List-Price Accuracy Gauge

Once a home is for sale but not selling, how do you know what to do?

Both buyers and sellers can apply my List-Price Accuracy Gauge:

Once the home is on the open market, if it is……

  • Getting visitors and offers, you are within 5% of being right on price.
  • Getting visitors but no offers, you are 5% to 10% wrong on price.
  • Not getting visitors, then you are more than 10% wrong on price.

It’s nothing personal, it’s just a simple guide to know how close the price is to being right.

The serious buyers rush out the first week to take a look, but after that it’s crickets, with only an occasional visitor. It is tough for sellers to cope, or make adjustments. But once the initial urgency has expired, you have to do something – don’t just sit there.

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How quickly should sellers make adjustments? The DOM clock is ticking!

0-14 days on market – Hot property, and when the sellers have their maximum negotiating power.

15-30 days on market – Buyers get suspicious, want to pay under list.

30+ days on market – Buyers will be expecting deep discounts, or ignore it altogether.

After being unsold for two weeks, sellers will suspect that something is wrong. But it is natural to resist changing the price and instead blame everything else – especially the listing agent.

Sellers, and agents, need to shake that off and act quickly to keep the urgency higher. The first price reduction should be for at least 5% and happen in the first 15-30 days for maximum effectiveness. If the home doesn’t sell in the next two weeks, then another 5% is in order, and by then the fluff is eliminated.

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Where do sellers go wrong?  They don’t properly price in the negatives.

Typically sellers just pick apart the comps to convince themselves why their home is the best around, and then settle on a list price that will show everyone who’s the boss.  If you don’t have any negatives, then you probably will get your price!  But typically sellers are forced to come to grips with the negatives of their house, and adjust accordingly.

Do sellers have to lower their price? No, not neccesarily.

There are other alternatives:

1.  Make your house easier to show.  Listing agents who insist on buyers jumping several hurdles just to see the home aren’t realistic about today’s market conditions. Make the home easy to see!

2.  Fix the problems.  New carpet and paint is the best thing you can do: 1) it looks clean, 2) it smells new, 3) you have to clean out your house to install it, and 4) you are managing a business transaction now – it is the logical solution.  Utilize staging too.

3.  Improve the Internet presence. Have at least a 12-25 hi-res photos and a simple youtube tour.

4.  Wait for the market to catch up.  If unsold for 60+ days, cancel and try again later – probably next year.

5. Reset the Days-on-Market stat.  As long as the MLS allows agents to refresh their listings, then it’s in the best interest of the seller to reset the DOM.  It is a gimmick, and instead sellers should concentrate on creating real value for buyers – that’s what will cause them to pay more.

The longer it takes to sell, the more discount the buyers will be expecting – usually about a 1% off for each week on the market.  When other homes are flying off the market, the buyers’ obvious conclusion is that your price is wrong, and they load up the lowball offers.

Even if you complete one or all of the five ideas above, don’t be surprised if you need to lower the price too. Keep it attractive!

Home Designs for Dogs

Isn’t it interesting how some people know what dogs think and feel? Or are they just selling something?

“It’s always a good idea to give your dogs a dedicated bed or other comfortable perch that’s a spot only for them—it will make them feel so adored. There are so many fabulous ones on the market, and you can have fun with them by covering them in a fabric that matches the room or doing a pop of color that stands out.

“You can also place an upholstered ottoman at the foot of your bed which is a great way to keep your pup pampered without having to share your bed. Add in a throw to make it that much cozier and more comfortable. And if your dog has a chaise or chair they love in your home, give into it, and let that be theirs. Just cover it in a durable fabric or even slipcover it so that it’s easier to clean.”

https://www.mansionglobal.com/articles/home-design-with-the-dog-in-mind-b9a4cdf6

Home Sellers Disclosing Repairs

From our broker of record:

Q. The seller told me that when he bought the property seven years ago there were drainage, soils and foundation issues.  He said he has fixed everything and there have been no issues or problems during his ownership. He said because he fixed everything there is nothing to disclose to a buyer.  Is that correct?

A. No. Past defects, even if repaired by the seller or others, are to be disclosed. Not only that the seller should provide all relevant information regarding the repairs to any prospective buyer but also any improvements or modifications. The information would include but not limited to the person(s) who performed the repairs (i) the property owner (ii) a licensed contractor (iii) an unlicensed tradesman (iv)all paperwork related to the repairs/improvements/modifications to the property.

In addition, the new “Flipper Law (AB 968)” which will become law July 1, 2024, means a seller of a residential one-to-four property who accepts an offer within 18 months from the date when title was transferred must make the following disclosures: 1) The seller must disclose repairs and renovations when performed by a contractor with whom the seller entered into contract; 2) the name of each contractor and their contact information; and 3) any permits obtained (or if not obtained, the contact information of the third party who can provide the permits). It happens regularly that sellers do improvements without obtaining proper permits, so double-check at the city or county to verify.

Hiring A Buyer-Agent

Hopefully the hubbub about realtors’ pay will cause consumers to investigate agents more thoroughly, which I’ve been encouraging for a while. Here’s one of my blog posts from 2009 – check the comment section too:

Most buyers struggle to find a quality realtor to assist them in buying a house, and it’s the realtors’ fault.  The national, state, and local associations are so adamant about protecting the new agents and giving everyone an equal chance, that they provide no help whatsoever to the general public.

Their message?  When trying to find good help, you’re on your own.

So how do you get what you need?

Everyone tells you to ask around, get referrals from friends, go to open houses, go with a big company, go with a small company, new agent, old agent, kickbacks, etc., that it probably doesn’t matter where you get a realtor, what matters is how to evaluate them.

Here are my things to look for when evaluating a realtor’s ability to help you buy a house:

1. ASK ABOUT THEIR RECENT TRACK RECORD OF SALES – Let’s cut to the chase, shall we?

Has the agent been able to successfully guide others to the finish line this year?  The best answer is 1-2 closings per month, if you want an agent who delivers personal service.  Any agent who sells four or more per month is slamming people into houses, and those at zero, well let’s face it, they don’t have anything of value to add to the equation.  Get a testimonial from a past client, and/or at look at the sales they’ve done and judge them to see if they were good deals.  (I’ve assisted 10 buyers with closing their sale this year).

These current market conditions are unlike any seen before.  If your agent has been closing some buyer transactions this year, they must have something of value to share.  Here’s what to look for:

2. ASK THEM, “WHAT/WHERE ARE TODAY’S HOT BUYS?  How they answer that will tell you just about everything you need to know.  If they give you a smart-aleck answer, they probably aren’t the right agent for you, only because they aren’t in the game.  If they can name one, at least they are looking at properties, and those are agents who can provide value – ideally your buyer’s agent is previewing property every day, in person.

3. THEY SHOULD ASK YOU QUALIFYING QUESTIONS – If they jump in the car without asking questions, their time must not be too value to them, and this isn’t a business where wasting a lot of your time makes for good quality realtors.

4.  THEY SHOULD KNOW ABOUT FINANCING – I guess it’s alright if they just hook you up with their lender to get pre-qualified, but if they can ask/answer the qualifying questions themselves, it might help when it comes time to structure an offer.

5. HAVE THEM SHOW YOU SOME HOUSES – Go in their car, and if they don’t need a map to get around, you’ve found an experienced veteran.  It’s not guaranteed that they can help, nor is it required, but it’s a good indicator.  If they are pointing out specific sales/listings along the way (theirs or others), then they know the comps too, which is another great indicator.

6. EVALUATING THE PROPERTY’S CONDITION – They don’t have to be a general contractor, but they should be able to educate you about the property’s condition.  If all they do is point out that “This is the living room”, they’re not going to have much to offer in terms of added value, unless you don’t know what a living room is.

7. HAVE A VENDOR’S LIST – Successful agents know professionals to call to fix stuff – the more thorough the list, the more problems they have encountered.

8.  DO THEY CHARGE FOR THEIR SERVICE? – Ask about “transaction fees”, “processing fees”, or “compliance fees”.  These are junk fees used to pad their bottom line, and are not required.

9.  DO THEY INSIST ON HAVING YOU SIGN A BUYER-BROKER AGREEMENT? – Pass on those, unless you got married after having one conversation too.

10. “FORECLOSURE SPECIALIST” – Be very leery – we are all foreclosure specialists now.  Any agent who tries to make it sound like they have some special “foreclosure ability” is blowing smoke, unless they are listing REOs and not putting them on the open market.  If they don’t mind breaching their fiduciary duty to their bank-seller, they’ll sell you down the river in a heartbeat.

11.  SHORT SALES – I personally see 2-3 short sales every day that have already found their buyer before MLS input, and it is VERY frustrating.  These agents don’t care about their own reputation amongst their peers, and that alone should make you wonder.

12.  OFF-THE-GRID – Ask about what agents can do to find properties that aren’t on the regular websites.  Any positive response would be a good indicator, and any examples of closing one would be even better.

If they can get through those questions and you still like them, you found a good agent!

NEW AGENTS – A new agent’s zeal and availability can really help buyers who don’t have the time or willingness to search for properties themselves.  Want somebody to do the legwork for you?  Put a new, hungry agent on it, but there may be some struggle clinching the deal if there are competing offers.

OUT-OF-COUNTY AGENTS – You’ll be doing all the work yourself, so your own proficiency in being a realtor needs to be up to par.

RELATIVES – Many deals crash and burn, and hearts are broken over houses.  Want a relative to help you?  Make sure that you’ll accept never wanting to talk to them if they cost you the right house, at the right price.

“GREAT TIME TO BUY” – If you hear that catchy phrase, just walk away.

The inventory of quality homes at good prices is EXTREMELY LOW, causing the buying experience to be full of frustration and disappointment.  You can look for weeks or months without seeing anything attractive, so I don’t know why any agent would call that a great time.

REALTOR TEAMS – No problem, but don’t interview the big dog and then get passed off to the assistant without asking the same questions.  You want to be clear about who is helping you, and what you can count on.  In my case, I may have Richard or another KR realtor help me on occasion, but I’m still the main person in charge, and am responsible for your success.

Realtor Definitions

“Curb Appeal” = The art of making your house look so good from the outside that potential buyers forget they can’t afford it.

“Cozy” = It means you can touch both walls at the same time.

“Open Floor Plan” = Good luck finding a place to hide from your family.

“Ocean View” = You might see water if you stand on your tiptoes and squint really hard.

“Panoramic Ocean View” = Less squinting needed.

“Low-Maintenance Yard” = Prepare to embrace the beauty of gravel and succulents. Your dog will hate it.

“Charming” = The real estate version of “it has a great personality.”

“Improved Pricing” = It’s less of a ripoff now.

“Off-Market” = Everyone has passed on it already.

“Seller Will Carry” = No bank will touch this.

“Bring All Offers” = My seller is nuts, so lowball me.

“Perfect For 1031” = Perfect if you want to overpay.

“Trophy Property” = Overpriced.

“Generational Property” = Way overpriced.

“Call For Price” = We’re embarrassed to publish it.

“Distressed” = Not distressed.

“For Sale By Owner” = For sale by ego.

“Below Replacement Cost” = Meaningless filler words.

“Leasehold Interest” = You’re not buying real estate.

“Fixer-Upper” = A polite term for a house that’s about to be condemned.

“Needs some love” = You might need therapy after seeing the kitchen.

“Rustic Charm” = No Wi-Fi, but plenty of cobwebs to keep you company.

“Open Concept” = No place to hide your junk.

“Vintage Decor” = Previous owners thought you’d enjoy their 1970s design choices as a timeless gift.

“Quaint Neighborhood” = The only exciting thing that happens is the occasional squirrel chase.

“Up-and-Coming Area” = It’s not great now, but just wait until someone opens an artisanal kombucha shop.

Zillow’s Home Trends 2024

Brutalist? Here’s what’s in and out:

Do you love to set trends rather than chase them?

You can get ahead of the curve on the hottest new home design trends by checking out our predictions of which features and design elements will be trending in 2024.

We looked at nearly 300 home features and design styles mentioned in for-sale listing descriptions on Zillow and then identified the keywords showing up more frequently than they did a year ago. From post-pandemic pastimes to nostalgic designs from decades past, Zillow identified the emerging trends of 2024:

https://www.zillowgroup.com/news/2024s-hottest-home-trends/

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