• Home
• Buy
• Sell
• Statistics
• Neighborhoods
• Loans
• Search Tucson MLS
• About Tucson
• Blog

Who Do You Pick To Sell Your Home?

December 14, 2009

I was very painfully dragged through a thought exercise the other day by my friend Rob Hahn.  He likes to ask tricky questions and then turn them around on you and act all innocent like he didn’t mean to start a ruckus.  But he totally means to do exactly that.  Trust me.

Anyway.  The question was thus: Who would you pick to sell your home, assuming you can’t sell it yourself?

It was a harder question to answer than I anticipated.  Who do I pick?  The person who sells the most homes – because they spend all day getting more clients instead of taking care of the ones they have?  The girl who makes her sellers feel good but may not negotiate all that well?  The woman who seems to have a lot of clients but then trashes them in the back office rooms when no one is looking?  The guy who has a lot of listings, but they take forever to sell because they’re always priced a little too high?

Who, in my market, would I pick to sell my own home?

And then, once I answered, I had to answer why I picked that person.  It was hard to pick.  Oh man, it was hard to pick.  I really really really wanted to sell it myself, according to my own standards of how things should be done.  In an ideal world, I really wanted to pick myself.  But that was against the rules of the game.

For me, in the end, it came down to two things: integrity and market knowledge. 

I picked the person who I knew wouldn’t be gossiping about me to coworkers or other clients.  The person who I thought would always be telling me their complete and honest opinion, even if it wasn’t exactly what I wanted to hear.  The person who would take the time to listen to me, to understand my goals and needs, and would tailor their approach accordingly.  The person who had demonstrated clear market knowledge, by pricing properties correctly.  Who I knew could discuss housing conditions in my area clearly and with confidence and substance and real market data to back up their answers.  The person who would tell me what to fix now and how to best prepare my home for sale.

Other than myself, of course.

It was an interesting exercise to determine what I believe makes a good agent.  What criteria would you use to pick an agent to sell your home?

When the Sales Price Isn’t The Market Value

October 14, 2009

I was doing some market value research the other day for a little Central Tucson house, in a price range where home buyers wanting to use FHA financing tend to look.

I had two decent comparable sales to use – but I noticed one sold to a buyer who used FHA.  And that’s a huge flag that more research needs to be done in order to use that sale as an indicator of market values.

See, many FHA home buyers in Tucson ask for closing cost assistance, if not also down payment assistance.  And those are in the form of credits directly to the Buyer at close of escrow, which isn’t recorded as part of the sales price but comes directly off the Seller’s bottom line – the Seller actually walked away with less money than what the sales price would indicate.

It’s easier to understand with an example.

Let’s say you just sold your home for $200,000.  With a regular home buyer, you’d get a check for $200,000.  (We’re simplifying here for the example, and disregarding other sales costs and loan amounts.)

If you had an FHA buyer who needed 3% of the purchase price towards their closing costs, you’d get a check for $194,000.

If you had an FHA buyer who needed 3% towards closing costs and 3% towards their down payment, you get a check for $188,000.

The assistance just comes off the Seller’s bottom line.  And if a Seller is willing to take less in the form of closing cost and down payment assistance, then it’s the same as if they sold their home for that lower value.  Paying $12k in closing cost assistance is the same as taking $12k less for the house.

So if I’m using that house to find market value, and the seller took what equates to 6% less than what the sales price indicates, then clearly, that impacts market value.

The sales price isn’t always the whole story.  There are all kinds of credits that can happen on the back end of the transaction that aren’t necessarily reflected in the record of the sale in the Tucson MLS.  You always gotta do the research.

What Kind of Financing do Central Tucson Home Buyers Use?

October 6, 2009

I was talking to someone the other day about the current market in Tucson and about home buyers having more cash than before, and using more FHA financing than ever before.  Clearly, there’s been a large change in home financing rules.  In my recent experience, I’m helping people buy homes here in Central Tucson largely with FHA financing – or with cash. 

So I ran some numbers this morning.  Because that’s what I do.

So far, in 2009, the financing for closed home sales in Central Tucson break down like so:

• 263 cash transactions, with an average sale price of $144,401, which is 30% of the sales.
• 342 conventional loan transactions, with an average sale price of $223,091, which is 39% of the sales
• 246 FHA transactions, with an average sale price of $157,661, which is 28% of the sales

Compare that to 2007, where cash transactions were 13% of the market, conventional sales were a whopping 82% of the market, and FHA was a mere 2% of sales in Central Tucson.

And in 2005, FHA was just 1% of the Central Tucson market.  (Conventional was still 82% and cash was 14% of sales.)

Big shift?  Yes indeed.  The cash is back – but it’s quiet cash and those folks are picking up the bargains, many of them investment properties.  And FHA is bigger than ever.  If you’re trying to sell a home in Central, it might behoove you to make sure the house will meet FHA financing requirements.  Otherwise, you’re cutting out a large chunk of the home buyers out there today.

Giving Away A Bedroom and a Whole Lot of Money

September 23, 2009

I was touring a house a couple months ago, getting a feel for the condition in order to price the house more accurately.  I’d done my research online ahead of time and had a decent range of price in mind, depending on the condition that I found.

Except when I got there, the owner had torn down the wall between the two front bedrooms, making one long bedroom with a closet at one end.

That’s a problem, for several reasons.

First, now I can’t market it as a 3 bedroom home.  More people look for 3 bedroom homes in this area than will even peek at the 2 bedroom homes.  So instantly, we just made a huge cut in the number of potential buyers that would even know the home was for sale.

Second, most buyers are going to want to turn that back into 3 bedrooms.  And from experience, I know that buyers nearly always overestimate the amount of money it will take to complete a repair.  So while it might take $1000 to turn that back into two separate bedrooms, I know that in a buyer’s head, that number usually sits at 2-3x that estimate.  And even fewer buyers want to take on that work anyway.

Both of those things mean that we’ll get less than top dollar for the house.  And in a market where home sellers are already dealing with declining values, it is silly to just give away more money because that separating wall doesn’t exist.

How We Pick The Home We Buy

August 31, 2009

Interesting post from the Zillow blog that puts a little science behind what I’ve always told my sellers – home buyers make decisions based on emotion, usually within the very first few moments they’re in the house.  In my experience, those first few moments make about 80% of the decision for a large portion of the population.

The post references a Katherine Salant column.  Excerpts:

In the first two or three minutes you are in a model home, your sensory organs are feeding data into the emotional centers of your brain. As you glance at the living room, these emotional centers rapidly register the details.

Then, on the spot, the emotional networks vote up or down. The deal starts or ends with the firing of a few billion neurons.

If our nearly instantaneous visceral response is positive, our dopamine receptors go into overdrive, Lehrer said. They make us want that house, and they make us want it immediately.

Once your emotions have voiced their opinions, a different set of neurons in the frontal cortex, which control your brain’s "executive function," start to kick in. They generate seemingly logical reasons why a particular house is the one, Lehrer said. As you continue to think about this purchase, your list of good reasons gets longer: It has all the formal living and dining space that we need for resale! We’ll have a place to put great aunt Julia’s living room set, which we just inherited! We can have romantic dinners for two by the fireplace in the family room!

This is why I’ve always argued that the point of good home marketing is to get a potential home buyer inside the house.  When I represent home sellers here in Tucson, I want to show people enough information, pictures, and details that they’re curious to see more, that they’re drawn to see the house in person.  I want that visceral emotional reaction from those home buyers.

I don’t want someone looking online and rejecting a house because they looked at 50 pictures and decided they don’t like the oak cabinets or the guest bedrooms seem to small in the virtual tour – I don’t want potential home buyers dismissing a house out of hand because of some perceived flaw or omission, most of which could be changed or otherwise addressed.  I want people in the house, seeing it in person, getting that emotional reaction.  That’s successful home marketing.

All of which – if you’re looking to buy a home -  is why you should work with an agent who knows your wants and needs, who understands that you can get caught up in that visceral reaction, and can remind you to evaluate the house from a more objective view point.

<SomeItem> is Broken/Old/Worn/Ugly/Stained. Should I Fix It Before I Sell My Home?

June 30, 2009

Yes.

I know it isn’t fun. 

No, we’re not going to offer an allowance instead.  Trust me.  I’m looking out for your best interests.

Let me know if you need help finding people to help you.  I know all kinds of helpful folk.

Fixing and Flipping Homes in Tucson?

June 23, 2009

I had an inquiry the other day from someone about to move into Tucson about potentially fixing and flipping homes along the Valencia corridor in Tucson – basically, the Southwest and the South side.

I gotta tell ya – that’s something I wouldn’t do right now, at least not operating in the open resale market.  I think the idea was to pick up a foreclosed home at a steep discount, make repairs, and resell it for profit.

The problem is that in those parts of Tucson, pretty much the only thing selling is the foreclosures.  If you find one at a crazy low price, I’d bet it is in terrible shape too.  Which means even more cash you have to put into the thing.

Not to mention that prices over the last year in that area have fallen – on average – 3% a month.  So not only do you have to recoup your repair costs, your purchase costs, the holding costs, and the selling costs in order to just break even – you lose money just owning the thing over a very short term because of the declining market.

It’s not a bet I’d be taking right now.

Where’s the Floorplan?

April 22, 2009

Question from the audience: why do listings for existing homes show tons of details, maps, pictures, virtual tours, fact sheets about every possible detail – but not floorplans?

My Answer:

I do floorplans occasionally – they’d be linked along with the rest of the virtual media.  I know in some other parts of the country, it is customary to have room measurements along with the listing – in Tucson, we don’t do that, we don’t have fields in our MLS for room descriptions or measurements.

But beyond that – I have floorplans drawn when I suspect the assessor square footage is incorrect, usually in older homes.  When I represent a Seller, I want the house to be as big as possible.  If having a floorplan drawn finds 1100 square feet instead of the assessor-listed 900 square feet, then we can price that house much differently.

In the luxury Tucson market, floorplans tend to be a typical item used in marketing.  I suppose the logic is that when you sell a high-end home, there’s a larger marketing budget – but floorplans are in the $0.10 – $0.15/square foot range, so we’re not talking thousands of dollars anyway.

Personally, when I represent home sellers, I know that more often than not, people buy on emotion.  Someone who swears they’ll never buy a home without a split bedroom plan will drop that requirement if they walk into a house with the right "feel," the right view, the right light, the right everything else.  So I want people inside the house – sensing, feeling, reacting – not discarding that listing sight-unseen because the floorplan doesn’t look exactly right.

It’s the same reason I’m not a huge fan of virtual tours.  Though if I ever find home video that does an awesome job of getting people to be curious about the house, I’ll adopt that strategy immediately.

I get 25 photos, and I’ll use up as many of those slots as possible to show the house from a multitude of angles and rooms.  But the point of marketing a home for sale is to entice people to come look at the thing, in person.  Floorplans are one of those things that I think can turn people away before they look.  I’ve seen too many buyers forgive a floorplan when everything else is right.

And I know that may not be an incredibly popular answer, in this age of information-freedom where we want all our answers up front.  But it’s honest.  When I represent a seller, my job is to get real live people into that house.  And despite what we often tell ourselves, emotional reactions are a HUGE influence on our buying decisions. 

New For Sale Signs!

February 3, 2009

The picture is a little dark, and admittedly was taken from my camera phone, but you get the idea.  We have new signs!

The top part is the regular part – how could I leave behind the recognition that comes from having that yellow sign in the yard?  Long Realty has such a dominant market share, I couldn’t give up that part.

But – there’s more.  See that bottom sign?  It has pictures of the inside on it, as well as the address, the MLS number, contact information for the latest pricing info, and a description of the house.  I think it’s pretty cool, all in all.  I might tweak the design yet, resize some of the text, but isn’t this so much better than an empty flyer box sitting in front of your house, taunting potential buyers?

I think so.

Dealing with Kneejerk

January 14, 2009

So I submitted a low offer yesterday.

Well, let me rephrase.  I submitted a reasonable opening offer on an overpriced house yesterday.  When the same house is under contract 2 streets over at $80,000 less…

Within about 4 hours, I had a rather terse call from the listing agent, saying his clients were not going to respond to our offer.  But they had another day and a half to consider it.  Why not sleep on it, get over that initial emotional kneejerk response, and at least counter with something?  I know our offer wasn’t what they were hoping for.  But they ain’t going to get what they were hoping for.  And when that house 2 streets over closes for $80k less, they’re going to be hurting, and our offer is going to start looking better.  But we’ll already be gone.

Now, if they’d gotten over that first emotional horror when confronted with the reality of the market via our offer, we might still be talking.  And when there’s no other buyers on the table and a 48 hour acceptance window, there’s usually time to turn it all over in your head, time to step back and think rationally.  Why answer in 4 hours?

Oh well.  We can find other houses in this market, no problem.  Sorry, home seller.

Next Page »

Copyright © 2010 Tucson Homes, Neighborhoods, and Real Estate from Housechick.com