Whenever I go on a listing appointment, I generally find that the seller already has a “number in their head” about what their home should sell for. This number can come from various sources. It is – unfortunately – almost always higher than the current market can command.
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.
Yesterday I showed a foreclosure. Until fairly recently, Westchester hasn’t witnessed much in the way of “underwater” home ownership. We’ve always had our share of foreclosures, but they were far from commonplace. The house was a mess. The walls contained broken dreams of home ownership and you have to wonder about the people who lived there.
There have been a lot of blogs written lately about who is to “blame” for the housing bubble and its disastrous aftermath. Some bloggers blame lenders, some blame agents, brokers, NAR, the Fed, home owners…the list goes on and on.
But one common thread I find very discouraging are blogs which lay blame on the homeowner who was underwater. They should have KNOWN better. They were GREEDY. They were IRRESPONSIBLE, they were this, they were that…
In truth, the housing debacle is as much a result of the decimation of the middle class as it is about a housing bubble itself. Families have found the ground shifting under them faster than they could ever have imagined. Many homeowners have found themselves into the horns of a dilemma. This is the story of my generation. As a forty-something I’ve felt the sands shifting under my feet ever faster. I have found myself scrambling to earn those ever elusive extra dollars that will allow me to keep my own home – even as I help my clients sell theirs.
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You know that your real estate market is expereincing a shake-up when an article about it in Inman News. The post was actually a reposting of an original article written by “The Real Deal” by Amy Tennery called Westchester real estate shake-up: Brokerage world sees shuffling of agents as firms shutter and consolidate during downturn.
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Kris Berg wrote a very compelling post on Inman yesterday Don’t Forget the Customer The article was spot-on about how brokerages function – and often how the function to the detriment of the consumer.
Now, I think most consumers would understand that in order to keep their doors open, a brokerage needs to be profitable. The bottom line for any business is that they must turn a profit or close their doors. Ideally, profitability should be tied to customer service. The agents of a brokerage should provide outstanding customer service including intelligent negotiating skills, a fine marketing plan, and service that smoothes the transaction process. Unfortunately, that model is not the prevailing one among brokerages.
The way brokerages function often is a mystery to the consumer and it often comes as a shock to new agents who think that the brokerage is there to “support” them. After all they are paying very hefty splits to the brokerage -supposedly for leads and support and training from the brokerage. And therein lies the rub for the consumer. Most brokerages disconnected from customer service and the newly licensed agent course became the big cash cow. They recruited and recruited throwing anyone with a license and a pulse up against a wall and hoping that something will stick. Even a non-productive agent had a couple of good deals in them from family and friends.
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Back in the bull market days of 2005-2006 the notion of needing to “stage” your home for a faster sale was nearly laughable. But home sales in the Westchester market are not what they once were. As most seller’s are painfully aware – this is not 2006. There is ample inventory on the market, prices are down and buyers are increasingly picky. Things once deemed insignificant now become major stumbling blocks to a successful sale.
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.
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It is very interesting that just as consumers are demanding ever more hyper-local content and knowledge from agents that we are also seeing another distinct trend in the opposite direction: the tendency to list and sell to larger and larger geographic areas.
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.
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We had our first snow yesterday. As usual we were told to expect the storm of the century, so I did what everyone else in Westchester was doing…got groceries, hoarded salt, made sure I had a good shovel and hunkered down. Seriously, the way we treat snow storms around here one would think that no one had ever heard of snow plows and other modern marvels that actually make it possible for you to be back in the real world within 24 hours. Nevertheless, the storm and subsequent dig-out gave me some quiet time with my canine family. I have two Siberain Huskies and a husky mix who for obvious reasons LOVE the snow. The colder the better and the heavier the snow fall, the happier they are. So after spending quality time with my shovel and salt, I spent some time outside with Buddy, Jade & Tundra. They had a great time tearing up the yard. To get good pictures however they had to stand still…I got a few shots of them running, but most of that passed by my camera in a blur!
For the stills here is a link to Siberians in the Snow on Flickr.
Enjoy the video and Happy Holidays.
In surfing the net, I discovered an on-line version of an article by Ben Brody and Laura Gurfein that appeared in last months Westchester Magazine about the county’s “top” Realtors. The subtitle declared “In good times or bad, whether buying or selling, these are the agents you want on your side.”
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.
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Part 1 of “This Brokerage Has 750 Listings…..So they must be the best! ” was prompted by the fact that the Westchester NY real estate market had changed and as a result, I was getting more and more questions about what a brokerage brought to the table in terms of marketing. I emphasized the importance of choosing the right agent and that the brokerage itself was of less importance. I also indicated that there was a lot of smoke and mirrors regarding brokerage brands and what that means to the seller in terms of marketing the home. Also, for those consumers who would like to see broker/agent input on Part 1 of this post…you can go to my blog on ActiveRain where I re-posted the blog. It got a good deal of attention and much commentary from real estate professionals.
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.
Does size really matter? Do the number of listings or the size of the brokerage have anything to do with the ability of the agent to market and sell a home successfully? Is it the brokerage or the agent that is the determining factor?
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.
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Whenever I go on a listing appointment, I generally find that the seller already has a “number in their head” about what their home should sell for. This number can come from various sources. It is – unfortunately – almost always higher than the current market can command.
