Don't shoot the messenger!

Do your sellers shoot the messenger when they don’t like the message? In other words, do they list with someone else who does not tell them the truth about their house?

How do you handle it when you walk into a home and your reaction is something like this:

• I can't breathe... what is that odor?



• This house looks like an annex to the city dump!



• Has your bathtub ever been cleaned since you moved in (15 years ago)?



• The price you want is about 20% higher than other similar homes in this area.



• One, two, three, four, five, six, seven, eight, nine... how many cats do you have?

There really is no way to diplomatically handle situations like these. And I find that many sellers will acknowledge them without too much resistance, although they may not have any intention of correcting them. Frankly, if these sellers shoot the messenger – i.e. don’t list with you because of your candor – who cares? Any listing with extreme “issues” is going to be a tough sell anyway.

The truths I have trouble with are the ones that may offend very nice people who are very very proud of their homes. Handling these situations with kid gloves is important if I don’t want the seller to go searching for another agent who doesn’t tell them the truth. More important, I don't want to insult the homeowner who has a wonderful home for them. Yet I can't forget that the buyer won't be looking at the home through the seller's eyes. My message has to communicate the truth in a helpful way:

The truth: Yikes, this color reminds me of ___________!

Your message: Mr. and Mrs. Seller, this color is perfect with your things, but statistics prove that neutral homes sell more quickly and for more money. Let me give you the name and phone number of a painter who can help you neutralize your home before we put it on the market so buyers can imagine their own things in this home – and that’s our objective, right?

The truth: This furniture is way too big for this room.

Your message: Mr. and Mrs. Seller, that furniture will be perfect in your new home, but there’s too much of it for this home. Why don’t you move some of the pieces (be specific) to storage while your home is for sale so buyers can focus on how their own furniture might fit in this room. And the side benefit is that the room will look much larger to buyers with just one couch instead of two.

The truth: Pictures, pictures, pictures – not an inch of wall or furniture-top to spare.

Your message: Mr. and Mrs. Seller, you have a wonderful family. I’ll bet you really enjoy these pictures… why don’t you tell me about them. You know, I’m afraid that buyers will want to stop and look at your pictures when they walk through, and that may distract them from making a buying decision. Why don’t you get some neutral paint on these walls so the buyer can focus on the updates in your home.

Proud sellers want you to like their home and to realize that they've put a lot of time and effort into it. They need you to validate their choices in decorating, storage, landscaping,etc. Yet you can tell them the truth without it coming out of your mouth sounding like a personal opinion. These sellers are eager to please and eager to sell, and they will appreciate your telling them how buyers are likely to react. The buyer becomes the messenger...

Your sellers can’t afford to "shoot" any prospective buyers, so you’ll be safe. You will get the listing. And everyone will live happily ever after.

Feedback and Questions:

• mwoda@remax.net
• www.MargaretWoda.com

Related Articles:

• Home Staging Resources
• Staged Homes
• Preparing and Staging a House for Sale
• Staging your Home to Sell
• Dress Your House for Success

Don't shoot the messenger!

Copyright 2007. All rights reserved. Margaret Woda.

March Real Estate Sales Statistics

MRIS, the regional multiple listing service for 25 local Associations/Boards of Realtors in Maryland, Virginia, Pennsylvania, D.C. and West Virginia, has just released sales statistics for March 2007. It's not surprising to anyone working in Anne Arundel County, Maryland, to see that everything is down EXCEPT days on market, when compared with last year. What is surprising is the fact that it's barely down - the sales figures are really almost stable. I'm certain that agents in other markets around the country would be very pleased to have numbers like these:

• Total sold dollar volume is down 2.91% from March 2006 to $ 250,453,279
• Average sold price is down 1.08% from March 2006 to $ 395,037
• Median sold price is down 3.96% from March 2006 to $ 326,000
• Total units sold is down .94% from March 2006 to 634
• Average days on market are up 82.26% from March 2006 to 113

Here is some more information that some people will find interesting:

• New listings taken in March 2007: 1316
• New contracts taken in March 2007: 738, including 208 contingent contracts
• Sold/settled units in March 2007: 634

Of the 634 homes settled, the majority (246) had been on the market over 120 days, while 178 sold within the first 30 days of listing. 544 of buyers for the 634 homes settled used Conventional financing and only 35 used VA or FHA loans.

In my specific marketplace, Crofton (zipcode 21114), sales statistics differ slightly from the county-wide numbers:

• Total sold dollar volume is up 9.43% to $ 17,875,623
• Average sold price is up 1/2% to $ 364,809
• Median sold price is down 4.91% to $310,000
• Total units sold is up 8.89% to 49
• Average days on market are up 97.73% to 87

While average days on market in Crofton have increased since March of last year, they are exactly the same as February 2007 and down significantly from January (113). That's good news, in my opinion. Of the 49 homes that sold and settled, almost half (21) had been on the market less than 30 days, while 14 had been on the market for over 120 days.

Again, Conventional financing was the most popular, with 43 settlements, while only 2 buyers used VA or FHA loans. That is good news for home sellers, since sellers' closing costs tend to be lower for Conventional loans than any government loans. It's also somewhat surprising, given Crofton's proximity to Fort Meade, the U.S. Naval Academy and Andrews AFB.

Statistics are published monthly by the Metropolitan Regional Information Systems, Inc. (MRIS) at http://www.mris.com/reports/stats/ if anyone would like to check on another zipcode or obtain greater details. You don't have to be a MRIS member to access this information.

Are these homebuyers for real?

Your home is on the market. It’s 9 a.m. The phone rings with a warning that prospective buyers are coming between 10 and 12. You rush the kids through their cereal and send them to perform their assigned chores. Mary makes all the beds; Jerry loads the dishwasher, takes out the trash, and wipes down the kitchen; you quickly check all the bathrooms to make sure no one left yesterday’s clothes on the floor and grab the Windex to polish the faucets and sinks.

Your spouse closes the closet doors, pulls open the drapes and blinds, turns on all the lights, turns off the TV, and changes the radio station from talk radio to soft rock. There is barely enough time for everyone to grab their sweaters and get out the door by 10. Oh, don't forget to confine the pets. Whew! You can only hope this buyer is the one who will make an offer so you won't have to go through this drill any more.

Determining whether prospective homebuyers are “real” or “fraud” is up to the agents. You assume they wouldn’t waste their time or yours. That’s one of the reasons you listed your home with a real estate agent and agreed to pay those “big bucks”. You KNOW that a FSBO (For Sale By Owner) has to let every caller in to see the house – including the people looking for decorating ideas, the people who can’t afford your home, and even criminals who are “casing the joint”. So how do agents separate legitimate buyers from the pretenders?

1. Come into the office –

If a prospective buyer is not willing to come into the agent’s office, chances are they’re not serious buyers. I generally begin by asking buyers for photo identification and leaving it in my office before I get into a car with them. I figure that an axe-murderer, rapist or robber probably won’t be inclined to provide this identifying information. As far as I’m concerned, these folks will have to settle for open houses and FSBO properties – they’re not getting into a car with me! (P.S. – That’s one of the reasons I do not hold Open House.) Of course, I have a standard questionaire for all prospective buyers - Fair Housing Laws require that I treat each buyer the same, and this "standard procedure" is the best way for me to document that I do.

2. Loan pre-approval –

If a prospective buyer has a loan pre-approval from one of the lenders I recommend, the loan officer who I know and trust has verified to the extent possible that this individual is who they say they are by verifying employment, assets, and cash on hand. If someone walks into the office with a loan pre-approval in hand, as far as I’m concerned, they might as well not even have one. This prospective buyer may or may not be pre-approved (anyone can "fake" a loan pre-approval), and may or may not be who they say they are. They could be frauds! And, assuming they are who they say they are, the agent should show them only homes for which they qualify financially.

3. Match properties to buyers –

Having completed the first two steps – verifying the buyer’s identity and financial qualifications – the next step is to match the buyer's wants and needs to properties. Does this home purchase require something to happen before they can buy such as selling their current home, getting a new job, receiving an inheritance that is in probate? Is this move necessary, such as relocation for a new job, or optional, such as a move-up to a larger home? Do they want/need to settle in 30 days, a year, or somewhere in between? Does your home have the features they are looking for in a home? You rely upon agents to know these answers before they bring strangers into your home… don’t you agree?

While I can’t promise that all real estate agents take these same precautions before showing your home, many do. Frankly, these three steps are essential for any buyer’s agent for two reasons: 1) The safety of you, your family AND the agent; and 2) so you and the agent don’t waste time with prospective buyers who won’t or can’t buy your home.

Determining that homebuyers are real and not frauds BEFORE agents show your home is a reasonable expectation for you as a home seller when you list your home. You shouldn't have to ask yourself "Are these homebuyers for real?" Agents, if you’re reading this, take note.

More information:

www.MargaretWoda.com

mwoda@remax.net

Are these homebuyers for real?

Copyright 2007. Al rights reserved. Margaret Woda

Real estate is NOT like it used to be -

We’ve been reading a lot lately about today’s market, how different it is now from last year. I thought it might be fun to look back a lot further – to the 70’s, when I started in the business. Some of you might not have been alive yet, and others were too young to be home buyers or sellers then, so maybe you will find this interesting:

• A brand new 3 bedroom, 2 bath brick-front townhome was priced in the low $20’s. Today, that home in that community sells for about $300,000; and new townhomes sell for more than a half million dollars.
• A real estate sales contract was 2 pages long, hand-written on legal-sized paper. Today’s real estate contracts are commonly about 45 pages long, computer-generated on letter-size paper. The half-page listing contract has been replaced with a dozen or more pages.
• The multiple listing service was alive and well, but home information could only be found in a book published weekly. New listings usually did not have any photos – a black and white exterior photo appeared a week or two later. Today’s listings are published worldwide on the Internet within minutes of going on the market, often with a dozen or more color photos.
• Real estate agents could show other company’s listings, but they had to go to the other company’s office to get the key. Then they had to return it before they could show another house, in case another agent needed that key. Today’s agents just aim their cell phones at an electronic key lockbox to obtain the key for a property.
• Speaking of phones, when an agent was running late or got lost (no GPS systems in those days), he or she had to stop and find a pay phone to place a call. Today they can make a hands-free phone call from their car.
• Telephone tag was the norm, with buyers and sellers having to leave a message with a receptionist and then wait for an agent to call them back with information about a property or anything else. Today, we not only have voice mail, we have text messaging and email; instant communication is the norm rather than the exception.
• Real estate agents always represented the seller, even when they worked with the buyer… even if the buyer was a friend or relative. Today’s buyers have their own exclusive representation from a buyer’s agent who looks out for their best interests and has no fiduciary relationship with the seller.
• The interest rate was about 7%… shot as high as 17% during the Carter Administration… and remained double-digits for most of my career. Who ever thought we’d see five or six percent in our lifetime? Yet we did, and the rate has hovered in the 6’s for over a year.
• There were only three loan choices: VA, FHA and Conventional. All of them were 30-year fixed rate loans. If the buyer was not active duty military or a veteran , VA was not an option; the FHA loan limit was $33,000 so that was not an option for higher-priced properties; that left Conventional. Adjustable rate loans, buy-downs, wrap-around mortgages and other creative loans were the market’s answer to high double-digit interest rates… yes, 17%. And these programs remained available when rates went down.
• Most contracts were written subject to loan approval, which required verification from employers, creditors and banks via "snail mail" (i.e. U. S. Post Office) - this often took about two months. Loan processing then took a few more weeks, so settlements did not occur until about 90-120 days after contract, in many cases. By contrast, today's buyers usually obtain loan approval within 24 hours, and only then do they go home shopping. After their contract is accepted, only an appraisal of the subject property stands in the way of settlement - and settlement usually occurs within 30 days of contract.

As you consider how different this year’s market is to last year’s, perhaps this little stroll down memory lane will help you to realize that it’s not as dramatically different as the media would have you believe. Okay, prices are down and sales are slower - slightly. But this is a “normal” market adjustment, and nothing to be afraid of.

If you want to buy or sell a home this spring, find yourself an experienced agent who has “seen it all” and is not intimidated – one who knows what steps to take to maximize YOUR profits in today’s market because they’ve lived and worked through similar situations (and worse!) in the past.

Feedback and questions:

www.MargaretWoda.com

mwoda@remax.net

Real estate is NOT like it used to be -

Copyright 2007. All rights reserved. Margaret Woda