What We Can Learn From Baseball

When I was 8 years old, I played baseball In Hamilton’s HTRBA “tiny league”. I played 1b-P-C for “Parfait House”.  I guess I might have pulled an A-Rod type of move and yelled at a fielder to miss a ball. But I was 8.  A-Rod reminds me of some people in my (or any) business. If I have to be a jerk, or an idiot or scare the client into not using the competition type, then I guess I don’t want your business.  Not for me.

Just to clarify-  I play as hard as anyone, maybe harder. But there is a certain level of professionalism expected in any business, and many miss the mark.

I’ll never forget one game when my dad removed me from the game (I was pitching and doing poorly) and I threw my glove at the fence in frustration. He made me sit in the car for the last couple innings. I remember that like it was yesterday, and it was 36 years ago.

It’s amazing what we can learn from baseball, even at a young age.

Buyer Deposits @ Contract Signing

“How much deposit do I need?”   is a common question from home buyers.  As my average sales price is $300,000,  my average deposit is about $5,000.  If a buyer does not have $5,000, for any reason, I don’t make a big deal about it.  I don’t make the buyer feel inadequate or embarrassed.  However, some folks do.  I have witnessed the following recently:

1. Some buyers have near-zero deposit, or just a $1,000.  Humble sellers understand this. Busy real estate attorneys get it. Some buyers truly do finance 100% of the price, because they have no money, but good credit.  This does not make them a bad buyer.

2.  In “North Jersey”, the CEO of my past company referred to the deposit as “The 10%”, as if every buyer has $50,000 just begging to jump out of their checking account.

3. My office recently had an agreement (signed contracts) with another agent, and the seller refused to sign them because the buyer’s deposit on a $355,000 sale only included a $5,000 deposit. The seller demanded a deposit of $8,000.  As if…

4. A local attorney for a buyer of one of my listings  (he is what you may call a “Hoity-Toity” kind of guy) recently told my agent we should be embarrassed for accepting a $5,000 deposit on a $400,000+ sale.  Guess what?  It’s not 1955 anymore!

Now, for a dose of reality:  After selling hundreds of homes, I can tell you it’s simply not true that a bigger deposit “keeps the buyer from backing out” or whatever other goofy myth you may think.  If a buyer wants to get out of a deal, they’re going to have their crafty attorney do it, using a contractual loophole.

More important that a big deposit, make sure your buyer is grounded emotionally, and loves your home.

Top Reasons Why Agents Take Overpriced Listings

The market is wildy cluttered with many overpriced listings.  It’s time to understand “why”.

1. Many agents have no idea what they’re doing.   They’ll take it at any price you want.  They don’t know where the market is going, or “why”. 

2. A great percent of agents are afraid to insult the seller.  If the seller wants $50,000 too much, the agent considers it a victory if they list it for just $40,000 too much.

3. Some agents think you’ll reduce it after it doesn’t sell right away.  If you’re super-motivated, watch out for this ploy. 

4. That agent might be going for the monthly listing award, and needs 1 more!  It’s that simple.

5. They haven’t had a new listing in a while.  Ask them where their 4 newest listings are, and when they listed them. Watch them squirm.  Sometimes, an agent needs to come home and tell their spouse they just listed a property. especially when they’ve been in a slump.

6. It doesn’t cost them anything if it doesn’t sell.  For most agents, the entire cost of advertising belongs to their broker.  The broker never sees your house, and they rely upon the agent to get it right.

7. If it doesnt sell, it’s not their name on the sign.  Acccountability?  Most agents fluff it off, then say, “The seller would not listen to me about the price.”

8. Some make mistakes. We’ve all been there.  Some homes are not so easy to price. After 30+ folks have come and gone through your turnstiles, however, it’s time to reduce!

The Market is_____________.

It’s all perspective.  If you are selling a home for $400,000, and you bought it for $200,000, then you did allright.  But if you paid $425,000 a year ago, after closing fees on both ends, then the market stinks. 

If you are trading up to a home which you are paying $400,000 for, which may have sold for $430,000 a year ago, how bad is that?  You just saved $30,000 !

It’s all perspective.

60 Minutes = 60 Errors

While I enjoyed the premise of the 60 Minutes feature which compared brokers who charge 6%  vesus discount firms, and in particular Redfin, it’s startling to me how irresponsible they are in their reporting. For example:

1. The N.A.R. is not a governing body, they are our trade association. They don’t force us to do anything. Actually, for having 1.3 million members, they are pretty weak.  If I chose to charge 10% or $10, it’s my right, not theirs.

2. 6% is not “sacrosanct”. While it may be the policy of many brokers to charge what they feel is appropriate for their firm, there is no policy from broker to broker.

3. The MLS is not a National database. There are over 900 MLS’s. One day maybe, but there is not 1 MLS now. There are 5 (?) for example in NJ alone, and we can’t even agree on how to run them, so 1 for the USA is a stretch for now.  Realtor.com is not the MLS.

4. 60 Minutes asked for, then ignored data from many folks, including Realtrends, because they wanted to slant their story the way they wanted it.

5. Why Redfin?  Who knows, but boy, did they get some free press. At Help-U-Sell, we have been saving the consumer money for 30 years. Redfin must be a sexier story, though, as they are relatively new in most states where they operate.

While 60 Minutes has the right to cut, splice, edit, and slant the story any way they feel, more than ever, I have a complete distrust and lack of respect for the them. It unfortuantely makes me suspect of all media.  It makes me wonder how many of their stories, especailly the politically slanted ones, have any accuracy or truth at all.

On a very positive note, the story does show the consumer that there is more than 1 way to sell a home, and big perecntage commissions are under attack by credible companies like mine.

Memorial Day

What once began as a day of remembrance for the Civil War fallen was rightfully changed to remember all casualties of American wars.  While you are enjoying your picnics this weekend, make sure to teach your kids the reason for this special holiday, and to honor those who sacrificed all in order to protect our great country, and other countries not so fortunate.

Make an Offer (and Negotiating), Part 2

Having witnessed the interaction between countless buyers and sellers in my career, I am able to share a few tips for buyers about how to posture, and some do’s and don’ts:

1. If you are late for an appointment where the seller is waiting, apologize. This will diffuse an angry seller.

2. Give the seller a sincere compliment. For example, “I love your landscaping, and your home shows very nicely.”  Most buyers think compliments like this will start a mental cash register for a seller, forcing you to pay more.  Don’t be silly.

3. Having rapport with a seller may be the difference between them choosing your offer and another. 

4. Make sure your kids are well behaved as you tour the home.

5. If you are going to make an offer, indicate to the seller that they should be hearing back from you or your agent. Why play games?  It does no any good.

6. If you make a “low” offer, DO NOT make a list of all the reasons, i.e.:

a. Your carpet is shot, and needs to be repalced.  b. The kitchen is dated.  c. Landscaping needs help.

Believe it or not, I have had buyers insist on doing this. Three guesses on how the seller handled their offers.

7. Know your next move in advance. Don’t take 4-5 days to give a counter offer. Do it in a few hours. This will let the seller know that you are sincere.

8. Be aware that if you find the property to be very desirable, chances are, in any market, another buyer feels the same way. Be prepared for another bid to come in while you are negotiating.  It’s Murphy’s Law!

9. When all else fails, ask to meet the seller directly on neutral ground, i.e., the broker’s office.  Most agents hate this idea, because it undermines their ability and importance, and is in direct contrast to “Real Estate 101”.  It works!

10. If the negotiations stall, wait a few days, and ask again. And remember, 5-6 thousand dollars sounds like alot, but amortized over a 30 year loan, it’s only $35 monthly. I bet you waste more than that on ______________.

Make an Offer!

Do you like the house and location?  Is the condition acceptable?  Do you pretty much like everything about the house except the price?  Make an offer!  If the house is priced at $329,900, but you feel it is worth $300,000, there is no harm in making an offer.  Most sellers have some bit of negotiability built in to their asking price, some more , some less than others.

So, why do buyers not make offers when they like a house?

1. They are not ready to commit.  They are afraid, uncertain, and perhaps have not seen enough homes yet to know the difference between a great house and an ok house.

2. They don’t want to insult the owners with a low offer.

3. They don’t want to be let down with a rejection.

#1 I can understand. As for #2 & #3, so what?  At the end of the day, you both move on.  It doesn’t cost you a thing, other than some spent emotions, to make the offer.  Make it, and hope for the best.

Value vs. Cost

If you spent $15,000 for a new deck in May, then listed your house in July, did the value of your home go up by $15,000?  $10,000? 

If you were a FSBO selling your own home for $300,000 then listed with a broker for a 6% fee, would you raise the price to $320,000?

What or who determines the value?  Isn’t it the pool of buyers who determines value?  What a homeseller wants and the reality of what they get do not always equal.  Here are some of the best returns on investment a seller can make, in my opinion:

1. Paint. Use neutral colors.

2. Declutter.

3. General landscaping, keeping lawn neat and trim, free of weeds and fertilized.

4. New carpet.

5. New kitchen flooring and counters (as needed).

Value is in the eyes of the beholder. Personally, I would love a bar near a flat screen TV.  My Mom, however, would find no value in that.

Giving Homesellers Feedback

When homes were selling in less than 30 days, there was no need for feedback. Just wait another week or two, and it would be sold.  Now, sellers seem to be on a mission for feedback, and perhaps because as agents we set ourselves up for this by promising too much.

A good agent can give “pre-feedback” before the home even goes on the market, but one must be careful. There is a certain skill level an agent must have to get the listing and price it right, while  carefully explaining  what the home’s detractors are, with great sensitivity, but being direct and honest.

A good agent with an abundance of experience knows what the buyers will say, both positively and negatively before the home hits the market. If an agent is surprised by buyer and other agent feedback, then they were not paying close enough attention to the home and it’s attributes.  

The following is a list of reasons why some of my listings are not sold, but sellers want me to call every buyer and every agent regardless, for feedback.

1. Colors are too personalized.

2. Bad curb appeal, cluttered looking yard and poor landscaping.

3. Price. Can’t forget that one.  Or, “I can get more house for less price”.

4. The back yard is too small.

5. The upstairs is too small.

6. Overall condition of house. (This is always fun to share with your clients)

7. Busy road  / side road / backs up to busy road.

8. The floor plan did not work for the buyer.

One of the biggest time wasters in getting feedback is this- rarely can an agent talk a buyer or other agent into getting that buyer to buy the listing, if the buyer is not excited about the home. Sometimes, a buyer doesn’t even know why they don’t like a home- it just doesn’t feel right.

My suggestion for sellers is this:  Hire an agent you trust. Ask them what the 3 biggest hurdles are going to be in the selling of your home. For the items which you can change, take care of them. For those you cannot, reflect these deficiencies in your asking price. Then let your agent work new buyers and focus on getting your listing sold, instead of focusing on why the others didnt buy, which they should already know anyway.