Real Estate - what should we do?

[FinallyRetired]

Several of my neighbors in Northern Virginia are hoping to put their homes on the market in the next year. They've held back waiting for housing to pick up, and I think this is indicative of the pressure building up with sellers waiting to sell and buyers waiting to buy. There may be a flurry of sales when the majority of buyers and sellers decide the bottom has arrived and mortgages ease up a bit. I expect a flurry of sales at pretty low prices, then a bounce back though not at the bubble prices we'd seen.

 

[Cantuar]

Bad time of year for selling, but when we sold our house a couple of years ago (beginning of the downturn) our realtor told us that the people out there looking for houses were usually the serious buyers. Middle of winter on the East Coast isn't the greatest time of year to sell, though. If you hope to get interested buyers in the spring it might be better to take it off the market for now and relist it at a slightly lower price then. That might be better than dropping the price now.

Are you doing all the good stuff with having the home staged and making sure it looks squeaky clean the photos? Is it listed on Realtor.com along with photos too?

 

[cj]

Are you doing all the good stuff with having the home staged and making sure it looks squeaky clean the photos? Is it listed on Realtor.com along with photos too?

Yes to all of those things.

 

[Cantuar]

Well, then, if it's competitively priced it should sell, especially when things pick up in the spring. The market in the DC-Baltimore area isn't great at the moment - our long-term realtor is seriously talking about retiring - but it's better than in some places.

Good luck!

 

[Donzo]

The property that I had in San Diego sold this summer, it was on the market for 8 + months. I lowered the price 2X, the 2nd cut was a biggie. I was afraid that fire season would slow/stop sales activity and lower prices further - also, I factored in having that money invested (most in MM/CDs) as opposed to waiting for my price to be met. It will take less than 9 months to break even with interest income and not paying taxes. Let alone all the upkeep and hassle.

I got lucky with this stragegy, the fires were brutal early this year and sales have slowed considerbly and prices are being cut.

You gotta look at the big picture - sure it would be nice to get your asking price - but having close to the asking price invested and working for you is VERY nice.

 

[boont]

Log Home On Four Acres

Two things. You need lots of pictures. Good pictures, of your house. If you can't take them hire someone who can. Use a website like Craigslist. Don't just leave it to the realtor. Also, pump up the "Log Home on four acres" description.

I got no response on a house I own until I changed the description to "1940's Garden Home". Phone suddenly started to ring. Some people like period homes.

Second thing. Instead of cutting the price, tell your realtor that you will pay them 8 percent instead of 6 percent if they can sell it in three months.

Guess which house will move to the top of her attention right quick.

boont

 

[Babeebloos]

Two things. You need lots of pictures. Good pictures, of your house. If you can't take them hire someone who can. Use a website like Craigslist. Don't just leave it to the realtor. Also, pump up the "Log Home on four acres" description.

I got no response on a house I own until I changed the description to "1940's Garden Home". Phone suddenly started to ring. Some people like period homes.

Second thing. Instead of cutting the price, tell your realtor that you will pay them 8 percent instead of 6 percent if they can sell it in three months.

Guess which house will move to the top of her attention right quick.

boont

I offered an incentive to my realtor when I sold my last home...it definitely WORKS!
Also I've been watching 'Designed to Sell' on HGTV....there are really great ideas that anyone trying to sell their home can use.
Number one thing is to De-clutter! No one wants to see personal things of the owners all over the place and full closets!
Someone looking at homes will look favorably on yours if you follow some of the advice on this show. It only takes ONE BUYER out there...and if your house shows the best of all the others in your market.. which one would they pick?

Good Luck!

 

[RetireeRobert]

Don't know about your area, but around here there are "professional stagers" who will declutter, arrange, stage your home for viewing by potentail buyers. Article I read about them it sounded like it was afforable service, and several realtors sang their praises as to effectiveness. You might look/ask around if there are such folks in your area, especially if you don't have time or inclination to DIY the staging.

 

[cj]

Thanks to everyone for all of your input!

Craigslist - check
Lots of pictures - check
Emphasis on the log home/4 acres - check
Declutter - check

The thing about decluttering is that it doesn't matter much if no one steps foot in the place! Since we have already bought a new place, we've moved all the junk out, so it's extremely neat and well kept. We are neat freaks, actually. When the realtors came through on the preview tour, all they could say was that it was beautiful, and no one made any critical remarks or suggestions. Anyway, we are just relaxing until after Christmas. Then we will probably look into doing the realtor bonus thing.

CJ

 

[starter82]

I'm from the general area where the house is located. I certainly don't know of the house's details, but the price sounds reasonable for what other houses are being listed and sold for (especially when you take into account the land).

On a side note. In the general area, median home prices increased ~107% (i.e., a bit more than doubled) in the five year period between 2000 and 2005. In that time, median household income rose by ~21%. In 2000, the median home price was 2.31 times the median household income. In 2005, this increased to 4.1. Medians clearly don't show the full picture. I'm not sure how this compares with the past.

 

[kcowan]

In 2000, the median home price was 2.31 times the median household income. In 2005, this increased to 4.1. Medians clearly don't show the full picture. I'm not sure how this compares with the past.

Now that the buying fervour is over, it will mean regression to the mean. It might take 7 years but it will happen.

 

[beowulf]

Well, then, if it's competitively priced it should sell, especially when things pick up in the spring. The market in the DC-Baltimore area isn't great at the moment - our long-term realtor is seriously talking about retiring - but it's better than in some places.

Same in the DC-VA area. There have been houses in my development on the market since early Spring. One even had a Sold sign up for a while, but it must have fallen through as it's still for sale. I am hoping we recover before the area we want to retire in does. Yes, that's greedy, but life is that way.

There are a lot of blue light specials where we are looking in Phoenix. We were looking at 2600 sq ft houses with lots of amenities for about $490K. The latest listing we recived had a 3600 sq ft house with free amenities for $450K. I guess the builders have to keep building or they go out of business. Would love to buy, but it will go down in price even more and we can't float 2 mortgages.

 

[boont]

"Regression to the mean"

"Now that the buying fervor is over, it will mean regression to the mean" kcowan

I hear a lot about this regression to the mean when people talk about real estate. However, if you mention that the stock market is way too high and must inevitably suffer a "regression to the mean" a whole forest of people will come forward and say they ride out all drops and buy more stocks at every opportunity.

That is not only inconsistent it doesn't make any sense either.

boont

 

[starter82]

"Now that the buying fervor is over, it will mean regression to the mean" kcowan

I hear a lot about this regression to the mean when people talk about real estate. However, if you mention that the stock market is way too high and must inevitably suffer a "regression to the mean" a whole forest of people will come forward and say they ride out all drops and buy more stocks at every opportunity.

That is not only inconsistent it doesn't make any sense either.

boont

I'm not sure I follow. Are you saying that it's inconsistent between the two markets (real estate and stock) or are you saying that the strategy is inconsistent?

 

[tryan]

There will always be more people "riding out" a volitile RE market .... people have to live SOMEWHERE. Also explains why stocks are much more risky (RE poor liquidity).

 

[kcowan]

There will always be more people "riding out" a volitile RE market .... people have to live SOMEWHERE. Also explains why stocks are much more risky (RE poor liquidity).

Plus the 'trading costs" for RE is 6% commission plus the cost and aggravation of a physical move, whereas a srock trade is the cllick of a mouse and $10. NO wonder stock prices are more volatile.

But some people are just in denial about property values returning to their baseline trend and keep clinging to the notion that "this time it's different". Yeah right just like with dotcoms...

My biggest concern is that the subprime fiasco might cause the long term appreciation trend to become a thing of the past.

 

[lazygood4nothinbum]

doesn't seem to be hurting the clampett estate. 30-day change: up $507,502. check out the ceeement pond.

Zillow - 750 Bel Air Rd, Los Angeles, CA 90077

 

[starter82]

But some people are just in denial about property values returning to their baseline trend and keep clinging to the notion that "this time it's different". Yeah right just like with dotcoms...

My biggest concern is that the subprime fiasco might cause the long term appreciation trend to become a thing of the past.

Aren't you sort of subscribing to the notion of "this time it's different" by saying that long-term appreciation may end with this "crisis".

 

[cj]

We've been on the real estate roller coaster before. This is the 4th house we've tried to sell. Two were sold in a great market (1988, 2002) but we bought a house in 1988 in the Washington DC area that we sold 8 years later for LESS than we paid for it. Bought September 1988 for $202K, sold in February 1997 for $200K. Of course now that same house is on Zillow today for $458K...

The market goes up, and people forget that it sometimes goes down. That's the way it is.

CJ

 

[BunsGettingFirm]

Is it advisable for the buyer (me) to offer the buyer's agent an incentive to for every 10k that he can knock down on the price? I think the agent gets 1.5% of the sale price. The broker and office gets the other 1.5%.

I'm looking for 1-BR or 2-BR condos in Boston. I looked at one broker's web site, and it clearly lists some decent-looking condos in the $200k to $250k range, but when I called, the agent was so eager to steer me to the $300k+ condos in the Harvard Square area. Since I will turn this condo into a rental in a few years, I don't want it to be too fancy. I also don't want to spend an extra $100k just so that the agent and his office can make an extra $3000.

I'm going to strike off this particular agent from my list because he's obviously not working in the buyer's best interest. However, I'm thinking that the other agents I call will do the same thing because the incent for the buyer's agent is not structured for him to find the best deal for the buyer because the pay off comes from having a high sale price.

 

[cute fuzzy bunny]

Unless you get someone who really cares about their job, the buyers agent is working for two thing. One is their commission, and the higher the sales price the higher the commission; the other is the seller who is actually paying them. Unless you get a "true" buyers agent that you are paying a fee and is not receiving payment from the seller. Some states have those.

A lot of agents also will not mention a purchase price or help you negotiate beyond showing you comparable sales. Most of them are afraid of the associated liability should you decide later that you could have gotten the home cheaper but the agents "bad advice" led you to pay more.

There are pretty good agents out there. Mine gives me any commission over 2.5% back in gift cards, lists for 2% and gives me her feelings on what the desperation level of the seller is and what price range I should be offering in.

 

[lazygood4nothinbum]

why would it benefit the realtor to steer a customer to a higher price? wouldn't it behoove the realtor to steer the customer to a lower price which would accelerate the sale? isn't the lesser percent of something greater than a higher percent of nothing? perhaps not understanding this is why i never went into sales.

 

[BunsGettingFirm]

"Now that the buying fervor is over, it will mean regression to the mean" kcowan

I hear a lot about this regression to the mean when people talk about real estate. However, if you mention that the stock market is way too high and must inevitably suffer a "regression to the mean" a whole forest of people will come forward and say they ride out all drops and buy more stocks at every opportunity.

That is not only inconsistent it doesn't make any sense either.

boont

The statement isn't inconsistent if these same people had sold on the way up and are diligently following a constant-mix portfolio strategy. However, unless most people are running their portfolios using a computer program, my bet is that they did exactly the opposite.

Even if they aren't using leverage, doing so would still require balls of steel. Hm...I'm going to use that as my new screen name.

 

[BunsGettingFirm]

why would it benefit the realtor to steer a customer to a higher price? wouldn't it behoove the realtor to steer the customer to a lower price which would accelerate the sale? isn't the lesser percent of something greater than a higher percent of nothing? perhaps not understanding this is why i never went into sales.

True, but CFB and I pointed out the same thing. If the buyer's agent gets paid a percentage of the the sale price, he's really getting paid by the seller, so follow the money, and you'll find the agent's true loyalty. The point is that I wasn't dreaming when I felt from my initial conversation that the buyer's agent wasn't working in my interest. I'd have go to realtor.com to find me a real buyer's agent.

 

[cute fuzzy bunny]

Easy. 3% of 350,000 is better than 3% of 300,000. And someone who quals for 300 will probably qual for 350.

Further, the average 350,000 house looks better than the average 300,000 house. Once you've showed a customer something larger, nicer and/or in a better part of town, everything else looks like crap. Its an easier sale to make because the buyer likes and wants it more, even though its a little more expensive.