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Piedmont Real Estate Blog

HGTV Effect

Nov. 15, 2011
Categorized in: Sellers

Sellers and real estate agents are increasingly feeling frustrated by something that's been dubbed the "HGTV effect". In a nutshell, potential buyers who have watched way, way too much HGTV not only don't want to buy anything that's not pristine, upgraded, perfect, they don't even want to look at it. Even the Washington Post has written about this.

There is almost no market any more for fixxer uppers. The market left for those is investors looking to give you a lowball price that is likely to make the average seller gag.

If you haven't redone the kitchen complete with granite countertops, hardwood floors (or ceramic tile) and the newest and best appliances, forget it.

The dilemna for a seller is that if you pay to upgrade your house you will NOT get that money back. Yes, you'll get some of the investment back. But you won't come anywhere near getting it all back. On the other hand, at least you'll get people to look at your house!

My advice, start upgrading now even if you're not going to sell for awhile. At least you can get some enjoyment out of the upgrades!

Oh, and if you're a buyer and want a deal, look for the properties that need upgrading and be ready to do the work yourself!

Rough Times in Real Estate

Jan. 11, 2010
Categorized in: Business of Real Estate

Most of the pain of real estate practitioners in this market is hidden away. Most of us don't talk much about the realities of doing this for a living in the worst economy in my lifetime. It's not just your average consumer losing their home to foreclosure.

But sometimes there's an amazing, honest, articulate agent with a story to tell. Matt Stigliano has a story worth listening to.

(How am I doing? Better than 2008! Not as good as a few years ago!)

How it Should Work

Jun. 21, 2009
Categorized in: Foreclosures/Short Sales

Short sales are a pain! You're going to hear that from any real estate agent you talk to, or more likely, even stronger language.

The relationship between banks and real estate agents on short sales has gotten to the point where you could call it adversarial. And, it shouldn't be that way. We should be working together towards a common goal, finding a deal that works for everyone and getting it closed before the house goes into foreclosure.

The thing is, I don't think it needed to be this way. Both banks and real estate agents should have sat down at the beginning of this wave of short sales and worked out some things. Here are some ways the outcomes and the working relationships could have been improved.

  • Each bank should have a package of it's procedures in working with real estate agents and owners on short sales.
  • Banks should have a link on their main web site that provides real estate agents with everything they need to process a short sale.
  • Lending institutions and real estate companies and/or associations should have set up joint seminars where agents and lenders could meet and develop working relationships.
  • Banks should have easy access on their web sites to information for their customers who are contemplating going through the short sale process.

No one item here would have completely fixed the problems with the current system. But any and all of them would have helped tremendously. And, this list is just a starting point. There are lots more possibilities.

This is a broken system. A little planning up front might have saved us all a lot of grief!

Apologies

Aug. 7, 2008
Categorized in: Business of Real Estate

The last two years have been miserable ones in this industry. And, the human toll has been awful. When faced with the overwhelming pain, fear, anger and misery it is human nature to want to pull away.

I was reminded today of how this is impacting both real estate agents and the clients we serve. The story was about a soldier coming back from deployment over seas, living in a hotel room with his family, trying desperately to get a happy ending for all of them. They were buying a foreclosure and, as usual, the process seemed never ending.

People under stress can react with anger and rudeness. Clients under stress often take that stress out on agents. The agents, out of self-preservation often pull back, even hide. Over time, given enough stress, even good agents can find themselves trying to avoid client contact. Who needs more stress, especially when you have so little power sometimes to make things better?

But being there for our clients, really listening, telling them the truth, good or bad and sometimes just telling them we have nothing to tell them is what needs doing right now.

So, for all the clients for whom I haven't been a good enough listener, for those whose pain I avoided in order to spare myself, I apologize. I'm going to take better care of me so I can take better care of you!

Bob and Carol and Ted and Alice

Aug. 1, 2008
Categorized in: Business of Real Estate

There's a new trend among local real estate agents. It's the sign that says simply:  

JULIE

There is, of course, a company name and phone number on this sign. But only a first name. Clearly, the agents using these signs are either convinced they're so famous that they're a household name or they're hoping to be.

If Cher ever decides to go into real estate, she can get by with putting just "Cher" on the sign. Same with Prince.

For the rest of you...

There are about 770 real estate agents in the local REALTOR association. I'm not the only Julie. You're probably not the only Bob or Carol or Ted or Alice. Get over yourself and put your whole name on the sign!

And, by the way, have you filed that "Doing Business As" form with DPOR allowing you to use just your first name in advertising?

When Will Things Turn Around?

Jul. 3, 2008
Categorized in: Buyers

The real answer to that question is, of course, that no one knows. There are some positive signs out there, but it's too soon to say if they're a trend or a blip.

But based on a current client situation, I'd have to say it hasn't happened yet.

I'm working with a buyer client who's also a licensed agent in a neighboring jurisdiction. This client is buying a home with other family members and there's a lot of nervousness about the future of property values in this area.

Here's the thing. This is a licensed agent. Agents get that this is cyclical. They get that if you're planning on staying in your home for many years (which is the case here) you're highly unlikely to lose any money. And, yet... there's a tremendous amount of concern.

We'll know the market has turned around when the agents aren't worried about buying!

This proves it's easier to be dispassionate about any market when it's not your money involved!

Who's Protecting Who?

Jun. 18, 2008
Categorized in: Business of Real Estate

I had an interesting incident with another agent recently. I wrote about that in another post. When I wrote it I promised to reflect in a later post on some of the larger industry issues involved.

In many professions there's a tension between the desire to protect the public and the desire to protect the members of that profession. And so, while the Hippocratic oath has doctors promising to "First do no harm" there is also a very strong taboo against criticism of other doctors.

It's really no different in real estate. (Although the stakes are a lot lower!) Part of our code of ethics says that we'll speak no ill of another agent. And, most agents are careful to adhere to that. I have no problem with not indulging in idle gossip about my peers. And, it's certainly much too easy in a very competitive industry to decide it's your job to cast aspersions at those you deem less "professional" than yourself.

But you can carry this too far. It's a thin line you walk and I think we've leaned too far towards protecting our colleagues at the expense of protecting the public. When another agent thinks I have a greater responsibility to protect her and her business than to be honest with the consumer, I think it's a problem.

The thinking in the industry is that my responsibility is to clients who have hired me. The agency relationship with them obligates me to put their interests first. However, even to a customer (otherwise known as the general public) I still owe the duty of honesty.

You can ask whether "honesty" is defined by answering direct questions with honest information or whether it obligates volunteering information for which we weren't directly asked. I'm going to suggest that splitting such hairs is the kind of behavior that makes real estate agents rank very poorly in polls that gauge trust by profession.

As I said, the line is thin. But I think it's time to start leaning the other way!

 

Misconceptions

May. 15, 2008
Categorized in: Local Market Conditions

People talk to me all the time about real estate. Obviously customer and clients do that. But people who barely know me but know I'm an agent also do that. That's a good thing! I like hearing what's on people's minds and how they're seeing the current market.

Lately I've been hearing some things that don't quite ring true. So I thought I'd set the record straight.

First of all there's the current chart topper "I know that a bank will take any offer just to get rid of a foreclosure." It's a lovely thought, but just not true. In fact, there is quite a range of policy on this among the various lenders. While, in theory, no bank wants to hold a property a day longer than they have to, each lender has its own policy as to what's an acceptable offer. That may be a percentage below the listing price or it may be based on a percentage loss they are willing to absorb. It may be a combination of factors, including how long the property has been on the market.

Unfortunately, no one hard and fast rule covers this. But be assured, I've seen banks reject lowball offers, even perfectly reasonable ones!

Here's what sellers tell me a lot these days. "I know you're probably right about the price, but I just want to try it at this higher price for a little while."

Here's the problem. Prices are declining. So, while you're sitting on an overpriced listing that no one comes to see, prices have gone down further. Now, just to catch up to the market, you need to come down further in price than where I originally suggested. All you've done is reduce your likely profit.

And, of course, real estate agents have their own misconceptions. The one you'll hear most often these days is "It's a great time to buy a house." One agent last week told me he's never stopped saying that! I'm guessing his clients who listened to him a year or two ago may not be thanking him now!

It's a great time to buy a house if you're likely to stay in it at least five years. Given current market conditions and where I think we're going, I still won't guarantee anybody will make money in five years. But I think, if you include the tax advantages, you have an excellent chance of breaking even or even a little better.

If you're likely to get transferred in a year or two, it is clearly not a good time to buy! If you're looking to flip a house for a quick profit it is definitely a very bad time to buy! If you're looking for a long term investment, say a rental income property, it's a very good time to buy.

And, as always, what you buy and where you buy make a huge difference!

A Loss to His Profession

Jul. 6, 2007
Categorized in: Business of Real Estate

Another friend is leaving the lending industry. With the market in the condition it's in and the serious over-population of lenders and real estate agents this is happening more and more often. It's a sad fact of life and one more isn't, in the larger sense, a surprise at all.

But this guy was tremendously good at what he did in terms of servicing his clients. He went out of his way to make sure a buyer understood what they were signing up for and that they were comfortable with that. He's as honest as the day is long and I never hesitated to refer clients to him.

But being good at what you do, whether in lending or in real estate is not nearly enough to guarantee you'll prosper. And, you have to be able to make a living and put food on the table. That's tough right now.

The thing is, as I watch lenders and agents leave the business, I'm not at all sure we're losing the people we should be! Heaven knows there are plenty of lenders out there who will push consumers into loans they barely qualify for and will surely regret later. There are plenty of agents who are really bad at what they do, don't keep up with what's new in the profession and give all of us a bad name when they compromise on ethics.

But most of the people I know leaving are good people. And I'll miss them! And I'm sure the consumers who have dealt with them will miss them as well. I suspect the commission system that this industry is based on makes this inevitable. I'm less and less sure that our current structure is good for either the professionals or the consumers!

But that's a topic for another day! So, best of luck to all of you who are moving on! Keep in touch from the other side!

The Ugly Side

Jun. 6, 2007
Categorized in: Buyers

As long as we're talking about old real estate adages, here's one that I was shocked to hear in my very first real estate training course after getting my license..."Buyers are liars."

My initial reaction was horror. And after all these years in the business I still believe that was the right response. I was horrified that people thought so badly about their clients and customers and even more horrified that they would state such opinions out loud to a roomful of agents who were brand new to the business.

I was also shocked that people who felt like that would choose to stay in the business! After all, we're talking about self-employed people here! They're not hanging on to get the gold watch and the pension after 50 years!

And by now you're probably thinking some pretty bad things about real estate agents! In actuality I think this is another case of misunderstanding.

The phrase is used to describe a fairly common occurrence. An agent will sit down with a buyer and get them to describe in detail exactly what they want. The agent then shows them 10 homes that exactly meet all their criteria. And a week later the client calls and says "we've got to see the house at 123 Main Street". Of course, the house meets absolutely none of their requirements, which is why it wasn't on the original list to show them. And, of course, they immediately fall in love with the house and buy it!

Agents get frustrated with these situations. And I understand why! We work hard to try and find the perfect house for our buyers. We listen carefully and search exhaustively. But everything we do is based on what they tell us they want. If that's not really want they want, we've wasted a lot of time and, more importantly, we've got no shot at actually satisfying the client!

But from a buyer's perspective I think many buyers come in with a list of exactly what they want. The problem is that a home is an emotional purchase, however much we try to tell ourselves otherwise. And, so we fall in love with a house that doesn't at all fit what our practical list said we wanted. And after we fall in love we find good, solid, logical reasons to justify buying this particular house. Buyers aren't liars! They change their mind! And, don't we all!

As an agent the trick is to realize that very few buyers make a decision about a home based entirely on logic. Emotions will play an important role. Buyers will change their minds, sometimes several times. And if you put yourself in their shoes, if you remember when you went house hunting the first time, you'll be a lot more helpful and a lot less frustrated.

And you won't end up, 20 years down the road, sounding like someone who should really have moved on to some other line of work a long time ago!

Tell me your stories! Have you ever bought a house that wasn't at all what you initially said you wanted? Do you remember why? Was it a good decision?

Relationships Pay Off

May. 2, 2007
Categorized in: Business of Real Estate

It pays to have good relationships with your fellow REALTORS. That's not always understood or appreciated by those outside the business. But an incident today illustrates the point.

A client called me about a listing he'd driven by. It wasn't in an area where they'd been looking and so hadn't come up on the regular search I was running for him. As it happened I knew the listing agent well and so asked him directly what he could tell me about the listing.

He was very forthcoming about the listing, including the fact that it was overpriced, where he thought the price should be and what his clients' financial situation was. This was very, very useful information! And I immediately relayed that information to my clients. I got this information directly because of my relationship with this agent.

Now, should he have given me that much information? My suspicion is no, but it may be that he'd discussed with his clients what he could disclose and they'd given him permission.

Was I unfair to take advantage of my relationship with this agent? I'd argue absolutely not! I told him up front that I was asking on behalf of a client. He knows that I'm obligated to represent the interests of that client.

Which by the way, brings me to another point! Many real estate agents talk too much about their listings and clients, oftentimes when it's inappropriate. The smart agents keep their mouths shut, or share information selectively when it's in their clients' best interests! The even smarter ones are always listening for information that could give their clients an edge in the transaction!

And, lastly, I'm teaching a blogging class again tomorrow and it's always nice to show them a blog post with a dialogue! If you get the chance to add a comment to this one it would be greatly appreciated!

Piedmont Real Estate Blog

Blog by Julie Emery
Amissville, Virginia

An ongoing dialog on real estate news, opinion and trends in Northern Virginia and the greater Piedmont area. Julie is an Associate Broker at Frankly Real Estate Inc, 6304 Crossroads Circle, Ste 102, Falls Church, VA 22044

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