments. While interest rates have not historically suppressed pricing, they can influence selling and buying which affects “supply and demand” on local levels. Locally, I am seeing inventory levels increasing, some of which is attributed to sales falling through due to inspection and financing issues. The “auction-type” environment of recent memory has subsided in many areas resulting in longer times on the market and buyers being better able to work through the buying process which should help them with their decision-making.

Competition in some areas remains intense. Many sellers and their listing agents remain overly optimistic as evidenced by a number of dramatic price reductions. Many buyers are refusing to continue the panic-buying hysteria we have been seeing. It appears that, as with the “bubble years”,  many sellers waited too long to try selling although, if they are buying, that may have been in their best interests. From a selling perspective, once again I would remind people not to try to “time the market”. As always, your experience may differ depending on your location and how you have been personally impacted. As I always say, the decision to buy or sell Real Estate is a personal one and the current environment typifies that as many sellers stay off the market while some buyers still do extraordinary things to beat their competition.

As always, this report compares current year-to-date results to one-year ago, the same time period. 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 any more than there is a national weather forecast so, whether you may be thinking about selling or buying, 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, some of which you can control and some of which you cannot. Data and information can be found in many places with no way to know how accurate they are or what they mean. I can provide the knowledge and insight to help you decide what works for you.

My second point is that, unfortunately, all Real Estate statistics involving sold data are stale. This is especially true if you are relying on Internet valuation models which use recorded data rather than up-to-date MLS information. Even then, while a sale may be reported as having settled or closed today, the real question is when was the offer negotiated? Typically, financed sales can take 45 to 60 days to close so the market today may be different from when the offer was presented and negotiated. This is especially true in changing markets. Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 4419 new “For Sale” listings through June 2022 compared to 4802 through June 2021, a decrease of 8%. There were 3538 closed sales through June 2022 compared to 3699 through June 2021, a decrease of 4.4%. The median selling price through June 2022 was $295,000 compared to $265,000 through June 2021, an increase of 11.3%. The decline in the number of newly listed properties impacted the number sold while substantially increasing their selling prices. Real Estate is a “supply and demand” commodity!

The number of currently available properties (649) is slightly below one year ago (665) and well above last month (487). The Days on the Market (DOM) (21) through June 2022 is up, the “Sold to List Price” ratio (101.8%) is down while the MSI (Months of Supply) remains less than 1 month (at .9 months), about the same as one year ago. Again, these numbers vary throughout the County:  the underlying data shows a wide range of results in all categories among the 49 different municipalities in Delaware County. What happens going forward?

Generally speaking, low inventory levels in some areas will continue to produce multiple offers even if not the same “auction-type” frenzy we have seen among buyers. In fact, some newer owners are already regretting a hasty decision to get a property under contract. This is amplified in areas where prices are flat or declining as those trends make re-selling costly. The “frenzy” is over or easing in many areas which caused many buyers to make offers “sight unseen” and/ or waive property inspections to improve their odds. I appreciate buyers trying to be creative to give themselves an advantage but combining buying “sight unseen” with waiving inspections is a recipe for disaster. There are not enough pictures, videos or words that can replace actually walking through a property and, regardless of how honest and knowledgeable a seller is, a completed property disclosure such as we have in Pennsylvania, is not the same as having a skilled inspector looking at the major components of a house, looking for problems with wood infestation, radon and other situations that can be unhealthy and/ or costly to repair. The effects of such creativity remain to be seen, perhaps taking a number of years, even for new owners happy with their purchases. I would highly recommend hiring professionals to do these inspection on your home in case there are unknown issues. Problems only get worse and costs to cure them increase.

The fact is that Real Estate, perhaps with the exception of those properties acquired strictly as “investments” with documented income, properly written leases and paying tenants, is generally not something given its expense and complexity that the typical buyer would want to purchase without an in-person showing let alone removing the protection of an inspection contingency. Technology, however advanced, has its limitations.

The overall economy, despite some people touting specific statistics, has serious issues that will keep some out of the market. 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 or planning to move within a short period of time. 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.

If you want or need to sell any type of Real Estate, now or in the future, whether you tried and did not succeed before or are planning for the first time, it is never too early to start the planning and preparation. Please do not wait for what you think is a better or the best time to start. Buyers look all year long and can only see and buy properties that are available to see. Based on the available information, is waiting something you would consider?

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

HIRE WISELY:  We are not “all the same”!

The Real Estate Market is Changing (Again!)

After many months of a buying frenzy that seemed more like an auction, the Real Estate market is changing. Inventory levels have increased with the market adding more listings each month than there are properties going “under contract. Some of these are houses that came back on the market that did not sell before and needed less competition and/ or lower prices to sell.

The number of multiple offers has generally decreased and, whether it is the market or buyers taking a stand, the number of purchase offers made “sight unseen” or without inspections seems to have been greatly reduced. Many agents and consumers, both buyers and sellers, are happy about all of this. However, when markets like we have seen change, often with little warning, one question always comes to mind:

What about the properties that did not sell?

Many properties came off the market and still remain off the market. I work with many sellers whose listing contracts expired without selling or who canceled their contracts. There are a variety of reasons for both expired and canceled listing contracts. Pricing and marketing are the primary reasons why houses do not sell but there are times when owners change, delay or cancel their plans.

Due to the pandemic, some sellers are still reluctant to let people they do not know and who may not be financially “qualified” to buy into their homes. Others may have issues they are dealing with, especially if they need to buy their own “next home”. While selling their home may produce a “windfall” if they have a lot of equity, what will buying cost?

My primary concern is always whether people are making an informed decision or reacting to what they “think” is happening in the market. Selling and buying Real Estate are personal decisions involving what is typically our biggest asset and our largest investment. As with the market 15 years ago, the sellers who jumped in early may have had the best success if they needed to buy another home. If that was not a concern, they could wait for prices to get to the point where they were compelled to sell. On the other hand, some sellers waited too long and missed an opportunity to maximize their proceeds. When will the next really hot market arrive? It could be years. Maybe not.

Buyers and sellers need to do the same planning and preparation that those tasks typically require, regardless of the market. Easier said than done! Anyone looking to sell or buy needs to understand their local market and decide how to react to the “variables” that exist. Hopefully, they know what they need and want from the process and understand that they cannot control interest rates, the economy, inflation and other things. The effects of buying and selling remain for years. They are important decisions and likely require the knowledge and insight that a Real Estate professional can provide.

I tell my clients that I cannot guarantee that their house will sell if it is on the market but am fairly certain that it will not if they take it off the market. Anyone trying to sell now may have less competition even if it may take weeks or months instead of days to sell and they may not see multiple offers. Hiring an experienced, trained and educated professional is more important than ever.

Regardless of “supply and demand” factors, every house will not sell. Houses may get showings without generating offers unless buyers think they are priced within the range of their perceived “worth”, whatever that means today. 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 and agents may not have even known that a house was available to look at or purchase. Some buyers may even make “full price” or higher offers just to control the process only to have remorse later as inspection results are revealed. Of course, this may well depend on the ratio of buyers 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 look at houses priced high compared to the rest of the market:  why try to negotiate a price down when other similar properties are available at more competitive prices or similarly priced houses offer more? Many sellers open to negotiating their price will never get the chance. I will be happy to discuss specifics with you.

The “bottom line” is always that you should do what is in your “best interests” and plan accordingly. There may be no “perfect time” to sell or buy. Buyers waiting for the “best” house to come on the market may miss the one that really met their needs and wants. Sellers waiting for a better offer may see their activity level drop off or see offers lower than what they have already declined.

If you want to sell or buy, let’s talk. There is no obligation but you may get the information you need to decide what to do next. It is better to know than to wonder what might have been.

Remember,

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

HIRE WISELY:  We are not “all the same”!

We Are NOT in a Housing Bubble

Repeat after me:  we are NOT in a “housing bubble”. We are NOT in a “housing bubble”. Now let me help you believe it!

For those who lived through the “dot.com” fiasco around the turn of the century, I never dreamed I would say those words but there was a REAL housing bubble 15 years ago. This market is CLEARLY different. That is not to say that it lacks drama or that it has not been incredibly frustrating on many levels, but let’s be CLEAR:  this is NOT a “bubble”. And no, I am not changing the meaning of the word “bubble” as some are doing with the word “recession”.

The current Real Estate market is softening in many areas due to increased inventory (including “leftovers” that needed less competition or lower pricing to sell) and rising but still historically low interest rates. Over the past couple of years a frenzy was created by a combination of historically low inventory, a global pandemic and competition which greatly elevated prices. This frenzy among buyers will have lasting implications. Many are now regretting their purchase decisions. Whether they came to feel that they overpaid or they cut corners including buying “sight unseen” or without inspections to compete, many are stuck with homes whose values may have dropped or that may have had unknown or undisclosed “material defects” or homes they rushed to buy without doing enough “due diligence” to make sure it really met their needs and wants. Many sellers overplayed their hands and wish they had sold! None of this makes the recent market a “housing bubble” as the frenzy was created by the actions of buyers and sellers.

The “housing bubble” 15 years ago was caused by government meddling that led to loose financing standards designed to increase homeownership among certain groups. We can debate the details and/ or the intent if you wish but the “ends did not justify the means”. While some may have enjoyed months of owning their own home, many lost those homes and their savings when the “bubble” burst and almost crashed our entire economy.

One question that seems to be on the mind of many people is this:  is now a good time to buy? Buying Real Estate, as I often say in my blogs, podcasts and social media posts, is a personal decision that depends on YOUR wants and needs. Another way to look at this is to consider what will happen if you wait. Interest rates could go higher or not. Supply may increase or not. Over time, while NOT a guarantee, Real Estate prices tend to rise despite or in spite of external factors. The “housing bubble” showed that you cannot force things to happen any more than you can “time the market”!

Again, this is NOT a “housing bubble” so I do not expect a sudden drop in pricing. However, prices will always fluctuate locally and across regions. Real Estate is a “supply and demand” commodity subject to the normal effects of economics, marketing and the overall economy. One specific aspect to consider as far as inventory and pricing is that there has been a moratorium on foreclosures throughout the pandemic. I have heard estimates that we have about a two-year supply that will be made available. This will likely be a measured process to avoid oversupply which would depress selling prices. Foreclosures may or may not appeal to the average buyer and, while “appearing” to increase supply and perhaps depress selling prices, they are not likely to have any impact on the pricing of typical resale homes.

Please call me if you would like to discuss this in further detail. I can add knowledge and insight to whatever data and information you have. Remember, when it comes to buying what is likely your biggest asset and largest overall investment:

There is no time for inexperience, empty promises or false expectations.
HIRE WISELY: We are not “all the same“!

My Buyer’s Offer Did Not Get Accepted: What Can They Do? Part 4 of 4: The MLS, Seller and Listing Agent.

Whether you are starting the process of buying your first or “next” home, engaged in the process of house-hunting or you have already been denied a house you really wanted to own, I want to share some time-tested advice.  I am going to address the main question in three parts.  This is not intended as legal advice and not intended to interfere if you have an existing business relationship.

Let’s start with the premise that you have made an offer and it was rejected.  You may have had no response or you may have been given an opportunity to negotiate that did result in a signed contract.  If a buyer makes what they think is a reasonable offer and the seller did not accept it, they should have no regrets.   Easy for me to say.  However, did the buyer have the right expectations and understanding about the process?  Could or should their agent or the listing agent or the seller have done anything differently?

If the seller was given the opportunity to review all offers and was properly informed of any possible interest that could generate additional offers and they accepted what they thought was the best offer, who has any reason to complain about the process?  Every executed agreement will not close so it may be best to remain on good terms with everyone involved.  You may get another chance to get a house you want to own, if you want one, but do not assume you will.

I provide my buyer-clients with a few pearls of wisdom I have gained through experience, training and education.  The process of buying or selling Real Estate is typically an emotional decision justified with logic.  It should be treated as “business” and not taken personally.  It is also not retail.  Looking for a house can be a full-time job but it is worth the investment of time and effort.  Your life will get back to normal after you succeed.  Bad decisions are costly and their effects can last a long time.  Real Estate is typically our biggest asset and requires our largest ongoing investment so buying or selling it deserves a lot of attention.

I have already discussed how a buyer might manage their search and making their offer in a previous post.  Those are both important but there is more work required to get the house you like under contract.  Respectfully, you may have had the best planning and preparation and made your best offer but there are still two potential obstacles to having a signed contract:  they are the listing agent and the seller.

As a buyer agent, it can be very frustrating just trying to show properties to our clients.  Add to that possibly waiting for a buyer to decide if they want to make an offer, their trying to assess how to do that and then trying to ensure that your buyer’s offer is properly presented to the seller.  My intent is not to criticize acceptable business models but I do question some business practices.  Article 1 of our REALTOR Code of Ethics requires that we protect and promote the interest of our clients and that we be honest with others.  Not all Real Estate agents are REALTORS.

The MLS has rules and regulations which member agents are required and expected to follow.  Listing statuses and their definitions are a major part of them.  For example, Bright MLS requires that properties are listed in the MLS within three business days of having an executed listing contract and within one business day once it is advertised if not already uploaded to the MLS.  There is status called “Coming Soon” which offers agents an opportunity to advertise properties before any showings are allowed.  There is a publicized date when showings will start.  Those dates change so buyer agents need to monitor them as they should when a listing agent specifies when offers are due and going to be presented to sellers.  There is no rule that you cannot submit an offer sooner than required or that you can’t have it “expire” before they intend to present it.  Obviously your buyer must agree with what you do.

The “Coming Soon” status can be effective with generating interest but frustrates some waiting for showings to start.  Listing agents and sellers tend to like this status as it can reduce the actual marketing time while maximizing competition and the selling price.  Buyer agents and buyers are less enthusiastic.  Should a buyer wait to make an offer on another house, especially if the listing agent of a “Coming Soon” property has not shared pictures or provided a decent write-up?  Is this property better than what they have already seen?  Competition and a lack of knowledge can create anxiety.  However, a major concern is that some listing agents may be allowing some people to  see inside, against the rules, while others are left out.  Some buyers are willing to make offers “sight unseen”.  However anyone views that, it is perfectly fine even if some refuse to do so.  Some think it “unfair” and risky.

Some agents have suggested eliminating this status saying that a property is either “active” and available for showings or it isn’t.  I can see their point but I do not agree.  Even now, some houses are listed as active and immediately placed “under contract”, suggesting that it never got full market exposure.  I think the issue is how the status is handled and that is a “people problem”.  There is no perfect system.  What guarantee is there that every interested buyer would be able to see every “active” and available house?

If you were going to design a perfect, “neutral” system, meaning it levels the playing field rather than favoring or potentially harming buyers or sellers, several things would have to be in place.  I will suggest a few although many will see the folly:

1. Perhaps no showings should be allowed until a property is “active” in the MLS.  PERIOD.  This makes sense but how do you implement it or prove it was violated?
2. Once “active”, a property should be kept available for showings and offers for some “reasonable” amount of time to allow any interested buyer and their agent an opportunity to visit and make an offer.  In theory, this should maximize the selling price but some sellers are more interested in a quick sale.  Only a seller gets to decide what is in their best interest and which offer to accept.  Either way, there is no way to force this on a seller.  What about buyers unable to see a house for whatever reason?  Even then, how do you know that your offer was properly presented to the seller for their consideration?
3. All listing agents should be required to use a third-party showing service to schedule appointments.  I have had to call listing agents to schedule showings on numerous occasions.  That tends to take longer as far as getting an answer and a confirmation than contacting an appointment scheduling service.  Are these listing agents too busy to promptly respond or are they trying to keep out competition, hoping to sell their listings to their own buyers?  I do not know but that is the suspicion.  Calls for showings can go unanswered for days.  Even worse, some listing agents, for whatever reason (some are valid!) need to attend showings.  A buyer and their agent should not have to work around a listing agent’s schedule.  Granted, they have to work around a seller’s schedule but it is the seller’s house.
4. Many agents have wondered whether their buyer’s offer was actually presented to the seller.  In PA we have forms which attempt to document that an offer was presented but you never really know.  I once had a sealed offer returned to me unopened.  That buyer never had a chance to compete.  In multiple-offer situations, I have been told by several agents that their seller-client reached a point where they wanted to stop looking at additional offers that they had in front of them.  I do empathize!  The real question is how many offers is too many to open, evaluate and compare?  My experience has been that after awhile the offers tend to seem very similar but you never know about any offers you do not actually look at.  What about the time and effort the agent and buyer took to see the house and prepare and deliver an offer?

The bottom line is that we have to rely on and trust each other to do our job.  Technology has made our job easier as far as creating, executing and delivering paperwork than in the past but you still have to print them out and look at them.  Some buyer agents do not submit complete packages.  Some use formats that are difficult to work with.  Do all agents really explain what their clients are reviewing and signing?  Do our clients really understand the paperwork and their potential obligations?  Electronic signing and delivery have made life easier but it has also increased the possibility of a client not fully understanding what they are doing in a rush to sign documents.  Can Real Estate really be conducted electronically instead of face-to-face, at least for major documents like representation agreements and agreements of sale?

My best hope is that a seller hires an experienced, trained and educated agent that has the ethics and integrity to do their job and that a buyer does the same.  If they have both hired the same agent, that is fine but that creates an inherent conflict called “dual agency”.  If, as is more likely, they have hired separate agents, my best hope is that they do everything in their power to promote and protect the best interest of their client while being honest, at least as allowed by their representation agreement, with everyone else.

The simple facts are these:

1. houses will come on the market.  They may or may not be overpriced or poorly marketed which could prevent their exposure to the full market which can lower activity and selling prices;
2. some buyers will miss opportunities because their search criteria do not “capture” every real possibility, they simply miss listings as they rush through an email, they are not able to schedule a showing before a house sells or they are not in a position to make a serious offer for whatever reason.  Much of this falls on the buyer.  Many “shop” online for weeks before contacting a professional who can better explain the planning and preparation needed;
3. sellers may make it more difficult than it should be to see their house or they might be expecting too much from the market;
4. agents may frustrate their clients’ efforts to sell or buy.

There is a lot more to buying or selling Real Estate than marketing, showings and writing offers.  This is NOT retail!  There is no online “shopping cart” or a “Buy It Now” option.  Again, this is a business decision which is often emotional and justified with logic.  While the public has endless access to data and information, it takes an experienced, trained and educated professional to bring the knowledge and insight that Real Estate sales often require.

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

HIRE WISELY: We are not “all the same”!

Data Integrity: How Accuracy Impacts Searches and Profits

“Data integrity” ensures that reported information is accurate and can be relied upon.  In Real Estate this could be the status of a property, the price, the type of property and its features.  The importance of accurate information cannot be overstated as people make costly decisions based on what is reported.

A seller needs a “ready, willing and able” buyer to complete a sale.  Buyers “acquire” Real Estate information from a variety of sources.  They expect that all properties matching their search criteria will be in their search results so that they can evaluate them and decide whether to take any action.  Suppose they get wrong information or they do not know that a property is available?  They may never get to see it so they cannot buy it.  Houses may sit on the market unsold causing the listing agents to ask the sellers for an unnecessary and costly price reduction which reduces their proceeds but does not make it any easier for buyers to find their property in their search results.  Think Google search.

Errors will affect a market analysis for both sellers and buyers.  Sellers looking to price their property according to its location, features and condition may rely on bad information causing them to overprice or underprice their property.  Their house could sit on the market unsold or they could accept less than they should have.  Buyers need accurate information when deciding how much to offer a seller.

Houses that do not sell typically have a pricing or a marketing problem.  By marketing I mean wrong or missing “searchable” property features, missing or poor-quality pictures and missing or poorly written property descriptions/ remarks sections.  In addition to excluding properties that really matched their search criteria, poor marketing may cause buyers to dismiss properties because they “look” bad.

Bad information can also impact the mortgage appraiser.  They evaluate selling prices based on reported comparable sales.  They rely on and verify what is reported but how would they know if something is missing?  Appraisers rely on pictures, features and the public remarks to try to identify the prior sales most similar to the house they are appraising.  What is the cost of inaccurate or missing information?  If relying on bad information makes it appear that a buyer paid too much, their sale 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 sellers have wasted months or even years on the market when they really had little chance of selling given the inaccurate information.  I call these “fatal errors”.  Marketing exposes property information to potential buyers, their agents and anyone else who may need or want to rely on what they hope is accurate information.  Garbage in; garbage out!

The Internet has made this more complicated.  Most buyers “shop” online, many even after hiring an agent.  The MLS syndicates property information to the major search engines.  If the MLS information is inaccurate, this magnifies the problem because the information is going directly to the consumer, unfiltered. Your printout is literally like a resume.  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?

I recently met two couples looking to work with me, one to buy and the other to sell Real Estate.  Both plans involved my searching the market to identify comparable properties.  Let me briefly discuss my experiences with both.

First let me discuss the buyers.  They are ready to buy their first home, have saved the necessary funds, done a little exploring on their own and are ready to conduct their search.  We discussed their budget, their “needs” and their “wants”.  Fortunately, my experience enabled me to share how the best search can get messed up because listing agents or those they utilize to upload the details of their property listings often enter incorrect information or, just as bad, incomplete information.

These buyers had two specific “wants”:  a porch and a yard.  I performed a search without those features, found 26 “results” and sent them to my clients.  Then I did two additional searches, adding the two specific “wants” separately.  I found only 3 listings that showed there being a porch and only 3 showing some yard.  I knew that seemed low but never expected the results to be so wrong.

I looked at the more basic search with 26 results and identified an additional 17 properties with porches, raising the real total to 20, and found an additional 21 properties with a yard, raising that total to 24.  How pathetic!  If I wanted to take the time I might review the pricing history to see how long the incorrect listings had stayed on the market and then to see how many took price reductions.  The bottom line is that I assume nothing:  porches and yards are salable features but not present on every home so not entering them when they are present can be costly.

The other couple is looking to sell a 4-unit building.  It features a large lot with a detached 2-car garage and ample parking so nothing is truly comparable.  However, determining a range of potential pricing should not be as difficult as it was.

Using my experience, I knew that I had to start my analysis by looking at multi-unit properties without specifying the number of units.  When I do this I often find “commercial” properties, meaning they offer more than 4 living units, but that did not happen here.

My search identified 22 properties.  7 were listed as offering 2 units; 1 was listed as 3 units; 1 was listed as a 4 unit.  All were correct but there were 22 in the search results?  13 properties were listed as only having ONE UNIT!  So sad and so avoidable!  My best guess is that the people who uploaded the data thought “unit” referred to “buildings” and not leased, income-producing units.  Who entered the information?  Did the property owners know?

Of the 13 errors, 11 offered 2 units and 2 offered 3 units.  Had I been searching specifically by number  of units and not known better, I would have missed information that could be helpful to these sellers.  I wonder if any buyers missed these 13?

One additional point.  Only 7 of the 22 showed annual income, an important measure used by investors.  I understand that some of these buildings had vacant units but think it important to enter “projected rent” rather than assuming that every investor knows the area they are searching.  Many investors own Real Estate located far from where they live.  One agent actually had the monthly rent instead of the annual rent.

The bottom line is that buying and selling residential or investment Real Estate can be challenging enough without hiding property from people.  Data integrity issues can cause buyers to miss the best listings and some sellers may take needless price reductions when price may not be an issue. 

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

HIRE WISELY: We are not all the same!