Main

Inside "For Buyers and Sellers"

There are 25 articles in this category and on this page. Up to the most recent 20 are listed here.

Loudoun Market HEAT Index™ Advice For the First Time Home Buyer Appraisals in a Softening Market Builders Offering Incentives Home Builders Sweeten Incentives Builder Desperation? Agent Incentives Speaking of Mollie Agent or Consultant? Home Inspections 101 Begonias in the Garden

Consumers Drive Real Estate Change ABC Values™ Previews on the Web Hot Real Estate Commission Debate Marquis Custom Homes in Raspberry Falls All About Property Market Values Remodeling: Cost vs Value 2005 New Real Estate Market Dynamics What's All the BuZZ I Hear? Zillow: FirZt ImpreZZionZ Tax Time | Real Estate Related Deductions

You will find a complete Index of Articles by Category in the History Archives.

April 07, 2006

Consumers Drive Real Estate Change

This just in from Inman News:

Client as catalyst: Consumers drive real estate change

Report focuses on consumer behavior, demands
Friday, April 07, 2006

Inman News

Consumers are demanding a range of real estate products and cost options and driving the real estate industry to a new era of specialization and segmentation, according to a work group that included real estate brokers, sales associates and consultants.

The work group, formed by a National Association of Realtors committee that is composed of Realtor association executives, also reported "conflicting consumer desires" – consumers seem to want both autonomy and personalized service in real estate transactions.

"The Consumer: Catalyst of Change," a Realtor association report released this month that is based on the work group discussions, also noted that consumers are hungry for: "convenient online services and search tools, including full information about listed properties," "immediate responses to their online or telephone communications," "personal, friendly service from both the agent and the real estate company," "a smoothly integrated transaction process with effective solutions for any hurdles along the way and no surprises at closing," "low fees and commissions or a choice of fee packages," and "a convincing sense that the agent and broker add value to the buying (and) selling experience."

This new study report from the National Association of REALTORS® (NAR) reinforces the A.D. Little study prepared for NAR several years ago.

National Association of REALTORS® A. D. Little Study: "Technology and the consumer will change the business model and execution of the real estate transaction. By 2005, real estate licensees will re-frame themselves from salespeople to real estate consultants".

The conclusion then and now: consumers are empowered with more information from the internet, want to see real value delivered by hiring an agent and want more choice in what they pay for and how they pay for it. Enter: the "Real Estate Consulting Model". When Pam and I founded our business we concluded that consumers were ready for change and that we would do business in non-traditional ways. So far, we are very successful using this new model. It is based on the premise that "one size does not fit all" in a real estate transaction. Here is how it works:

• We show you all the services and associated costs that makeup a real estate transaction and we jointly choose those right for your situation. We call it smart planning or SmartPlan™.
• We show you the cost of the services selected compared to typical commission rates.
• Then, you choose how you want to pay. We call these financial smart choices or SmartChoice™.
• We put our joint plan into action and focus on producing the desired result. You attain your real estate goal at the right cost, in the shortest amount of time with the least hassle.

In addition, we offer a one stop shop to provide any necessary pre-listing items such as new carpet, paint, maintenance, floors and even new appliances to get the home prepared to sell. We use contractors and suppliers we know and trust and manage the entire process. We charge a management fee for this value added service.

Ever wonder where our name came from: Choice³ Realty? It is intended to brand our way of doing business; giving consumers choices. You can find a complete description of our service model at OUR SERVICES: Real Estate for the 21^st Century. You will even find an entry titled: Consumers Drive Real Estate Change that we created over a year ago.

We believe we are on the edges of what will be enormous change in the industry. We didn't make 2005 as A.D. Little suggested but, it is not far off. The innovators have and will continue to change the landscape. "Lead, follow or get out of the way." We choose to lead by being different.

Published by Merv on April 7, 2006 08:59 AM | Give us your comments here.
Read (0) Comments on Consumers Drive Real Estate Change and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Press Room , Real Estate

March 30, 2006

ABC Values™ Previews on the Web

RealEstateABC.com launched their own home valuation tool free for consumer use just a few weeks after Zillow announced their beta site. Called ABC Value™, it operates on the same principles, namely public records and recent sales. I find it easy to use and I particularly like the easy way to adjust for value based on general interior amenities, exterior, lot size, view and noise/traffic factors. I also like the feature they included for market conditions; cold, average and HOT. After these adjustments, you can also adjust for square footage of the home if the tax record is wrong. ABC makes it very clear that these are only estimates and "For deeper insights, contact a local real estate expert." Here are some screen shots (click for a big picture):



Selecting your own comps from the local area around your property is as easy as clicking check boxes. ABC Value™ doesn't have all the cool charting that Zillow does but then again, it is quick and easy. Testing a couple of my current listings I found it to be as accurate as Zillow and better with the value adjustments provided (remember, you have to be objective as most home owners are not).

Let the race begin! Read more about RealEstateABC.com...

About RealEstateABC

RealEstateABC.com was started in March 1998 with the goal of providing a site that candidly informs homebuyers and home sellers about the real world of real estate, without puff, hype or sensationalism. We want to help consumers with insight into how things really work with straightforward analysis of market trends and "how to" guides.

This philosophy applies to all the resources on our site, including the Agent Directory and the Home Values tool. Most Agent Directories focus on having the greatest number of agents, but we want the best. So we continually work to put the most informative agents in the directory and we list the agents in the geographies where they are experts. Our Home Values tool helps consumers with the central mystery of buying or selling a home, "what is it worth?" By providing an "ABC Value™", an estimate of value of the selected property based on recent home sales, the consumer has a starting point which they can refine further based on their knowledge of the specific property and by working with a local market expert, a real estate agent.

We've been gratified by the response to RealEstateABC.com from consumers and real estate professionals:

• Our "how to" guides appear on over 30,000 real estate web sites RealEstateABC.com is one of the most-linked-to real estate sites on the web
• Our site has had numerous mentions in the media including being named "Cool Site of the Day", featured on CNBC's "Power Lunch", and named by PC Magazine as one of the "100 Best Sites You Didn't Know You Couldn't Live Without"

RealEstateABC.com is part of InternetBrands.

Published by Merv on March 30, 2006 08:15 PM | Give us your comments here.
Read (0) Comments on ABC Values™ Previews on the Web and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Real Estate , Real Estate Technology

March 13, 2006

Hot Real Estate Commission Debate

Evidently Brad Inman of Inman News touched off a hot debate about real estate commissions last week in one of his blog entries. Quite a variety of comments and lots of them (over 200). Brad has another regular news article discussing his remarks and the comments. Very interesting to see the various reactions to what seems to be a very touchy subject.

Here are my top 20 21 responses to the commission debate.

1. Commissions are not sacred.
2. Brokers and agents do not have an inherent right to anything including commissions.
3. The consumer has a right to negotiate.
4. Consumers have a right to understand what they are paying for.
5. Innovators have a right to interject themselves into our business.
6. FSBO's have a right not to pay anyone.
7. Consumers are tired of the old models.
8. The old models are dying.
9. New models will provide enormous competition.
10. Change is good for the consumer.
11. Consumers generally don't want cheap, they want to understand the value delivered for the fee paid.
12. All agents have a right to present themselves to consumers.
13. The agents with the highest quality, professionalism and VALUE driven fee structure will be chosen by consumers.
14. Transparency in fee structure will win.
15. This is still a relationship business.
16. Relationships are built on trust.
17. Trust is attained by being trustworthy.
18. Trustworthy (worthy of trust) is attained by being honest, looking after your clients best interest and not your own, and delivering on commitments.
19. Prospering in this business is dependent on doing the right things and doing things right.
20. Consumers will do business with people that deliver value and people they trust.
21. We should not feel threatened...we need to innovate.

Comments are welcomed and valued!

Published by Merv on March 13, 2006 07:50 PM | Give us your comments here.
Read (4) Comments on Hot Real Estate Commission Debate and (0) Tracking Web Links
More articles like this one filed in: Editorial , For Buyers and Sellers , REALTORS® , Real Estate

February 26, 2006

Marquis Custom Homes in Raspberry Falls

Pam and I attended a Marquis Custom Homes brokers open last Thursday in Raspberry Falls. There are four spec homes available for near immediate occupancy. The models are:

• The Sinclair: Homesite 104, Offered at $1,049,402
• The Sinclair: Homesite 174, Offered at $1,066,077
• The Glenmore: Homesite 176, Offered at $1,195,213
• The Edgewood: Homesite 184, Offered at $1,156,519

All are more than 4,000 square feet of living space on the main floors, have hardwood floors, gourmet kitchens with granite and upgraded cabinets and sun rooms. Ready for spring move-in.

Buyer's benefit: purchase with Pam or I representing you by March 31, 2006 and receive $25,000 off from Marquis and an additional $10,000 to $12,000 commission rebate (depending on model purchased) from us.

It is important to note that the builder's discount and our commission rebate is ONLY available from us if we represent you through a private sales appointment with Marquis and this must be your first visit.

Interested? Call 703-431-2145 and ask for Merv or Pam. We have brochures available. Learn about Raspberry Falls here.

Published by Merv on February 26, 2006 10:41 AM | Give us your comments here.
Read (0) Comments on Marquis Custom Homes in Raspberry Falls and (0) Tracking Web Links
More articles like this one filed in: Featured Properties , For Buyers and Sellers , Home Builders

February 21, 2006

All About Property Market Values

I am going to make some BOLD statements:

• TAX ASSESSMENTS HAVE NOTHING TO DO WITH THE MARKET VALUE OF A HOME
• APPRAISALS HAVE NOTHING TO DO WITH THE MARKET VALUE OF A HOME
• CMA'S HAVE NOTHING TO DO WITH THE MARKET VALUE OF A HOME
• ZILLOW ZESTIMATES HAVE NOTHING TO DO WITH THE MARKET VALUE OF A HOME
• YOUR NEIGHBORS OPINION HAS NOTHING DO TO DO WITH THE MARKET VALUE OF A HOME
• WHAT YOUR NEIGHBORS SOLD FOR 6 MONTHS AGO HAS NOTHING TO DO WITH THE MARKET VALUE OF A HOME
• ALL OF THE ABOVE HAVE SOMETHING TO DO WITH THE MARKET VALUE OF A HOME

SUPPLY AND DEMAND HAS EVERYTHING TO DO WITH THE MARKET VALUE OF A HOME

Property and homes are commodities, pure and simple. High demand and low supply drives prices higher and the asset becomes more liquid (easier to sell). Low demand and high supply drive prices lower and assets become less liquid (harder to sell). Market value is ultimately determined by what a buyer is willing to pay and a seller willing to take. I hear the following statements from consumers: Well, I can't sell for less than my tax assessment! My home is worth at least my appraised value! My neighbor said... My Mom told me... The one down the street sold for...and my home is better... Zillow says...

Let's take a look at my BOLD statements one at a time...

• Assessments: The tax assessor compiles general data about about home sales in specific areas in a jurisdiction looking back the last year. Yes, the last year. County records are incomplete, contain very little detail and is fraught with error. The assessor has no way to evaluate the quality of a property; condition, how well it is maintained, amenities, or any other qualitative measures. When was the last time an assessor visited your home to determine these things? Never! Markets change and can do so rather quickly. Your assessment has everything to do with generating revenue for the jurisdiction and always lags current market conditions. The average Loudoun County home sales price went up 23% last year. The average assessed value went up a bit more than that. Some individuals more, some less. There was strong market demand the first half of the year. Prices rose rapidly. There has been extremely week demand for the latter part of the year. Demand drives market value. The assessor doesn't have it. If anything, if you believe your assessment is too high, appeal it!



• Appraisals: Appraisers have a little better handle on market value. They visit the property, take measurements, take pictures, note features and amenities, have opinions on quality and condition and are out in the market and have a pretty good idea of what's happening. They see lots of homes. They approach residential value from two perspectives, current cost to build (cost models that take into account lot, size of home and amenities) and comparable properties that have sold (usually in the last six months or so). The are also looking backward. Appraisers have algorithms and formulas for adjusting value based on comparisons of location, lot size, square footage, age, condition and amenities. Banks base their loans to buyers on an appraisal. But again, they are looking backward. A market value appraisal performed for a seller 3 to 6 months ago does not reflect current demand. So, we need to be careful on how we use it, if at all.



• Comparable Market Analysis (CMA): This is the method used by most real estate agents. It is not only a comparison of similar properties that have sold (backwards looking in time), but also a comparison of similar properties currently on the market. We also look at location, condition, size, quality and amenities as well as time on market (an indicator of market condition). Knowledgeable, experienced agents will not provide a specific market value. Instead, they will provide an approximate range of potential value. We will also take into account buying patterns of consumers. For example, wood floors, upgraded cabinets and appliances, granite or stone counter tops, finished basements and home theaters are in strong demand. It is expected in certain price ranges. And, in a buyers market homes that have these features will be the first to sell everything else being equal including price. So, if a home does not have these, a much lower price is what will attract a buyer. Adding these amenities will not necessarily allow you to set your price higher than comparable. Adding these may, in fact, simply allow you to compete with other properties on the market that do have them. Bottom line: CMA's do not set market value...they are just estimates.



• Zillow: New, exciting, cool, presents lots of information. Zillow bases their Zestimates on public records. See Assessments above. End of story for Zillow.



• Neighbors, Family, Friends ET Al: These lovely trusted people have opinions. If they are not real estate agents or appraisers that have not done the necessary homework, they don't have the data. Respect their opinion but don't listen.



• All of the above (except #5): All of these are helpful in estimating market value and we use all of them. We show potential clients how we use each of these to "triangulate" determining the most probable range of value. We use our market data studies, in general, to advise clients on what to expect. In a buyers market, sellers would be advised to set their price lower in the range. In a sellers market, higher in the range. Of course, competitiveness of the property plays a big factor as does the market price range sellers are in. Entry level properties have more potential buyers, high end properties have a significantly smaller pool of potential buyers. Of course, there are other personal factors to consider such as how fast a seller needs to sell for whatever reason.

Sellers are not only competing with other sellers, they are competing with new home builders. In our current market, new home builders are offering huge incentives to buyers to move their inventory. These include all the bells and whistles mentioned above and/or CASH.

The conclusion? Pricing and presentation are everything in attracting buyers. Estimating market value is as much an art as it is a science. Be prepared to be logical and realistic above all else. Our job is to apply the art to the science and help sellers get the highest value that the market will provide.

Here is some other interesting and relevant reading:

Balanced market creates new approach to home selling

Previous listing strategies may backfire in 2006
Monday, February 20, 2006

By Dian Hymer | Inman News

There are plenty of home buyers intent on buying while they can still lock in a relatively low mortgage rate. So, the 2006 housing market should present good opportunities for sellers who understand how to maximize profit in this new, more balanced, selling environment...

The first step is to start thinking like a buyer, not a seller. Although buyers are anxious to buy before rates rise further, they know that the appreciation rate is subsiding.

When the market is rising quickly, buyers are less concerned about overpaying because they're sure they'll recoup the excess payment within a few months because of robust appreciation. This was the psychology of last year's buyer. Now, buyers are much more concerned about value...
Read the whole story here.

And from my favorite Massachusetts agent, Mollie Wasserman, this and other insights from her blog about using information:

What the Internet Can and Cannot Do

It is often said that “the only thing new in the world is the history that you don't know". This saying kept going through my brain last week when a new home valuation web site named Zillow was launched to a lot of buzz. The press, as usual, carted out the same tired (and wrong) prediction that it has made for fifteen years: that home valuation sites like these will put Realtors® out of business or at least greatly reduce our fees.

Actually, over the last dozen years, the opposite has transpired: it doesn’t matter whether you are talking about law, medicine, accounting, mortgage or real estate; the more that the public uses the internet to gather information, the more they turn to professionals before they make major decisions. That’s because there is a huge difference between gathering information and interpreting it.

Over ten years ago, I penned a Real Estate Internet Warning that seems even more relevant today than it did then:

REAL ESTATE INTERNET WARNING© Despite advertising claims to the contrary, the internet is NOT an experienced Real Estate Professional. It cannot consult, counsel, advise, have knowledge of local laws and market conditions, make judgments, "own" the result, or most importantly, understand your individual goals and needs and care about you as a Client. Furthermore, while the internet can provide information, it cannot interpret it. To obtain an accurate assessment of any data you're receiving online, please contact us.

Mollie Wasserman

The rest of the article here.

Published by Merv on February 21, 2006 07:48 AM | Give us your comments here.
Read (2) Comments on All About Property Market Values and (0) Tracking Web Links
More articles like this one filed in: Editorial , For Buyers and Sellers , Real Estate

February 20, 2006

Remodeling: Cost vs Value 2005

The National Association of REALTORS® and Remodeling Magazine issued their 2005 Cost vs. Value Report back in December (we are a little slow to catch up). The survey found that the top 4 investments are upgraded kitchen, remodeled bath, new siding and window replacement. Here is an excerpt from the report:

FEATURE: 2005 COST vs. VALUE REPORT

Remodeling's Payoff

The annual report compares construction costs with resale values in 58 markets.

The "Cost vs. Value Report," published each year in conjunction with Remodeling magazine, gives you a city-by-city guide on what various home projects will pay back at resale. This year’s report features data for five more markets than last year* and a new project—a mid-range home office remodel.

...

Since 2002 four projects, reported each year since 2002, have shown the greatest return at resale on a national basis. Two of the projects, siding and windows, reflect the importance consumers place on curb appeal and insulation; the others, a kitchen and a bath project, are consistently high performers in most markets.

The full article can be read here. The print publication has these projects calculated for all 58 major metropolitan areas of the US.

This is timely because we have a few clients considering upgrades as a way to be more competitive when they are ready to go on the market. The key question is: What is the market value without the upgrades versus with them. If there are unrealistic expectations on the first part of this question (current market value) then upgrading won't matter.

In the Northern Virginia market, buyers are consistently looking for bells and whistles in a home, mainly in the kitchen: upgraded cabinets, granite counters and stainless steel (or maybe black) appliances. If you are selling a home in the upper brackets (north of $500,000) without these, it is hard to compete since so many homes built in the last few years had these amenities added during construction. With the inventory of homes for sale at such a high level, you either have the amenities or drastically lower the price to compete. It's a tough call.

Published by Merv on February 20, 2006 05:38 AM | Give us your comments here.
Read (0) Comments on Remodeling: Cost vs Value 2005 and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Property Presentation , Real Estate

February 10, 2006

New Real Estate Market Dynamics

This IS a must read article from Realty Times today:

'Good Deal' Matter of Interpretation

Realty Times | February 10, 2006 by M. Anthony Carr

Everybody's looking for a good deal. Sellers want the highest price possible and buyers want to buy a house below asking price. They both want the same thing -- a good deal. Following years of a sellers market, many consumers are facing a more normalized market across the country. Particularly, in large metropolitan markets, the normalizing of the market has created a wait and see attitude on purchasing or selling real estate.

For the wise investor/home buyer, the cautionary phrase of "wait to buy real estate" should give way to "buy real estate then wait." One of the keys to savvy real estate investing -- whether for personal use or wealth building -- is timing. In a seller's market, every buyer who was serious about getting into a home, knew it was time for bidding up. Getting the best price with the best terms was not a winnable strategy for so many buyer. The name of the game was winning the house.

Read the full article here.

Published by Merv on February 10, 2006 11:37 AM | Give us your comments here.
Read (0) Comments on New Real Estate Market Dynamics and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers

What's All the BuZZ I Hear?

There is Zillow buzz all over the net. Many different reactions. I'd guess equal on both sides of the great/not-so-great evaluation. It just might become the best FSBO site in the universe. But, until they have total MLS access (and even they say it is not practical) I don't think they can reliably get the values right. And, if the FSBO's of the world rely on Zestimates, I think more business is headed our way.

REALTOR.com© may be the closest thing to a national MLS. I would love to help them with valuation models if they would change their mindset away from just "finding homes for sale." There are a Gazillion reasons why this would never happen.

Published by Merv on February 10, 2006 05:09 AM | Give us your comments here.
Read (0) Comments on What's All the BuZZ I Hear? and (0) Tracking Web Links
More articles like this one filed in: Editorial , For Buyers and Sellers , Real Estate , Real Estate Technology

February 09, 2006

Zillow: FirZt ImpreZZionZ

Enough with the Z's already! All I can say is Zowee! (sorry) Can you believe the data gathering and data base building for this? And then the presentation. An amazing effort by Zillow. My first impressions were immensely positive. Here's a screenshot of the search results page:



Very cool!

Now, lets get under the hood.
First, it appears the data base is built from public records. Not bad, just not reliable. Public records are notoriously fraught with error and incomplete. Even in our area (Loudoun County, Virginia) where Zillow rated the data quality 5 stars, properties I searched only showed tax records from 2003. What happened to 2004 and 2005? The best data from tax records (in addition to the address) are the lot size, assessed value and sold price history when the deed transferred. Information about the features of a home (e.g. bedrooms, finished levels and square footage) are often missing. Although Zillow offers a mechanism to adjust, I found their categories lacking and when applied to one of our real listings, the valuation resulted in an absurdly high value.

Next, the current valuation is computed from history and appreciation trends. This might be good if you are looking at cookie cutter homes in a large subdivision with a lot of activity. Unreliable in areas with low turnover and uniqueness. A good example of this is in a neighborhood consisting of primarily custom homes. Zillow consistently valued older (built 5 to 10 years ago) higher than what they recently appraised and ultimately sold. Here's a snapshot of value trends:



Finally, tax records are not always updated in a timely manner. And, using tax records cannot provide any current information about the state of the market or the current condition of the property. An analysis of MLS records exposes current market conditions. An agents experience and first hand knowledge of a property can adjust the potential value that Zillow will not be able to do. Here's a snapshot of the detail:



Initial conclusions: Zillow gets an A+ for the data gathering effort and presentation. The Website is nicely designed and easy to navigate with simple explanations that are consumer friendly. I give it a D for accuracy on the small sample I took (my current listings). Zillow consistently overvalued (sometimes by more than 10%) our homes. I suspect that since Loudoun was such a hot market for the last 24 months with annual assessments rising 25 to 30% a year, Zillow paints an optimistic picture.

Consumer warning: Go ahead and use it. It is free and easy. Remember, beta means it is still being tested and tweaked. Zillow warns of that. Will I use it? Probably to get another data point. I use three methods to get to value range now. One of them is assessed value and appreciation rates. I tell our clients it is the roughest of all of our analysis, a rule of thumb. Zillow will not replace an experienced agent. I worry consumers will get enamored with the reports and zestimate and make some wrong decisions about listing price, especially when Zillow provides an optimistic value range.

I like it for its amazing build and presentation (I think these things are cool anyway). I'll continue my data analysis approach using MLS data. Priceless. And, not worry Zillow will replace me anytime soon (or ever).

Published by Merv on February 9, 2006 06:35 AM | Give us your comments here.
Read (0) Comments on Zillow: FirZt ImpreZZionZ and (0) Tracking Web Links
More articles like this one filed in: Editorial , For Buyers and Sellers , Real Estate , Real Estate Technology

February 01, 2006

Tax Time | Real Estate Related Deductions

We subscribe to Realty Times and every month we have the opportunity to mail or email a monthly newsletter. Normally, we don't find much noteworthy to be broadcasting to our clients, past clients and prospects. Anyone interested in it can view it through the EASY LINKS in the sidebar. This month, there is a particularly timely article about tax deductions provided by home ownership. Specifically, consider this for people who sold a home in 2005:

Top 10 Tax Breaks, On The House

By Broderick Perkins

Selling Costs and Capital Improvements: When you sell your home, you can reduce your taxable capital gain by the amount of your selling costs, which include real estate commissions, title insurance, legal fees, advertising and inspection fees. Cost typically stemming from decorating or repairs -- painting, wallpapering, maintenance, and the like -- are also selling costs if you complete them within 90 days of your sale and with the intention of making the home more saleable.

We are not tax advisors and you should consult with a tax accountant or attorney to determine what might be applicable in your situation. Many of our selling clients spend a considerable amount of money sprucing up the property for the sale. You just might be able to get some of that back!

Read the full article here: Top 10 Tax Breaks.

Published by Merv on February 1, 2006 03:59 PM | Give us your comments here.
Read (0) Comments on Tax Time | Real Estate Related Deductions and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Real Estate

January 30, 2006

Loudoun Market HEAT Index™

Inman news recently ran an article about Nate Summer's Marin Market HEAT Index™. Nate is a broker in Marin County, California. Discovering his work was timely as we were also investigating the use of indicators to help identify market conditions. We concluded there was a simple relationship between how many properties are being sold and how many properties are for sale at any given point in time.

Nate's Market HEAT Index™ Website is here and he provides a discussion on how the index is used. He also has the ability to view the index by cities or price ranges.

Our application of his index to Loudoun County has a couple of tweaks but the math behind it is similar. See a full graph of the application here. We used all property types in our application (single family, townhouse, condos and residential lots and land). A future project will be to add selection criteria for location (towns and zip codes?), property type and price range. More tools to be able to give our clients the absolute best advice based on real data.

Our next article will discuss the development of our own version of the Market HEAT Index (Loudoun MARKET^pulse™ Index) and show why it might actually show more.

Published by Merv on January 30, 2006 07:29 AM | Give us your comments here.
Read (0) Comments on Loudoun Market HEAT Index™ and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Market Updates

January 20, 2006

Advice For the First Time Home Buyer

I received this great question from a reader who appears to be contemplating her first home purchase. I thought it was timely because of the current level of uncertainty in the real estate market. It is important enough to bring to the front page. My response is also included.

I've managed to save up roughly $37732 in my bank account, but I'm not sure if I should buy a house or not. Do you think the market is stable or do you think that home prices will decrease by a lot?

Here are my thoughts:

That's a great question and one every first time home buyer should ask. I wish we had a crystal ball and could predict the future. We don't, but here's what we do know:

1) The national economy is still expanding with some geographic areas doing better than others. In the DC Metro area jobs are being created at a rapid rate and the predictions are that it will continue to do so for some time (barring some national disaster). Job growth creates housing demand. For the last several years, builders have not been able to keep up with the demand.

2) Average home values in our area have risen nearly 100% in the last 5 to 6 years. It cannot continue that trend because when home ownership becomes less affordable, people quit buying and as a result, prices are forced to moderate simply due to supply and demand.

3) Real estate investing has been red hot (buying and flipping is estimated to be 25% of the current market). The easy money days (we believe) are gone and many investors are trying to get out at what appears to be a market top, inflating inventory.

4) All the "bubble talk" is causing purchasers to be cautious and buying has slowed.

5) Although current mortgage rates are still historically low, they most likely will continue to rise. This will have a moderating effect on the market.

6) The result is a greater supply of homes for sale (inventory).

So, all indicators are that the market will slow, less hysteria, more reasonable housing availability and a more rational market. Prices may decline. The may continue to rise. We don't think it will be extreme in any case.

Here are my final thoughts. Home ownership is part of the American dream, always has been and will continue to be. Over the long range, home prices continue to rise. As in any free market, there are short periods of fluctuation both up and down, but the long term trend is up.

You should want to purchase a home for the right reasons; a place to call your own, your personal sanctuary, your desired lifestyle and maybe your privacy and your ability to make your home an expression of who you are. The other major reason is the obvious tax benefits. I look at it as the government helps us make our house payments because of the interest and property tax deduction.

We always look at a home purchase as an investment. It is basic human nature to do so. On the other hand, buying property is not like buying stock. Companies can evaporate overnight as you know. Property values may go up and down, but you will always own something tangible.

My advice: If you want to own your own home, determine what lifestyle you desire, what you can afford and where you want to be. Then, contact a reputable Realtor® to help you get the best possible deal. This may be a great time to be in the market. There are more choices and sellers are more willing to negotiate.

I hope this is helpful. Send us an email if you want to discuss this offline. Thanks for visiting!

Published by Merv on January 20, 2006 07:21 AM | Give us your comments here.
Read (0) Comments on Advice For the First Time Home Buyer and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Real Estate

December 31, 2005

Appraisals in a Softening Market

Finally got a ratified contract. Maybe you offered closing cost assistance. Maybe you had to accept a lower offer to get the contract. Done? No. The buyer's lender will order that dreaded appraisal and everyone hopes it comes in equal to or higher than the negotiated price. Boom! Bad news. The appraisal is substantially lower than anyone expected. What happened? And, what can you do?

1. You can renegotiate the price and hope the buyer has some extra cash to make up any difference.
2. Bite the bullet and agree to the appraised value as the selling price. Just how desperate are you to sell?
3. Don't negotiate. Void the contract and start over (the buyer may have already done this.)
4. Challenge the appraisal. But, you have to back it up with comparables that the appraiser didn't consider. The buyer and seller have to be pretty motivated to get the deal done.

You probably got into this situation for a couple of primary reasons: your agent didn't get the comps right in the first place or you weren't being realistic (as in greedy) and thought you should get what your neighbors got 6 to 12 months ago regardless of what your agent presented. On the other hand, the appraiser flat out missed it (go back to #4 above). Sellers have to realize that markets change. Competition changes. Buyers wants and desires change.

There are a few ways to avoid this disappointing turn of events. Make sure your agent shows you the detail and the comps are recent and closely aligns with your neighborhood or at least the type of property within the general area. Next, since the local market started slowing a few months ago, we recommend spending the few hundred dollars to get a pre-listing appraisal. This becomes another data point for you and your agent to consider. Also, temper your expectation. You most likely have a generous tax free gain (called equity). It is still a GAIN (not a LOSS) even if the market is not as generous. The absolute worst behavior is to be unrealistic, set your price too high and sit on the market for weeks and months without even a showing or an offer.

There is another good article in the Washington Post this morning about "Appraising a Shifting Market."

Published by Merv on December 31, 2005 09:27 AM | Give us your comments here.
Read (0) Comments on Appraisals in a Softening Market and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers

Builders Offering Incentives

If you have been putting off buying that "new home," now may be the time to get a better deal. We've noticed an advertising trend by builders offering incentives to both buyers and agents alike. Up until this year, builders wouldn't even negotiate. Since about July when the market started to soften incentives started crawling out of the woodwork like a trail of ants after the sugar. The most extreme was the email ad for 6 months builder paid mortgage and 6% commissions to agents that brought buyers and closed before year end (we commented on this one several weeks ago). Here is an excerpt from an article published in the Washington Post this morning:

Facing Weaker Home Sales, Builders Sweeten Deals

Freebies Include Mortgage Help, Televisions

By Sandra Fleishman Washington Post Staff Writer Saturday, December 31, 2005; Page A01

Home builders around the region are luring would-be buyers with freebies worth thousands of dollars, in an attempt to prop up sales in a slowing real estate market.

Pulte Homes Inc. is offering a 42-inch television, free heat for six months or a $5,000 check for window coverings to some buyers. Ryan Homes will finish the basement free. NVHomes will throw in a golf club membership in some developments.

"Incentives are definitely on the rise," said Kenneth Wenhold of real estate research firm MetroStudy. He estimated that since July, when the market began to soften, buyer traffic at new-home projects has fallen off 30 percent and so have contracts. "With all the inventory, buyers now have more choices." ...

The number of homes for sale in the Washington area has more than doubled since last November, according to figures from the area's multiple listings service. The last time the Washington region had this many houses for sale was the late 1990s, before low interest rates and a growing job market fueled the years-long boom in home sales.

During that boom, even while houses and condos sold as soon as they came on the market, builders sometimes offered limited year-end deals. They have also routinely given buyers a break for using approved lenders or title companies. But those incentives were nothing compared with what's going on now.

Among the deals showing up in ads and sales offices are upgrades to gourmet kitchens, six months of mortgage payments, a year-long lock on interest rates and tens of thousands of dollars toward closing costs. Many of them have been promoted as year-end or holiday specials.

In the Washington area, incentives can amount to as much as 5 percent of the sales price, according to Daniel Oppenheim, an analyst with Banc of America Securities. One problem for builders, he said: Investors who bought recently are reselling to cash out.

"All of a sudden the new-home builder is not only competing with the resale market but with the exact same home they just completed," Wenhold said.

Read the full article here.

It is reported that over 25% of the new homes homes sold in this region the last two to three years were bought by investors looking to make a quick profit. There are an abundance of these homes now on the market by those that couldn't get out soon enough. Bad news for sellers. Good news for buyers. Many of these can be had at a steep discount.

Published by Merv on December 31, 2005 08:47 AM | Give us your comments here.
Read (0) Comments on Builders Offering Incentives and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Home Builders , Market Updates

November 11, 2005

Home Builders Sweeten Incentives

Jim Duncan, my Blogging friend at www.realcentralva.com commented on my last post referring to this article in the WSJ. Thanks Jim.

Published by Merv on November 11, 2005 12:39 PM | Give us your comments here.
Read (0) Comments on Home Builders Sweeten Incentives and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Home Builders , Market Updates

Builder Desperation? Agent Incentives

Great News for You: 6% Commission*
Good News for Your Clients: 6 Months Free*

I receive emails from the real estate agent and builder community advertising the homes they are marketing. I received this one (click to view) a couple days ago with the headline above. That's right. 6% commission to me if I can sell one of their homes and 6 months free to home buyers (I assume no mortgage payment). There are three caveats:

• Purchase contract signed by 11/30/2005 and
• Close by 12/31/2005
• Buyer must use their lender

These homes appear to be ready for occupancy. We are seeing lots of incentives to buyers (and agents) everywhere in the region. This one is the most extreme. These homes range from the mid $600's to over $1 million. If you follow our thinking on a regular basis, you know how we feel about agent incentives. We don't think it is right.

So, here's the deal: anyone out there that wants to buy one of these Stanley Martin homes as described and you can meet the time constraints, we will share half, or 3%, of the commission with you as a rebate at closing! Now that is a buyer incentive. You have to call us before you visit Stanley Martin.

Published by Merv on November 11, 2005 06:50 AM | Give us your comments here.
Read (1) Comments on Builder Desperation? Agent Incentives and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Home Builders , Market Updates

October 11, 2005

Speaking of Mollie

In our last article we referred to Mollie Wasserman as a pioneer of real estate consulting. She is also a pioneer of using the web in her business. She developed a Website long before it became "the thing to do" for real estate agents. She hasn't quit. Look waht I found on a recent visit to her Website: an audio visual presentation for sellers that thoroughly explains the "consulting" business approach and what her clients can expect from her team when engaged. She does a much better job than we do presenting the business approach. Thanks again Mollie for the inspiration! Take a look at www.molliew.com. Look for this image on Mollie's home page. She also has one for buyers.

Published by Merv on October 11, 2005 06:38 AM | Give us your comments here.
Read (0) Comments on Speaking of Mollie and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers

October 10, 2005

Agent or Consultant?

We started blogging on March 25, 2005 and are gradually increasing our audience. Our blog and business Website are constantly evolving. Our objective is to provide meaningful, straight forward information about this business of real estate with a little fun thrown in. It occurred to us that we have not really explained our business approach and why we do what we do and look the way we look. Well...here goes (Warning! this may be a little tedious):

When Pam and I decided to start our own real estate business we concluded that we did not want to join the herd and compete in what is a "me too" business. Look around. You will find agents all look the same, sound the same, use the same canned materials and are very self promoting. They all talk about their production levels, #1 this, #2 that, integrity, and years of experience. They have glamour photos, a catchy tag line, a template website (or web page) and some sort of personal or brokerage branding. Dont' get me wrong, there are may great agents that have built a significant business using this approach. In recent years, many more are adding price differentiation by offering discounted "commissions". According to their very competitive ads, sellers can choose 5%, 4.5%, 4%, 3.99% and 3.85% full service listings. If we were buying a commodity, why wouldn't we always choose the lowest price? 3.85% looks good to me. The fact is "service" is not a commodity. All of this seems to be very confusing and, in our opinion, not very compelling...

Our journey into this business began in April, 2004. After several months of industry research, looking at hundreds of ads, scores of Websites, reading several real estate success books and dissecting the the real estate transaction we concluded the business was very much like any other service driven business from a delivery and cost standpoint. There are unique rules and laws that govern us but the essential ingredients are the same: create trusting relationships by paying attention to detail, delivering on promises, using technology to inform and gain internal efficiency, keeping clients interests above our own and delivering at a reasonable price that pays us for our time and expense. Real estate is not rocket science.

It was during the research phase of our start-up that we discovered three very important concepts and practices. First, the A. D. Little research report commissioned by the National Association of Realtors® that basically predicted the old business models of "selling" real estate will give way to a concept of "consulting". Next was the discovery of the National Association of Real Estate Consultants that offers education and a passion about "real estate consulting". And last, and perhaps the most important, was the serendipitous discovery of Mollie Wasserman, a real estate agent with Keller Williams in Boston that pioneered the "consulting" concept many years ago. It all started to make sense. The internet provides consumers with a wealth of information making them more knowledgeable. Consumers are demanding more at a value price they can understand. Consumers want a partner in a real estate transaction that is not "selling" them anything. They want experienced, thoughtful guidance.

We put together the business plan, including the philosophical beliefs and value system, tools including appropriate technology, business models that are "value to the consumer" driven and of course, marketing. Our objective is to create a brand the symbolizes all of this and represents to the consumer a symbol of value. Hence Choice³ Realty. It needed to be anything but personal promotion.

By August, 2004 we were off and running. I joined RE/MAX Renaissance because of the business values expressed and because RE/MAX provides the freedom for agents to be creative and very independent. We didn't want a broker to tell us what we could not do. September 1, 2004 Pam left Long and Foster after 5 successful years to join me at RE/MAX.

The response to our approach is phenomenal. Our clients now understand what they are paying for and how much. It's all about fixed vs. variable costs and providing choices (the Choice in our logo). Fixed costs are those services/materials provided in every transaction such as sign post, lock box and MLS entries. Variable costs are those that may be different in every transaction. These include the level and types of marketing required. Some properties require lots of marketing, some don't. Some services are optional such as a seller home warranty, staging and full VisualTour vs. a few photos.

Hence, we provide a flexible service schedule where we customize a plan for buyers and sellers and offer three (there is a ³ in our logo) ways to pay for services; time and expense, fixed fee or commissions. Most clients choose fixed fee. It is also the seller's decision on what to offer cooperating brokers (buyer agents).

It is a win-win for our clients. They only pay for the services they need to meet their objectives. We get paid for our time and expense and provide uncompromising service (have you noticed our tag line is You Choose. You Win!...?). Finally, we refer to ourselves as the Choice³ Realty Group. Our intent is to create a growing business and include other agents who want to do business the way we do. By the way, we refer to ourselves as "advisors" because that is the relationship we build with our clients.

So, there you have it. The evolution of a different business model and how it works. We have an entire section devoted to our business model on our Website at www.choice3realty.com.

Published by Merv on October 10, 2005 10:14 PM | Give us your comments here.
Read (0) Comments on Agent or Consultant? and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers

September 10, 2005

Home Inspections 101

Having a home inspection might be the single most important aspect of purchasing a home. You want the peace of mind of knowing exactly what you are buying. We always recommend our clients make a home inspection contingency part of a purchase contract. There may be rare instances when an inspection can be waived.

Sellers have legal responsibilities to either disclose all known defects to potential buyers or provide a disclaimer that they are selling "as-is". The latter is a notice of buyer beware and is the usual notice that sellers make. Even in the "as-is" notice, sellers and their agents have a legal obligation to disclose any known material defects or abnormal conditions. The inspection contingency gives you many alternatives based on the inspection report:

• void the contract,
• request the seller make necessary repairs,
• re-negotiate the price, or,
• accept the property as-is.

The recommended course of action is very similar for buyers and sellers.

For Buyers

The purchase contract will stipulate time limits for having the inspection done and a specific amount of time after the inspection for you to give notice of action. If there are issues, we usually recommend that you re-negotiate the price, receiving credit for the cost of any repairs or equipment replacements if they can be reasonably fixed. This way, you can make the corrections yourself (using contractors of your choice) and to your specifications.

For Sellers

Based on the age of the home and its condition, we often recommend sellers have a "pre-list" home inspection for the peace of mind of knowing what it might reveal. If we know of conditions that need to be addressed, getting these done before hand will make your home more desirable and reduce the chances that a buyer will walk away from a purchase contract because of defects.

If a buyer finds issues after a purchase offer, we usually recommend that you re-negotiate the price, giving credit for the cost of any repairs or equipment replacements if they can be reasonably fixed. This way, the buyer can make the corrections and remove any future disputes as to whether they were done properly or to the buyers expectation.

I found a great web resource providing detail on what inspectors look for...

Take the Virtual Home Inspection Tour now to learn about some common problems found during a home inspection.

We can recommend many companies and individuals who are certified by the American Society of Home Inspectors (ASHI), are ethical and are highly experienced. All of these perform to the highest industry standards as well as our own standards for professionalism and customer service. Each charge about the same for their services. We let you choose.

---

Published by Merv on September 10, 2005 04:57 AM | Give us your comments here.
Read (0) Comments on Home Inspections 101 and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers

September 05, 2005

Begonias in the Garden

Onich Hotel Gardens, Onich, Scotland

The single most impressive feature of the UK is the fascination and use of flowers everywhere. Flower gardens, window boxes and hanging baskets give properties old and new an attraction that is extremely appealing.

We advise our clients to spruce up their landscape before marketing their home. The objective is to present a colorful freshness and a well cared for look that attracts buyers. Cut flowers inside the home provides the same effect. It is relatively inexpensive and it works!

Click the picture for a close up view.

Published by Merv on September 5, 2005 07:27 AM | Give us your comments here.
Read (0) Comments on Begonias in the Garden and (0) Tracking Web Links
More articles like this one filed in: Entertainment , For Buyers and Sellers , Property Presentation

September 04, 2005

Remodeling: What's it worth?

One of the important considerations before making the remodel decision is: what will the return on investment be when I sell? "Some remodeling projects can pay big dividends to sellers at resale."⁽¹⁾ Others may not. The seventh annual Cost vs. Value report recently published by Remodeling and REALTOR® magazines lists nine (9) of the most popular remodeling projects and compares the cost to the additional resale value added to a home in 53 major markets.

The following remodel projects included in the publication are:

• Major kitchen remodel
• Master suite addition
• Minor kitchen remodel
• Bathroom remodel
• Bathroom addition
• Attic bedroom/basement remodel
• Sunroom or deck additions
• Window replacement
• Siding or roofing replacement

The study reports that either a bathroom remodel in a mid-range valued home or a deck addition return greater than 100% of the costs in the Wasington DC Metro area. In general, according to this report, returns are greater in areas that experience rapid price appreciation. An independent analysis of the survey reports an error rate of ± 5-10%. While this study can serve as a general guide, there are many other considerations such as:

• Remodeling may be an alternative to selling if you are simply looking for larger space or more comfortable living conditions.
• Spending significant amounts on remodeling before a sale may not be worth it. Lower cost alternatives such as paint and/or new carpeting may be better.
• Your homes location, general condition and market characteristics are important elements in making the remodel decision.

When we work with sellers, we get to these answers through our needs assessment up front. If you love your house, love your neighborhood and have many close friends nearby, remodeling may be a better alternative to selling.

Contact us for a complimentary copy of this new report or for a discussion of our needs assessment. We can help guide you to the right decision.

---

(1) From the 2004 Cost vs. Value report published by Remodeling and REALTOR® magazines.

Published by Merv on September 4, 2005 02:43 PM | Give us your comments here.
Read (0) Comments on Remodeling: What's it worth? and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Property Presentation

16 ways to sell for top $!

You can get top dollar and sell quicker by following these guidelines:

1. Make a good first impression. Keep your lawn trimmed and edged. During winter, keep snow and ice removed from sidewalks and steps.
   
2. Welcome prospective buyers with a clean and painted front door. A seasonal door decoration adds warmth.
   
3. Assure a quick sale and top dollars by decorating. Faded walls, worn and scratched wood-work reduce appeal.
   
4. Show the bright side of your home by opening draperies, curtains and blinds.
   
5. Entice buyers with a clean kitchen. Many judge the housekeeping by the oven and the stove. Clean until it shines. Baking soda is good for removing stains, and it will not mar the finish.
   
6. Sell your home with sparkling bathrooms. Repair caulking in bathtubs and showers. Shower door, ceramic tile and grouting should be polished and free of water marks and stains. Consider a professional deep cleaning of the whole house. It will do wonders!
   
7. Avoid cluttered appearances. Remove excess furniture and other items you seldom use. Clear stairways are essential and safe.
   
8. Make closets look larger. Remove Items that can be stored elsewhere. Neat, well-organized closets show that there is ample space.

This is only the first 8...more

Here are the next 8 fool proof ways to increase your home's value and sell it faster.

9. Display the full value of laundry or other utility space by removing all unnecessary articles. Brighten dark, dull walls with a lighter coat of paint.
   
10. Check major appliances. Change the filter on the furnace. Correct noisy attic or appliance fans with a little oil. Clean the exterior of the water heater, furnace and other appliances that will be seen by prospective buyers.
    
11. Fix minor flaws is your house. They suggest neglect to the prospect and are easy for you or a handyman to fix.
    
12. Have as few as possible in the house when it is shown. Too many introductions are distracting to buyers. By putting them at ease, you give them a chance to clearly absorb the advantages of the property.
    
13. Let your agent or the showing agent do the talking. Be polite, but do not strike up a conversation with prospective buyers. The agent showing the home has the details already and need all the attention of the buyers to increase their interest.
    
14. Turn on the porch light when showing the house after dark. Also have the house well lit throughout when the hour of the appointment nears.
    
15. Sell the house first. Do not try to sell the buyer any furniture, rugs, or drapes in the house at this time.
    
16. Finally, consider professional staging. It is proven that a professionally staged home sells faster and at a higher price! It will return many times the nominal cost.

These 16 ways to improve your chances of selling for top dollar quickly are really just common sense. The best test:

• Step out to your curb, put yourself into the buyers mind and assess what you see from the outside. Do you have curb appeal? If not, what can you do? First impressions are important.
• Next, go inside and note your impressions here. Again, try to be objective. Homes that show well will sell quickly and for the highest price.

One of our most important responsibilities to you as our client is to be objective and offer our best recommendations. It just may be that spending a little to get to show status will provide a handsome return. In the end, you have to decide what you can or cannot accomplish.

Do you know you need to do all or some of these but are short of cash? Call us, we can help. We offer these services as part of our business and we can be compensated at closing.

Published by Merv on September 4, 2005 02:04 PM | Give us your comments here.
Read (0) Comments on 16 ways to sell for top $! and (1) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers , Property Presentation

Time to Sell? Part 2

In a softening real estate market it is of utmost importance to sellers that your home shows its best. Homes that are neat, clean, organized and has fresh paint will sell before those that don't and for more money.



Here's a case in point:

A recent listing client made the following home prep investments to their 3 bedroom, 2 1/2 bath, finished basement and 2 car garage to be listed at $425,000:

• Packed and stored all unnecessary household items to create an uncluttered, organized and more open environment.
• Replaced all carpeting with a medium grade in a neutral clor.
• Had all exterior outside wood rot repaired.
• Repainted all exterior woodwork.
• Repainted most of the interior in a neutral color creating a bright, fresh appearance.
• Cleaned the entire home inside and out.
• Refinshed and stained the deck.
• Staged by a professional home staging service.
• Spruced up the landscape adding flowers in beds, trimmed edges and placed hanging baskets across the front porch to greet visitors with color.

There were two other homes listed in the neighborhood:

• One was listed for $440,00; the same basic model just a little bigger.
• The other was listed for $425,000; same model with an added master bedroom and full bath above the one-car garage.

Our client received 2 valid contracts. We ratified one of the contracts for $5,000 more than the asking price. The status of the other properties are:

• The $440,000 property is now listed at $427,500 with a different broker.
• The competing $425,000 dropped their sales price to $399,900 and is still for sale.

Our clients understood the value of making their home show! They spent $11,000 on the improvements. We offered a fixed fee listing and a "one-stop-shop" where we paid for and managed the improvements. We will be reimbursed our expenses at closing. $11,000 was invested in the improvements but we saved this client over $6,000 in commissions and we got a contract at $5,000 over the list price. Net cost to the sellers to make the improvements: $0.

Published by Merv on September 4, 2005 11:50 AM | Give us your comments here.
Read (0) Comments on Time to Sell? Part 2 and (0) Tracking Web Links
More articles like this one filed in: Case Studies , For Buyers and Sellers , Property Presentation

September 02, 2005

Time to Sell?

This is one of the most common questions we get. There is not a general answer. Like everything else, it depends on many factors including location, condition, price range and current market conditions.

Since the market dynamics are changing, it is important to remember a few key facts about "time on market". Lower priced homes usually sell faster because there is a larger pool of buyers. Conversely, executive and estate properties take much longer because of a smaller pool of buyers. Also, see 2005 Loudoun County Monthly Sales Data, source of buyers and marketing plans. History shows that when a home goes on the market, the peak interest comes in the first two to three weeks. To illustrate this point:

INTEREST LEVEL IN PROPERTY (for illustrative purposes only, each bar represents ~1 week)

Listing (Goes on the market) Week 10

This is the reason it is extremely important to get the price in the right range up front. If a property is over priced, it will be shunned and it gets "stale". The longer a property is on the market raises the question of "what's wrong?" to agents and potential buyers.

We perform periodic market studies by location, type and price range to keep abreast of market conditions and use this in designing the right marketing plan for our clients.

Published by Merv on September 2, 2005 06:45 AM | Give us your comments here.
Read (0) Comments on Time to Sell? and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers

March 27, 2005

Buying in a Seller's Market

Northern Virginia is a seller's market and has been for a couple of years. This year doesn't look any better. To buy in this market requires an aggressive game plan. Many buyers lose contract competition because they have too many contingencies, think that everything is negotiable all the time (not motivated to step up to market demands), not quick enough and generally indecisive.

Here are some tips that might help...

Increase your chances of getting your dream house instead of losing it to another buyer, with these easy steps.

1. Get prequalified for a mortgage. You’ll be able to make a firm commitment to buy and make your offer more desirable to the seller.

2. Stay in close touch with your real estate sales associate to find out first about new listings that come on the market. And be ready to go see a house as soon as it goes on the market.

3. Scout out new listings yourself. Look at Internet sites, newspaper ads, and drive by the neighborhood frequently. Maybe you’ll see a brand-new “for sale” sign before anyone else.

4. Be ready to make a decision. Spend lots of time in advance deciding what you must have so you won’t be unsure when you have the chance to make an offer.

5. Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don’t try to go too low to get a deal. In a tight market, you’ll lose out.

6. Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you’ll probably be able to sell your house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.

7. Don’t get caught in a buying frenzy. Just because there’s competition doesn’t mean you should just buy anything. And even though you want to make your offer attractive, don’t neglect inspections that help ensure that your house is sound.

Remember: get pre-qualified, limit contingencies, be decisive and make a competitive offer! You will greatly improve your chances of getting the home you really want.

Published by Merv on March 27, 2005 02:15 PM | Give us your comments here.
Read (0) Comments on Buying in a Seller's Market and (0) Tracking Web Links
More articles like this one filed in: For Buyers and Sellers