But nothing is worse for values in your complex than a ton of listings just sitting on the MLS going nowhere.  Ok – so how can you help move these units ….let me count the ways.

1. Don’t make getting through the front line-security something akin to the landing at Normandy.  Security is great – requesting a card from the agent is fine, but make sure that the building is actually accessible including the amenities. After all the buyer is often buying the lifestyle associated with the complex.  It does no good for me to say “Oh and you should SEE the gym!” When they can’t see the gym because  it is locked and no one has an access key.

2. Please don’t make us chase keys all over God’s great earth!  You are shooting yourself in the foot when you don’t allow lock boxes. This stops more showings than you can possibly know.   When you insist that the agent pick up keys at a brokerage you are often forcing them and their clients to take a scenic tour of several brokerages.  Let’s say I want to show three units at three different brokerages in your complex.  That’s three stops to pick them up.  Then the showings, then another three stops – with my buyers in tow to return them. That’s six extra stops to show three units.  Our area is urban – so this isn’t trivial.  God forbid if I want to show them another complex that has the same issue.

Often, in those cases I will eliminate all but one unit, and only if they have a strong interest in the complex, will I return to show the rest.  Meanwhile, other complexes got  showings in all their units.  Statistically, what do you think that means for the likelihood of the buyer placing an offer on your complex.

3. When I submit a form or have questions, I’m not calling you for my health and I’m not doing it to annoy you.  Several management companies seem to regard agents as a lower form of life.  I’m just doing my job and am trying to sell a unit in a complex that you manage.  Please be polite and respond as soon as is convenient.  I don’t want to pester you, but if I don’t hear from you for a week, I will start to stalk you.

4. If your complex is showing its age, the unit can be in terrific shape, but buyers won’t get past the dated common spaces. This is particularly true of buildings built in the 70s and 80s .  If buyer’s aren’t biting at all, look at your carpeting, look at your wall paper.  If it screams thread-bare or the 80s – it might be a good idea to consider changing it out.  I know times are hard, but buyers are looking at the whole package.  It may scream “deferred maintenance” and “future assessments” to them. So preserving the value of the units may require some coin.

5. If you require a board meeting – please don’t tell buyers that you only meet every other month except for those with five Monday’s in them.  Banks are tough these days and getting a commitment letter is feat in and of itself. It also takes a lot longer than it did. Having buyers waiting for weeks because of a board that only meets occasionally can kill a transaction. Rate locks are expiring more than usual these days and this only exacerbates the problem.

6. If a bank notes a problem  and refuses to issue a commitment letter for some defeciency such as not enough fidelity bond insurance.  Please deal with it immediately.  No, its not going away if the buyer switches banks.  The banks are pretty much mirroring each other with respect to these issues. This type of problem will prevent any unit that is on the market from moving unless the buyer has all cash.  I ran into this last year  and it was a nightmare because management wouldn’t cooperate.

7. Finally, a word about tightening requirements or adding restrictions. The banks are tough enough these days. Just to get a loan with 20% down requires fingerprints, DNA samples and your first -born child as collateral.  At this point, although boards need to be discriminating, piling on more restrictions and more constraints than before can be counterproductive.

One area of contention is pet-friendliness. With the new homeowner’s tax credit history – many of your prospects will be empty -nesters – and many of them cherish the companionship of their pets.  I know that being pet-freindly has its challenges, but Westchester condos are notorious for their lack of accommodation to pet-owners.  I think this is a mistake.  If you are currently pet-friendly, you will surely decrease the pool of buyers by abandoning that policy.  I know of one complex that has recently done so and another that is thinking of doing so.  It’s a disturbing trend and it will reduce the buyer pool.

There you have it – several ways in which you can make your Westchester condo or coop complex more desirable to the limited pool of qualified buyers .

© 2010 – Ruthmarie G. Hicks – http://thewestchesterview.com. All rights reserved.

At first this might seem like real estate heaven for buyers and sellers a like.  However, the number of these sites have been propagating like bunnies and the elation turns to confusion when the consumer picks up the phone to call the agent who listed the home.

Where is the Listing Agent?

You see, these listings are being sponsored by  agents and brokerages that for the most part have nothing to do with the listing.  Some may have no idea about the listing whatsoever.  They engaged a  service that covers several counties, and know nothing about the home in question. In fact their working territory might be 30-50 miles away or more – but they are eager to help the buyer or seller with their real estate needs no matter how little they know about the area.

Now if you look very, very carefully – you can indeed find the listing agent. Just look for the only 8 point gray colored font on the page and you probably have located the listing information.

Public Facing Home Search – Some History:

Confused yet – you should be.  A little history will help consumers to  understand what is going on here: On my site – as well as many other agent websites -  you can sign up to “search for homes.”  These sites are up-to-date and derived from the broker’s version of the MLS – but it is not in fact THE MLS.  The public never truly sees  the broker/agent version of THE MLS;  they see a public facing version of  the same.  It is up-to-date, but has restrictions and is not 100% complete.  These sites are referred to in the industry as “IDX” sites – for “internet data exchange.”

People who land on my site can sign up for IDX access any time they wish.  I am giving them a feed that is derived from the MLS.  So consumers on my site recognize that although I let them view all the listings in the county – they aren’t all MY listings!  If they were I’d be having a coronary  trying to keep track of the thousands of homes I was lucky enough to list county-wide.

Google Now Gets To Pick Up IDX Listings as Individual Web Pages:

Here is where it gets tricky.  The pages indexed to Google are the exact same thing.  They agent has  subscribed to a site that takes each and every listing that most consumers sign up for – and has indexed each listing as a separate web page to Google.  But here is where it gets deceptive.  Since its on Google as its own separate web page and has the agents face, name, number, email and other information – it LOOKS like that agent’s LISTING.  And here is where I feel a line has been crossed that should not be.   This is deliberately deceptive and confusing to the public.

In the interest of full disclosure -  I do have an axe to grind here.  As a listing agent nothing makes me madder than someone  taking my photos, my descriptions, my video links and my marketing and using them to promote themselves. If I just slapped up the listing and put no effort into the process I probably wouldn’t mind…but I spend HOURS on proper presentation, taking hundreds of shots to pick the best ones.  The photos are edited and tweaked and submitted after hours of work.  The same is true for my video feeds.  The fact that another agent  displays it as their own infuriates me.

What Does Do For the Consumer – Seriously?

Objectively, from the consumer’s standpoint – the trend to bypass a buyer’s agent and go directly to the “source” is not a good one.  Representation is a tricky topic – and one for another blog – but  a buyer going directly to a listing agent can be problematic to the buyer.   The notion that a buyer can save significant money going direct to the listing agent is a fallacy.    So having a different face and name for buyer’s to call is not necessarily a bad thing.  However, there are several disturbing issues:

• These sites are often purchased by agents who don’t really work the area in question. In fact such indexable listings are a great way for an agent to push their way into an area they know nothing about.  Bottom line here – the consumer has no idea if the agent has any local knowledge at all.
• There are questions about specific issues where the consumer might want to seek out the listing agent for information.
• If someone is thinking of listing a home and they are looking for a listing agent with experience in the immediate area – this can be very, very deceptive.

The question from the consumer’s standpoint remains – does the mess you see at the right make ANY SENSE for the consumer…seriously.

The popularity of these sites is sowing the seeds of their own destruction:

As these sites propagate like bunnies – their usefulness to the agent is diminished with every single new subscriber. Given that the first two pages of Google now look like nothing but  a string of listings for the same property, the ability of these sites to draw in buyers and sellers is already on its way downhill.  This form of marketing my be a victim of its own success in fairly short order.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com – Why are Google searches for listing addresses so confusing?

Sites like Zillow and Redfin are turning what should be a rather simple process into a monster of complexity. Finding the listing agent on an IDX site or a major real estate portal should be a piece of cake, no?  Hardly. There is no way this isn’t creating confusion for the general public.

Large Portals Such as Zillow -  Pay to Play:

You see all those wonderful portals such as Trulia and Zillow that agents happily used FOR FREE are now demanding pay back for all that free exposure.  I have no problem with entities like Zillow monetizing.  However, the way in which they are doing it marginalizes the listing agent unless they pony up the big bucks.   If they don’t, those with fatter wallets get “credit” for the listing.

Zillow now happily puts  the mug and contact information of any agent alongside their listing data as long as they cough up the dough.   The implication to the public is  that the agents listed have something to do with the listing.  Most of the time, they have nothing to do with it whatsoever.   They simply paid to be a “premier agent” or an area “specialist.” As I stated in my previous blog about “premier agents” and area “specialists” they often are nothing of the sort.  Some have had no sales (either on the listing or sales end) in the geographic area that they supposedly specialize in.  Where is the actual listing agent in all of this?  At the bottom of the page. No photo, no contact information – tossed off as an obligatory afterthought.

Oh! Those Wonderfully “Creative” IDX Sites!

Then there are the uh….”creative IDX sites.”Although there are several IDX sites like this, but Redfin has the most Google support.  They at least mention the listing agent underneath the photos.  But once again, the actual listing agent is an obligatory afterthought.  In their place  is another agent’s mug and contact information associated with the listing.

I took a sample listing from outside my state to illustrate how confusing this muxt be to the public.

I randomly found a listing in Cambridge MA for 31 Linnaean St.  First I found the listing on Zillow: As you can see from the picture…there are four agents to choose from on the right.  But which one is the listing agent.  What’s a buyer or potential seller supposed to do with this information?

Maybe they might hit it right by going eeny, meeny, miny, moe….But that still wouldn’t cut it because the listing agent isn’t even there!  If you go to the very bottom of the page – look for the name without a photo under “Listing Provided by”…..Well that was about as clear and simple as mud!

Now let’s go to misleading IDX’s. This happens to be from Redfin, though I’m not singling them out specifically. There are other IDX’s that are doing this.   There are other offenders, but Redfin has the most google juice,  and the price of  having large amounts of Google juice is that you face more scrutiny.

Here we have yet ANOTHER agent complete with photo and contact information.  He is easy to contact, all you have to do is point and click to work with him…Trouble is – he has nothing to do with the listing either.  The listing agent is mentioned in small print under the photos.  There is no way to contact her. No phone number, just the name and the brokerage.   Now that was clear, wasn’t it?  No it wasn’t.

So I counted five featured agents associated directly with this listing…Ironically none of them had anything to do with the listing.

Yes, I DO Mind:

Look, I don’t have a problem with people using my listings in their IDX. And I expect that people would call the agents who gave them access to their IDX.  My sellers and I would benefit by having a larger pool of buyers.  I don’t even mind large entities such as Zillow and Trulia creating large portals for consumers – although I find these portals to be of dubious value to the consumer.  But I expect said IDX’s and portals  to keep it honest and not implicate other agents  as the source of the listing.  To have specific photos and contact information of specific agents associated with specific listings does just that.  And yes, I mind.  I mind very, very  much. I also think a line has been crossed and that this practice needs to be stopped dead in its tracks.

It does nothing to inform the public.
It is deliberately misleading.
It is a not so subtle attempt to glom on to another agents listing.

I know the DOJ was after transparency and for “opening up” the real estate industry to new models.  But I seriously doubt that they intended for the black box that was the real estate transaction to become a black hole of confusion for the public.

I want to thank Andrea Swiedler for her blog “HEY, thats MY LISTING!” (http://activerain.com/blogsview/1657380/hey-thats-my-listing-) for influencing my decision to write this blog.  Although I didn’t agree with why she was so steamed, but she made me define and pin-point what really does raise my hackles.

Further Reading:

Who Is Zillow Really Targeting? It’s the AGENT stupid – not the consumer….

Zillow named in patent infringement lawsuit

© 2010 – Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.

Disclaimer – There is no love-loss between Zillow and me:

Those who have been reading my comment threads on various forums know that I have absolutely no love for Zillow whatsoever.  I consider their forums poorly monitored, and  their Zestimates to be pointless bordering on the unethical since any number that is often off by 20% or more that the public tends to implicitly trust has the capacity to cause harm.

The fact that the Zestimate itself is inherently inaccurate doesn’t  bother Zillow one wit.  Their canned responses in Ron Tarvin’s blog regarding the lawsuit is a strong indication of same.  They know the Zestimates are often way off the mark.  They know it causes confusion within the public. They know this has the capacity to harm a seller. They know that agents tear their hair over inaccurate Zestimates that cause the public to put lowball offers on their listings. But they don’t care, because it was never about providing transparent information to the pubic.  It was – and is – all about the traffic.  If it drives people to their site, they simply could care less. The question is why?

For Zillow – it was never really about the consumer:

I have long suspected that Zillow’s  whole point of being is to insert themselves between the client (either the seller or buyer) and the agent as a pointless middleman who has managed to glom onto real estate leads.   Their target was never the consumer – it was always the agent and the brokerage. They have always wanted to charge agents in order to put them in front of buyers and sellers.  Their entire site is set up as “bait” to acquire consumer information – phone numbers and email addresses – to sell to agents.

Checking out  the Zillow Premier Agents:

This week they proved my hypothesis correct.  Now, in addition to the pointless Zestimate they are promoting  the equally useless list of  Zillow Premier Agents to the consumer.  Why is the  list of preferred local experts useless?  Because if you can pay – literally ANYONE can claim to be a local expert on Zillow – so long as they are willing to pay for the privilege.  When I found out about the email (which I threw in the trash) I did a bit of research – and this is what I turned up..

• First I checked the address of a condo complex where I do a goodly number of transactions.  The names of six agents popped up.  I checked the MLS for each of these agents for the past year. 5 of the six had not ONE transaction in the complex.  No active listings, no contracts, no solds as either a buyer’s or listing agent..no nothing. The sixth had one transaction under contract.   In fact, there were agents on that list I had never heard of before.  How does a list like this serve the public interest? It doesn’t.

• I then went to two zip codes where I am active but not dominant in any way.  This was less specific in that in involved more than a single complex – but a town and a village.  I ran through a bunch of listings in one particular village and came up with the following:  I turned up 8 agents.   Half of these agents had no sales or listings over the course of the past year.  Nothing, notta, zippo….for four of these agents.  Two of the agents had one transaction over the past year and only the final two had a significant sales history in the area.

• The town I studied didn’t fare any better. After viewing several listings, I turned up seven agents. Once again , four had no sales in the area over the past year  The agent who was labeled as an area “specialist”  had one sale under their belt. Another agent had participated in two sales over the past year.  Only one had a significant sales presence in the area.

How do you differentiate between the agents that had a goodly number of transactions and those who didn’t? You can’t.  In fact, using that criteria I could be Premier agent anywhere in the country – even if I had never set foot in that neighborhood  or even that state.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com – all rights reserved.

There is an old saying that there are only two things you can count on in life – death and taxes.  Apparently homeowners in Westchester  now have a third thing they can count on – exponentially increasing property taxes. Homeowners in New York are up in arms over property taxes. For those who don’t know the region, New Yorkers enjoy just about the highest property tax rate in the country. Westchester has some of the highest taxes in the state – so you get the picture…..In many areas of Westchester, the taxes actually exceed assessed values.

White Plains NY is a case in point.  Taxes have been marching to new heights each year. Year after year, the city, schools and county come with their hands out expecting homeowners already reeling from the worst recession since the Great Depression to fork over more in property taxes.  Many are hanging onto their homes by their fingernails.  And as more and more homeowners feel the squeeze – many will find they can no longer afford to stay in a community that just a few short years ago was quite reasonable and affordable.

Traditionally, White Plains enjoyed significantly lower property taxes then the rest of the county thanks mostly to our large commercial and retail base. But even though that base has increased, the number successful certioari actions has also increased. The net result has been a shrinking tax base in the commercial/retail sector pushing the lions share of the burden onto  homeowners. Most notably: owners of single family homes.

Homeowners and city officials in White Plains need look no further than Sleepy Hollow to see what happens to home prices when the homeowners are saddled with an ever more onerous tax burden. This burgeoning problem needs to be nipped in the bud or home values could well suffer.

I chose Sleepy Hollow for a comparison because it is an analogous community in many ways to White Plains. Although city officials and union leaders prefer to liken White Plains to Scarsdale and Larchmont where high taxes are better tolerated, our community profile is in truth more like that of Sleepy Hollow.  The commute to Manhattan is similar the two neighborhoods I chose to focus in are are quite comparable in terms of home size, amenities and lifestyle.

Gedney Farms is an established upscale neighborhood in White Plains. Over the past ear the average sales price in Gedney was $993,000 – just shy of $1 million dollars. The average tax bite in these sold home was slightly more than $16,000 per year.

Philipse Manor in Sleepy Hollow is quite similar in many ways to Gedney Farms. However, Sleepy Hollow is a village with relatively little commercial activity resulting in a higher tax burden on the homeowner. Over the past year the average sales price in Philipse Manor was $847,000 – a significant 15% drop from the prices enjoyed by Gedney residents. That’s a difference of $147,000 – not exactly chump change. When you look at the tax bite that Sleepy Hollow extracts from Manor residents, one can see why. Its enough to make your head spin. The average tax on the homes sold that year was a crushing $22,500 or 29% higher than what is seen in White Plains.

Does the tax rate account for the price difference? Uh….ya think?  Think of it this way….taxes that high are like another mortgage payment. For Gedney residents its about $1333.00 a month, but that goes up almost $550 a month for Sleepy Hollow residents. Assuming a 6% mortgage rate (assuming they have enough cash to not need a jumbo loan) that translates to a drop of over $90,000 in buying power. If you don’t believe me – the charts below tell the story.

City, county and school officials take note. I know you have turned a deaf ear to the voters on this issue for many a year. Your special interest groups have drowned out the silent majority.  But now you are looking off the cliff and into the abyss.  Single-family home values could easily implode. Here is the scenario that I fear the most.

Raising the taxes the proposed 19% will make homes in surrounding areas such as Scarsdale, Larchmont, & Rye – more attractive to buyers.  Many single family home buyers  preferred these areas over White Plains, but high home values put them out of reach. Now that home prices have declined and taxes in White Plains have risen, the trend has been towards these higher-end areas and away from White Plains.   Fewer buyers means lower prices.

As taxes rise, those who were hoping to retire  (or simply age) “in place” will realize that this is no longer possible. The increase in taxes will be just that extra shove off the cliff that will force many homeowner’s hands.  They will have to sell in  a bad market.  This will push additional inventory onto an already weak market.  More homes for sale = more downward pressure on home values.

Further, as home values decline, more homeowners will be able to successfully grieve their taxes.  Thereby further eroding the tax base.  And the merry-go-round keeps going round and round.

In the past,  home owners were just giant money cows to be squeezed to the heart’s content of public officials, educators and unions. But declining home prices translates into lower property values and lower assessed values – and that should put the fear of God into you. The message is loud and clear! Keep hiking taxes and you erode home values AND your tax base.

Further Reading:

Certioraris a Taxing Situation for New York Homeowners
© 2010 Ruthmarie Hicks, http://thewestchesterview.com. All rights reserved.

Before continuing further – full disclosure here – I am a full-time agent.  I do sometimes work as an adjunct professor of biology/natural sciences.  But such work is very part-time and more because I enjoy it than for income. (I’d be in a ton of trouble if I relied on teaching for income.)

There have been several recent blogs about the war between part-time and full time agents.  It kind of reminds me of the war between stay-at-home vs. working moms of the 1980s.  Each camp is armed and dangerous – and with fewer sales to go around – the goal is the extinction of competition that they feel is squeezing their ability close enough sales in order to survive.  It’s kill or be killed so the waring parties are in opposite fox holes exchanging fire.

I don’t know what it was like before.  I came into this industry at the tail end of the boom. Productivity was already heading well south and new agents were hated beyond belief.  When I walked into my first brokerage – bright-eyed and bushy tailed – I was greeted with a  mixture of out and out hostility and anger combined with smug amusement.  Skirmishes between the long-term full-timers and part-timers were common.  Over the next few years this escalated to out and out warfare.

“Part-timers are better because they aren’t so pressed to make a sale…There is nothing worse than desperate agent breath!”  Major artillary

“Full-timers are available 24/7/365 – a part-time agent means part-time service and a lack of dedication. “  Saturation bombing.

Blah, blah, blah!

Two recent articles by Bernice Ross showed me just how explosive this issue has become.  The articles – Crackdown on independent contractors and 8 reasons we need independent contractors, and  were actually about the potential loss of the independent contractor status for most agents.  But the comment stream led me to realize that in war of the part-timers vs. the full-timers  we are at DEFCON 2 and the leaders on either side of the argument are ready insert the brass keys and launch their ICBMs.  Rather than looking hard at the issue itself – many chose to view it through the lens of “how can this work to thin the herd.”

Some of the comments included:

” Elimination would allow brokerages to run themselves as real businesses. Training, coaching, team work, company and individual goals and on and on. Such a breath of fresh air.

“The agents who sell one or two houses a year would be gone leaving more for the agents who take this business seriously.”

“If 50% of the agent’s left the field, it would probably be the agent’s who are not committed to being in real estate.”

“If it curtails or eliminates the part time agents it could not be a bad thing. They cannot answer their phone or return calls while mixing paint or selling merchandise. Many are not being fair to their agency, peers, or clients.”

“There are way too many non-professional and part-time agents in this business…. It is time to professionalize this business and hire agents with years of experience and industry knowledge, who have taken the time to get their CRS, their GRI, and many other real estate designations.”

“Memo to Bernice: It’s 2010 and the real estate buying public is one hell of a lot smarter than the average Realtor slug! Improvise, adapt and overcome or go the way of the Fuller Brush Man!”

Note that the article wasn’t even ABOUT part-time agents…Also note that the responses rather CONVENIENTLY cast the surviving agent’s mold in the image of the poster.

To me it comes down to professionalism.  I’ve met some very professional and attentive part-timers and some real laggards that were supposedly full-time.  Do we need to raise the bar?  Absolutely.  I think demanding an apprentice period along with a more intensive course of study is in order – perhaps even a two-year degree.  That would get rid of dabblers trying to turn a quick buck.  But I draw a line of  distinction between part-timers and dabblers.

© Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.

First, the inspiration for this post belongs to C.Tann-Starr. She wrote a tremendously refreshing and honest post  - Momentum After The Tax Credit Expires? Seriously? Suffering From Lookie-Lou-Itis?

Second, I don’t have a crystal ball.  I can only use common sense to look ahead.  The only thing I know is this:  What goes up, must come down – and what goes down, eventually goes back up.  We can also look to the past in order to better see the future.

How I stole a house in 1996:

The year was 1996 and willy nilly I found myself thrown into the housing market. There were no incentives out there, no $8000 tax credits, interest rates were hovering between 7-8%.  The country was MIRED in a real estate recession that seemingly had no end.  Few were buying – and those that were – were offering low ball  after low ball.  Homes languished on the market for months if not years.

But I needed to move.  I moved back in with my mother when she became ill and now she had passed on.  It was time to sell the big family home that had housed three generations of my family.

My friends told me I was crazy:

Why buy in this mess?  And a HOUSE no less. Wouldn’t a condo be less risky?  Surely prices would drop still further – in a few years they told me – I would be able to “steal a house.”   But driving the purchase of a house forward were two issues.   I had two dogs – one was mine, one was my mother’s.  Renting can be problematic – particularly since my mother’s dog was a “barker.” Then there was the condo vs. house conundrum.  Market forces pushed me towards a house when I recognized that home prices had fallen further than condo prices.  In fact, at that time I  could buy a house for less than I could purchase a comparable condo.

So I bought a house.  I bought the house for $245,000.  Prices continued to decline for another 18 months.  My initial “investment” went down in value during that time.  Prices didn’t start to climb back up for another 2-3  years.  Then I sat and watched the biggest housing boom in history unfold before me.

The lien on the home now is roughly $160,000.  Even after an over 20% correction in our city’s home market…my home is worth nearly double what I paid for it.  The likelihood that I would ever be underwater on said house is pretty slim.  Prices would have to go back to levels not seen since the mid 1980s for that to happen.

The lesson here was that I bought into weakness.  When everyone was scared and staying away, circumstances forced me to the plate and I pulled the trigger.

I pulled the trigger while others waited and watched:

At the time there were many more buyers that decided to “wait it out” so they could “steal  a home.” Many of those lookie lous that held  would  later  look back wistfully at the period before 1998 saying “Those were the good old days!  Houses were cheap and there were plenty to pick from. I wish I had bought back then!”  They never got their “steal” because they waited until a boom was in full force before pulling the trigger.    I got the steal.  How?  By paying market value for a home when prices were depressed and everyone was running scared.

The fence sitters of today may well look back upon this time the same way  people  looked upon the mid-90s.   For home buyers, these may well be the good old days!

© Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.

Unfortunately, unrealistic expectations can set buyers  up for  unnecessary disappointment and frustration.   There are several flavors of unrealistic buyers out there.

The “I want to steal a house” investor:

This buyer is determined to find  a home for pennies on the dollar. They comb through listing after listing and call agent after agent to show them home after home that looks as though it is the bargain of the century.  The trouble is that once they see the home, they realize that this is beyond the simple fixer-upper.  A new coat of paint is not going to do the trick.   These  homes don’t just need TLC – they need to be gutted.

This type of buyer needs to realize that there is no free ride here.  Many of them have been  watching too many late-night TV shows that claim that banks want to get rid of these properties at “any price.”   After the way the banks have behaved over the past year – does anyone seriously think they are going to get the better end of any deal involving a bank?   Banks have shown  themselves to be more than  capable of looking after their own interests.

The “I’ve got champaign taste and a beer budget -but I’m not settling” buyer:

This buyer can appear in any market. Since affordability has improved, it might seem counterintuitive to observe an increase in this type of buyer right now.  Yet, that’s what I’m seeing.   They want far more than they can ever possibly afford and the buyer’s market media hype is giving them tacit permission to push for the impossible.   The sad thing is that this buyer is not looking at the increased affordability of the past year as the gift that it is – instead they are on a quest for even more.

This type of buyer has two choices: bite the bullet and buy what they can truly afford or roll the dice and hope that affordability increases still further.   The latter has true risks in this market. Although prices may decline further, affordability  is probably not going to increase because interest rates are almost certainly headed northward.   This may well more than offset any further price decreases.  For affordability to increase the buyer has to look to their own finances not the marketplace in order to afford “more.”

The buyer who will only put in offers 10-20% below asking price no matter what the comps say:

This type of buyer is of the mindset that “if you don’t ask, you don’t get.”  They want to “test” the seller with a lowball in the hopes that the seller is desperate enough or ignorant enough of the comparable solds  to accept.  As I said in my previous blog about sellers:  asking isn’t getting.

Not only does this rarely work, but it can really offend the seller to the point where the buyer could lose the sale.  Low-balling is not a good way to win friends – or negotiate a sale.  Offers should be based on the comparable sales – NOT the asking price.  Many seller’s have already priced their homes realistically.  A realistically priced home is more likely to be having multiple offers – so low-balling is a bad idea.

At the end of the day, buyers need to take a realistic look at the comparable sales.   Those numbers are not lying and placing realistic offers in that “sweet spot”  where they are consistent with recent sales – leads to success in the long haul.

In the end, the sale and purchase of a home should be a win-win for all concerned. It’s not about “beating the market” or “getting the better end of the deal.”  It’s about negotiating a transaction that works for all parties.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com. All rights reserved.

In truth, I can’t blame sellers for this…their minds have been levered to continued price increases to such an extent that the current market has left most sellers blind sided.

The first thing I often hear is that “I need to get X out in order to buy my next home which I can now get for Y  because its gone down in price.    The trouble if the property you want to buy has gone down so much in price, chances are the property that you want to sell has gone down by a similar percentage.  Wishful thinking is often the culprit here.  Markets are fluid – that was fine when prices were going up – but it also holds true when prices decline.

Misinformation is another issue.  Many sellers look at what their neighbor is asking for their home.  Asking isn’t getting.  Many listings are overpriced  in this market – so setting your price on the basis of other listings is not a wise strategy.

“But my neighbor sold their house for X just six months ago!”  Six months is a lifetime in a depreciating market.   If your market is depreciating – and many markets still are – then prices have decreased over six months.

Zillow zestimates and other information on the internet may or may not be accurate.  Zillow has been off as much as 25% in our area.   So if the zestimate of your property seems too good to be true, it probably is.

If you need to sell, price your home competitively – this is particularly important in a declining market where inventories are high and buyers are few. Overpricing your property will result in fewer or no showings.  The property will sit as the market declines further – resulting in an even lower price down the road.   Overpricing a home is just about the worst thing you could do in this competitive market.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.

Clients ask me where the Westchester real estate market is going.  I have to be honest with people.  I have definite thoughts about   how interest rates and expiring tax credits are going to impact the market – but another wild card remains – unemployment along with under-employment.

My own former career fell victim to outsourcing combined with an influx of H1-B employees from abroad.  With absolute stunning speed, I watched as prospects for employment at a livable salary evaporated into smoke.  This happened several years ago and the only reason this is relevant to the discussion is that my story is not unique.  Earning capacity has gone down -even for those who are fortunate enough to be employed. Housing can’t completely recover until the employment issues and stagnating pay are addressed.   These are issues that are bigger than the real estate market  but the point is that the housing crisis does not exist in a vacuum.

© 2010 Ruthmarie G. Hicks – http://thewestchesterview.com – All rights reserved.