Tuesday, October 31, 2006 - Statistics and More Statistics

Yesterday, I promised some more statistics on the market in Prince George's County.

A year ago September, we had a measley 1700 properties on the market. September 2006 - just shy of 3700. This means you, Mr. and Mrs. Seller, have way more competition than you did last year and the year before. To make matters worse, the number of houses that are actually getting contracts has been dropping steadily since last March.

So, in September 2005, we had around 1700 listings and 1200 ratified contracts.

In September 2006, we had almost 3700 listings and only 900 ratified contracts. That's a staggering 118% increase in the number of houses for sale and a 14% drop in ratified contracts. And it is in this atmosphere that sellers are asking higher and higher prices.

That math just doesn't work. So no wonder it's taking longer to sell a house!

Tomorrow - What's A Seller To Do?

(C) 2006 Susan Pruden.

Monday, October 30, 2006 - The Prices are Falling! The Prices are Falling!

Okay, so I'm not really Chicken Little.

In Prince George's County, prices are falling from their lofty starting point, but not below last year's prices for the same period.  We're still seeing appreciation over last year, just not over last month.

The average sales price in Prince George's County for 2005 was right around $330,000. As of September , our average sales price for 2006 is just shy of $368,000. However, our average asking price is $430,000! That means there is a disconnect somewhere between what sellers are asking and what buyers are willing to pay.

Ask most real estate agents and they'll tell you that sellers just don't get that the market has changed. The change is that houses selling today won't get more than their neighbors got, they'll get about the same. But sellers are still adamant about asking for more, with the idea that they can always come down, or that a buyer can always make an offer.

Two things happen with that mentality -- 1) buyers look at the number of days that houses have been on the market and automatically discount the asking price, figuring that the seller must be getting desperate and 2) if the house is priced above the market, the buyers who are looking for that house may never even know it's on the market -- they're looking in a lower price range. If they could afford the seller's price, they'd buy a bigger (or better or more updated or more something) house!

More statistics tomorrow -- it has to mean something!

(C) 2006 Susan Pruden.

Sunday, October 29, 2006 - Why I Seldom Show My Own Listings

Sellers often ask me how often I'll show their listings. The answer is "seldom".

1) Most buyers wish to be represented by a buyer's agent. They want someone who is looking out for their interests, not the seller's interests. I would say that 80% of the calls I get on my listings are from buyers who already have an agent, they're just doing a little legwork on their own. If I know that they are represented by an agent or that they wish to be represented by a buyer's agent, I may not show them my own listings. Maryland agency law says I must determine this at our first face-to-face meeting.

2) The other 20% of the calls that I get are from buyers who are trying to rule the house out of their search -- in other words, they're narrowing the selection. So I'll get a call asking if there is a bathroom in the master bedroom or if there is a garage. If not, they'll move on to the next property. If it does meet their criteria, then I usually find out that they fall back under #1 and already have an agent.

3) There are some buyers who think that they'll get a better deal if they work directly with the listing agent. They think that they can make a low offer and that the agent will be so eager to made both sides of the commission that they'll do whatever they can to convince the seller to take the offer. The last three times that I worked both sides of a transaction were with buyers who had an inside track with the seller and generally got a better-than-average deal.

4) Some agents promise the seller that they'll do special marketing to the agents in their own office before marketing to the rest of the world. This generally benefits the company that is listing the property, not the seller. The biggest benefit to the seller is for the house to be marketed to as many people as possible, as quickly as possible.

So don't be surprised if your agent doesn't show your house very often -- our most important function in the early stages is to market it as broadly as possible to as many qualified buyers are possible.

(C) 2006 Susan Pruden.

Tuesday, October 24, 2006 - Scams - how to avoid them

I have a rental listing in Cheverly and just about immediately, we got an bite from Craig's List. The email address was a yahoo.com.uk account.

The prospective tenant , from England, sounded great and was really interested. Ready to move in by the end of the month. After several emails back and forth, he said that he wanted to reserve the property and would send the money right away -- but he would send far more than was necessary and would we send the remainder to his decorator, who would handle the move in. He would fill out the application and lease as soon as he got to the States next week.

I'm sure that his next email to me -- had I been willing to go along with this scenario -- would have been to say, "why don't you give me your bank account number and I'll wire the funds to you". Typical Nigerian email scam. So I sent my final email to him with a tracer on it and lo-and-behold, the email was opened in Nigeria!

The way to circumvent these scams? Don't change what's smart just because you think you have a "live one". I told him that we would be unable to reserve the property for him until we received a fully completed application and certified funds, overnighted to my office. That once we ran a credit check and approved the application, we would reserve the property, but not until then.

If you own rental properties, it's a good idea to put a good screening process in place and then follow it. Always. Not only will it help protect you from scams, it'll help keep you out of Fair Housing violations as well!

I'd be shocked if we ever hear from him again.

Update: It has now been just about a week since I sent the final email and, no surprise, we've never heard from him again!

(C) 2006 Susan Pruden.

Tuesday, October 24, 2006 - Check Your Property Taxes

A client of mine (he just sold his house last month) was wondering how long it would take for the Prince George's County government to refund his property taxes. Well, of course, the short answer is "Don't hold your breath!)

However, I went to the county website and there a new tab there for checking on and even paying your taxes. First of all, that's incredibly helpful. You can see when your taxes were paid (to check up on your mortgage company!) and see what the balance is.

So, when I looked up his taxes, I found that his property was not listed as his principal residence -- which has cost him a lot of money over the past seven years. He is eligible for the homestead tax credit, which I discussed here and here, but since it was listed as "not a principal residence", he did not receive the credit.

There's no happy ending to this story. My client cannot get a refund of the homestead tax credit that he should have received over the past seven years. That money is gone.

So, moral to the story ... check your tax records carefully and make sure that your principal residence is correctly identified as your principal residence. It can save you a great deal of money in just one year and a great deal more when it accumulates over many years.  Go to the Prince George's County Property Tax Records, type in your address and check.

(C) 2006 Susan Pruden.