My very first blog and I have a lot to say. Let's see if I have time to get it all down. Rather then write some meaningless blog just to get hits on my twitter account of whatever the masses are doing I thought I would write about what is wrong or right with this industry and how I can help newer professional and buyers and sellers with how they treat each other.
What makes me qualified to give out advise you ask? Well nothing really but I do have 20 plus years of full time real estate experience, I own both a successful RE/MAX office and a title company, Indian Valley Closing Services inc. My wife Stephanie owns a mortgage company, Main Street Home Funding inc. ( I'll let her tackle that industry) I have not dabbled in Real Estate or done it part time rather I have helped families and investors buy and sell day in and day out over and over again month after month, year after year. I am no stranger to 14 hour days and intense time management.(Be careful with too much time management), at the same time keeping a balance with family time which is so so important. Since I started at the age of 22 the business has changed incredibly and to stay on top we have needed to constantly adjust. I have done a lot of things right and made mistakes as well , but I am hoping that others may learn from my experience.
This blog "Unwritten Rules of Real Estate 101" was created to help Buyers Buy, Sellers Sell and Agents communicate and work better. I will continue to add as my life experiences jog my memories of past events. So lets kick it off:
Unwritten Rules of Real Estate #1 Give People Some Time to Respond
Not the most important rule but one I see broken daily. I call it the Cinderella Offer. A Buyer will make a offer and the agent preparing that offer will have an expiration date midnight that day! You are telling me that I have an offer that is only valid for under 24 hour and you just dropped it on my desk without warning? Most sellers are not willing to make one of life biggest decisions at the drop of a hat. They need time to absorb and understand the terms and if they are like me, they want discuss it with their spouse and possibly take a day or two to think about it and make a confident response. Sometimes the sellers work split shift and need more time to discuss. Some sellers are not always reachable and some sellers have other plans. A successful agent may need time to fit in a 2 hour appointment to sign the paperwork in there schedule remember they are people too..
Yes everyone wants an answer ASAP including myself, but an educated buyer and agent will allow adequate time for the seller to respond. What good is an offer that technically expires after midnight. It is a waste of time because we will have to revise and it makes the Buyers look impossibly demanding. It also makes the agent look like they don't know what they are doing.
Well there, got that one off my chest. Stay tuned....
Unwritten rules of Real Estate #2 Thinking, "The Buyers can always make an offer" may be the biggest mistake a Seller or Agent can make.
I have heard the above phrase too many times to ignore so lets takle the art of proper pricing head on.
Buyers in this market are well educated in values. In fact, some are more in tune with pricing than some proffesisionals. This makes sense since during the purchase property, a buyer will study that section of market extensivly day and night during the term of the search. Most professionals study the broad market and have a better sense of overall pricing but they don't always have the time to research as carefully as an attentive buyer. This can lead to pricing mistakes.
Unless you have a one of a kind, knock your socks off, never saw anything like it home,(less than 3% of all homes fall into this catagory) the buyers will not overpay just because a seller started at higher in price. Homes generally sell for within 2% of market value which is determined by negotiations between a buyer and seller. The properties that buyers offer on sell within 4% of what the seller is asking at the time of the offer. I have been tracking these numbers carefully for the last 15 years or so and they don't really change in good or bad markets. What does this mean? It means that if you are priced more that 4% over the market, your chances of even getting an offer go down dramaticaly.
Sellers of mispriced homes always question their agents with "Why havent we had any offers on our house?" The answer is simple "No one has liked it enough to even try to purchase it" Let me go one step further and say if no one is even looking at it, you are not even in the ballpark. When confronted with the reality of market pricing a seller or agent may say " If I reduce my price the buyers will make a low ball offer. Newsflash: If you have been on the market for more than 45 days and have recieved no offers, that is not going to change. If by chance you do get an offer on a overpriced home, chances are it will be low. You see buyer will not make a realistic offer to an unrealistic seller. They will start incredibly low and this is a formula for "toxic negotiation" where each part thinks the other is out of their mind and nothing gets closed.
According to the National Association of REALTORS,If a home is priced correctly, there should be one offer for every 10 showings. In a normal market, you shou get 1 to 2 showings a week at minimum.
Proper pricing is more important that ever. If you ever want an accurate estimation of value, I offer a free detailed analysis of your home to determine value. It doesn't matter if you are selling or not I would be happy to help you out if needed,
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