Cutting Your Losses

Robert Bruner, the Dean of Darden School of Business at UVA has a blog that I often find interesting. His latest entry is based on a quote by the famed investor Bernard Baruch "If you have made a mistake, cut your losses as quickly as possible."

He talks about the difficulties of doing that in the business world, specifically using the AOL/Time Warner merger as an example. But one of the points he makes about why it's so difficult seems applicable in real estate as well.

He talks about "sunk cost" thinking. In other words, a seller says "I bought this place for $400,000. I'm not selling it for less than that."

The problem becomes that if you really do need to sell there's no guarantee you can hold out long enough for prices to go back up, or even to stabilize. If you're a seller who's moved on and you're paying two mortgages, how long can you continue doing that?

If you refuse to lower the price or let an offer get away for $10,000 difference, what happens when it's still on the market six months from now and you've paid that much more out in mortgage payments and prices have continued to fall?

Sometimes, cutting your losses is the best advice, in business and in real estate!

Stinky!

More and more often these days I walk into a house and the first impression is.....

OMG! Phew! What is that awful smell?!

Now, to be fair, most of these homes are vacant. (Over 3/4 of the homes I show these days are vacant!) And, a closed up vacant house will always start to smell, over time.

Some of the smells I regularly encounter:

• Mildew
• Mold
• Pet urine
• Cigarette smoke
• Dead, rotting animals

There are plenty of others, many of them not easily identified.

If you're a homeowner, selling a vacant home, either you or your agent should be checking from time to time to see if the home has acquired any unfortunate odors.

Keep the air conditioning running! I know you're not living there and hate paying the bills, but, believe me, what you'll net in a better offer is more than you'll lose on paying those bills.

If there are some stubborn odors, take steps to remedy them. Get rid of drapes, have carpets professionally cleaned, consider getting an air purifier.

By the way, adding really smelly air fresheners is not the same as taking care of the problem!

Remember, the sense of smell is powerful and has a major influence on our emotions. No one falls in love with a stinky house! Even if they still buy it, the price went down the minute they opened the door and smelled the place!

If you're considering putting your house on the market, consider having a friend or neighbor give you an honest assessment of what they smell when they first walk in the house. This can be a delicate area so make sure they know they have your permission to be brutally honest!

And, if your agent tells you there's an odor problem that needs to be dealt with, don't waste any time in dealing with it. There's a house down the street that smells just fine and is also for sale!

Getting Into Your House

When I want to show a listing to a buyer, I use a lockbox to enter the house. Typically, in this area (Prince William, Fauquier, Culpeper, Rappahannock and Warren counties) that generally means an electronic lockbox that often looks like this:

To access this box and get the house key out, I use an electronic device that's been updated with a special code within the last 24 hours. It's an extra level of protection for the homeowner in case my "ekey" is stolen. Within 24 hours it's essentially worthless unless you know my passwords in order to get it updated.

The other advantage of this lockbox is that I know who has shown my listings. If something is missing, left unlocked, etc. I likely know who to track down to ask about the problem.

There have always been a few holdouts who still used combination (combo) lockboxes:

These boxes require only an alpha or numeric code in order to open them and access the key. If I know the combination I could, theoretically, give that information to someone else and that's all they'd need to access the keys to your home. It's a less secure method of access. The advantage in some agents' eyes is that if someone from outside our area wants to show the house, there's no problem if they don't use the same lockbox system used in this area.

With the large number of foreclosures in our area, we're seeing a big increase in the use of these combination lockboxes. Most banks will mandate that a combo box be used on their listings. I've had trouble coming up with a good reason for this. The only thing I can think of is that they want bank personnel to be able to access the property if necessary, without a real estate agent present.

I was troubled this week to learn that a local agent had mentioned that if he's unable to show a home when his buyer clients want to see it and he can't find any other agent to cover for him, he'll simply give his clients the combination and let them go in the house on their own.

Hmmmmm! The number of reasons this is a bad idea is very long. The liability to the agent should anything go wrong, is huge. It could be that his clients are good people with the best of intentions but they have trouble getting the keys back into the lockbox. It happens all the time. It is, of course, highly unprofessional and, I'd suggest, unethical. The listing agent should definitely be making a phone call to the agent's broker at the very least, to protest this behavior.

By the way, when the agent was confronted with what a bad idea this was the response was "Everybody does it." I never got that one by my Mom. And, I'm not buying it now!

Selling Agent Bonus

A client of mine who is selling his house has decided to offer a bonus to the selling agent. These are becoming quite common in the Virginia real estate market as sellers look for a way to sell their homes quickly without giving up too much money.

I strongly dislike these bonuses. Here's why:

1. It's not about the agent! Buying a house is supposed to be about what's best for the buyer. At least if you're an agent representing the buyer. It's never supposed to be about what's best for you!

2. In too many cases, they're not disclosed. Agents must tell the buyers about these bonuses. To not disclose this information is unethical!

3. If it is disclosed, it's surely evident to the buyer that this is money that could instead have been taken off of the listing price and that, therefore, the house is overpriced. It's like the "buy the house, get a car" gimick. Any savvy buyer figures our immediately that this means the house is overpriced by at least the value of the car. (Usually more!) As a buyer's agent I'd tell my clients to knock the amount of the bonus off of the price when we make an offer.

3. If it works, what does that say about the ethics and professionalism of the agents? Would they really show a house that's unsuitable for their client, in hopes of getting the cash? Would they try to influence their buyer's decision in order to cash in?

4. Many of these bonuses come with deadlines. "Good for offer before July 1st" for example. Really?! So, if the house isn't sold by July 1st you're going to be less desperate to sell than you are now? I'm betting I can get that money out of you after that date, one way or another!

5. I don't believe it works. Bottom line, it's another gimick and these almost never work. Sellers are dealing with the savviest, best informed buyers ever, thanks to the internet. Very few are going to be taken in by this kind of thing. Let's be honest, you're offering the bonus because your house is overpriced and you don't want to lower the price. You're not fooling anyone!

Zillow is Coming!

Zillow made a big splash when they first showed up a few years back. Mostly it grabbed people because it was so much fun to enter your neighbors' addresses and see what Zillow said their homes were worth. Mind you these days that exercise is mostly depressing! And, those "zestimates" were never very accurate.

I told sellers then, and still believe, that you need to know what Zillow says about your house. Because there's a pretty good chance that potential buyers will know.

And, an article in today's Realty Times emphasizes why Zillow is continuing to gain in importance. REALTOR.com has been the big boy on the block forever. But from a technological perspective it's been a long time since they had anything approaching a technological edge. And, while, theoretically, REALTOR.com exists to serve me as a member of the National Association of REALTORS (NAR), for most of us it feels like it exists to gouge us!

While Zillow (and other sites) will allow me to upload unlimited photos, virtual tours and other good stuff, all for free. REALTOR.com charges me for everything, including having my name on my own listings! For example, to link a virtual tour (using VisualTour.com) REALTOR.com charges me $19.95. But linking that same tour to Zillow is free!

Consumers still prefer REALTOR.com, but only because not enough agents are taking advantage of the free stuff at Zillow. Trust me, that's going to change!

So, if you're a consumer and haven't yet checked out Zillow, you should. And, if you're an agent and haven't checked it out, what are you waiting for?

Ignoring a Potential Buyer

I was showing a home to a client a couple of days ago. We had just finished and were getting in our cars when someone drove up. He got out of his car and asked if I was the real estate agent. I told him I was "a" real estate agent, but not the listing agent for this property.

This gentleman went on to explain that he's been calling and leaving messages for the listing agent for months, trying to get in to see the house. All his calls have gone unreturned.

Have I mentioned that this house has been for sale for more than 450 days?

Real estate agents get discouraged too. I understand that. But a potential buyer who is this determined would certainly seem worthy of a returned phone call.

I wonder if the owner knows there's a potential buyer who's having trouble getting to see the property.

By the way, this is one more reason (if you needed one) to never, never call the listing agent on a property!

Just Because You Like It...

It's funny how you see things differently when you look at someone else's home. A surprising number of the homes I've shown in the last week have had a feature that is often less than desirable for potential buyers.

Now let me say first of all, that I have nothing against hunters. And, you should be able to decorate your home any way you choose, WHEN YOU"RE NOT TRYING TO SELL IT!

But most Americans these days are not hunters. That's true even in our area. The percentages are pretty small. And, a lot of non-hunters are going to be less attracted to a house full of dead animals hanging on the walls. You may not think it's fair. But it's the truth.

I'm not singling out only hunters. If you have a hobby that's not exactly main stream, it's a good idea to send stuff to storage. Don't leave the handcuffs on the bed post! (Even if you're in law enforcement!)

The goal here is for the buyers to identify with your house, to see it as their own. That's hard for them to do if they see something that makes them uncomfortable.

So, stash the stuffed animals. If you question whether it's appropriate, assume the answer is "no". You want every edge you can get in this market!

Appealing Property Tax Bills

With property values falling in our area, many of you have been astonished that according to the county your property value actually increased.

You should know that nothing is written in stone and that these things can be appealed. First, you should contact your county immediately to find out what the process is for an appeal. It's different in each county.

Now you need to start gathering data to support your contention. One source of help can be your real estate agent. I've helped clients in the past by putting together a current analysis of the market, including comparable home sales.

If you're doing this on your own, you're going to need to get information on what has recently sold in your neighborhood, and what it sold for. The homes you're using for comparison should me as much like yours as possible.

You should talk to neighbors about their assessments. There are a surprising number of clerical errors. If your assessment is completely out of line compared to neighbors with similar homes you've got good grounds for appeal.

Take into account factors that may decrease your homes value. What's going on in the neighborhood? Is there a heavy increase in traffic that impacts the value of your home? How abour rezoning?

Are there factors unique to your home that might affect the assessment? Do you have structural issues? Is there, for example, a crack in the foundation?

There are resources in the web that can help as you prepare your case. The Federation of Tax Administrators site has good background information on the appeals process for each jurisdiction. The American Homeowner's Association has a kit to help with this process. You can download it for free on their web site. And, the National Taxpayer's Union has a guide ($6.95) on fighting property taxes.

Lastly, I'd also urge you to remember that these same property taxes are the ones that pay for policemen, firemen, schools and school teachers, etc. If no one pays property taxes you might find you don't like the place you end up living in!

Days on Market Change

Effective today the methodology for determining how many days a property has been for sale is changing in the local Multiple Listing Service.

The indicator that is changing is something known as Days on Market Property and basically tells you how long the property has been listed for sale, Even if the sellers have changed agents or changed something about the listing, it still shows you the cumulative days on the market.

The rule has been that in order for that number to reset to zero, the property must be off the market for 180 days, essentially six months. If it is relisted after that time the counter starts again at zero. If it's relisted before that 180 days, the counter picks up where it left off. So, if you had your house for sale for 100 days, then took it off the market for two months to make some renovations and relisted it, on the first day it's back on the market it shows it's been listed for 101 days.

The new policy decreases that waiting time from 180 days to 90 days.

The rationale is that the market has changed, houses turn over more often and that the 180 days didn't accurately reflect the market. At least that's the story from the MLS.

In actuality it's motivated by unhappy sellers and their unhappy agents. Let's face it, a house that looks like it's brand new on the market is going to get more attention than a house that's already been listed for four months, or two years! And, when an offer is written, how long it's been for sale is one factor a buyer may want to consider in their offer.

Buyers are definitely the ones on the short end of this stick. The real estate agents who represent buyers can still get the information on how long the house has been for sale. But they're going to have to go that extra mile and do the research. Some of them simply won't bother. And, it becomes close to impossible for the consumer to get this information.

It seems like a short-sighted change that's been made for all the wrong reasons. Changing this kind of data point to deal with market fluctuations just doesn't seem smart. So, while they've no doubt made some sellers a little happier, I doubt they've done anyone any good in the long term.

Video, Photographs and Listings

I've been wrestling with the question lately about how to use the visual tools available to advertise listings.

First of all, there's absolutely no question that high quality photographs are essential to marketing a listing. The National Association of REALTORS (NAR) own numbers show that listings with six or more photos are viewed 299% more often than those with fewer. That's a very significant number! Which makes you wonder why another study by NAR shows that only 23% of its members own a digital camera! But I digress!

And, don't underestimate the importance of the quality of those photographs. I'm always amazed when I see photos of cluttered countertops and piles of dirty clothes in the middle of the floor! Most of us have heard for years about the importance of curb appeal. It's been important because it was the first impression the potential buyer had of your home. But now that first impression is online. Curb appeal now applies to the whole house!

Virtual tours have become important, although I suspect that, like me, most buyers find it easier to just look at a large number of photos without all the pretty music and panning back and forth!

Now we're starting to see some videos incorporated into some listings. To be honest, what passes for videos is, for the most part, nothing more than a slide show narrated by the agent with maybe a few seconds showing the agent talking. Again, really what you're getting are just photographs of the home but in a format suitable for putting on YouTube.

It's too early for there to be any hard numbers on the effectiveness of this form of advertising. But I am wondering if buyers find it any more useful than a large number of high quality still photographs.

So...I'm asking for your input. What's your preference? Do you want a YouTube movie with a series of narrated slides? Are still photographs just as effective? More effective? If you're a buyer, what works for you?

Thanks for helping me figure this out!

It's All Out There

This was in the Washington Post as part of a Q&A with one of the local REALTOR associations.

We are listing our Cascades townhouse next month and were wondering about pricing. We have lived there nine years and paid under $200K in 1999. This information is available to anyone accessing the Loudoun County Appraisal District Web site. Should we expect buyers to know this information and, if they do, should we also expect to get "low-balled" more than someone who doesn't have as much equity? Will we have to adjust our price/expectations accordingly?

I don't believe you need to be concerned with the public records and how much you purchased your home for nine years ago. The biggest issue is how big your mortgage is, and no one knows that but you and your bank. Contact a Realtor and have them do a comparative market analysis and take their advice on pricing your home to match your home type and area.

This was part of a longer article and many of the answers weren't particularly good. But this one in particular seemed worth commenting on.

First of all, you should always assume that buyers will have all publicly available information in their possession. Even if the buyers haven't thought to search out this information for themselves any decent real estate agent will be pulling the tax records and showing that information to their client. Sellers who assume they can hide some information from potential buyers are always asking for trouble. In the age of the internet, everybody knows or, at least, can know, everything!

Secondly, the buyers should not base their offer on what a seller bought the house for. Regardless of what you paid for this house, in a falling market, you are likely to get a low ball offer. The buyers know, and certainly their agent knows, that a year from now there's a good chance that the value of that home is less than it is now. It might not be worth a lot less. It's certainly possible we're near a bottom. But with that kind of uncertainty all buyers will lowball an offer and all sellers should expect to have to deal with that.

The other point I'd make here is that REALTOR associations should not have non-REALTORs answering these questions!

Townhouse in the Ocean

This one is fun!

While I was looking at the Culpeper townhouse market yesterday I stumbled across this map, helpfully pinpointing the location of the townhouse...

I have a feeling this is not really ocean front property!

It does make an important point. Sellers should take a look at their listing and make sure there aren't any obvious problems. It matters that the information is complete and correct.

Buyers have a multitude of homes to look at. They use all kinds of things to narrow their search. You don't want them to eliminate you because of incorrect information.

And, the commute from this townhouse in the middle of the Atlantic is likely to be way too long!

Short Sale Misery

I've heard a lot of talk amongst real estate agents lately, both online and in person, about short sales. And, the gist of the conversation is that they are horrendous and no real estate agent in their right mind would do them.

While I certainly understand the sentiment, I am disturbed by the remarks.

First of all, let's be clear that real estate agents are running a business. And, if the business does not make a profit it soon goes out of business. So, it's not reasonable to expect real estate agents to take on listings that will not pay them but will result in increased costs.

There are a number of reasons why it's risky to list a property where the owner owes the bank more than the property is worth. First of all, you sign a listing agreement with the owners. And, in that agreement, they agree to your fee. But the lender must agree to any contract and they have a history of voiding the listing agreement you signed with the owners and telling you what your fee will be. (By the way, it's always lower.) At that point you've already done a tremendous amount of work and it makes no sense to walk away, even if it turns out that what the bank pays you is a pittance. Something is better than nothing.

And, you'll work much harder for that reduced commission. Dealing with the bureaucracy at most lending institutions is a real pain. And, often you're dealing with both a first and a second mortgage.

The other big problem is that most short sales never happen. In most cases, especially in this kind of market, the property goes into foreclosure a couple of months later. Since lenders already have established relationships with real estate agents, you then lose the listing altogether.

All that being said, there are families who need help keeping their homes from going into foreclosure. We are uniquely positioned to perform that service. And, there are, of course, big hearted people who willingly take these risks and help these homeowners. I'd just like to see more of them.

It's interesting that attorneys don't refuse to take on bankruptcy cases our of fear of not getting paid. They get their fee up front or they don't take the case. Maybe that's what needs to happen here. Or maybe there's a retainer so the agent knows there will at least be some pay for their trouble.

I think the industry has an obligation to figure this out. I think it's in our self-interest to show we're willing to go out of our way to help. It certainly can't hurt the overall reputation of our profession!

Why Sell Now

There are a lot of sellers sitting out there wondering whether to try and sell now or to hold off, at least until spring, in the hopes of seeing a better market then.

There's some data to suggest you might as well bite the bullet and do it now. The S&P/Case-Shiller index of home prices shows that the last real estate downturn, in the late 80s and early 90s, it took about seven years for the market to recover enough the prices began to rise again.

We're only a couple of years into this one. And, this downturn may play out differently. There are certainly plenty of interested parties, especially in an election year, who would like there to be some good news on the real estate front. But it seems unlikely that two years or maybe even three will be enough to move us back to rising prices given the amount of inventory out there.

And, you'll see an increase in the number of homes selling, I suspect, long before you see that begin to push up the prices of those homes.

So, if you're wondering whether to put your house on the market now or wait for the spring market the answer is that it probably makes very little difference in terms of the price you'll get for your home. What you should consider is that, as in most years, I expect the inventory to jump tremendously in the spring and the competition for the buyers will be much fiercer.

Maybe the real question is how will your home fare against the increased competition?

Television Advertising

Another agent asked me awhile back what you do for advertising if you're not going to do print ads. It was a good question and I believe I ruminated on that previously in this space.

But a new option has presented itself recently. And I'd like to ask for your input on this one.

My broker has worked hard to negotiate some amazing rates for TV commercials through a local cable provider. The rates are low enough that they do truly make it affordable.

The question is, how effective is it? Do you still watch TV commercials? I know at our house, ever since TIVO came in the door, TV commercials are out! (Although we still stop it for the Apple Mac ads!) I suspect we're not the only ones who have changed their TV viewing habits.

And, let's face it, affordable means we're definitely not airing these in prime time.

My understanding of any form of advertising is that only with repetition can you truly expect an ad to have any impact. While these are affordable, how many would you have to run in order for it to really register in people's minds?

The big upside I see here is walking into a listing appointment and telling a seller that I can put their home on TV. Sellers like big, splashy marketing ideas, often regardless of effectiveness. (Let's face it, there's a fair amount of desperation out there right now!)

I'm still trying to determine whether to take advantage of this opportunity. But, meanwhile, I'd appreciate your input. What do you think? I'd welcome your input!

Estimated Net Proceeds to Sellers

When you sell your home and finally get that check it will not be for the full sales price amount. Even if you own your home free and clear of any mortgages, there are still fees that will be taken out before you see any money.

The agent who lists your house should go over these charges with you when they first talk to you about listing your home. You need to know what kind of money you'll walk away with (and IF you'll walk away with any) so that you can make plans for where you'll be going next.

This estimate should then be redone when you get an actual offer on the house. Especially in this market, there can be a substantial difference between what you originally listed for and what the house eventually sells for. It's in everyone's best interest to make sure there are no ugly surprises at the settlement table.

Some of the things you should expect to see on the list of estimated charges are closing fees paid to settlement companies or attorneys. This is the money they charge for preparing all the documents, communicating with your mortgage company about the payoff and for actually conducting the settlement and recording the deed.

You will pay transfer charges which are essentially a tax levied by the government on the sale of your home. In general, in our area right now, that will be $1 for every $1000 of sales price. So, if you sell for $400,000 that tax will be $400.

You will pay a commission to both the listing agent and to the agent representing the buyer.

If you have a mortgage, you'll not only pay off the existing balance, you'll also pay a partial month's interest. Because interest is paid each month in arrears, meaning in February you're paying the interest for January, there will be interest due from the partial month in which you close. How much that is will depend on what day of the month you settle.

Other charges you may pay include termite inspection fee (typically $50-$70), Closing Cost Assistance for Purchaser, and fees for well and septic inspection.

There may also be other expenses out of your pocket before settlement that you'll need to know about. If you live in an HOA there will be a charge for obtaining a copy of the homeowners association documents. (Typically about $100.) If there is a home inspection by the buyers, there may be repairs you're required to make as a result. A good estimate will attempt to give you some idea of what those might run.

This will be an imperfect document. There's never any way to know precisely each and every piece of this. But it's a great source of satisfaction to me when I get really close to that final number.

By the way, in my opinion it's a good idea to estimate on the high side. No one has ever complained at closing that they walked away with too much money! But a seller who expects more and takes away less can be a problem!

Types of Turbulence

1. Does not tell the truth on the loan application
2. Submits incorrect information to the lender
3. Has recent late payments on credit report
4. Found out about additional debt after loan application
5. Borrower loses job
6. Co-borrower loses job
7. Income verification lower than what was stated on loan application
8. Overtime income not allowed by underwriter for qualifying.
9. Applicant makes large purchases on credit before closing
10. Illness, injury, divorce or other financial setback during escrow
11. Lacks motivation
12. Gift donor changes mind
13. Cannot locate divorce decree.
14. Cannot locate petition or discharge of bankruptcy.
15. Cannot locate tax returns.
16. Cannot locate bank statements.
17. Difficulty in obtaining verification of rent.
18. Interest rate increases and borrower no longer qualifies.
19. Loan program changes with higher rates, points and fees.
20. Child support not disclosed on application.
21. Borrower is a foreign national.
22. Bankruptcy within the last 2 years.
23. Mortgage payment is double the previous housing payment.
24. Borrower/co-borrower does not have steady 2-year employment history.
25. Borrower brings in handwritten pay stubs.
26. Borrower switches to job requiring probation period just before closing.
27. Borrower switches to job from salary to 100% commission income.
28. Borrower/co-borrower/seller dies.
29. Family members or friends do not like the home buyer chooses.
30. Buyer is too picky about property in price range they can afford.
31. Buyer feels the house is misrepresented.
32. Veterans DD214 form not available.
33. Buyer has spent money needed for down payment and closing costs and comes up short at closing.
34. Buyer does not properly "paper trail" additional money that comes from gifts, loans, etc.
35. Does not bring cashier´s check to title company for closing costs and down payment.

36. Loses motivation to sell (job transfer does not go through, reconciles marriage, etc.)
37. Cannot find a suitable replacement property.
38. Will not allow appraiser inside home.
39. Will not allow inspectors inside home in a timely manner.
40. Removes property from the premises the buyer believed was included.
41. Is unable to clear up liens against their property ? short on cash to close.
42. Did not own 100% of property as previously disclosed.
43. Thought getting partners signatures were "no problem" but they were.
44. Leaves town without giving anyone Power of Attorney.
45. Delays the projected move-out date.
46. Did not complete the repairs agreed to in contract.
47. Seller´s home goes into foreclosure during escrow.
48. Misrepresents information about home & neighborhood to the buyer.
49. Does not disclose all hidden or unknown defects and they are subsequently discovered.
50. Builder miscalculates completion date of new home.
51. Builder has too many cost overruns.
52. Final inspection on new home does not pass.
53. Seller does not appear for closing and won´t sign papers.

54. Have no client control over sellers.
55. Delays access to property for inspections and appraisals.
56. Unfamiliar with their client´s financial position ? do they have enough equity to sell, etc.
57. Does not get completed paperwork to the lender on time.
58. Inexperienced in this type of property transaction.
59. Takes unexpected time off during transaction and can´t be reached.
60. Jerks around other parties to the transaction ? has a huge ego.
61. Does not do sufficient homework on their clients or the property and wastes everyone´s time.

62. Engineer will not approve septic system or well.
63. Inspection report reveals substantial damage and seller is not willing to fix or repair.
64. Home was misrepresented as to size and condition.
65. Home is destroyed prior to closing.
66. Home not structurally sound.
67. Home is uninsurable for homeowners insurance.
68. Property incorrectly zoned.
69. Portion of home sits on neighbor´s property.
70. Unique home and comparable properties for appraisal difficult to find.

71. Fails to notify lender/agents of unsigned or unreturned documents.
72. Fails to obtain information from beneficiaries, lien holders, insurance companies, or lenders in a timely manner.
73. Lets principals leave town without getting all necessary signatures.
74. Loses or incorrectly prepares paperwork.
75. Does not pass on valuable information quickly enough.
76. Does not coordinate well, so that many items can be done simultaneously.
77. Does not bend the rules on small problems.
78. Does not find liens or any title problems until the last minute.

79. Is not local and misunderstands the market.
80. Is too busy to complete the appraisal on schedule.
81. No comparable sales are available.
82. Is not on the lender´s "approved list."
83. Makes important mistakes on appraisal and brings in value too low.
84. Lender requires a second or "review" appraisal.

85. Too "picky" with conditions and "scares" the buyer.
86. Infuriates the seller.
87. Home inspector not available when needed.
88. Inspection reports alarm buyer and sale is cancelled.

A Little Light?

If you're a seller or a potential seller I know you can use a little good news right now; a sign that there's a light at the end of the tunnel. And, it just so happens I've got a little good news right now. Even better, it's good news about hard hit Culpeper County!

I've listed two new properties in the last 10 days. One went under contract within two days. The other one went up for sale on Sunday and today we've got a serious buyer contemplating an offer. In this market that's pretty remarkable!

How did this happen? The credit goes first of all to the sellers. Both sellers had worked hard at informing themselves about the local market. Their pricing expectations were realistic and they made the decision to be aggressive with pricing because they knew what they wanted as well as what was possible.

Both sellers had their homes in top showing condition. They addressed curb appeal. Their homes had good quality flooring in good condition. The walls were clean and freshly painted. There was no clutter. And they made their homes easy to show. In short, they did everything right.

Homes can sell quickly in this market. But it takes hard work, aggressive pricing and a strong desire to sell. Both sellers here knew what they wanted and were focused on their objectives. Only sellers who have that same kind of determination should even think about selling in this market.

No deal is done until we've gone to the settlement table and signed the papers and the deed gets recorded. But I like the odds on these two!

Now that you know it can be done, how willing are you to do what you need to in order to make it happen?!

Discount It and They Will Come

K Hovnanian, one of the largest homebuilders in the country recently did a nationwide sale event called "The Deal of the Century". It included steep discounts of up to 25% or $100,000 in an effort to clear out inventory. In places like New Jersey and New York those discounts amounted to almost $150K.

And, it worked! They got contracts for 1700 homes and have deposits on 400 more. They've almost met their quarterly sales goals, all in one weekend.

There are a lot of analysts talking about how this proves there is pent up demand out there. Duh! Who didn't know that?! Buyers will buy at the right price! Of course they will!

Here's the problem. How many home sellers are in a position to reduce the sales price by 25%? And, if they are in a position to do so, will they? So far, the answer has clearly been "no". Most of the people I meet with about selling their homes these days don't have the kind of equity that would allow them to do that. They don't deal in volume and can't make it up by selling 100 houses!

There's an old saying in the real estate industry that "price cures everything." meaning that if I get the price of your house low enough it doesn't matter what's wrong with it. And the saying is true. Which is not to say that it should be your mantra in getting homes sold. In my opinion it usually makes much more sense to correct anything objectionable in a home, improve the look of the place and try that first. And, in this market, maybe you lower the price some AND do that work.

I can lower the price of your home to $1000 and I guarantee I will sell it and sell it quickly! That doesn't mean it's the best strategy.

But, heck, if you can discount your home 25% I absolutely believe it will get your home sold. I'm not holding my breath, though. I suspect the typical homeowner isn't going that low until the rush of foreclosures forces his or her hand!

First Appearances

I believe both real estate agents and consumers are still trying to figure out how technology is changing the way homes are bought and sold. I'm trying to stay on the leading edge of this stuff. But sometimes the most obvious things still surprise me and they definitely surprise my clients. Let's face it, they have better things to do with their days than to think about real estate every waking moment!

A new one came up for clients this week. I'm talking to a lot more families who have already listed their house with someone else and are now looking for a new real estate agent. One of the things I always look at are the photographs of the house. It continues to astonish me how truly awful some of them are.

We are used to thinking that the first impression that clients get is when they drive up to your house and walk through the front door. We've been talking for years about curb appeal. The fact is, first impressions are now made on the web. And by and large, they're the only chance you have to impress.

When there are oodles and oodles of houses to look at, a buyer has to figure out how to narrow down their search. Once you get through the obvious criteria such as style of house, number of bedrooms, number of baths, size of lot, garage, basement, you get to the photographs pretty quickly.

The thing about the photographs is that what makes a buyer steer away from you house may have nothing to do with the house itself. If the house looks like a mess, somewhere in the back of their mind is the idea that if they lived in that house they would be more likely to be messy. If the house looks crowded and/or cluttered they'll believe it will look the same when they live there. It doesn't have to be the truth. They may have one tenth the furniture you have. But the impression has been formed and it's enough to make them go on to the next house.

It used to be that you ran around making the house look terrific when you knew someone was coming to look at it that day. Now, you'd better make sure it looks terrific on those photos that will be on the internet.

"You never get a second chance to make a first impression" has never been more true! If that first, photographic, impression of your home on the internet doesn't wow them, they're never coming for a second look!