Andrew Wetzel's Musings

May 22, 2021

The Type of Market and How it Affects Searching for Price

I recently wrote a blog on “Multiple Offers” and how two different agents viewed them.  I want to explore one of their comments further.  One agent said that multiple offers are the result of pricing a property too low.  While I don’t agree, I do feel that there is something to this.  Let me explain.

Suppose an agent is working with a buyer “pre-qualified” and comfortable spending up to $300,000 on a house.  Pick any price.  What “price range” should they search?  I say “range” because no one would search for one specific price.  You can start at a certain number or go up to a certain number.  This is why pricing is different than before we had the Internet.  Agents have to “factor in” what a consumer may be thinking rather than trying to interact with the mindset of an experienced, trained and educated agent.  Let’s start with the minimum first.

For some buyers, such as investors, I do not set a minimum.  They may be open to considering whatever is in their search results and open to driving by or studying what I send them to eliminate houses that do not appeal to them.  Buyers looking for their next home, especially if they are financing the sale, may need to pick a starting point to meet their needs and abilities as well as the requirements of their financing.  Some houses simply need too much work.  How far they look below their “top number” depends.  Sometimes the areas that interest them or the features they include will provide some guidance.  Otherwise, they may evolve into “knowing” that anything below $x is a waste of time.

What about the top end?  They are “pre-qualified” and comfortable spending “up to $300,000” so why wouldn’t that be the number?  This is where it gets tricky.  The market will suggest or dictate what you should do if you want to succeed.  In a buyer’s market, if houses are getting less than full price, you can search higher than their top number.  That does not guarantee success as there may be competition even in “slower” moving markets.  A seller may still want full asking price.

In a seller’s market, when houses are getting more than full price, you may want to search lower than $300,000, expecting to have to raise your offer, if given the chance.  In a hot market every house will not sell so this is not a blanket statement but you may not succeed by offering full price.

The MLS offers data comparing the selling price to the opening and final asking prices.  However, “data integrity” may be lacking if incorrect information is entered, possibly impacting the overall report.  An agent has to look “within the numbers” to see what is really happening with pricing.

A buyer needs to know their financials, including their comfort level, and an agent needs to interpret the market so that they can properly advise their client.  How much to offer is still the buyer’s decision.  In some markets, offering “full price” will get a house “under contract”.  In other markets, the “asking price” is where the bidding starts.  The price is either a ceiling or a floor.  Ultimately, prices have to appeal to buyers, agents and appraisers.   Even cash sales have some parameters.  Sellers set the asking price and buyers determine the value.

That being said, some sellers and their agents purposely underprice a house to expose it to more people in the hope of generating multiple offers.  As I often say,  Real Estate is not retail!

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

HIRE WISELY:  We are not all the same!

May 15, 2021

All Offers Must Be Received By … and Will Be Presented on ….

The type of Real Estate market produces some creative ways to “protect and promote” the interest of our clients.  The ebb and flow of who has “power” and “leverage” is interesting.  What may work (or frustrate others) in one market may appear insane in another.  That being said, we are required and expected to respect different “business models”.  However, do we have to do as we are told?

Many listing agents use a “Presentation of Offers” form which spells out what they want included in a purchase offer and how they conduct business.  I respect different “business models” and think the concept makes sense but I am left wondering about some of what they expect.  As long as the seller agrees that is fine but some of what I see seems counter-productive.  Here are a few examples:

  • An agent must submit an offer before being allowed to show a property;
  • A buyer must perform inspections before submitting an offer;
  • Do not have any contingency expire on a weekend or holiday.  If you do, add language to the agreement stating that the time frame is extended to the next “business day”. What exactly is a “holiday” anyway?;
  • Offers received after 5pm will be presented to the seller the next morning;
  • Offers received after 5pm on Friday will be presented to the seller on Monday;
  • Offers are to be submitted at a “specified time” and will be reviewed at a “specified time”.

Respectfully, if a seller agrees with any of these or other terms, perhaps that is their wish and their choice, that is fine but some of these make me wonder.  Real Estate is not a 9-5 job although it should not be 24/7 either.  I guess it all comes down to the type of market.  The question is:  do we have to comply?

We are in the hottest seller’s market I have seen in years.  Every house seems flooded with showings and multiple offers which, combined with the pandemic, many sellers and buyers are finding very frustrating.  To accelerate what I refer to as the “second step” to selling or buying Real Estate, the “third step” being when an offer is negotiated, some listing agents are doing one of two things to generate immediate interest.  They start showings at an “open house” or use a “Coming Soon” strategy to make buyers salivate before they can legally get in.  Both can work but may be creating a frenzy that will not play out as expected.  Some buyers are making offers “sight unseen”, waiving inspections and/ or going well over asking price, all in an effort to beat real or perceived “competition”.  Some agents just make their listings “active” and let the fun begin.  Th market will change.  It always does.

Some agents take this a step further and advertise when offers are due and when they will be presented to the seller.  These are bold steps that must be managed.  I find it interesting when a property listing expires unsold or a contract gets canceled and the listing agent neglected to remove language stating that offers were due and would be presented weeks or months ago.  OOPS!

Let’s suppose I activate a listing on Friday, state that offers are due by Monday at 3pm and will be presented to the seller at 7pm.  Pick any days of the week or time frames you prefer.  What happens next?  Compliant buyers and their agents will honor the listing agent’s instructions assuming they will be followed.  But will they?  Suppose they aren’t?  Some agents will try to submit offers after 3pm.  Does the listing agent say NO?  Is that buyer or agent penalized for being late?  Suppose the buyer agent has difficulty reaching the listing agent to say they have an offer or has trouble getting it to them?  We do so much electronically these days so that should not be a problem but it can be if there are Internet or equipment issues.

Suppose I have a buyer who does not like competition, may have lost out on one or more other houses they really wanted to own or they just want a quick answer so they can pursue other options before they sell?  What should I do?  I would submit an offer as soon as I can and, if my buyer is willing, we can make it expire prior to the 7pm deadline.  Listing agents are required to submit all offers in a timely manner.  While it is possible that their seller has said not to present anything before Monday at 7pm, if I were the listing agent I would let my sellers know that I had something, especially if it is compelling.  Suppose the seller says they want to accept the offer that came in early?

Buyers and their agents who were in the process of meeting the 3pm deadline have every right to be upset but did the listing agent do anything wrong?  Suppose a seller signs an offer before an “open house”?  At the very least, if my seller decided to sign an offer earlier than we advertised, I would let agents know what happened to be transparent and fair.  I would not want to waste their time and effort.  You never know, something could happen with the accepted offer and we may need to resume showings.  Perhaps a buyer is willing to provide a back-up offer.

Multiple offers are common these days which sounds nice but explaining them, evaluating their differences, responding to them and selecting the “winner” can be more complicated than it seems.  Are they taken at “face value”, which means that no one is provided an opportunity for a “second chance”, or are all or some “negotiated”?  What happens if they only “entertain” a few of them?  Even with multiple offers there is no guarantee that a seller will get what they want but they might learn the market’s perception of value.  Sellers determine the price but buyers determine the value.

What happens when the “sight unseen” buyer finally sees inside or the buyer who waived inspections questions the condition of the property or what the seller disclosed?  What happens when the appraiser files their report?  The “creativity” that secured a signed purchase agreement does not guarantee a deed transfer.  Real Estate is like 3-dimensional chess compared to a basic retail transaction where I pay you and I get my purchased item right away.  Real Estate provides “delayed gratification”:  every day until settlement may offer an unpleasant surprise.  It is never over until the seller has the buyer’s money and the buyer has the seller’s keys.

Even in “normal” markets, which generally means 3-6 months of available inventory, depending on what you believe, things can get contentious.  While we generally “cooperate” with each other, this is a competitive industry.  Only one buyer gets the house.  Buying or selling Real Estate are emotional decisions justified with logic.  Putting in the time and effort to buy or sell Real Estate requires commitment and exposing yourself to potential frustration.  They are not things most people do every day.  What one person thinks is creative can have quite a different reaction from someone else.

REALTORS have to manage expectations.  We need to explain the process of buying or selling to our clients.  We have done this before.  The consumer has 24/7 access to endless amounts of data and information, including television shows, but it takes an experienced, trained and educated professional to add two secret ingredients:  knowledge and insight.

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

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

HIRE WISELY:  We are not all the same!

April 16, 2021

When Should You Reduce Your Asking Price?

That depends.  Depends on what?  There are several things to consider.  Let me discuss two.

First, pricing is an art and not a science.  No matter what data and information went into determining your asking price, the price is an educated guess at best.  Is it realistic or hopeful?  If there is little or no information to rely on, it might just be a shot in the dark.  Either way, what would convince you to consider lowering it?  Some sellers think a reduction is the same as a loss when it might well be the difference between selling or not.

I suggest that a seller give this some thought at the beginning of the market process.  Their thinking may change but waiting to consider how to react to the market when a house is on the market can be stressful and cause a seller to miss a great opportunity.  Some sellers measure success by showings.  However, a lack of showings may the result of poor or ineffective marketing.  What about a house that gets many showings but no offers?  That is likely a price problem as it suggests that buyers found more for the same price or the same for a lower price.

Second, a listing agent needs to have a discussion about pricing.  The points already mentioned would make a great conversation.  In addition, a market analysis will provide historic information as well as some insight into what is happening now, both of which have a degree of subjectivity and built-in error.  As part of looking at the market and evaluating what the owner is selling, a listing agent needs to know their seller-client’s motivation:  is it time or money?  If the seller is committed to selling sooner rather than later, a price reduction would be more likely to be considered.  Of course, in that instance an asking price might have been aggressive at the start.  If it works, great.  If not, some sellers will think they have already agreed to accept less than the market value.  If they prioritize the amount they receive, they may be reluctant to reduce at all and if they agree, it could take time.  Again, having this discussion early on will save time later and may prevent problems.

Historic sales are just that.  Depending on the time frame you use, they may cross months, seasons and even years.  Even if a property settled yesterday, when was the offer made and negotiated?  It could be weeks or months old and not indicative of the current market.  A look at the pricing for houses under contract, while not providing the number the seller accepted and not being subject to an appraisal, will at least tell you what one buyer found compelling enough to consider.  You may see a trend higher than or lower than the settled pricing.  Of course, any agreed-upon price could be quite different from the then-current asking price and you won’t know that until after settlement.

Depending on the market, I believe that when a new listing hits the active market, it has its greatest chance of attracting interest as there may be more prospects looking at that time than will enter the market in the next few weeks.  It has been my experience that new listings can and should get a flurry of activity quickly and then, if activity or interest has been lacking, the seller has a decision to make.  Generally speaking, activity drops as the supply of buyers reforms, meaning new buyers come on the market, sales fall through or buyers have shopped and are ready to make an offer.

Many think you should give a house a week or two to gain maximum exposure to attract most of the buyers.  That makes sense.  After all, if you are satisfied with the marketing, meaning that agents and buyers will be able to find your property in their search results, a lack of activity generally means that buyers are not interested or they are simply more interested in other properties.  Again, activity is a poor measure if an owner wants a sale.  Showing your house to an endless parade of lookers gets old fast.

If buyers can find houses similar to yours for a lower price, you either need to meet the competition or wait until the competition has been sold.  If they can find houses priced like yours that offer them more, assuming you will not make improvements, you need to re-price to offset what you do not have.  Some sellers will consider making upgrades but that is risky and most will cost you more than they are worth.

The bottom line is that pricing is a tool.  It is used to connect buyers to properties.  However, Real Estate is NOT retail:  the price is generally considered negotiable.  The market helps determine whether the asking price is a “floor” or a “ceiling”.  Ideally, a price should take into account your location, the features and the condition while being competitive with other properties.  Owners determine their asking price and buyers determine the value.  If you believe that the price is the reason people aren’t coming or aren’t making offers, you can re-position your house with similar competition.

The real question is how much do you reduce?  If you are getting showings but not getting any offers or only low offers, the situation may not be as dire and perhaps your agent can contact the buyer agents who have visited to see if there is a price that would work.  A good buyer agent will initiate contact if their buyer-client has interest but not at your asking price.  A good listing agent won’t wait to see if you get any feedback. 

I believe that your first price reduction should be substantial and that you need to review the competition, stay engaged as the market changes and select a price that makes sense from a competitive standpoint and a technology standpoint.  Some houses need more than one reduction either because a house is simply priced too high even after being reduced or because the market changes.  When you pick your price, you pick YOUR competition.  There is no magic to it:  a reduction either changes “your luck” or it doesn’t and needs to be looked at again.

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

HIRE WISELY:  We are not all the same!

Is it a Better Time to Sell or to Buy Real Estate in Spring 2021?

As is usual, my best answer is it depends!  Can the answer be a “tie”?  I would like to think that when Real Estate is sold that both people “won” but Real Estate is a competitive process where two people have opposite if not adversarial motives.  No buyer ever said I want to give the seller as much money as possible unless, of course, they know there is competition or they intend to use their successful offer as leverage to negotiate something to their benefit later such as inspection results.  No seller ever said they wanted to give a buyer the lowest price unless they wanted to dump the property or intended to make no repairs.  Most sales happen between those extremes.  Getting to settlement is another matter.

The market today, Spring 2021, is as competitive as I have ever seen and I have been doing this since 1996.  The years from 2003 through 2008 were fairly hectic but that was a true “bubble” fueled by government manipulation to increase home ownership that relied on loose lending standards which financially destroyed many of the buyers it was supposed to help.  Sadly, many who bought were not really qualified to manage the finances and, frankly, many flippers took advantage of the market and sold bad rehabs.  I could go on but my main point is that this is NOT what is happening today.

Today is very different.  The market has been created by a combination of perpetually low interest rates, extremely low inventory and pent-up demand delayed by the pandemic.  Lending standards appear to be solid so buyers are better situated today, at least financially.  That being said, this cannot go on forever.  Interest rates have been rising slightly but there is plenty of money to lend.

Two significant variables are likely to change.  One is the number of buyers.  If this is anything like the “bubble years”, buyers have jumped off and over the proverbial fence and decided to buy earlier than they had been planning.  Sooner or later the market runs low or out of qualified buyers and I hope that does not result in easing lending standards.  The other variable is the inventory level.  My best guess is that the number of properties for sale will rise once whatever is holding owners back changes.  Just as the number of buyers was inflated by a number of factors, I believe that owners have been held back by a number of factors.  These diverging trends produced what we are seeing today.

Real Estate depends on “supply and demand”:  buyers and sellers are on opposite ends of a proverbial see-saw.  The supply of one often exceeds the supply of the other causing prices to rise and fall.  Competition drives prices up; excess inventory drives them down.  External factors like interest rates, the general economy and other variables like a pandemic play a vital role.  So back to the original  question, is it a better time to sell or to buy?  Let me break it down this way.

I believe that the group that has or had the most to gain in the current environment are the owners of properties which they were not selling to buy something else.  I call these “extra” properties.  Whether they are vacant, used for investment or the owners were willing to go into a rental or some other arrangement, those owners only had to focus on getting the most they could for their property.  What they achieve is determined by their understanding of what is going on and their risk tolerance.  Did they sell too soon or did they wait too long?  Many will regret missing the opportunity to “cash in”.

While I value home ownership and embrace the concept of owning compared to renting, I fear that the group who may have the most to lose are the buyers who jumped in without really thinking long-term.  It is nice to talk about building equity and owning a home for almost the same monthly payment as your rent but home ownership is more complicated than numbers.  A home purchase decision can easily become regrettable if one or more of the following happens:  you spend your savings for a down payment and suffer a loss where your savings are needed, you buy without doing the legwork to see if a neighborhood or house fits your lifestyle (having to resell in the short term can be costly), you made an offer you come to regret (did you buy “sight unseen” or waive inspections to make your offer more competitive?).  Long term, Real Estate tends to be a great investment.  However, the short term is more volatile.  Either way, you have to live somewhere but Real Estate is an investment and subject to risk.

Don’t get me wrong, private home ownership is one of the many blessings we have in America.  However, with any opportunity comes responsibility.  Buying Real Estate is an emotional decision justified with logic.  “Normal” markets generally allow a buyer time to really consider whether it is the right time for them to buy and whether a specific house really fits their “wants” and “needs”.  You may have time for a second showing or to have family and friends take a look.  Sadly, I have worked with many sellers who told me they wish they had bought another house.  I have heard many stories of how they made their decision, what they wish they had done differently and how their decision impacted their life.  Where you live affects the quality of your life.  A poor decision can rob you of equity.

The current market does not generally allow a lot of time to think and ponder, let alone compare your options.  It may compel buyers to make unwise offers they may come to regret.  I have heard many buyers respond to being told that a seller accepted another offer by saying “it wasn’t meant to be”.  That is a great response, especially if they meant it.  I have also seen people react as if their world were crumbling.  I try to prepare my clients as best I can and hope that they are ready for the process.  Planning to buy Real Estate requires a serious commitment and can be like a full-time job.

If the last frenzy was any indication, I suspect that 10 to 15 years from now, some of today’s buyers may find that their house is worth about what they paid, no more and hopefully no less.  At least that means that they “broke even”.  You have to live somewhere.  After 10 to 15 years of paying rent you walk away with nothing and, chances are, your rent has gone up dramatically.

On the other hand, unless they are forced to sell, I don’t see sellers reminiscing about a house they sold, wishing they could get it back.  Cars have that effect but not houses.  That is not to say that all sellers succeed.  Their motivation or sense of urgency may cause them to accept an offer that was not the best.  On the other hand, patience is a virtue but it can be expensive.  Contingencies within an offer can cost them money even if the price seemed nice.  A seller needs to be informed about the market just as buyers do.  Are they more focused on the money they achieve or how long it takes to sell?

There is one more group to consider:  the seller who needs or wants to sell one house to buy their “next home”.  In this market, they may be facing an uphill battle especially if they have competition.  That type of contingency can really impact the process.  It also impacts prospective buyers for their house.  I see listing contracts expire or get canceled because a seller wants a buyer to give them time to find a house or they want a short-term rent-back.  Any of that may be a concern for buyers.

If a seller is buying their “next home”, aside from how they manage an agreement with their buyer or the seller of the home they like, they need to compare their market with that of their “next home”.  It may be a great time to sell, convincing them that they may never have another chance to get what this market offers.  However, what will their “next home” cost them?  One of the ironies I have seen a number of times is the owner who expects top dollar for their home and thinks they can get their “next home” cheap.  There is a serious disconnect there.  On the other hand, while the two processes have to be coordinated, I have seen sellers who really needed to reduce their asking price but refused to even consider it.  If a reduction makes buying impossible I understand that but ego can get in the way.  If the seller’s property’s market value is flat or declining and the cost of buying is rising, we have a conflict.  Every day, week or month that passes is costing them more than they are gaining.  Some sellers are willing to rent so that they can sell and, ideally, buy later when prices stabilize, whatever that means.

Buying or selling as a single, disconnected act is one thing.  No one can predict what tomorrow will bring and decisions always look clearer in hindsight.  Tying a sale to a purchase or a purchase to a sale takes the game from checkers to chess and expands the thinking.  The possibilities can be endless!  All you can do is get the best information you can, decide what you want and need to accomplish and know when to make a move or when to hold back.

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

HIRE WISELY:  We are not all the same!

April 5, 2021

My New Audio Course is LIVE on Listenable.io

I received an email from the staff at Listenable.  They provide an online platform that offers “powerful, bite-sized audio courses authored by well‑loved experts”.  They said:  “Congratulations on launching your first course on Listenable!  We’re excited to have you on board!  We sincerely appreciate the work you’ve done to create such an outstanding course and we are proud to have you on the Listenable team.”

I am happy and excited to add my content to their impressive lineup of courses.  The title of my course is “The Basics of Selling Residential Real Estate”.  Why did I create it?

My passion for Real Estate led to my writing blogs and recording podcasts.  Someone at Listenable heard my podcasts and contacted me to ask if I would be interested in creating an audio course for them.  The subject matter was up to me and this topic seemed an obvious choice.

As I have learned over the course of my career as well as through my involvement in various roles within the Real Estate community, Real Estate is not rocket science by any means although many make it far more complicated than necessary.  The process of selling or buying residential Real Estate generally involves a number of basic steps that must be completed in order to succeed.  Hiring a professional should increase your chances for success.  Our experience, training and education can provide the knowledge and insight typically needed to navigate the home selling or buying process.

My course consists of 13 lessons averaging about 8 minutes each.  I break the steps of selling Real Estate down into “the basics” and explain what we do and why we do it.  My goal is to take some of the mystery out of what people think we do and clarify it so that the typical listener will be more comfortable with the process.  I discuss the entire selling process from hiring an agent through settlement/ closing.  I hope that you will listen to it and recommend my course to people you know.

Here are the lessons:  The “Five Steps to Selling Real Estate”; Hiring an Agent; Preparing Your House for Sale; Marketing Your House to Sell; Pricing Your House to Sell; The Listing Contract; Your House is on the “Active” Market; Congratulations, You Have an Offer; Contingencies; Closing the Sale.  I included two “bonus” lessons:  Andrew’s Time-Tested Real Estate One Liners and The Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS.

Here is a direct link:  https://listenable.io/web/courses/380/the-basics-of-selling-residential-real-estate/   To enjoy14 free days of Listenable, use this link:  https://listenable.io/?rf=CMO1BEOO

I have an extensive catalog of blogs and podcasts posted on several websites including my primary site AndrewWetzel.com.  If you haven’t followed them, I encourage you to give them a try.  If you have read and listened to my material, thank you.  I will keep adding new content.

Best wishes and thank you for listening and reading!  As always, I am a phone call, email or text away if you have any questions.

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

HIRE WISELY:  We are not all the same.

February 20, 2021

Delaware County PA January 2021 Residential Housing Market Update

Tri-County Suburban REALTORS and Showing Time have released their January 2021 Local Market Insight report for single family homes in Delaware County Pennsylvania.  The report relies on Bright MLS statistics.  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 web site, AndrewWetzel.com.  I am only a phone call, an email or a text away!  I respond promptly to all inquiries.

The market continues to be affected by the pandemic and resulting economic impact.  The weather has also been a factor.  However, generally speaking, the results in many areas are encouraging and, as always, your experience may differ depending on your location and how you have been personally impacted.  As I always say, the decision whether and when to sell or buy Real Estate is a personal one influenced by a number of lifestyle factors and external variables.  The pandemic typifies that.  Some have not been deterred while many others have decided to delay their plans to sell or buy.

The report compares current year-to-date results to one-year ago, same time period.  This report only covers one month so I would not over-react to the information.  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 greatly from neighborhood to neighborhood and even block to block.  There is no such thing as a “national” Real Estate marketany 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 as well as provide you with the knowledge and insight to help you decide what works best 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, 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 534 new listings in January 2021 compared to 586 in January 2020, a decrease of 8.9%.  The average number of active listings in January 2021 was 441 compared to 994 in January 2020.  Low inventory levels continue to affect the market.  There were 544 closed sales in January 2021 compared to 438 in January 2020, a 24.2% increase.  The median selling price was $240,000 in January 2021 compared to $202,000 in January 2020, an increase of 18.8%.  What effect did the large decrease in the number of properties being listed and available have on the market statistics?  It likely created some anxiety resulting in multiple offers, perhaps well over asking price, and buyers taking other actions to make their offers more competitive.  These include buying “sight unseen” and/ or waiving inspections.  The result was a huge increase in selling prices along with a large decrease in the Days on the Market (DOM) and the “Sold to List Price” ratio.  Do we really have an inventory problem or pent-up demand?  Time will tell.  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.

Generally speaking, the effects of what is happening remain to be seen.  Some buyers may come to regret a hasty decision to get a property under contract at “all costs”.  Buying “sight unseen”, especially without inspections comes with a risk.  Sellers and their agents need to consider how to manage such offers as they may have appraisal issues and/ or be more likely to result in buyer remorse.   Given the  expense and complexity of a typical Real Estate purchase, buyers and sellers need to fully understand what they are doing and what can go wrong.  Even with our property disclosure law in PA, many sellers either do not know about underlying issues with their properties or forget to disclose them.  Whatever your feelings about property inspections, they can provide important information to a buyer.  Getting a contract signed is only the first step to completing a Real Estate sale.

What about the properties that did not sellMany came off the market and remain off the market.  As the pandemic has evolved, some properties did come back on the market but many have not.  Did owners delay, change or give up their plans?  Buying activity has generally been strong but some sellers are reluctant to allow showings or may have issues holding them back.  Given the statistics, are people making an informed decision or reacting to what they “think” is happening in their local market?  A brief conversation may be very helpful if you have any questions about selling or buying.

Anyone thinking about selling or buying needs to understand their local market and decide how to react to it.  The effects of buying and selling remain for years as does inaction.  At some point things will return to whatever is “normal”:  how many will regret not taking action?  These are important decisions and likely require the knowledge and insight that an experienced, trained and educated 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 won’t if they keep it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

No matter how good the market may appear, 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 local market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a property was available to look at or purchase.  Some buyers may make an attractive offer just to control the process only to have remorse later as inspection results are revealed or they see another property they prefer.

Regardless of the amount 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 others offer more for the same price?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

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.

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 we experienced in 2020, is waiting for Spring something you would consider?  If so, now is the time to start planning.

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

HIRE WISELY:  We are not all the same!

January 13, 2021

Delaware County PA December 2020 Residential Housing Update

Tri-County Suburban REALTORS and Showing Time, using Bright MLS statistics, have released their Local Market Insight report for single family homes in Delaware County Pennsylvania through December 2020.  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 web site, AndrewWetzel.com.  I am only a phone call, an email or a text away!  I respond promptly to all inquiries.

The market continues to be affected by the pandemic and resulting economic impact.   However, generally speaking, the results in many areas are encouraging and, as always, your experience may differ depending on your location and how you have been personally impacted.  As I always say, the decision whether and when to sell or buy Real Estate is a personal one influenced by a number of lifestyle factors and external variables.  The pandemic typifies that.

The report compares current year-to-date results to one-year ago, 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 greatly 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 as well as 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 settled or closed today, the real question is when was the offer negotiated?  Typically, 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 8309 units listed for sale through December 2020 compared to 8993 listed through December 2019, a decrease of 7.6%.  Low inventory levels continue to affect related data points.  There were 7139 closed sales through December 2020 compared to 6984 through December 2019, a 2.2% increase.  The median selling price through December 2020 was $250,000 compared to $227,000 through December 2019, an increase of 10.1%.  The large decrease in inventory, meaning the number of properties being listed, had a relatively small effect on the number sold while substantially increasing their selling prices.  The number of currently available properties is well below one year ago and the Days on the Market (DOM) and “Sold to List Price” ratio are much improved.  Do we have an inventory problem or pent-up demand?  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.

Generally speaking, low inventory levels in some areas have produced multiple offers and a frenzy among buyers, some of whom may live to regret a hasty decision to get a property under contract. During the shutdown when “in-person” Real Estate activity was not permitted, many buyers made offers “sight unseen”, some without inspections to make their offers more attractive to sellers.  The effects of these strategies remain to be seen but Real Estate, perhaps with the exception of those properties acquired strictly as “investments” with documented income, 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.  Even with our property disclosure law in PA, many sellers either do not know about underlying issues with their properties or forget to disclose them.  Whatever your feelings about property inspections, they can provide important information to a buyer.

What about the properties that did not sellMany came off the market and still remain off the market.  As the pandemic has evolved, some properties did come back on the market but many have not.  Did owners delay, change or give up their plans?  Buying activity has been strong but the sellers may be reluctant to allow showings or may have issues holding them back.  Given the statistics, are people making an informed decision or reacting to what they “think” is happening in the market?  A brief conversation may be very helpful if you have any questions about selling or buying.

Anyone thinking about selling or buying needs to understand their local market and decide how to react to the pandemic as a “variable” that was not here last year and, hopefully, will be gone in the near future.  However, the effects of buying and selling remain for years.  They are important decisions and likely require the knowledge and insight that an experienced, trained and educated 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 won’t if they keep it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

Despite the pandemic, 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”.  Most property listings whose contracts are canceled or allowed to expire have asking prices considered high for their local market and/ or they were poorly marketed, meaning that some buyers and agents may not have even known that a property was available to look at or purchase.  Some buyers may even make “full price” offers just to control the process only to have remorse later as inspection results are revealed.

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?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

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.

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 we experienced in 2020, is waiting for Spring something you would consider?

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

HIRE WISELY:  We are not all the same!

January 12, 2021

How Sellers Sold Real Estate in 2020: Who is the Typical Seller?

NAR or the National Association of REALTORS has released its 2020 Profile of Home Buyers and Sellers.  The profiles are based on a survey using 131 questions mailed to over 132,550 recent home buyers who also purchased a primary residence between July 2019 and June 2020.  The focus of this article 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 conducts their survey annually.  This year’s results were unique as it was impacted by the pandemic starting in March of 2020.

  • The typical seller was 56 years old and had lived in their home for 10 years;
  • Sellers aged 18-34 sold within 5 years, those 65 and older sold within 16 years;
  • 69% had sold a home before and 31% had not;
  • 80% of the homes sold were single, detached;
  • 70% bought in the same state and the typical distance moved was 20 miles, 16% moved to another region, 14% stayed in the same region but in a different state;
  • 44% bought a larger home, 30% bought a similar size and 28% bought a smaller home;
  • 61% bought a newer home than they sold, 21% bought one the same age, 26% bought an older home;
  • 49% spent more than their selling price, 23% spent the same, 27% spent less;
  • The most commonly cited reasons for selling were to be closer to friends and family (15%), to buy something larger (14%), and a change in their “family situation” (12%);
  • 89% used a Real Estate agent, 88% used the MLS, 68% used yard signs;
  • 22% wanted to sell within a specific timeframe, 21% wanted help with pricing, 17% of sellers wanted help marketing their home, 16% wanted help with ways to sell it for more, 11% wanted help finding a buyer;
  • Houses typically sold within 3 weeks and achieved 99% of their final asking price.  Homes on the market for 2 weeks or less got full price, 29% sold in less than one week and got more than the asking price;
  • The typical selling price was $242,300:  pre-pandemic median @ $270,700 compared to $300,000 later;
  • The reported level of urgency rose after the pandemic, 46% compared to 39%;
  • The median equity in a sold home was $66,000;
  • 46% used incentives to attract interest.  The top two were offering seller assistance with closing costs and home warranties;
  • 69% were very satisfied with the process, 21% were somewhat satisfied, 10% were dissatisfied;
  • Only 8% sold without an agent, the lowest share since this survey began in 1981;
  • The typical FSBO was 57 years old;
  • The typical FSBO selling price as $217,900, more than 10% less than Real Estate-assisted sales ($242,300);
  • 77% of FSBO homes old within two weeks likely because they sold to someone they knew (51%) and sold for less.

The bottom line is that selling your home or any piece of Real Estate can be a very confusing and emotional process.  This NOT a retail transaction!  I respectfully suggest that you hire an experienced, trained and educated professional whom you can trust to sell what is likely your largest asset.  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 done much less frequently 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 questions about the process, please contact me.

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

HIRE WISELY!  We are not all the same!

January 2, 2021

Bright MLS November 2020 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 November 2020.  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 web site, AndrewWetzel.com.  I am only a text, email or phone call away!  I respond promptly to all inquiries.

The overall market continues to be affected by the pandemic and resulting economic impact.  However, generally speaking, the results in many areas are encouraging and, 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.

The report compares current year-to-date results to one-year ago, 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.  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 settled or closed today, the real question is when was the offer negotiated?  Typically, 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 7911 units listed for sale through November 2020 compared to 8661 listed through November 2019, a decrease of 8.7%.  Low inventory levels are the cause of related data points.  There were 6379 closed sales through November 2020 compared to 6381 through November 2019, a negligible decrease.  The median selling price through November 2020 was $252,000 compared to $226,000 through November 2019, an increase of 10.6%.  The large decrease in properties being listed had a relatively small effect on the number sold while substantially increasing their selling prices.  The number of currently available properties is well below one year ago and the Days on the Market (DOM) and “Sold to List Price” ratio are much improved.  Do we have an inventory problem or pent-up demand?  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.

Generally speaking, low inventory levels in some areas have produced multiple offers and a frenzy among buyers, some of whom may live to regret a hasty decision to get a property under contract.  During the shutdown when “in-person” Real Estate activity was not permitted, many buyers made offers “sight unseen”, some without inspections to improve their odds.  The effects of that remain to be seen but Real Estate, perhaps with the exception of those properties acquired strictly as “investments” with documented income, 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.

What about the properties that did not sellMany came off the market and remain unavailable.  As the pandemic has evolved, some properties did come back on the market but many have not.  Did owners delay, change or give up their plans?  Buying activity has been strong but the sellers may be reluctant to allow showings or may have issues they are dealing with.  My only concern is whether people are making an informed decision or reacting to what they “think” is happening in the market.

Buyers and sellers need to do the same planning and preparation that those tasks typically require.   Anyone looking to sell or buy needs to understand their local market and decide how to react to the pandemic as a “variable” that was not here last year and, hopefully, will be gone in the near future.  However, the effects of buying and selling remain for years.  They are important decisions and likely require the knowledge and insight that a 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 won’t if they take it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

Despite the pandemic, 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”.  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” 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 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 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?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

The overall economy is coming back but many are still hurting financially.  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 what we experienced in 2020, is waiting for Spring something you would consider?

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

HIRE WISELY:  We are not all the same!

November 28, 2020

Delaware County PA October 2020 Residential Housing Report

Bright MLS has released their Residential Market Statistics (which they call Local Market Insight) for single family homes in Delaware County Pennsylvania through October 2020.  If you would like information about this or any other County or any specific municipalities in the Delaware Valley, please contact me.  I am only a text, email or phone call away!  I respond promptly to all inquiries.

The overall market continues to be affected by the pandemic and resulting economic impact.  However, generally speaking, the results in many areas are encouraging and, 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.

The report compares current year-to-date results to one-year ago, 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.  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 is 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 settled or closed today, the real question is when was the offer negotiated?  Typically, sales can take 45 to 60 days to close so the market today may be different.  Up-to-date information, even if not perfect, is important!

As far as the statistics, there were 7282 units listed for sale through October 2020 compared to 8133 listed through October 2019, a decrease of over 10%.  Low inventory levels are the cause of related data points.  There were 5684 closed sales through October 2020 compared to 5879 through October 2019, a decrease of over 3%.  The median selling price through October 2020 was $250,000 compared to $227,500 through October 2019, an increase of almost 10%.  The large decrease in properties being listed had a relatively small effect on the number sold while substantially increasing their selling prices.  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.

Generally speaking, low inventory levels in some areas have produced multiple offers and a frenzy among buyers, some of whom may live to regret a hasty decision to get a property under contract.  During the shutdown when “in-person” Real Estate activity was not permitted, many buyers made offers “sight unseen”, some without inspections to improve their odds.  The effects of that remain to be seen but Real Estate, perhaps with the exception of those acquired strictly as “investments” with documented income, 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.

What about the properties that did not sellMany came off the market and remain unavailable.  As the pandemic has evolved, some properties did come back on the market but many have not.  Did owners delay, change or give up their plans?  Buying activity has been strong but the sellers may be reluctant to allow showings or may have issues they are dealing with.  My only concern is whether people are making an informed decision or reacting to what they “think” is happening in the market.

For example, I recently sat on an Auxiliary Tax Assessment Appeal panel and heard almost 1000 appeals by people generally questioning whether their proposed assessed value is realistic or not.  While I understand their concern about how the new assessments based on July 2019 market values will affect next year’s tax bills, many are saying that the pandemic has lowered selling prices which is a debatable statement.  Whether true or not is easily demonstrated but, regardless, the new assessed values are based on July 2019 long  before the current pandemic was known.

Buyers and sellers need to do the same planning and preparation that those tasks typically require.   Anyone looking to sell or buy needs to understand their local market and decide how to react to the pandemic as a “variable” that was not here last year and, hopefully, will be gone in the near future.  However, the effects of buying and selling remain for years.  They are important decisions and likely require the knowledge and insight that a 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 won’t if they take it off the market.  Anyone trying to sell now may have less competition and more offers to consider.  Buyers may have more competition and fewer houses to consider.  Hiring an experienced, trained and educated professional is more important than ever.

Despite the pandemic, 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”.  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” 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 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 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?  Many sellers open to negotiating their price will never get the chance.  I will be happy to discuss specifics with you.

The overall economy is coming back but many are still hurting financially.  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 what we experienced this year, is waiting for Spring something you would consider?

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

HIRE WISELY:  We are not all the same!

Next Page »

Create a free website or blog at WordPress.com.