Sunday, April 29, 2007
I am once again holding open 525 Pomona in Albany for a colleague from my office. This home has been on the market for a month. As a reminder, this home has 3 bedroom, 2 baths and is in one of the most desirable cities in the East Bay.
What is happening? Why is this home not in contract?
There are a series of reasons.
The keystone to selling any property is the price. All the other marketing is built upon the price. If the Seller and the Agent get that wrong, it all will have been built upon a faulty foundation. When the agents in our office came to visit Pomona, before it came onto the market, the consensus was that the listing price should be $649,000. Fo various reasons the seller decided that they wanted the home to come onto the market at $675,000. Not a huge difference, but it became one of many factors in the why is this home still on the market.
The home itself is in a wonderful area. Not too far from the schools of Albany, within walking distance of Solano Avenue, the El Cerrito BART station and El Cerrito Plaza, but the home itself is a bit eccentric.
Pomona does open upon a wonderful, light filled living room with hardwood floors, a box beam ceiling and a fireplace, but the eating area is small. You move from there to the remodeled kitchen, which, though very nice, has a strange oven placement, off to a corner.
The kitchen opens to the master bedroom suite that was a later addition, and feels like it.
Up some rather steep steps are the two remaining bedrooms, and additional space that has been carved out of the attic. Some families, and that is the main audience for Albany, feel a bit disconnected by the idea of the children's rooms being upstairs while they are downstairs in the master bedroom.
There is also no garage. There is simply a parking pad in the front.
Nome of the things I have listed are deal breakers, but taken as a group, and with more homes coming onto the Albany market, these factors have lead to a home that is still available.
All that being said, if a buyer can see beyond the those eccentric qualities of the home, there could be a bargain to be had in this home in Albany.
525 Pomona has been on the market for a month. The sellers want to talk.
Wednesday, April 25, 2007
As I'm sure many of you saw, existing home sales were down in volume in March. Today the numbers on new home sales came out, and they were slightly up.
Before I go on, it is worth mentioning that these are nation wide numbers, and as I have been drilling into all of you who read my blog, Real Estate happens on a local level. Even when the pudits are talking about the California Real Estate Market, they are usually talking about Southern California. Real Estate is all about what is happening in your neighborhood, or the neighborhood in which you want to buy, not about the nation as a whole.
Still there are lessons to be taken from these numbers. The Sellers of New Homes are, by in large, developers. To them it is all business and little sentiment. If they numbers add, they will do it. They can;
- Offer incentives to buy a home like upgraded kitchens or floors
- Offer below market financing packages
- Offer incentives such as paying for closing costs or title insurance
- Lastly, though theyt will usually try the above strategies first, they will lower the price.
Existing home sellers, at most, sell a home once every 3-4 years. They are not as tuned into the ever changing market as developers. We saw it in 2005 when it seemed to take almost a full year of bad press, and a downward trending market to get sellers to catch on that they had to change something if they wanted to sell their properties.
Even in a flat market, or even in one that is shifting towards the buyers, a well priced home that shines like a diamond, will sell in days and attract more than one offer.
The entire marketing effort when selling an existing home is biult on the corner stone of a good price based on the inventory, the condition of the home, market conditions, and competition. Beyond that, great presentation like new paint, staging, new counter tops, etc. can make an existing home sell quickly and at a good price in any market.
Saturday, April 21, 2007
This was a rough news cycle this week. A lot of news got pushed to the side, because of the tragedy at Virginia Tech so you may have missed this piece of news.
On Friday, during a speech to the House Appropriations Committee, Treasury Secretary Henry Paulson said that the housing down turn was at or near the bottom:
"This is a complicated issue, but from the standpoint of the overall economy, my bottom line is we're watching it closely but it appears to be contained,"
Secretery Paulson went on to say that the economy was robust, and that he feels that the crisis in the sub-prime marketmay be coming to an end.
Well...that is interesting. In my previous entry I had similar feelings about our local market, and all Real Estate is local. You buyers should be very aware of these conditions.
Wednesday, April 18, 2007
A few weeks ago I wrote about how the market seemed to be taking an aggressive jump as the Spring Real Estate took off. We seemed to be getting into a market of multiple offers, and properties once again going into contract well above the list price. It was a surprising change, and early in the season, I was unwilling to say whether it was just the normal Spring up tick, or an actual shift in the market, though my gut told me it was just a seasonal shift.
We are now a little further into the year, and I am willing to take more of a stand. When you look at home values this year compared to last year, they are basically flat with a slight increase of just .9%. That is from Dataquick.
But what is making it seem like such a lively market, so many offers, so many going over list price?
Part of part of the reason is that there are even fewer homes on the market in the relatively hot areas like Albany and Berkeley. We've never had a large inventory of available homes anyway, and now there are even less. You have the same number of cats, buyers, chasing even fewer mice, available homes, so from the outside it looks like a lot of activity. You also have the situation where sellers have really caught on to what is happening in the market. They could hardly miss it with the nightly news filled with stories about the bubble bursting. Home sellers had to figure it out sooner or later, and for the most part, they have. The result is that they are pricing their properties even lower to match the market. That just makes the cats scramble even more.
That is why in a market that is basically flat when compared to this time last year value wise, even though it can often feel like there is a lot going on.
Sellers should still be happy. A flat market is a lot better than what is going on elsewhere in the nation. Buyers should still be happy too. Instead of seeing home values rise out of reach, they are still where they were last year, and so are interest rates.
Saturday, April 14, 2007
Of all the skills a Realtor must possess the one that should be in the top five for any client, whether a buyer or a seller, is the agents ability to negotiate. This is especially true in today's market with buyers feeling more in control of the process than they ever have been.
Your Realtor will help you negotiate the price, the number of days in escrow, the number days for the contingencies, whether or not to have contingencies, and then the negotiations that revolve around any discoveries made during the inspections.
The Realtors will be looking after your best interests and working with your instructions, but it is the style with which the Realtor approaches the negotiating that differentiate one agent from another, and, ultimately, the successful outcome.
Some see negotiation as a battle with a clear winner, and a clear loser. They want to dominate the other side. I think this is the wrong approach. It merely invites bad feelings, and can ultimately lead to the end of the contract over petty issues. This does not mean I favor a negotiating style that invites the other side to push me around like a rag doll, and that I will ignore the needs of my client.
There is a midle point in which differences can be discussed in a calm and rational matter. This is a business negotiation, not an emotional brawl. Differences should be categorized from most important to the least, so that the discussions do not get held up or even ended by something trivial.
While staying firm, there should be an atmosphere of "let's see how we can move things forward" prevading all discussions. It is not an ego contest between the Realtors. It is a negotion between a buyer who wants to buy a home, and a seller who wants to sell a property. The Realtors are facilitators and advocates in this process.
Friday, April 13, 2007
This weekend I will be holding open this 3 bedroom 2 Bathroom home in Albany.
This home is filled with light, hardwood floors throughout, box beam ceilings and a remodeled kitchen. The large master suite in back opens out to a lovely yard. I will be holding this home open from 2pm - 4:30 on Saturday and Sunday.
This is actually the third weekend of open homes for 525 Albany. Why is this home still on the market? Over 300 people came to see the house on the weekends. It seems to be the perfect size for a new family trying to get into the Albany School district. It is a little eccentric, but charming none the less.
Some of the people who were considering writing an offer for the home saw all the people at the open houses, the location and size of the home, and they decided that there was going to be too much competition, and so decided not to make an offer. This news came from their agents. This would sometimes happen in the Real Estate market we had pre-2005. The perception of a highly desirable home can drive potential offers away.
This is a lesson about having your agent keep in close touch with the listing agent regarding offers. Someone could have walked away with a great value purchase. Someone still might. I predict all those people who wanted to make an offer, but chose not to, will see that 525 Pomona is still on the market, and at least 2 offers will come in next week, and they will get the home at a great price.
Saturday, April 7, 2007
speculativebubble.com took the average US home price from 1890 to the present date, adjusted it for inflation, and then took that graft and made a roller coaster out of it. Keep your eye on the bottom, right hand corner at the dates as the years go by, and enjoy the ride.
Wednesday, April 4, 2007
I just listened to offers with my clients for their home on Oregon street in Berkeley. I gave the agents bringing offers for their clients the opportunity to present them to the sellers. Half took the opportunity and the other half simply dropped the offers at my office.
That night I saw clearly how having your agent present your offer directly to the sellers can give your offer a clear advantage.
First let me say that when you are in competition for a home, it is the offer itself, both the amount of the offer, and the terms of the contract, that are the most important features in a successful bid.
But, in a situation where two bids or even a series of bids are close in amounts and terms, it is the agent telling your story to the sellers that can really make the ultimate determination.
My clients were clearly touched by the stories they heard from the agents. It swayed how they thought of each offer, and they felt a real connection to the buyers making the offers. Those offers became more than black and white contracts. They could see the buyers behind all those numbers and words.
It is important that given the opportunity, when you are making an offer to buy a house, that your agent go and tell your story.
It could make all the difference.