Archive for the 'Sellers' Category
Reverse Offers: When She Asks Him To The Dance
categories: Listings, Real Estate Industry, Sellers, Stuff I like to talk about
Just like everyone wants to be liked, Sellers just want some buyer love. Your home gets shown, and show, and shown, you get the idea. Everybody “likes” you but who LOVES you? We can lower the price and wait some more. That’s the traditional approach, right?
Why do we feel it necessary to do what is normal. We’re in a very different market. One that acts like nothing most of us have ever seen. What used to be “normal” isn’t any longer. It’s like when we were kids, the boys ALWAYS asked the girls to the dance, right? Why didn’t the girls ever ask the boys? Maybe some did. Those girls who refused to do what was considered normal.
That’s what a reverse offer is like. I had a unique listing that received little traffic but great feedback when we had showings. After too much time on the market I decided to do something different. We had a buyer who loved the house but wanted to keep looking. I approached the Seller’s with the idea of making an offer to the buyer.
Now, here is the important part. If you do this, it must be a meaningful offer. Meaningful enough to pull the buyer off of the fence and say “Maybe I don’t need to keep looking”. At the same time, you want to deliver the offer in a way that says “We think this is meaningful and you shouldn’t see this as an opening offer to a protracted negotiation. We’re pretty much where we think we can go”.
Well it worked. We had to give up a little more than our original reverse offer price but the important thing is we motivated the buyer to make a decision. As most Realtors out there can attest, getting buyers to pull the trigger can be difficult in this market.
If we shift our thinking with the shifted market, we will survive…or better yet, thrive!
Posted by Bob Strader | Currently No Comments »
$432k House Raffle in Forsyth for $5 a Ticket | Creative Way to Sell a House
Forsyth - Of all the posts I’ve written, this post last October about a house auction in Annapolis has made my phone ring more than any. It never ceases to amaze me when I see that Maryland area code come across my caller id … I know what the call is for sure.
To date they have sold 22,517 fifty-dollar tickets for that auction, with only 27,000 total needed to pull it off. They are confident that they are going to sell the required amount and have scheduled the auction for January 23rd.
In my initial post, I had hypothesized about doing an auction here in Alpharetta - but it was only a hyphothetical because I got a bunch of inquires about how to buy a ticket for the “Milton House.” My thought was to do an auction for $100 a ticket and sell 7,000 of them. I thought selling 27,000 tickets was a bit of a stretch, but it looks like I was wrong.
Fast forward three months and now there is an auction for a $432,000 house in Forsyth County north of Cumming at 7996 Bethel Road. The house acutally has a Gainesville address, as it is between Cumming and Gainesville.
Here’s the deal, though: FIVE DOLLAR TICKETS. Can I call this the $5 house then? You can buy individual tickets or group of 5, 15 or 30.
Here is the link to the website to get more information and purchase tickets: RafflingMyHouse.com. The raffle is scheduled for March 31, 2009. The house is pictured above and is 4 BR and 4.5 Baths.
There seems to always be a charity aspect to the house raffle. In this case, it is a local organization call Seed Sowers, whose mission has remained for the past 10 years, to assist single parents, the handicap, and the elderly with various needs including housing.
In a time of economic turmoil, the house raffle is a logical solution. On one hand, Seed Sowers has an opportunity to increase its revenues to support the growing demand of its mission and the homeowner has an opportunity to indirectly sell their house by donating it to the charity. The donation includes the equity in the home and 10% of all proceeds from tickets sales in excess of the homes fair market value.
Just another example of more creative thinking in a market that demands it. Tickets went on sale January 1st. Let’s see how many they sell.
Posted by Kevin Warmath | Currently 14 Comments »
I’ll Show You Mine If You Show My Yours | Solving the Real Estate Log Jam Problem
categories: Alpharetta Real Estate, Buyers, Sellers, Stuff I like to talk about
ALPHARETTA - We’ve all been there - or at least I think we have - when in order to get something you have to do something uncomfortable first.
It’s the old dare: You show me yours and I’ll show you mine. No! You first, I said. Really … I’ll show you mine. Really … I will.
I lost that dare when I was pre-pubescent to the judge’s daughter in her basement around the corner. She permanently scarred me from believing that people are fundamentally trustworthy. She took advantage of me at such an impressionable age. I took the risk back then, though. The payoff was HUGE and the potential loss small.
Fast forward thirty-five years and it’s still the same game just with different stakes.
There are scads of people who would like to sell their homes and they are even realistic about having to reduce the price to get it sold. However, they are reluctant to show you theirs, so to speak, because they are afraid that when they become a buyer that you won’t show them yours.
Buyers have repeatedly told me: "I’d be more than willing to lower my price $50,000 if I was sure that I could save that $50,000 when I purchased my next home." The thing is, we all have our own judge’s daughter in our past who has made us distrustful of our fellow man.
The Problem
The result of this situation is a huge real estate log jam. No one can buy because no one can sell - and many first time homebuyers, who don’t have anything to sell, have already purchased in the last two years or now have more trouble qualifying for a mortgage and/or coming up with the required downpayment. So how do you solve this trust issue where today’s sellers don’t trust tomorrow’s sellers?
The Solution
One solution has been the "Buy This House and I’ll Buy Yours" program. You may have seen this on a for sale sign rider. These programs are run by realtors who are ostensibly trying to help their client sell their home. The idea is to remove any obstacles from keeping a prospective buyer from buying - you might call this a mini log jam solution, because the programs are really targeted to a single transaction, not an entire marketplace that is in gridlock.
This program is closely related to the "I’ll Buy Your House If It Doesn’t Sell in 90 Days" program. The buy out prices in these programs are typically so low that you’d probably not want to sell at that price and mostly the purpose of these programs is to generate listing leads and appointments for realtors. The low buy out price has some shock value in getting sellers to glimpse what their house may truly be worth, but in reality, the realtor doesn’t really want to buy your house. He wants to sell it and if, indeed, he winds up buying it, his program has failed.
Property Swapping
Another solution, aimed more at the systemic gridlock of the real estate market is the house swap option.
Over the past year, I’ve had more and more people approach me about swapping their home instead of selling it.
The idea here is that by not going out into the broader marketplace you insulate yourself from the possibility that you won’t be able to buy low if you have to sell low. Remember the judge’s daughter? I sold low but couldn’t buy low.
If you enter into a swap agreement, both parties are simultaneously obligated to each other - that is the key. You jointly buy and sell at the same time, agreeing on the relative value of each other’s properties. Everyone shows everything up front - no chance to be have sold low and now be able to buy low - or at least for both parties to have taken roughly equal discounts.
I know a family with a 4+ acre horse farm on Hopewell Road in Alpharetta (Milton), shown on the right, who would like to trade for something smaller in a subdivision. They say they can’t reduce their house to what it would take to sell it, but they could possibly trade.
I’ve also known people in the area who were having a tough time selling and voiced interest in trading with someone from Florida. There are scads of Floridians who would love to move to GA, but can’t sell their house in FL. How about a trade, Mr. Gator?
These trade opportunities are great, but how do you find them when they are floating around in the heads of local realtors?
To that end, there are some new property swapping website that are coming online. They are in their infancy, but the opportunity is there for them to make a dent in the real estate log jam. Check out, for instance, www.PropSwapGlynn.com , which is a site focusing on property in St. Simons and Brunswick, GA. Anyone want to swap their permanent residence for a vacation property on the beach?
There is also a brand new site for property swapping in Atlanta at www.PropSwapAtlanta.com . If you want to sell your home, it would make sense to work with a realtor who will also market your home for swap, not just for sale. You can’t put too many irons in the fire in this market.
If only I had had the internet back when I was interacting with the judge’s daughter. We both could have gone online, found each other and negotiated our exchage and commitment before we - or at least I - put our tender feelings on the line only to get snubbed. Lesson learned - and applied to real estate.
Posted by Kevin Warmath | Currently 6 Comments »
Every House Has a Story, What’s Yours? | The Big Dig House Story
categories: Sellers, Stuff I like to talk about
LEXINGTON, MA- I’m fond of saying that every house has a story - and that it is the job of the listing agent to tell that story.
After all, potential buyers always want to know "What’s the story with this house?" and often people buy a home as much for emotional reasons (they can see their kids eating breakfast at the kitchen counter - or they can picture the Christmas tree in the foyer) as they do for the number of bedrooms and baths.
This particular house has nothing to do with local Alpharetta real estate. In fact, the house is outside of Boston. But it is a really cool example of a house that has a definite story. In this case, the house is constructed from the remains of the Big Dig construction project. The house is essentially a recycling project and what an awesome project it is. Make sure you see the time lapse sequence of constructing the structure .
The coolest part of this house is that the story translated into a sale in four days for $2,000,000 - cash on the barrel head.
Who says that recycling doesn’t pay?
What’s your house’s story? It doesn’t have to be as extravagant at this one, but it sure does help to have one when it comes time to sell. Have you ever been on a first date and the person you’re with didn’t ask you a little bit about yourself?
If you need help telling your story feel free to contact me. That’s what we do for a living.
Posted by Kevin Warmath | Currently 1 Comment »
Calling All Alpharetta HOA Presidents | Sharing Information About Your Neighborhood is a Great Way to Boost Home Values
categories: Alpharetta Real Estate, Sellers
Over the last few years I’ve received a number of phone calls from residents of Milton and Alpharetta neighborhoods asking my opinion, as a realtor, about how they can increase their home values. Usually these calls are from older neighborhoods where the price of their homes was relatively lower than some of the newer neighborhoods. However, the owners in the older ‘hoods think that their homes are not THAT much less desirable than the new homes.
The problem stems from the fact that raw land appreciated so quickly in north Fulton County, and particularly in Milton, where it is said to have quadrupled in a few short years prior to our current "market correction."
This created a price gap between the "original neighborhoods" and the new neighborhoods. The original residents want to bridge that gap, but how?
Some of the neighborhoods like Brierfield near Crabapple have redone the entrance to the neighborhood with stacked stone signage and have replaced all the mailboxes and sign posts to given an updated look.
That’s great, although, I don’t think that you can say the houses in Brierfield are worth $2000 more today than they were last year because of this. Here’s my suggestion: Promote the benefits of living in your neighborhood.
By that I mean: market yourselves. A neighborhood should have a unique selling proposition, just as a house should. For instance, the neighborhood has one of the few swim teams around, or the best ALTA tennis program, or multiple lake lots with community access to the lake for fishing, or well-organized kids events like Halloween and Easter egg hunts, or horse trails, or proximity to a park or even a Starbucks or lawn maintenance included in the HOA dues.
For the longest time, I’ve been trying to get my neighborhood to build an artificial putting green (don’t forget the sand bunker) next to our pool. How about that for a unique selling proposition? How do you think the conversation would go when a prospective buyer drove into the neighborhood? Man speaking to wife: Look honey, they have a putting green. I love this neighborhood already.
The HOA should have an External Communication function/person whose job it is to spread the unique selling proposition. If your neighborhood does not have an external website, build one. Get a neighborhood kid to spend a little time optimizing it for the search engines…he or she will know what to do.
Publish your community calendar, tennis matches, swim lessons, etc. Take lots of pictures of different times of year and post those. Calculate the number and age of the children and publish that because every mother I’ve ever worked with wants to know if there are kids her kids’ age to play with and the only place this information exists is with the existing homeowners.
Ultimate goal: make your neighborhood desirable. Market it. Make someone in Iowa reading about your blooming azaleas in April drool to live in your neighborhood. Let them know what kind of people live in your neighborhood and that you all aren’t a bunch of raving lunatics!
A good time and place to start could even be right here and now. Leave a comment to this post and tell us what neighborhood you live in and why it is a great place. Go ahead…sell me on it. Leave the url for you neighborhood website if you have one.
In the end, the value of your home is based on the comparable sales in your neighborhood. If you can make your neighborhood the envy of the area and get people wanting it instead of just "taking a look," you’ll be more likely to get some solid sales at closer to list price and develop some price momentum.
Of course, you all need to be keeping you homes maintained and updated, particularly the kitchens, but marketing the neighborhood as only residents can do won’t cost you a dime, just a little time. Go ahead, start today!
Posted by Kevin Warmath | Currently 2 Comments »
Sales Price Up, Number of Sales Down | Real Estate Market Trend Remains the Same in North Fulton and Alpharetta
categories: Alpharetta Real Estate, Local Market Conditions, Sellers
I received a phone call from a local newspaper yesterday asking for some real estate market analysis. It seems that word has gotten out that I like to crunch the numbers.
Someone had forwarded the reporter a link to an article on CNN Money that listed Atlanta (and mentioned Alpharetta) as one of the six best places to buy a home based on prices expected to rise the most - or decrease the least - in the next 12 months.
How seriously should you take a list like this when Detroit (Farmington Hills) is on the list with you? Isn’t the housing market in Detroit a train wreck? Maybe the wreck has already happened and now they are just cleaning up. After all, Ford did announce today a $100M of net income in Q1, a $382M increase over Q1 last year.
The CNN Money analysis was done by looking at the Metropolitan Home Price Index published by OHFEO and the "fundamental housing value," a measure also called the price-rent ratio which is derived by taking the price of a home and dividing it by the discounted value of the future stream of rent payments you could get for that house. This is an investment based valuation method that says anything over 1 is overpriced (as an investment) and anything under 1 is underpriced. CNN selected metro areas with high momentum and low price.
In selecting Atlanta, CNN singled out Alpharetta as a "typical affluent suburb" and pegged the average sales price at $359,950. I could take exception with CNN that Alpharetta is typical, but that is an entirely different post ;-> Here I want to focus on the average sales price for Alpharetta, which is what the local reporter was looking for, too.
Average Sales Price in Alpharetta for Q1 2008
The average sales price in Alpharetta for Q1 2008 was $384,612. This includes all resale and new construction single family residences. The average for Q1 2007 was $372,895.
The change represents a 3% increase in sales price, but doesn’t tell the whole story. The real story is that in Q1 2008 only 237 homes sold in Alpharetta versus 402 in Q1 2007. That is $63M less sales volume than a year ago.
If you look at North Fulton as a whole, which includes the four cities of Alpharetta, Roswell, Johns Creek and Milton, the numbers show the same pattern on a different scale. [Note: it is a little difficult to separate sales in the City of Alpharetta from North Fulton as a whole because there are homes in Milton that have an Alpharetta postal address and homes in Johns Creek that have a Duluth/Alpharetta/Rowsell postal address, but I did my best based on high school districts.]
In Q1 this year, the average sales price in North Fulton was $423,503 vs. $413,791 a year ago. However, again, that represents far fewer transactions: 474 in Q1 2008 vs 784 in Q1 2007. To most sellers, that is the definition of a buyer’s market regardless of average sales price.
So, while the exposure given Alpharetta by CNN Money is nice to get, I’m not sure that their methodology, as with most "Best of Lists", is anything but hogwash. Yes, we have price momentum. Yes, real estate is priced more affordably to begin with in Atlanta and Alpharetta. But CNN’s methodology doesn’t take into account the inventory that is not selling in this market and the effect that it will eventually have on the overall market. Maybe sellers will just withdraw and wait until price recover. Maybe they can’t wait and will reduce their price to sell. Only time will tell.
CNN Money’s point in the whole story is that Alpharetta is a good place to buy because it has good potential for appreciation. While I couldn’t agree more, because there are some many fundamental growth factors in favor of Alpharetta, the short term prognosis is dicier. Alpharetta real estate prices are increasing; that is, we have positive price momentum which is what CNN Money was measuring. However, you can only take advantage of that momentum if you are able to sell. There were 310 fewer sellers realizing any gains this quarter and a year ago.
Now, on a slightly different slant, if you want to live in one of the skinniest counties in America (Marin County, CA was the skinniest), CNN Money has that coverage for you, too. They actually compared counties based on the body mass of their residents. But what if you have a county with just a bunch of mammoth-sized but lean residents, wouldn’t that skew the rankings? Anyway, you won’t find anywhere in Georgia on that list, that much you can bank on.
Posted by Kevin Warmath | Currently 6 Comments »
No Picture Available | How Not to Market a House for Sale
categories: Alpharetta Real Estate, Photography, Sellers, Stuff I like to talk about
No Picture Available. Like shown on the left, that is what is displayed in the MLS when, duh, the agent has not loaded any pictures.
Pictures increasingly tell the story in our visual age. That explains why home buyers who are browsing homes online are frustrated when they come across a listing with no pictures. Can the seller even be serious about selling if they don’t post a picture? Are they trying to hide something?
Would you be surprised if I told you that in February of this year, of the 65,663 Residential and Condominium properties listed in the Multiple Listing Service for the Atlanta metro area, 5,023 had no photos at all? On top of that, 11,474 only had one photo, when the MLS now allows you to post 12 photos per listing.
I’m not sure if it is malpractice or laziness, but it is unforgivable for a listing agent to not have at least half a dozen well-taken, well-lighted, well-cropped photos of the home they are marketing. And solid quality photography should not be reserved only for million-dollar homes. Digital photography is too inexpensive and easy to learn for every house for sale not to have a photo.
Additionally, the way that people and agents search for homes these days is with "saved searches." Buyers have predefined searches (if you want one, just contact me and I’ll set you up) that automatically notify them of new homes on the market that meet their criteria. If there is no photograph when that buyer gets the notification, that buyer is likely to never consider your home again. You missed your shot.
Photography is a mini-hobby of mine and I take pictures of all sorts of things besides houses, but I’m always looking for ways to take and display house pictures better. One of the coolest new tools I’ve found is piclens, and you can see an example here of some home photos I’ve taken of an awesome home for sale just north of Alpharetta in East Cherokee county.
As time permits, I’m also adding "face shots" of Alpharetta real estate to Zillow. I don’t sweat every detail of these photos, but do post them to Zillow so that people using that service from out of state and relocating to Alpharetta can get a better feel for what the properties look like. They might even call me when they are ready to move…if they like my style ;->
Lastly, I have a collection of what I call lazy realtor photos. I’m not sure if these are humorous or sad. For more on bad real estate photos, check out Athol Kay’s MLS Bad Photo of the Day. Athol has carved a name for himself in the real estate blog sphere just by cataloging other realtors’ photo atrocities.
My Collection of Atlanta Real Estate Photos by Lazy Agents
Agent is either too lazy to get out of the car or doesn’t know how to crop a photo.
This agent can get out of the car, but doesn’t know how to park on the street.
This agent was (too) short ;-> Nice roof, though.
This agent went to art school before real estate.
This agent can’t see the houses for the trees.
This agent was actually a fencing contractor!
So, which is worse, a bad picture or no picture at all? You should never have to find out.
Posted by Kevin Warmath | Currently 1 Comment »
Market Conditions and Zero Down Payment Home Purchases in Alpharetta and North Fulton
categories: Alpharetta Real Estate, Buyers, Local Market Conditions, Sellers
Hello, Buyers: There are 1,004 homes for sales in North Fulton (Alpharetta, Roswell, Johns Creek and Milton) between $225,000 and $500,000. If I were personally looking to buy, I’d be in the market.
It’s a buyers market yet people tell me every day that they don’t think they can buy a house. Some buyers are scared by the recent mortgage industry trouble and don’t think they can get approved. Other buyers think that they should wait longer because prices will continue to fall. Let’s examine that thinking.
I’m not bankable after the sub-prime meltdown
The troubles in the mortgage industry have given some people the unwarranted impression that they can’t get a mortgage, particularly as a first time home buyer. The facts are that the bulk of the sub-prime mortgage crisis was caused by “low doc”, “no doc” or “stated income” loans failing. Basically there were loans available where all the borrower had to do was verbally tell the bank what their income was. The interest rate wasn’t as good as “full doc” loans but, heck, it was a loan and it was often used by investors to purchase investment property.
The problem was that it was abused; people misrepresented their income and ultimately defaulted, particularly as interest rates inched up, as many of these loans were variable rate. Most, if not all, major lenders are not offering the “no doc” loans like there were.
However, there are still many zero down payment loans available. Wells Fargo, for instance, has six different zero down loans to chose from depending on your specific situation with purchase price of up to $417,000. In North Fulton, there are 811 homes to chose from between $225,000 and $417,000. Do you think we could find one that would work for you?
If you have an income (documenting it would be nice) you can get a loan, regardless if you have any money to put down.
The market is still going down; let’s wait some more
The market is definitely slower than a year ago, but mostly just in terms of the number of homes sold. The average sales price is holding pretty steady and in North Fulton the Sales Price to List Price ratio is only down one percentage point to 96%.
The slowness in this market is notable in fewer homes being sold and the average time on the market going up. The table below shows sales data from August 2006 versus August 2007. The data is only for homes listed with a realtor, so it doesn’t include private sales. It is also for resale homes only and does NOT include new construction.
Compared to 2006, $45M less real estate was sold in North Fulton in 2007 and 125 fewer properties were sold. Interestingly, though, the average sales price is UP over $30,000.
| Year | Sales | Volume | Avg Sales Price | Avg List Final Price | Avg Original List Price | Avg Days on Market |
|---|---|---|---|---|---|---|
| 2006 | 398 | $166.5M | $418,432 | $428,984 | $436,687 | 70.3 |
| 2007 | 272 | $120.9M | $444,675 | $462,977 | $474,917 | 94.3 |
My opinion is that the “good houses” are selling and they are still selling for a decent price. Houses that are not in top condition or “challenged” in some other way are either not selling or dropping off the market. If you are a seller, you need to be aware that you have more competition – 1,004 homes on the market between $225k and $500k this year versus 832 the same time last year. This is where the price pressure that sellers are feeling is coming from.
The difference between the east side and west side of GA-400
The numbers above are aggregate for North Fulton. When you look at just the east side, the average sales price has actually dropped about 2% from $431k to $422k in the past year, but the days on market hasn’t gone up as much as on the west side. The average sales price on the west side has gone up from $403k to $478k. I attribute this difference mostly to the affect that new construction on the west side is having on resale values: you can barely find new construction under $700k and the resales are taking advantage of this by bumping their price and daring buyers to find something cheaper – even in this market!
What does all this mean?
If you are considering buying, I think that now is a good time. Prices aren’t going to go that much lower - and on the west side they are actually still going up significantly. Interest rates are at or below 6% in many cases and there are loan programs to help you with down payment.
If you do the math, a $300k loan at 6% for 30 years is roughly $1,800 per month. Throw in a little for taxes an insurance and you are at $2000/month. Compare that to your rent and then give me a call!
Posted by Kevin Warmath | Currently 3 Comments »
