It’s more Like a Baseball game
We are currently transitioning from a very long inflationary period in the housing market, perhaps the longest in recorded history. The problem many sellers are having is that because this upswing has lasted so long, many of them weren’t in the market the last time it tipped downward. Some of them weren’t even born!
As the market heads down in some price ranges, some sellers are having difficulty adjusting to the fact that the economic principals in an inflating market still apply in a deflating market. In order to cause a sale to happen your price must be at or in front of the direction the market is heading.
For those who don’t have the foggiest idea of what I’m talking about, think of a pop fly ball in a baseball game. The ball usually goes up and then down. With me so far? As the ball goes up if you could position your glove above the ball it would eventually go into the mitt. If, however, the ball is heading down, i.e. has reached the peak of its energy, you must get underneath it to reach the goal, in this case an out.
The ball’s arc represents the market. As the market heads down a seller has to get “underneath” it with his price or no sale will happen. This is a time when it is more critical than ever to have competent help reading the market.
If you find that showings are slow or nil, you need to ask your REALTOR about price reductions, and then listen to the advice. Small incremental price reductions could result in frustration for everyone as you chase the market down. Kind of like chasing a home run up to the fence and then watching it go over.
Tuesday, August 28, 2007
Tuesday, April 17, 2007
Lead The Duck!
If you’re a hunter shooting at a flying duck, you know you’ll have to aim in front of the duck if want dinner. How far ahead of the duck depends on what size of gun you have and how fast the duck is flying. Well, so goes the real estate market, particularly the one we are in. The duck represents the market and the gun represents the price of your home. We often hear sellers tell us that they want some “negotiating room” or they can always “come down.” While this line of reasoning may work to some degree when the market and the price of houses are on the increase but what if the market and prices are not increasing? Let’s go back to the duck analogy and say that the duck is flying backwards. Ducks can’t fly backwards you say? I suppose you’re technically correct but work with me here -- If you aim ahead of the duck when it’s flying backwards your chances of hitting it are not good, and it may be McDonalds tonight. Let’s leave this lame analogy and go to house prices.
In a rapidly inflating market you can afford to be a little ahead of market value because the market will catch up with your price. If you leave too much room for “negotiating” or if you take the “we can always come down” attitude, in a down market, you could find yourself chasing the market all the way to the bottom with price reductions. We see this often with FSBO folks when they don’t have a good read on market statistics. Often, a hard lesson to learn is working with the market you are in, not the market you wish you were in.
As you can see, leading the market is not always the wisest strategy.
Ask me sometime how they catch ducks in Australia.
In a rapidly inflating market you can afford to be a little ahead of market value because the market will catch up with your price. If you leave too much room for “negotiating” or if you take the “we can always come down” attitude, in a down market, you could find yourself chasing the market all the way to the bottom with price reductions. We see this often with FSBO folks when they don’t have a good read on market statistics. Often, a hard lesson to learn is working with the market you are in, not the market you wish you were in.
As you can see, leading the market is not always the wisest strategy.
Ask me sometime how they catch ducks in Australia.
Tuesday, March 20, 2007
Does size really matter? Really?
Our healthcare provider has some eight billion members and is trying to pull off a family doctor image program. My mother, my wife and I all have the same last name. My family doctor doesn’t remember it.
When I was in high school many years ago my family moved from a tiny town where I had 16 classmates in my sophomore class to Seattle and a high school where my junior class had 1500 members. Talk about culture shock!
Is a bigger company better in real estate? Can the big companies provide you better anything? Let’s examine the claims.
National Branding: OK I’m waiting. If your home has a big company name on the sign in the front yard is that going to help sell your house? Are they buying the company? The typical buyer would like to buy your house and I don’t think it matters what company has it listed.
Nation Wide Network: Most real estate companies belong to a national relocation network of some kind or another the big companies happen to own their own.
One Stop Shopping: Some of the new large company business models include title and mortgage companies. They do this so you can come to one place and get all of your real estate needs taken care of under one roof. More like one profit center. Huge potential for RSPA violations and conflicts of interest!
A Whole Lot of Agents: Is that a good thing? You only get one per transaction. You better have a reliable reference because they are all acting as little independent businesses.
Now let’s look at a smaller company option.
Closer Brokerage supervision: The broker is an important part of a real estate transaction. They oversee and check each agent’s work. Kind of like a student/teacher ratio is important so is a broker/agent ratio.
Personalized service: Fewer agent transactions = more time devoted to each transaction
Tighter company policy: In a company of 5 it is easier to maintain a company policy across every level of service. In a company of 100 the broker may not see some of his agents over the course of a month.
National Relocation Network: Ours has 2500 member brokers, we can relocate you anywhere.
First class web site: The key to any marketing website is how it comes up on the search engines ours http://www.agentmikel.com/ comes up before the big brokers most of the time.
Ok , I rest my case. You need to sell your house? Come see us.
Scott
When I was in high school many years ago my family moved from a tiny town where I had 16 classmates in my sophomore class to Seattle and a high school where my junior class had 1500 members. Talk about culture shock!
Is a bigger company better in real estate? Can the big companies provide you better anything? Let’s examine the claims.
National Branding: OK I’m waiting. If your home has a big company name on the sign in the front yard is that going to help sell your house? Are they buying the company? The typical buyer would like to buy your house and I don’t think it matters what company has it listed.
Nation Wide Network: Most real estate companies belong to a national relocation network of some kind or another the big companies happen to own their own.
One Stop Shopping: Some of the new large company business models include title and mortgage companies. They do this so you can come to one place and get all of your real estate needs taken care of under one roof. More like one profit center. Huge potential for RSPA violations and conflicts of interest!
A Whole Lot of Agents: Is that a good thing? You only get one per transaction. You better have a reliable reference because they are all acting as little independent businesses.
Now let’s look at a smaller company option.
Closer Brokerage supervision: The broker is an important part of a real estate transaction. They oversee and check each agent’s work. Kind of like a student/teacher ratio is important so is a broker/agent ratio.
Personalized service: Fewer agent transactions = more time devoted to each transaction
Tighter company policy: In a company of 5 it is easier to maintain a company policy across every level of service. In a company of 100 the broker may not see some of his agents over the course of a month.
National Relocation Network: Ours has 2500 member brokers, we can relocate you anywhere.
First class web site: The key to any marketing website is how it comes up on the search engines ours http://www.agentmikel.com/ comes up before the big brokers most of the time.
Ok , I rest my case. You need to sell your house? Come see us.
Scott
Tuesday, January 16, 2007
The Best Deal
Did you ever wonder why some home sale transactions work and some fail? Allow me to shed some light.
In most home sales there are several key people involved who don't always have each other's interest in mind. The buyer is interested in making sure the property suits his needs, that everything that can be known about the property is known and that he buys it at the best possible price. (Usually this "best" deal means the lowest possible price.)
The seller wants to make sure that he has a solid, serious, buyer, that his property is not tied up needlessly and that he sells it at the best possible price. (Usually this "best" deal means the highest possible price.)
The bank that is also involved in the sale wants the buyer to have good credit and a good job that he/she has had for at least two years, and to have little or no debt. He too wants the house to be sold for the best possible price. (Usually his "best" means not too high and not too Low.)
Sounds to me like we need a referee. Most of what a Realtor does in the transaction is helping smooth out the communication between the buyer, seller, and lender so that everyone gets the "best" deal. A good Realtor is a skilled communicator who can keep all of the conversation on track and headed toward the final goal of closing the transaction. After you tire of "For Sale By Owner" and you hire a Realtor, when all is said and done and your house is sold, if it seemed too easy...Count your blessings, you probably got the "best deal".
Scott and Sam Mikel...are Associate Brokers at RE/MAX Equity Group. For sound real estate advice contact them at 258-2439, their 24 hr number, or check out their web site at http://www.agentmikel.com/.
In most home sales there are several key people involved who don't always have each other's interest in mind. The buyer is interested in making sure the property suits his needs, that everything that can be known about the property is known and that he buys it at the best possible price. (Usually this "best" deal means the lowest possible price.)
The seller wants to make sure that he has a solid, serious, buyer, that his property is not tied up needlessly and that he sells it at the best possible price. (Usually this "best" deal means the highest possible price.)
The bank that is also involved in the sale wants the buyer to have good credit and a good job that he/she has had for at least two years, and to have little or no debt. He too wants the house to be sold for the best possible price. (Usually his "best" means not too high and not too Low.)
Sounds to me like we need a referee. Most of what a Realtor does in the transaction is helping smooth out the communication between the buyer, seller, and lender so that everyone gets the "best" deal. A good Realtor is a skilled communicator who can keep all of the conversation on track and headed toward the final goal of closing the transaction. After you tire of "For Sale By Owner" and you hire a Realtor, when all is said and done and your house is sold, if it seemed too easy...Count your blessings, you probably got the "best deal".
Scott and Sam Mikel...are Associate Brokers at RE/MAX Equity Group. For sound real estate advice contact them at 258-2439, their 24 hr number, or check out their web site at http://www.agentmikel.com/.
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