For Sale by Angry Wife

 Posted by at 7:50 am
Jul 252012
 

The following is just too funny–and demonstrates that a sense of humor can be important in this business. (I don’t think any of us are making light of the seller’s situation.) Reprinted from Scott Leavitt’s Tuesday Tactics Newsletter, with permission:

“We think this might be deserving of a new acronym: FSBAW (For Sale By Angry Wife)!

For Sale by Angry Wife!

The sign says it all:

“Husband left us for a 22-year-old. House for sale by scorned, slightly bitter, newly single owner… Adulterers need not apply.”

(I bet they’re serving free revenge at the open house. Cold, of course.)”

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May Sales Information

 Posted by at 8:06 am
Jun 242012
 

I found it mildly amusing that the MREIS (Maine Real Estate Information System) issued their monthly press release regarding May sales at about the same time I announced my vacation. Were I inclined to feel self-important I would speculate this is not a coincidence and there was concern that my vacation announcement might impact expectations regarding sales in July. (“Walter’s not working; sales will go down.”) I assure you my contributions (or lack thereof) will not significantly impact the sales data of either the county of the state.

Of course you’ve probably heard that statewide unit sales of residential property were up 32%. That’s certainly good news, but is tempered by the fact that comparing this year to last means comparing this year to a “bad” one. If a picture is worth a thousand words, the graph will show that the overall sales trend for May from 2007 continues a downward slant. But also do not forget this only represents one month–basing a trend on one month is not especially valid statistically.

Of perhaps more interest is the localized version… these releases include a “three month rolling average” by county.  For the months of March, April and May Piscataquis County Sales were up by nearly 13%–but understand that 13% represents four additional properties sold this year versus last and a median sales price this year of $60,000. (The median sales price indicates that half the homes were sold for more and half for less.)

The truly “bright spots” (measured by largest percentage increases) in our state are Washington County (162.5%) and Lincoln County (78.6%). Franklin County was the only county showing a loss (1.7%).

What all this means probably depends on your own bias and interest. Logically, with interest rates and prices this low, demand should (and will) increase–eventually. My instincts suggest that the road is a long one and I would be prepared for plenty of ups and downs.

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Don’t Get Too Excited!

 Posted by at 7:53 am
May 272012
 

While it is not my desire to squash optimism, the recent sale of rose-colored glasses deserves some pause. If you have property listed in Piscataquis County I would not suggest you start planning how to spend the proceeds from your sale.

The latest press release from the Maine Real Estate Information System headlined the fact that sales and median sales price both were up in April (8.7% and 4.5% respectively). However, the numbers for Piscataquis County tell a slightly different story. County numbers are always reported on a three month “rolling average”–so the statistics I’m about to share are for February 1 through April 30. We’re comparing this year (2012) with last (2011). By the way, it’s important to remember that last year was not exactly a stellar year for the state or the county.

For the period noted, unit sales in Piscataquis County were actually down by 12.5% and the median price dropped a whopping 17.8%. Our county is a long way from “economic recovery” in just about every sense of the word.

To get a better sense of the market, consider the County Seat, Dover Foxcroft. (For those unfamilar with the area, our county is geographically large and very rural. The population of Dover Foxcroft is slight above 4,000.) There are (using MREIS data) currently 112 residential properties listed for sale in Dover Foxcroft. For the past six months, 18 have sold–an average of three per month.

A generally accepted real estate measure is “days on market” or “DOM.” Basically, this is a measure of how long it takes property to sell. You do not have to be a math whiz to see that with 112 properties for sale and sales rate of three per month, it will take… slightly over three years for all these listings to sell.

Now there are a lot of things “wrong” with this analysis–the largest being that it’s based on totals and really needs to be broken down either by price or location. The other observation that needs to be made is this area has always had a longer DOM that many others. If you are in the market in any way (selling or buying) further analysis is recommended, but it’s probably safe to say this is not a hotbed of real estate activity.

Markets with high inventory, low median price, and slow sales rates are often thought of as a “buyer’s market.” So while there’s plenty to choose from and prices are low (the median price for the rolling quarter is currently $60,000) it might a good time to buy. Again, further analysis of your individual situation is warranted.

(For those who are curious, one reason for the state-wide increase was a 20% increase in unit sales in York County. However, the median price of those sales did drop slightly.)

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Salesmanship is NOT a dirty word!

 Posted by at 6:43 am
Nov 282011
 

For a long time now I’ve been “preaching” to those who will listen–“It’s high time for those of us in the real estate industry to realize we are not in the business of selling houses; we are in the business of helping people make intelligent decisions regarding real estate.” I would call your attention to the fact that I said “selling houses.” I didn’t say “We are not in the business of selling.”

Some years ago I wrote a short booklet called Salesmanship Is Not a Dirty Word. I can assure you that I’m not “anti-sales.” I happen to think that selling is an important skill–even if we have to call it something else to make it palatable. 

So this morning I read an article on RIS called Warning: Your Sales Techniques May be Under Fire. It’s actually a pretty good piece. The author notes that while brokers have traditionally been “selling information” (because of the historical emphasis on the multiple listing system) things have changed. Buyers now have all that information available to them thanks to the Internet. (I wonder how that information gets there… hmmm.)

Therefore, he somewhat rightly concludes, buyers of real estate are looking for someone to “assist and consult.” But, like all good ideas, when you push this to the extreme it doesn’t work. “No dialog, technique, or pitch needed,” he goes on to say.  That’s where the author lost me.

 This is the age-old debate–it’s not a new one based on some new paradigm. Every industry has always had salespeople who put their personal gain before their customer’s. Real estate is no different. Well, except for one thing, maybe.

If you hire me (or somebody else) to “assist and consult” with you… wait. How are you going to decide to hire me? Will you draw my name out of a hat? Should we develop software that is a random broker generator to pick your broker for you? (Banks are doing that with appraisers these days–interesting back story there.)  No, I think we’re probably going to have some dialog and while we may not like calling it that, I’m going to “sell” you on the value of hiring me.

Let’s assume, however, that somehow you do manage to hire me without any influence on my part. So if we assume I’m not supposed to use sales techniques, let’s consider what that means. If you’re a buyer and you decide to make an offer on a home I’ll just submit the offer and we’ll see where the chips fall? Or maybe you are about to make a truly “bad” decision… you don’t want me to try to talk you out of it, right?

See, when we write articles like this we can afford to be conceptual and puristic. When we’re out in the trenches we have to deal with reality.

If you’re entering the real estate market as either a buyer or a seller I think you absolutely need a broker who knows how to sell and is pretty darn good at it. Remember, it’s about perspective. He or she is supposed to be using that skill on your behalf–not on you for his or her own gain.

Unfortunately, the information aspect of this business makes it very easy to end up working with a broker without much thought. You call a number on a sign because the house looks interesting. You don’t think about selecting your broker. You’re leaving that to chance. Wouldn’t it make sense to find out what that broker’s perspective is?

I often tell students that they’ll make their biggest mistakes in the business when they are broke. Why? Because it’s about perspective. It becomes very easy to put the transaction (sale) ahead of the client when you can’t make your mortgage payment.  Just like in dating; desperation isn’t pretty. Don’t hire a desperate broker.

Customers and clients really do need a sensitivity to this–is your broker truly working in your best interest? Extreme cases are relatively easy to spot because you feel “pressured.” 

There are two questions you should be asking yourself constantly:

  1. Do I feel like I am making my own decisions with all the information and options available to me?
  2. Do I feel like my broker is my partner-working with me?

If the answer to either question is not a resounding “yes,” it’s time to reassess your relationship.

 

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Home Inspections…

 Posted by at 6:40 am
Oct 112011
 

Home inspections are always a good idea for buyers… and they actually can benefit sellers! But a home inspection is not a pancea–there are things that can go wrong with the process. The “House Detective” is nationally syndicated columnist Barry Stone–he writes a great blog and answers some tough questions. There’s some interesting reading even if you’re not considering buying a home!

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Time to Lower the Price?

 Posted by at 7:41 am
Jul 132011
 

We’ve had our property on the market for a while and there’s been very little interest. How long should we wait before reducing the price?

Tough question, and maybe not the correct one to be asking. The first question I’d ask is whether or not your property is priced properly–at or near market value. Assuming it is, I’d look at recent sales activity in your town/market. One way to do this is to calculate what’s called an “absorption rate.”

Let’s say there are currently 75 residential properties on the market  and in the past six months there have been 26 sales… statistically speaking there is a 1.44 year supply of inventory.  So if you’re priced correctly and your property has been on the market for a couple of weeks… well, calm down. In that situation, unless we get ahead of the current 75 listings, it could take a year and half for your property to sell.

Reducing the price is only one of the ways to get ahead of everybody.  There’s a lot of emphasis on price these days, and the tempting conclusion is to think the price sells the property. What sells the property is locating a  ready, willing, and able buyer. So the real question we need to ask is “how are we going to find a buyer?” Part of that consideration is “are we priced too high to attract a buyer?” If you’re close to market/appraised value, the answer is “probably not,” so sit tight.

(Bear in mind market value can change very quickly and you should be revisiting your price position regularly. And don’t forget that market value is both science and art.)

The exception to this is when a property ends up priced so low a buyer can’t resist it. I remember years ago my mother came from shopping once with a container of “drip” grind coffee. We pointed out that she didn’t have that kind of coffee maker and she replied, “But it was so cheap I couldn’t resist it!” That’s an example of price “creating” a buyer. 

So price may “create” a buyer. But you still have to ask yourself “How many buyers can I create by reducing to an irresistable price?” Remember that if you only consider price you are competing with foreclosures… and that IF you can create a buyer with an amazingly low price that buyer STILL needs to either have the money or the ability to borrow it. I have a couple of low priced properties that generate frequent calls. Most of the calls start with “will the owner finance?” Guess we didn’t create a buyer after all–or at least not a qualified one. Would you be surprised to learn that another question is “Is that price negotiable?”

If you make it all about price… it will be all about price! Sell your property, not your price.

 

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Bugs in the Well?

 Posted by at 9:38 am
Jul 072011
 

Buyers who are purchasing a home or camp with well water are wise to make their purchase contingent on a satisfactory water test. There are, of course, various types of tests for different substances. The most common problem we see with these tests is the presence of bacteria–particularly in systems that have been idle (such as camps) for sometime.

Even if you aren’t considering selling your property, an occasional water test is a good idea. You’ll find some easy to understand information at the University Maine Cooperative Extension website–you can download two brochures for free. One will explain the testing process–this can be a “do it yourself” project. The other will explain the process used for disinfecting your well if bacteria is found. The direct links to the well information are:

How to test your well.

How to treat your well.


“Disclaimer” — One of my volunteer positions is president of the executive committee for the Piscataquis County Extension. Even so, I can say with some objectivity that your local extension office is a great resource… as is extension in general. In fact, that’s one reason I agreed to accept the positon. If you’re thinking about moving to a new area, visit the chamber of commerce and the extension office. There’s lots to learn!

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Who’s Buying Maine?

 Posted by at 8:28 am
Feb 132011
 

The answer might surprise you!

For several years now, MREIS (Maine Real Estate Information System) has tracked where buyers of Maine property live(d) when they purchased the property. The 2010 data has just been summarized and I’ve tabulated some of the results–specifically single family homes.

The data shows that three out of four (76.5%) of the single family homes sold in Maine last year were sold to people already living in Maine.

When we add the New England States we learn that just over 90% of the homes sold in Maine last year were sold to people already living in the Northeast.  (Massachusetts accounts for 7.17%, New Hampshire 3.7%, New York 1.45%, Connecticut 1.3% and Vermont .43%.)

One item that I confess surprised me a little was that 1.3% of the sales were to buyers from Florida. I suppose these might be “seasonal” homes, but we could wonder if perhaps a few people are trading some sun for some snow.

While the numbers aren’t statistically significant it is interesting to note that the states of Pennsylvania, Virginia, California, Texas and Maryland have provided Maine with a number of buyers and 43 (.36%) of the homes sold were purchased by “International” buyers. And would the one person from Mississippi who bought a home in Maine last year please raise his or her hand?

“What about land?” you say. The numbers are not signficantly different. Just under 76% of land sales in 2010 were made to buyers already living in Maine.

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Seller Financing Caveat

 Posted by at 12:26 pm
Nov 102010
 

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) was passed in 2008 as part of the federal Housing and Economic Recovery Act. The act required states to establish a registration/licensing process for loan originators. Maine enacted its versionwhich will take effect January 1, 2011.

 There are exemptions for seller financing of the seller’s principal residence and for financing provided to family members. Thus owner financing of the sale of the owner’s home is exempt and parents financing a child’s purchase are exempt. But a buyer who is fixing up and reselling homes would need to be licensed to take back financing. Previous exemptions based on a maximum number of transactions are gone. The purpose of the law is clearly to disallow or at least discourage private, unregulated financing.

Those considering seller financing beyond the previously noted exemptions should check with the Office of Licensing and Registration.

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Can We Bribe A Buyer?

 Posted by at 5:56 am
Aug 012010
 

While I’ve never been asked exactly that question, it’s sometimes implied–especially given the slow moving market we’re experiencing. There’s an obvious temptation to “get creative” when property goes on the market. After all, what was the tax credit? (And for the linguists: what is the difference between an incentive and a bribe?)

Definitions aside, recent changes in the mortgage industry have an impact. For all practical purposes, there are severe limits on what sorts of  (and how much) incentive sellers can offer a buyer. Savvy buyers are often leery because they recognize gimmicks and the risks associated with “rebates” in any form.

Some of the things that do work :

  • Realistic pricing… there’s very little reason for a buyer to pay more than fair market value and it’s easy for them to have some sense of what that is.
  • Curb appeal matters and the old “one chance to make a first impression” logic applies. Keep the lawn mowed and trimmed, plant a few flowers.
  • Keep the inside neat and fresh. You don’t need to create a sterile look, certainly… but neatness counts.
  • Part of neatness is “decluttering.” Pack up and store 1/3 to 1/2 of your “stuff.” It’ll make the house look bigger and you might discover you don’t miss it!
  • Think “exposure.” Don’t be bashful about letting people know your house is for sale… and make sure the information about it is complete and accurate. Facts are important, but presentation makes a difference.
  • Be patient. At least one study showed that it takes as much as 21 showings to sell a house.

These are “safe” and relatively inexpensive buyer incentives. Remember that an incentive is only an incentive if the buyer wants it! At the same time, understand that once a buyer falls in love they may drive a hard bargain.  Be prepared for low offers even if you’re priced right. A lot of buyers are using the “nothing ventured, nothing gained” approach.

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