Do You Really Want To Sell Your Home? - Then Price It Realistically From The Start!

People come up to me all the time and ask, "How's the real estate market doing?" Although I would really enjoy giving a simple answer to this question, the real answer is far more complex. In certain parts of the country, the housing market has been stronger than in many other areas, although, prices are lower than they were at the peak of the market. However, many homeowners who list their homes have listed them at unrealistically high prices, and then been inflexible in terms of reducing their price. I have observed homeowners list their houses at prices higher than homes sold for at the peak of the market, and then becoming disappointed when their homes don't sell. Some homeowners explain their asking price by explaining how much money they have put into their homes, or how beautiful and exceptional their house is. Often, these same homeowners have owned their houses for many years, and they seem to conveniently forget how little they originally paid for their houses. Yet, the reality is that the price one receives for one's house is not related directly to how much one may have paid, or how much one may have put into the property. In the end, houses generally sell based on what buyers are willing to spend for the house, and that is generally related to the real estate market at that time.

These homeowners are generally hurting their own chances of selling their homes by listing their homes at unrealistically high prices. Houses that are "priced right to sell" from the start have a far better chance of selling than those priced too high. Today's buyers study the internet, and many realize what comparable houses are realistically selling for. A basic reality of real estate is that in most cases, the best offer a homeowner will receive for his house is received in the first few weeks after it goes on the market. New listings are "hot" to potential buyers, while houses that remain unsold often elicit questions from buyers as to what was wrong with the property - why it hasn't sold?
Many owners interested in selling their homes interview several real estate agents and brokers, and ask for recommendations as to pricing, as well as many other questions. Many owners want to believe the agent that tells them their house is worth the highest amount, as if saying it will automatically bring forth a higher price. Instead, owners should demand a professionally prepared Comparative Market Analysis, including pricing and a marketing plan from their realtor. In most cases, a homeowner will do best going with an agent that acts professionally, markets professionally, and justifies both the pricing, and how the marketing plan will work.
In addition, even if a "stranger from another planet" decided to pay an unrealistically high price for a house, most buyers need to get a mortgage to finalize the funding for the purchase. Lending institutions, for a number of reasons including some unwise lending decisions during the height of the real estate "bubble," are doing far more complete and conservative comparative market analysis of their own, and if this comparison (known as "Comps") do not justify the price being offered, the lending institution will deny that amount of funding because it does not "comp out."
Since for most individuals, their home is their most valuable asset, doesn't it make sense to objectively ask the same questions as an owner that potential buyers will ask? The main question should be, "How does this house compare with comparable homes in comparable areas in comparable condition? Owners should also ask, "If I were buying a home, would I pay that much for this house?"

New Year - But It's Still Real Estate!

2015 is now over 1/24 completed, and statistics show that over half of us have already broken our resolutions, and are now proceeding as usual. While real estate is one component of what goes on in the real world, every period has certain specifics and nuances that should be addressed proactively, if one is to achieve the best results. Here are some factors that impact real estate as we face 2015:

1. Oil Prices: The significant cut in pricing significantly reduces homeowners (especially in areas that have winter seasons) heating and energy costs. For many, this will mean at least a $500 savings (or more) during the cold - weather months  Another impact is that there is no longer a savings heating using gas heat, and that might impact potential buyers' decisions.

2. Mortgage Rates: As we begin the year, these rates are at or near historic lows. It is important to remember that for every $100,000 of mortgage, a change of 1% in the rate translates to approximately $65 per $100,000 of mortgage, per month. In areas such as the New York metro area, where the typical mortgage is for a far larger amount, consider the differential. In addition, when mortgage rates are lower, more people qualify because of the lower monthly payments.

3. Consumer Confidence: Most polls show that it is improving, and more people buy homes when consumers feel more secure and confident. However, these same polls continue to fluctuate, and thus must be reviewed regularly.

4. Supply & Demand: Is it a buyers or sellers market? What is the trend? Why?

5. Other Factors: These include: economic, political and perceptions.

New year, but the same rules apply. The better you understand external conditions, the more capable you'll be of adjusting, adapting and enjoying the real estate market

Today's Real Estate Mortgage Environment

Mortgages have existed for as long as most of us remember. Few individuals would be able to achieve their goal/ dream of home ownership without one, and therefore, it would probably be helpful, to review what the present mortgage situation, scenario and environment is.

1. Mortgage rates continue to be at (or near) historic lows. When the interest rates are low, it means that more people might qualify for one, and that others might be able to afford more home. Although no one possesses a crystal ball and can guarantee or see the future, most economic indicators point to these rates gradually moving higher. Therefore, those wanting to buy a home, presently have a great opportunity.

2. Mortgage downpayment: While most conventional mortgages still require 20% down, there are new programs that some people will qualify for, that will now permit downpayments as low as 3%. Understand that while that might create a better situation for some, it will also mean a higher monthly carrying charge (payment)

3. Conventional vs Jumbo mortgages: Periodically, lending institutions change the amounts that necessitate taking out a jumbo mortgage. In the past, this generally brought forth a higher rate, but recently the jumbo rate has actually been lower than the conventional one.

4. Credit Rating: Ever since the economic credit crunch that occurred at the end of the last decade, most lending institutions have significantly tightened their qualifications required to obtain a mortgage. Today, in order to obtain the best rate, one must possess a credit rating equal to no lower than 720. 

5. Best advice - Get pre-approved in advance. Discuss the process informally with a qualified, recommended, mortgage professional. Have someone knowledgeable look at, review and assist you in transforming your personal credit report to the best possible, and do so before you begin the process.

These are only a few of the things one should know about today's mortgage world/ environment. Potential home buyers should thoroughly discuss the entire buying process with both their selected real estate professional and with a trusted, quality mortgage professional.

Real Estate's Compromise Between Hype/ Motivating, & Absolute Integrity

While conceptually most people might indicate that they would prefer doing business with someone who adheres to absolute integrity, the reality is that unless a real estate professional is capable of combining enthusiasm, hype and motivating prospective buyers, he won't get the needed results. When an agent discusses listing one's home with a homeowner considering selling his home, he must realize that he is also in competition with others seeking that same listing.

My personal trademarked slogan is, "I'll always tell you what you need to know, NOT just what you want to hear," TM but that does not mean that anyone works in a vacuum, and therefore the facts must be presented in the most palatable manner, using the finest in sales techniques and people skills. This fine line should not mean compromising integrity, but rather understanding and using one's words in the most effective and motivating manner.

One can be enthusiastic and motivating without abandoning one's ideals and commitment to integrity! Doing so may mean taking a little more time and effort, but isn't it worth it, to get the best results, while being true to oneself and ideals.

Know what you can compromise without selling out! When a real estate professional understands how to merge both necessary components, he best serves his clients. 

Selecting The Real Estate Professional FOR YOU!

The vast majority of individuals who either seek to sell their homes or buy one, utilize the services of a real estate agent. This is for a variety of reasons, including such factors as: professionalism and understanding the process and its nuances; hand holding; getting the best price under the best circumstances; reducing the stress of a generally tense period/ situation, etc. I have written extensively about why someone should use a real estate agent, but this article is hopefully stressing not only selecting an agent, but rather selecting the right real estate agent FOR YOU!

1. Whether you are buying or selling, take the time to carefully examine and interview several agents, and select the one who is best suited for you!  There are a number of factors to consider, but it must begin with your personal comfort level with that individual. Does the professional make you feel comfortable and ease with him, and do you believe him (and in him)?

2. Many people choose their agent based on numbers only, or promises (perhaps empty ones) that might be made. Be organized and ask how that individual will achieve what he states he will. Does the explanation ring true to you?

3. Don't simply go with the agent that gives you the highest listing price! Remember that listing and selling price are often far different, and the best way usually to list a home for sale, is to base that price on comparables, and the existing local market (and other economic conditions).

4. Ask about marketing plan, and negotiating skills. How will your home be marketed if you are selling (and how will you be marketed if buying)? FYI - one way to determine the quality of one's negotiating ability is how he defends the commission he asks for (and his personal value). If one can't negotiate impactfully in his own defense, how can he possibly do so best for you?


"I'll always tell you what you need to know, NOT just what you want to hear." TM

What You Need To Know Is Different From What You Want To Hear!

Because I feel so strongly about how important it is for a real estate professional to focus on communication with absolute integrity and what the client needs to know, I have trademarked this statement: "I'll tell you what you need to know, NOT just what you want to hear." TM 

The focus of meaningful communication between real estate agent and client must be based on letting one's client fully understand the plan (to either buy or sell a home), and avoid the temptation to either sugar coat the issues, or merely say what the professional believes the client wants to hear. While that may be the easier approach, and might enhance the ability to obtain clients, it is NOT in the best interest of any potential client to not understand factors, approaches, marketing plan, and ramifications in a clear - cut way.

For example,  a homeowner might be attracted to the agent that compliments him and his home by telling him to list his home at an inflated price. However, the reality is that homes that are priced right from the start provide the best results to that homeowner. Similar discussions where there might be big differences between needing to know and wanting to hear, often occurs in the commission discussion (e.g. homeowners might want to hear a low commission, while there are often numerous reasons why a higher commission is warranted and necessary), the curb appeal scenario (the professional must act as the objective eye), and whether a house needs staging (the often fine line between being kind/ complimentary, and being truthful and objective).

Both buyers and sellers should interview their potential real estate professional, and be influenced, not by whether the agent merely tells you what you want to be told, but whether he behaves truly strong and professional, by telling you what you NEED to hear! (even if it may not be what you want to hear) 

Home Buyers and Sellers Should BE PREPARED!

What might it mean when I state that both potential home buyers, as well as homeowners wanting to sell their homes, must BE PREPARED? Nearly everyone who has ever either bought or sold a home realizes that there are often challenges, tensions, obstacles, and other scenarios that often complicate (and sometimes ruin) a deal! Here are a few ways that, with the assistance of a quality, experienced real estate professional who is best suited for the individual, buyers and sellers could improve the experience by being prepared:

1. BUYERS: Begin by realistically knowing what you want, as well as what you need. Have an earnest discussion, at the onset, with your Buyer Representative, so that you have realistic expectations of what is available, and a realistic view of what that may cost. Make sure your credit is paid attention to, and speak to a Mortgage Professional before you begin the process, so that you know how much mortgage you qualify for, and get either a Pre - approval or Priority Buyer Letter, at the onset. Interview real estate professionals, so that the agent you select is the right one for you and your needs. 

2. SELLERS/ HOMEOWNERS: Price your home (listing price) right from the start. In the vast majority of circumstances, selling a home is an easier process when the highest number of qualified buyers get to see it. De- clutter and enhance curb appeal, as well as doing necessary touch - ups that create the best possible 1st impression! Seriously consider staging services provided by recommended professional stagers.

Both sides should take a bigger picture approach, rather than being myopic or argue petty or minor issues. Keep your ego out of it. Let the real estate professional you have selected negotiate in a quality, effective manner.