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.

Increasingly, listing agents, myself included, are encouraging sellers to stage their homes prior to putting them on the market.  That includes, but is not limited to painting, pointing up and arranging furniture in a way that maximizes the potential of the space and creates a neutral atmosphere.  We ask that seller’s depersonalize the space so that buyers can “mentally move in.”

Although I am not one to spend a homeowners money needlessly,  there are times when I feel staging is essential.  Staging is most beneficial in the following cases:

An Empty Home:

When the sellers have moved out – they tend to leave an empty shell of a house that used to be a home.  That house can tend to lack personality and be all too forgettable  to a prospective buyer. Right now there is an excess of inventory that is completely unfurnished and after a while they can all start to look the same to buyers.  If a house is in danger of becoming that forgettable – it needs staging in order to stand out in the eyes of buyers.

A Very Dated Space:

A space that looks like it was in the height of style during the  1970s complete with orange shag carpets and disco lighting definitely could use a facelift.   Not that there is anything wrong with the 70s – but many buyers weren’t even born yet and its hard for them to imagine their things in homes decorated in a way that their parents would appreciate.

An Awkward Space:

Spaces that are tight or have an awkward configuration really benefit from proper staging.  Often buyers just can not possibly imagine how on earth to decorate a space.  Often they feel that their furnishings won’t fit.  In cases like this, it is vital that this objection be neutralized or the home will just “sit.”

For those who feel it is a waste of money, it should be noted that no one would stage if it didn’t actually work.  Staging can pay for itself.  If buyer’s find the space desirable and can imagine themselves in the home, they are more likely to make an offer and for top dollar.

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

White Plains  NY Cooperatives:

Cooperative prices were actually up slightly over the same period in 2008.  However, this slight uptick might be do to an increase in the proportion of 2 BR units in the sales statistics.  The previous quarter showed a grim 17% price reduction and recent sales in specific complexes indicates that this downward trend is continuing.  Since 2 BR units are suddenly far more affordable, buyers are finding that they can afford a larger unit.  Sales volume is down 17% over the previous year and the current inventory of 9 months indicates a buyer’s market undergoing  a price correction bordering on double digits.

White Plains NY Condominiums:

Condo sales remained very soft though pricing showed no further reductions after the near 17% decrease that happened in the third quarter.  However, the inventory is alarming because in spite of increased buyer activity across the board.  Currently there is a 13.1 month inventory sitting on the market which promises to increase as soon as the spring selling season gets under way.  Such an inventory is consistent with double digit price decreases.  Sellers should take care to take advantage of this lull in price reductions and price their units aggressively.

White Plains NY Single Family Homes:

Single family homes showed the greatest year over year price drop in this quarter.  Average home prices are down 24.2% year over year – shedding an average of $186,000 in value. The current inventory is  a bright spot.  The six month inventory indicates a buyer’s market undergoing high single digit declines, but this may be the calm before the storm once the spring market starts and people list their homes. Overall, sales volume is up over the previous year which would be a very positive sign if sales volume hadn’t been so desperately low last year.

Further Reading:

White Plains NY Housing Market Statistics – Third Quarter 2009.

Housing and Market Statistics for White Plains NY – Second Quarter 2009.

White Plains NY – Housing and Market Statistics for Fourth Quarter 2008.

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

The contrast between old-school hyper-local agents and the newer nomad agnet was driven home to me while I was working with two listing agents who still work exclusively in small niche markets.  I was at a closing with one of them and she implied that since I had the entire city of White Plains to cover, why didn’t I simply refer out the client who finally bought in Scarsdale?

Can a real estate agent be too local?

I knew that the attitude about staying hyper-local is alive and well though it appears to be a staple of old-school real estate.  Still, I was more than a tad surprised.  Scarsdale is not the moon.  It is the town directly adjacent to the west side of White Plains and about a whopping six miles from my front door to the center of the village.  If we followed this line of thinking to its most extreme would mean that a buyer potentially moving from New York City to Westchester NY would have to have as many as five or six agents to explore all the possibilities open to them that were within about 30 minute commute.    For the consumer this seems most unwieldy if not highly impractical.  Could you imagine the mountain of agents all crawling over each other for the buyer’s attention?  What a mess. Not to mention a monster of coordination.

From the agent’s perspective, there could also be a danger to being too local. What if something happens to that small segment of the market you represent?  If your geography/price range are razor thin – you are setting yourself up for trouble.  This was clearly seen this year when agents who specialized in small high-end markets got creamed because jumbo loan issues bit them in the backside.   Another listing agent I encountered was used to selling about 10 major properties a year – but this year had only managed a single sale.

The nomad real estate agent:

On the other hand, we have the opposite trend.  I’m seeing this from the listing side.  There are a cohort of listing agents that are increasing their range to encompass as many as five counties.  These agents list in such a wide ranging area that I refer to them as “Nomads.” (Please don’t yell at me if you are from a rural region.  I am speaking from a local perspective in a densely populated area.)  Densely populated areas tend to have more gyrations in market conditions per square mile than more rural locations.  The number of towns, cities and villages with their local governments and school systems  within Westchester County alone is daunting enough.  Market  nuances that can seriously impact home values would be a black box to an agent that is overextended geographically.   I have to question whether this is in the best interests of the seller.   Let me put it this way:   If going to each listing once a week would entail a gasoline bill that looks like the national debt – I submit that you are probably trying to cover too much ground  and that this could seriously impact the result to the client.

Why do I say this?  Well, I’m a numbers type of person, and I started looking at the raw numbers of agents who cover large territories and found a disturbing trend.  I will give the caveat that this was not totally scientific. I looked at a handful of agents randomly.  Still, the results from my informal survey were pretty compellling.  When comparing solds to expireds and cancelleds, the ratio of closed sales to listings was consistently under 50% .  35-45% success appeared to be the norm for the Nomads  whereas anything from a 55-90% success rate was the norm for those who stuck closer to home.   To be fair, I  chose not to include expired or cancelled listings that the agent re-listed.  Nor did I include sales listings that wound up as rentals.   The further the range, the lower the actual ability to close the sale.

Now, as a business model, being a Nomad might make sense.  It’s probably exhausting to service so many listings that fail, but  many businesses are based on throwing as much up against a wall as they can to see what sticks.  It can be profitable to work that way.

But what about the seller?   For the seller, listings that just won’t sell are like beating your head against a wall – it feels so good when it finally stops.

Personally, I take a line right down the middle of this controversy.  I have too many buyer clients who want one-stop shopping to limit myself to one town or community.   Therefore, with respect to buyers, I cover pretty much the bottom half of the county. With  listings, I have traditionally stayed closer to home.  However, I am gradually extending my listing range to also encompass the lower part of the county.  When listing opportunities arise in areas where I have not taken listings previously, I generally choose to work with a co-listing agent who is experienced with respect to the neighborhood in question.   In that way, I have started to expand my territory while retaining top service for my clients.

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

Sellers with homes listed today will be able to identify with some of the antics that buyers in a bear market will pull.  But this is about a listing that was active 14 years ago in 1996 – during another deep housing recession.   I wasn’t a real estate agent at the time,  I was a seller.  My mother had just died after a prolonged illness and I was listing her house for sale.  The house in question was a beautiful 1932 Tudor sitting on prime property with sweeping golf course views in wonderful residential area in White Plains.  There was a good deal of emotion involved since the home in question had been designed by my Grandmother and built by my Grandfather.

Although I wasn’t an agent  I was smart enough to read the newspapers and  so I know it was a crummy market.   The house would have been worth roughly $600k just a few short years ago – but in 1996-1997 I was hoping for about $550k – but knew I would probably only see a litte more than $500k. Gut instinct told me to rent the place, but my co-executor was adamant that the house had to be sold.

Nothing prepared me for the crazy home buyers that came through looking for a “deal.”

90% of them were bottom-feeders looking to steal a house – and looking for ANY excuse to chisel  the price to the bone.   My beleaguered broker  came to me with all sorts of concession requests – some of which made  sense.  But more often than not, the requests bordered on the absurd. Some of the more hilarious issues are worth noting because when we see frustrated sellers – we need to be aware that their pain is real and that some of the crazy concessions being asked by buyers can be truly ridiculous.

Among the more ridiculous issues I encountered:

1. “We are offering $50k less than listing price because  the fact that one bedroom is on the ground floor, makes this a 3 BR house. “

My response to my broker:   That non-bedroom was quite large with two ample closets and a full bath.  Further there are two other full baths in the house and an additional half-bath – so there is no bathroom shortage either.

2. “Since the house is ‘old’ I want the ENTIRE PLUMBING AND ELECTRICAL SYSTEMS replaced from scratch at the seller’s expense.”

My response to my broker: Sorry, the electrical is fully updated and I’m not pulling every single pipe out and replacing the entire plumbing system.

3. “Since the house obviously has lead paint – I want all the walls stripped of all lead paint at the seller’s expense.”

My response to my broker: You’ve got to be kidding – it’s a 3500 sq.ft. house with cathedral ceilings.  Tell them to  buy a newer home if they feel that strongly about it.

4. “I don’t like the Tudor look of the wood beams across the living room ceiling.  I want $20k off the house to be able to drywall over them.”

My response to my broker: If they don’t like Tudors, why are they bidding on a Tudor home?  There is a glut of homes on the market and this is TUDOR – so much so that Henry VIII would find the home quite comfortable.

5. “I want all the asbestos removed completely even if it is encased and not friable at the seller’s  expense.”

My response to my broker:  Sorry, the asbestos is contained and in good condition (not friable) I’m not about to open Pandora’s box and create a problem that didn’t exist before.

6. “We want all the windows changed out at the seller’s expense because they are so old.”

My response to my broker: Yes most of the windows ARE old but the reason they are still there is that they are one-of-a-kind original leaded stained glass windows!  I’m not taking those out.
Note: My favorite comments involved the balcony.  To me it was a beautiful and elegant feature – but boy did it become a bone of contention.

7. “I have two children, that balcony is DANGEROUS, they could fall off.  But I’ll consider it anyway if you knock off  $20k.”

My response to my broker: How did they determine that each child’s life was worth about $10k?  $20k is not going to solve this problem.  They either need to admit that this is a red herring or move on to a home that they have fewer fears about.

8. “The balcony overlooks the living room and there is a big picture window.  I could see a burglar entering through the LR window – swinging on the chandelier, landing on the balcony and entering our bedrooms at night.”

My response to my broker:  They’ve  been watching too many action movies.  My family has lived in this house for nearly 65 years and you would be amazed to know that NO ONE has ever tried to do that.

So when I have sellers who are tearing their hair – I try to look back over 13 years  and remember crazy and out-of-control things seemed to me.  I would add that my ability to play hard ball reflected my situation.  There was no lein on the home and at the time, property taxes weren’t that high.  I had the luxury of being somewhat picky.  For those who really need to sell,  its a far more complex problem.

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

Cooperatives:

The number of co-ops sold are  down 15% over the previous year.   This is a trend that has been seen in other parts of the county and reflects the difficulties in obtaining financing.   Currently there is a nearly 8 month inventory on the market. However, prices remain slightly higher than the previous year, (5.4%) indicating a market that is stabilizing.   There are some mixed signals here.  the inventory is still high however, the pricing is surprisingly robust.

Single Family  Homes – Scarsdale:

After a “pop” during the 2nd quarter prices have once again fallen and are down 27% over the 3rd quarter of 2008.   Swollen inventories are going down.  Right now inventories are approaching th 6 month mark.

Single Family  Homes Edgemont -

Edgemont shares ad PO with Scarsdale, but it is actually is in the town Greenbburgh.  Sales have picked up in the area leaving inventories low at about 4.4 months.

An Important Note About the Criteria for the Statistics:

I handle each type of housing in Scarsdale differently. I also include a special section for single family homes in “Edgemont” which is really in the town of Greenburgh with a Scarsdale post-office and zip code.
For condominiums and cooperatives, I use the Scarsdale post office and zip code as my criteria. Many of these complexes are actually located in Greenburgh and Eastchester.

This reflects the way most buyer’s shop for housing. Coop and condo buyers work by address whereas those looking for single-family homes are often shopping municipality and school districts.

Additional Reading:

Housing and Market Statistics for Scarsdale NY – Second Quarter 2009

Scarsdale NY – Housing and Market Statistics for First Quarter 2009

Scarsdale NY – Housing and Market Reports for 4th Quarter 2008

© 2009 Ruthmarie G. Hicks http://thewestchesterview.com. All rights reserved.

Now, I have nothing against the Realtors who were chosen  as the finest agents in Westchester NY real estate. None at all.    it was fascinating to see how the authors chose to define “success.”  They used a simple unbiased metric  – the bottom line.  They defined success in terms of .sales volume in dollars.  The theory being – the bigger the sales volume the better the “track record.”  This kind of boggles my tiny mind.  In a twisted way it reflects the public antipathy to Realtors in general because it emphasizes that “success” is defined in dollar signs.

This got me thinking – how exactly should one define success in real estate?  How should these bottom line numbers like sales production and number of listings held factor into a home owners decision about who to sign a listing contract with?

Well, realistically, an agent has to achieve two goals.  Certainly, over time, the agent must be able to turn a profit or they will go out of business.  This is much harder to do than most people outside our industry think.  I have to make a living this way and turning a profit is absolutely essential or my bills don’t get paid.  But for all the delusions of real estate agents being “rich” without any effort, the failure rate is enormously high – north of 80% in most of the country (over 90% locally.)  So posting sales volume  is a major component of success.

But, what does this do for the client? The home seller or home buyer?  The article indicated that whether selling or buying – these agents were the best.  But by looking at sales volume only, the article missed the mark altogether.

1. Is this agent primarily a listing agent or a buyer’s agent?  If they have an even number of sales in both categories – fine.  But I looked at the sales history of a couple of these superstars. They were primarily listing agents and did relatively few sales as a buyer’s agent.

2. On the listing side, what is their success rate?  After all, an agent can make a bundle listing in volume. The percent of listings that actually sell is another matter.To that end I took a look a closer look at a “top agents” sales record for 2009.   I picked an agent on the list at random and found the following.

• This agent’s 2009 figures were way off from 2008. It’s a tougher market in which to sell homes and their sales volume was down nearly 4-fold.  That’s quite a drop.  Granted Westchester home sales are well down from 2008.  Although this agent was working a niche which has been badly hit  in the market, it is still a stunning fall in volume over one year.
• During 2009 the number of expireids/cancelleds was nearly equal to the number of actual sales.  So when a seller listed, they had about a 50% chance of getting their home sold.  A few of these properties were rented.  If you include those as successful then the seller had a 68% chance that his home would be either sold or rented by that agent.

Compare these stats with those of another agent that I selected.  This agent will probably  never appear in the “top 20″ in terms of volume. But their record speaks for itself.

• In 2009, this agent actually increased production – showing that they could negotiated just as well under far more difficult circumstances.
• Every single listing either was sold or rented.  The one expired was relisted immediately.  With this agent 88% of the listings sold, the other 12% were rented.

Which type agent would you rather have listing your home? The more successful earner, or the one that truly gets the job done for the vast majority of their clients?

Now there are more criteria for sure.  I did not measure days on market or final sales price vs. list price.  The point is that are many factors beyond market share and raw profits that define greatness in the real estate industry.  From the consumer’s perspective – sales volume should be the least of these.

© 2009 Ruthmarie G. Hicks http://thewestchesterview.com. All rights reserved.

In the end, I  promised a sequel  that got into more specifics.  So here it is – six  major myths about  listing a  property and marketing a property that are often trumpeted by our own industry.  Its been said that if you repeat something often enough it becomes “fact” in the eyes of the consumer.  So let’s put some of these “facts” to rest.

Myth #1 – “We have  12 billion to the 10th power  active listings, so  our reputation speaks for itself!”

Really?  How on earth does anyone come to that conclusion?  You can have all the listings in the world, but if you can’t sell them, what’s the point?   The percentage of sold listings is a bit  more pertinant. However, even that number does not discriminate between individual agent performance.

Myth #2 – “Your listing will appear on our website which is on page 1 of Google!  That will draw in TONS of buyers”

Yup – it sure will be – along with every other listing in the ENTIRE MLS – whether you are listed with this brokerage or not.

Why? because listings and pictures are like  crack-cocaine to buyers and that’s what  these sites are designed to lure.  The “bait” has to be the entire MLS or the buyer will be on to the next site in very short order.   So rest assured your listing will appear on their site just like every other listing on the MLS whether your contract is with them or the small independent broker down the street.

Myth 3# – Our brokerage has the big dollars behind it to fully support your listing!

It sounds really comforting.   Many consumers believe that a big listing brokerage must be brimming with money to market their home.  Why wouldn’t they do it if they stand to make so much more once the sale is complete?

There are a couple of problems with that notion:
1. That big plush brokerage has a big plush overhead to go with it!  That’s a fixed cost that doesn’t go away and in many cases it has become a monster demanding ever more revenue to sustain it.  Most brokerages are not nearly so flush with money as they were in years gone by.

2. The other problem is “risk.”   By marketing a house the agent or/and brokerage puts money on the table and assumes a financial risk.  The risk is that the house won’t sell.  No matter how good you are as an agent or broker…its a game that you will not always win.

Most sellers would be shocked at how little a brokerages will actually spend. But the  fact is  that if a broker is holding  700 listings, how much money can they spend at any one time?   If you spend $2000 on each listing that’s  $1,400,000 in outlays – with no guarantee of success.  HELLO!!!   Do you see now what I mean about the risk issue?

Brokerages of this size are generally playing a numbers game.  They throw 700 listings up against a wall and some will actually “stick.”  The sheer volume of listings necessitate this approach.  But how wedded to each listing can a brokerage of that size be? That dedication must fall on the individual agent representing the seller.  Since the agent doesn’t carry anything close to a the volume of a major brokerage – each individual listing is of far more importance.  This is another reason why sellers should look to the AGENT not the BROKERAGE when selecting a professional to list their house.  .

Myth #4 – “Our brokerage has a terrific individual marketing!”

If a brokerage has  over 700 listings, how individual can the marketing plan possibly  be?
Usually  that means that the listing will be sucked up into the cookie-cutter marketing machine they throw at every listing.

In fact, if the agent keeps intoning “my brokerage does this, my brokerage does that” it is often a signal that they may well have divorced themselves  from all but standard brokerage marketing. In this tough market that’s not a good thing.  It is also a sign that nothing truly unique or outside the box will be brought to the table to help move the home.

Myth #5 – “We are the biggest brokerage in the area with the most agents and everyone of them is ‘motivated’ to find you a buyer.

WHOA!!!  All I can say to this is RUN THE OTHER WAY!!! This may well mean that they are highly motivated to keep the sale “in-house” which is  code for the agents have a financial motivation to do so.

This is a problem on so many levels, it’s hard to know where to begin.  For openers it violates the spirit of the MLS.  The MLS’s were created to  level the playing field between competing brokerages so that buyers and sellers could work with whoever they wanted to without feeling they were at a disadvantage.   Creating financial incentives to keep sales in-house throws a monkey wrench into that system.

It may sound great – having 500 agents looking to find you a buyer,  but there’s a big elephant in the room.   If the listing agent is motivated to keep the sale in house, what will they do if an agent from a competing office brings in the best offer?  Will they push an ‘in-house’ offer?   Even if it truly isn’t the BEST offer? The answer depends on the individual.  I know many agents who would never compromise their sellers…but there are always a few who would.   Bottom line:  Why work with a brokerage that encourages this since it can almost invites unethical behavior? In the end, the numbers tell the story.  There are roughly 6500 agents working in our county.   Even if a brokerage had 1000 agents, statistically, it is far more likely that the “best” offer will come from an agent outside the listing brokerage.

Myth #6 – Our big brokerage has a relocation service that brings in gazillions of buyers just panting to see our listings!

Please see myth #5.   Any buyer coming in through a relocation service will be looking at the entire MLS inventory…not just the listings within that brokerage.

So there you have it….six common myths about listings, agents, brokerages and marketing.  I hope this adds some transparency to an issue that is generally a black box to consumers.

Further Reading:

This Brokerage Has 750 Listings…..So they must be the best! (Part 1)

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 1:

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 2

© 2009 Ruthmarie G. Hicks http://thewestchesterview.com

What Does the Brokerage Bring to the Table?

With the Westchester NY real estate market in a downward trajectory,  sellers realize that they need more than a sign in the ground to move their property.  In truth, this was always the case, but these days I’m getting more and more questions about marketing the listing. One of the biggest issues  I encounter on listing presentations  are questions regarding the brokerage itself.   Most questions revolve around marketing.  What does the brokerage do in terms of marketing  for the listing?

I think that most sellers assume that since the brokerage is “big” and has capital behind it, that they are the ones spending  big bucks on marketing the home.  But this is rarely the case.   Many big-box national brokerages build on that confusion and perpetuate the myth that their brokerage “brand” makes a significant difference in selling a home for top dollar.  They also tout their “marketing package” in terms of the amount of support they offer.  Some actually stress that the number of agents in the brokerage somehow makes that brokerage better or somehow more able to move the property.   With all the hype and misinformation out there it is small wonder that sellers are confused.

I  would challenge these large brokerages who claim that their numbers speak for themselves  to enumerate exactly WHAT  they do to justify their claims?  And while they are at it, I would like to have some hard numbers to back up their success stories.  I haven’t seen any of them come up with any marketing advantage that holds up under scrutiny.  Most of the time they appear to be blowing smoke.  Don’t get me wrong, I’m not slamming big brokerages. That would be rather foolish since the brokerage that I am currently associated with is quite large.  What I am trying to do is cut through the hype.

Follow the Advice of Deep Throat:

Who actually sells the listing? The agent or the brokerage? To figure that out you have only to listen to the words of “Deep Throat” in All the President’s Men.   He told Robert Redford to “Follow the money!”

If a brokerage has  hundreds of agents, it is likely that they have close to 1000 listings.  Brokerages are business to make money on sales.  For a big brokerage like this – the listings are a numbers game.  Throw 1000 up against a wall and maybe half will “stick.”  So how important is your individual listing going to be to that brokerage?  Answer: not very.

But what about the agent? Most agents have just one to two listings at a time.  Others have more like 20-30.  Agents are paid on commission.  If the property doesn’t sell – all the work they did is down the drain….and  there is a lot more to than sticking  a sign in the ground.  When a listing fails to sell an agent is out usually well over 150 hours of time AND they are generally out a good deal of marketing money as well.  Do you think that agent cares if your home sells?  You better believe it.

Take Home Lesson:  Look to the AGENT to market and sell your home.

Stay tuned for part 2 – where some major marketing myths will be revealed.

Further Reading:

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 1:

Mirror, mirror on the wall…who’s the fairest listing agent of all…Part 2

© 2009 Ruthmarie G. Hicks http://thewestchesterview.com.  All rights reserved.

As can be seen from the photos – many who live along the Garth Woods Conservatory have a birds eye view of the woods – with gardens or terraces having a view of the woods.

© 2009 Ruthmarie Hicks All Rights Reserved.