#533 in a series of true experiences in real estate
June 2007, Hills Newspapers
Anyone who’s been reading the newspapers pretty much anytime in the last six months may be under the impression that our real estate market is down. In fact, the market in our area is still healthy and fast.
I read the papers too, and I guess it is the case that there are fewer sales and fewer buyers this year. This would make sense as prices are even higher than before so fewer people can afford to buy. But it’s hard to tell given the crowds at open houses and the multiple offers that continue to be common.
It just isn’t like Michigan here, or even Southern California. Our marketplace is different, always has been, still is. Buyers like hardwood floors here, not carpet. They prefer gas stoves, not electric. They’ll pay a premium to be able to walk to coffee and produce and to have a good place to walk their dogs and babies, to go running, to hike in a park.
Our market is quick. Successful buyers know the market, they’re savvy about values and about making offers. They read the huge disclosure packages that we have these days, usually including recent inspection reports, and they’re familiar with what sorts of things are covered – age and condition of roof and heat, earthquake retrofit, foundation, etc.
Buyers know to ask if houses they are interested in are compliant with city point of sale ordinances and they know that if the houses are not, the new owner will need to make them comply.
They may not have owned a house before and may know little about making repairs and maybe this is why many will pay more for a house that is in good basic shape and also looks good. Clean, spare, attractive go a long way.
There is only one shot at the first day on the market. Houses that are ready for visitors and for offers are the first ones sold. Almost always these houses have these things in common: they look good (very clean and pretty), they’ve been inspected and their disclosures are ready for distribution, they are priced intelligently (more on this in a minute), many people are seeing their interiors.
Not every one of them, but many, are also vacant, that is, unoccupied, and they are professionally staged.
Almost all have a dedicated website including interior photos. Many of the visitors (buyers and agents) have first learned about the house on the Internet, either through an agent website or MLS or both. By the time they get to the house, they are already familiar with the size, price, features and neighborhood.
Anyone interested in the house after walking through it will typically sit down to read the disclosures, a copy of which will be in the house, and they will ask two questions: “When are you listening to offers?” and “Are the disclosures available on-line?”
Sometimes the answer is “offers as written” but more often, a specific date is given, usually about a week in the future.
Some agents hold two Sunday open house, some only hold only one. This will depend on demand for the type of property and its location and also when the agent tour is scheduled. In our area, this might mean Sunday and Monday open, then offers or Thursday and Sunday open with offers invited the following Wednesday or Friday.
There are of course variations, with some houses, for one reason or another, not being held open at all.
How the whole getting-into-contract process goes depends on many things, such as: inventory volume at the time (how many other similarly priced and located houses buyers have to choose from), how close to value the asking price is, the overall appeal of the property, how well known the agent is (local, respected listing agent vs. unknown, out-of-area agent), advertising that has worked, including MLS.
We do not believe in artificially low pricing although it does probably work in most cases. We spend time investigating each house, looking at the competition, past and present, talking with our sellers, finding a price that makes sense and that the seller will find acceptable. If he has an offer from one buyer and it is early, it will likely be at list. That would not be a good time for the seller to decide he wants more money.
We have encountered both buyers and sellers who found our market too quick. A buyer makes an offer in competition and wins, then has second thoughts. He wonders if he paid too much, maybe he paid more than he had to.
A seller receives several offers, all over his agreed upon price, and he wonders if he accepted too little, didn’t wait long enough, could have asked more. It was too easy?
All we can say is that marketing works. Preparation, advertising, an invitation to the world to buy usually results in one or more people making a choice to buy.
Value is what the buyer is willing to pay and what the seller is willing to accept. If you are successful, on either side, just be grateful.
