Open house and carry on

Open House Still Part of Home Buying Process

open house
Stats from NAR’s Profile of Home Buyers and Sellers 2017 (infographic from nar.realtor)

The tradition of having an open house, like other real estate customs, has recently become a source of debate over its value and effectiveness.  According to Rachel Stults, the tradition began over one hundred years ago when brokers allowed prospective buyers to “inspect” the house by having it open to the public (A Brief History of Opening Our Homes to Total Strangers; realtor.com; April 21st, 2015).  The house was advertised as “open for inspection.”  Of course, it was a much different time. Home buyers were not represented, and there was no home inspection as we know it today.  Hence, the “open house,” as first conceived, served an important function for the both the buyer and the seller.

As the housing industry evolved, visiting an open house morphed into a Sunday tradition.  Open houses were not just for home buyers, as it also became a form of Sunday afternoon entertainment for the general public.  The internet changed the tradition by virtually opening the house to the public through pictures and tours and allowing buyers to identify the specific homes they want to visit.

There is disagreement among real estate agents and other housing experts on the merit and effectiveness of the open house.  Additionally, home buyers have significantly changed how they use the open house over the last two decades.  According to the National Association of Realtors’ Profile of Home Buyers and Sellers (nar.realtor), twenty-eight percent of home buyers surveyed in 1999 indicated they found their home by visiting an open house, compared to only seven percent in 2017.

Adding doubt is a recent study that indicates having a public open house actually decreases the probability of selling a home by about 6.1 percent (Allen, Cadena, Rutherford & Rutherford; Effects of Real Estate Brokers’ Marketing Strategies: Public Open Houses, Broker Open Houses, MLS Virtual Tours, and MLS Photographs. Journal of Real Estate Research: 2015, 37:3, 343-369).  The authors indicated that having a public open house can increase your home’s days on market up to twenty-five days.

Although the open house may have lost its clout as a selling tool, it is still a major aspect of the home buying process.  Open house data from NAR’s 2015 Profile of Home Buyers and Sellers indicated:

-48 percent of all buyers surveyed used the open house as part of their home search process.
-Repeat home buyers are more likely to find their home from an open house compared to first-time buyers.
-The income bracket most likely to frequent an open house has a median income between $250,000 and $499,999.
-Home buyers below the age of 65 (but older than 24) are more likely to frequent an open.
-The Northeast and West regions of the US have more successful open houses.
-Buyers seeking a new home visit open houses more than those seeking a re-sale.
-Couples (married and unmarried) are more likely to visit open houses than single home buyers.
-And, ninety-two percent of home buyers surveyed indicated that open houses were at least “somewhat useful.”

If you decide to have an open house, put away your valuables and medications so as not to tempt thieves who may wander into your home.  Have a discussion with your agent about focusing on selling your home, instead of trying to get more clients.  And finally, don’t distract from your home by having an “event,” which employs food trucks, bounce houses, and other open house gimmicks.

Copyright© Dan Krell
Google+
If you like this post, do not copy; instead please:
link to the article,
like it on Facebook
or Twitter.

Protected by Copyscape Web Plagiarism DetectorDisclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Buyer’s market home selling

Buyer's Market
Home Selling Mistakes (infographic from floridarealtors.org)

As winter approaches, many home sellers will be contemplating their next move after their homes have not sold.  It is likely that a volatile housing market awaits home sellers during the first half of 2018.  If you’re planning to list your home, you should have a selling plan that is able to adjust to market conditions quickly.  In other words, know about home selling in a buyer’s market.

The good news for home sellers is that this year’s home sale prices continue to climb, as the September 26th 20-city composite of the S&P Corelogic Case Shiller National Home Price Index (spindices.com) revealed.  The national index during July increased 5.8 percent compared to the same period last year, while the Washington DC area realized a 3.3 percent year over year gain.  However, there is expectation home sale prices may moderate or even slightly decrease in the first quarter of 2018 because of Fed policy and other market forces.

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices stated in the release:

“While home prices continue to rise, other housing indicators may be leveling off. Sales of both new and existing homes have slipped since last March. The Builders Sentiment Index published by the National Association of Home Builders also leveled off after March. Automobiles are the second largest consumer purchase most people make after houses. Auto sales peaked last November and have been flat to slightly lower since. The housing market will face two contradicting challenges during the rest of 2017 and into 2018. First, rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures. Second, the Fed’s recent move to shrink its balance sheet could push mortgage rates upward.”

Of course, home sale price indices only show sale prices for homes that sell.  And while home sale prices are increasing back to record levels in many areas, the volume of homes sold during 2017 so far is disappointing.  According to a September 20th NAR news release (realtor.nar), August’s existing home sales dropped 1.7 percent.  The Pending Home Sale Index for August dropped 2.6 percent, which made the NAR revise their 2017 home sale forecast to be “slightly below the pace set in 2016.”  Home sale volume in the first quarter of 2018 may also lag due to continued lack of inventory and anticipated increasing mortgage interest rates.  Lawrence Yun, cheif NAR economist, quipped

“The supply and affordability headwinds would have likely held sales growth just a tad above last year, but coupled with the temporary effects from Hurricanes Harvey and Irma, sales in 2017 now appear will fall slightly below last year…The good news is that nearly all of the missed closings for the remainder of the year will likely show up in 2018, with existing sales forecast to rise 6.9 percent.”

Since these are August sales figures from the NAR, it is an unfortunate truth that August sales were not really affected by hurricanes. Mostly because hurricane Harvey hit Texas the very last days of August and Irma hit Florida in September. The main affects of the hurricanes disruption to existing home sales will be seen in September’s statistics. And “missed closings” is a euphemism for phantom closings, because they don’t really exist. So, with regard to sliding home sales, you should take Yun’s “headwinds” of supply and affordability very seriously.

Home selling in 2018, a buyer’s market?

Home sellers positioning themselves solely on this year’s home sale prices may be in for a rude awakening next year.  Sellers may feel as if the market is getting soft, however that may change the latter half of 2018 as home prices moderate.  Sellers will need to be reasonable.  They will need to have awareness of many factors besides home sale prices, including existing home sales volume and neighborhood sale trends.  Including home selling in a buyer’s market.

If you’re planning to sell your home, you will need to play to your audience (home buyers), and listen to their feedback.  Know how to sell in 2018.  Prepare your home before listing it in the MLS by repairing deferred maintenance and possibly making updates.  Home buyers have a track record of paying more for a home that has been totally renovated.  However, if you don’t completely repair and/or update your home, be prepared to lower your sale price.

Be flexible to quickly adjust to the market.  Feedback is highly important to get other’s perspectives about your home.  However, take Realtor feedback with a grain of salt.  Instead, have your agent collect buyer feedback at open houses. Home buyers tend to be more honest when giving feedback, and it can be especially helpful in a buyer’s market.  If the consensus is that the price is too high, the price may actually be too high.  If buyers are turned off by the condition and/or curb appeal of the home, consider making repairs or lowering price to reflect the condition.  If they are focused on your décor, consider hiring a professional stager to make the home more appealing.

Rather than a soft market, we are experiencing the struggle for a balanced market due to an inventory shortage and sharply decreasing affordability.  The last year and a half has been all about the home seller.  However, 2018 will be about the home buyer.  Home selling in a volatile or buyer’s market can be challenging. If you’re planning a sale, be realistic about your home’s condition and value. Over pricing your home from the start can make your home languish on the market, which could get you a much lower price if it sells.

Copyright© Dan Krell
Google+

If you like this post, do not copy; instead please:
link to the article,
like it at facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Attract home buyers – Zillow listing

attract home buyers
Attract home buyers (infographic from blogs.realtor.org)

If you’re selling your home, check your Zillow listing.  You may find that the information may not be complete.  Or worse, the information posted is from a previous sale.  But don’t worry, Zillow now gives you the tools to take control, attract home buyers, and improve your sale.

Most of the information you see on your Zillow listing is syndicated from the MLS.  This means that your listing agent uploads information to the MLS and the MLS sends it to other websites.  If you’re not happy with the listing, your agent can change some information via the MLS, and/or log into the Zillow listing to make changes.  However, if your listing agent is too busy to service your listing or does not know about logging into your Zillow listing, you can now take control and attract home buyers.

Zillow offers home owners the opportunity to “claim” their home to access features to personalize information to help home buyers (and Zillow) to get a better picture about their home.  The “Personalized Owner Dashboard” gives you control of your listing (zillowgroup.com/news/personalized-owner-dashboard).

Of the many available tools, online metrics is useful to see how much attention your home is getting from home buyers.  You can view your home listing’s online activity, including how many times the listing has been viewed compared to your competition.

Improve on the house description by adding “What I love about the home.”  This feature conveys to home buyers what attracted you to your home.  Elicit the home buyer’s emotions to visit it and attract home buyers by adding your story.

The MLS limits the number of pictures on your listing.  So, solely relying on the MLS feed can also limit your Zillow listing.  Increasing the number of pictures and adding video can make your home listing more robust, and attention getting.  Zillow allows you (and your agent) to upload additional pictures.  You can upload, arrange, and describe additional photos to help give home buyers the best view of your home.  Zillow even lets you upload a video that you record from your smartphone!  Besides including a link to the MLS virtual tour, Zillow added the “walk through” video feature last year.

Not happy with your Zestimate?  You’re not alone.  Zillow’s Zestimate tool has received mixed reviews since its inception.  Many home buyers and sellers have used the tool as a guide in to help their buying and selling by looking at house and neighborhood trends.  However, there has been criticism from home owners and real estate agents saying that home valuation tool is not inaccurate and does not correctly portray their homes and listings.  As a response, Zillow has changed the algorithm over the years.  And this year, Zillow announced a $1,000,000 prize for the best model to improve the Zestimate tool (zillow.com/promo/zillow-prize).  But that hasn’t stopped a class action suit that complains that the Zestimate is “misleading” home buyers (Rachel Koning Beals; Do Zillow ‘Zestimates’ mislead home buyers? Lawsuit claims yes; marketwatch.com; May 23, 2017).

Improve your Zestimate.  Yes, you can improve your Zestimate.  The dashboard allows you to update the facts about your home.  Updating your home’s information will give home buyers a better description, and it can possibly improve the Zestimate.  Since the Zestimate is based on public records, all your home’s information may not be current or complete.  Telling Zillow about the extras, such as bathrooms, a finished basement, a deck, etc. can be a plus and attract home buyers.

Copyright© Dan Krell
Google+

If you like this post, do not copy; instead please:
link to the article,
like it at facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Selling your home – try, try, again

selling your home
Why your home didn’t sell (infographic from househuntnetwork.com

If your home didn’t sell this spring, it’s ok.  Rocky never quit when he lost, and neither should you.  No one said selling your home was easy.  Take stock and plan for your next sale.

If your home didn’t sell, you’re not alone.  Consider that April’s existing home sales dropped 2.3 percent, according to the National Association of Realtors May 24th press release (nar.realtor).  NAR Chief Economist, Lawrence Yun, stated that the April slide was “expected” because March sales were very strong.  Additionally, he pointed out that new and existing inventory is not meeting demand.  Many prospective home buyers are frustrated because there is not much of a choice and they are not finding the homes they want.  When selling your home, does it have features that buyers want?

Pending home sales also declined in April.  Based on contracts signed, the forward looking indicator suggests additional decreased sales in the months to come.  Yun also attributes the prospect of future decreased home sales to low housing inventory. He stated that the inventory of existing homes for sale decreased about 9 percent from the same time last year.

When selling your home, consider that the appearance of a brief period of slow sales is not necessarily a warning sign of an impending housing crisis.  Instead, a slower sales trend may be considered part of a normal economic cycle after a breakthrough sales year.  It is a sign of a healthy market seeking balance.  The cycle is caused by home buyers and sellers struggling to find equilibrium.

If your home didn’t sell, you may have a better chance in a few months when the cycle changes.  However, before going with the same strategy, try to analyze what happened during this listing period.  You may find interesting and revealing information, about your home and your agent, that could help you the next time.

First, talk to your listing agent.  If they were active in marketing your home, they should have a wealth of information.  Start by asking them about showings.  The number of showings determines buyer interest in your home.  If you had few visits to your home, it could mean the price is too high.  It could also be a result of low quality MLS pictures and information.  Buyers start with the MLS listing to determine if the home is worth a visit.  However, if you had plenty of buyer visits but no offers, there may be other issues that need attention.

Check with your agent for feedback.  Agents often communicate about their visits to homes.  Home buyers who attend open houses also provide feedback.  Skip over the positive feedback because agents and home buyers often offer positive feedback just to be polite, even if it’s not warranted.  Look toward critical reviews for help to improve your home presentation and marketing.  If the same item is mentioned multiple times, you should take that as an indicator and begin there.

When selling your home, price, presentation and marketing are relatively easy to adjust.  However, your home’s condition could be a deterrent.  Buyers in the current market are very demanding and selective.  They want a turn-key home that has the recent updates featuring the newest technologies.  Even though housing inventory is low, many home buyers will not settle for any house.  If your home is not updated relative to the top sales in your neighborhood, you may have to consider a major price adjustment.  If your home’s condition is holding back a sale, do a cost-benefit analysis.  You may discover that selling for less could net you more than if you spent tens-of-thousands on renovations.

Copyright© Dan Krell
Google+

If you like this post, do not copy; instead please:
link to the article,
like it at facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Gonzo home sales and prices

gonzo home sales and prices
Gonzo Home Sales and Prices? NAR Housing Expectations 2017 infographic (from realtor.org)

Everyone seems to be excited about this week’s Case-Shiller home price numbers reported for February.  Even the title of the April 25th press release sounded a little giddy: “The S&P Corelogic Case-Shiller National Home Price NSA Index Sets Fourth Consecutive All-Time High” (spindices.com).  Yes, the Case-Shiller 10-city and 20-city composite indices are close to the 2007 level.  But before you become intoxicated by reports of gonzo home sales and prices and run off to sell your home, here’s more to the story.

Gonzo home sales and prices

Gonzo home sales and prices depend on the market.  According to the recent Case-Shiller release, Seattle, Portland, and Dallas topped the charts with annual index gains of 12.2 percent, 9.7 percent, and 8.8 percent respectively.  Not surprisingly, Seattle and Portland have been the hottest real estate markets over the past year.  Tampa’s and Cleveland’s housing markets are at the opposite end of the spectrum with decreases of -0.5 percent, -0.3 percent during February; while Miami’s home price index was unchanged.  Washington DC reported an annual gain of 4.1 percent, with a 0.2% gain reported in February.

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices stated:

“There are still relatively few existing homes listed for sale and the small 3.8 month supply is supporting the recent price increases. Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates.

Housing’s strength and home building are important contributors to the economic recovery. Housing starts bottomed in March 2009 and, with a few bumps, have advanced over the last eight years. New home construction is now close to a normal pace of about 1.2 million units annually, of which around 800,000 are single family homes. Most housing rebounds following a recession only last for a year or so. The notable exception was the boom that set the stage for the bubble. Housing starts bottomed in 1991, drove through the 2000-2001 recession, and peaked in 2005 after a 14-year run.”

Gonzo home sales and prices are dependent on local real estate.  It’s true, housing inventory is lacking.  At a time when homes should be coming to market for the spring season, the Greater Capital Area Association of Realtors Montgomery County single family statistics for March 2017 indicated that there were -1.8 percent less new listings compared to the same time last year.  And the total number of active homes for sale are -16.4 percent less than the same time last year.  Although June is usually the peak time for home sales and prices in our area, home sales increased 17.9 percent month over month, and is 11.7 percent higher than the same time last year; while average home sale prices increased less than 1 percent (gcaar.com)!

Holy shades of 2005, Batman!

Housing stats sound eerily like those before the housing bubble crash.  But this market is different in many respects.  Consider that housing speculation is not as prevalent as it was at that time; homes are not being flipped in a matter of days in most areas.  And home buyers are more sophisticated and savvy than they were in 2005; home buyers are more demanding, as well as sensitive to home condition and price.

Yes, it’s true that house values are increasing.  Yes, home sales are breaking records.  But not all homes sell.  You should realize that that home sale stats includes data of homes that sell.  Homes that don’t sell are not included in the numbers of closings, nor are they included in home sale prices.

Homes that don’t sell tend to be overpriced for the home’s condition, or neighborhood.  Sometimes, the physical location of the house is not ideal; for example, situated next to train tracks.  If you’re selling your home this year, don’t get greedy.  Get a professional opinion on pricing your home correctly; over priced homes tend to not sell quickly, or not at all.

Pricing your home may not be as easy as you think.  Empirical research has confirmed that there are many variables that affect sales price.  Factors that impact home sale price include the home’s location, condition, amenities, and market timing.

If you want to sell your home quickly and capitalize on home sale trends: consider repairing deferred maintenance issues, making updates, and don’t take home buyers for granted.  When making repairs and updates, don’t go for the cheapest quote because it will likely show.  Also, make sure your contractors are licensed.

Home buyers are just as savvy as you, so any attempt to deceive will backfire and hurt your sale.  Focus on broadening your home’s appeal.  Consider making your home turnkey, since most home buyers are looking for a home they can move right in and without making immediate repairs and updates.

For a guide on a successful home sale, take a look at “The magic of 4 to sell a home

If you like this post, do not copy; instead please:
link to the article,
like it at facebook
or re-tweet.

Protected by Copyscape Web Plagiarism Detector
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.