Real Estate Thanksgiving

real estate thanksgiving
A Real Estate Thanksgiving

Thanksgiving is a time to take stock and be thankful.  Although the original Thanksgiving may have had a religious purpose, today’s secular holiday is about traditions.  However, it seems as if the tradition of enjoying a peaceful meal with family and friends has been increasingly difficult over the past few years.  But since the election is over, let’s try to talk about something worthy of discussion (at least until the next election cycle begins), such as real estate and housing. Yes, it’s a “Real Estate Thanksgiving.”

Why shouldn’t we focus on something we all can get behind? There is a good chance that your dinner guests will include someone will be moving next year.  Whether they are buying, selling, or renting a home, someone at the dinner table will be affected by such issues as housing affordability, mortgage rates, and availability of homes.

Things to talk about during your Real Estate Thanksgiving might be about mortgages, home sales, home prices, rent, maintenance, etc.  The topics are seemingly endless.

Talking about mortgages during the Real Estate Thanksgiving.  The current news is about mortgage interest rates.  How high will mortgage rates go?  Housing experts agree that mortgage rates will likely be about 5 percent next year (although the Fed just announced they may hold off on interest rate hikes after spring).  Paying more interest on your mortgage may not be your idea of positively affecting home sales.  However, increasing mortgage rates typically moderate home price growth because of affordability.  Another silver lining of increasing interest rates is a stimulated lending environment.  As a result, mortgage companies will likely further loosen lending requirements, which will increase the home buyer pool.

Real Estate Thanksgiving and home sales could focus on the reasons for the fall slowdown.  Will home sales rebound this spring?  You’re probably aware that home sales have dropped off during the fall.  Major media outlets have grasped the news and created the meme depicting “housing bubble 2.0.”  You can’t really blame them because there are many economists who are projecting bleak home sales to continue through spring.

The main reason for a disappointing 2019 forecast given by many industry insiders is affordability.  I contend that this rationale is shallow and one-dimensional.  There is no doubt that rising interest rates and increasing home prices are on the minds of home buyers.  However, the lack of home sale inventory is a dimension that is often forgotten when discussing home sales and rentals.  The lack of available homes for buyers and tenants to choose has forced many into fierce competition.  The result has been upward pressure on home prices and rents.

You have to also consider the economy at your Real Estate Thanksgiving. The strength of the economy is an aspect affecting the housing market that many haven’t discussed.  Whether you want to admit it or not, the economy is the strongest it has been in decades.  Consumer outlook is optimistic.  Home buyers and renters have expressed confidence about their job prospects too.  Employers are competing for talent, influencing the highest wage increases in over a decade.

Commenting on the economy, First American chief economist Mark Fleming believes that the economy will be a major force in the housing market (How Will a Potential September Rate Hike Impact Existing-Home Sales?; blog.firstam.com; September 18, 2018).  One of the features of his analysis for 2019 is “It’s the Economy and First-Time Home Buyer Demand, Stupid.”  He described a pent-up demand from a wave of millennial of first-time home buyers who will be in the market next year.

Fleming explained that home sales slump during an adjustment period that home buyers undergo when interest rates increase.  The same thing occurred in 2010 when rates increased from 4.5 to 5 percent.  However, the economy was struggling at that time, and home sales were stagnant.  Fleming described First American’s positive housing forecasts overcoming rising interest rates, saying,

“According to our Potential Home Sales Model, the boost from the strong economy and first-time home buyer demand should overcome any downward pressure from rising rates on home sales.”

Original article is published at https://dankrell.com/blog/2018/11/21/real-estate-thanksgiving/

By Dan Krell. Copyright © 2018.

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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.

Narcissistic real estate agents?

narcissistic real estate agents
When real estate agents are narcissistic

A common criticism of real estate agents is that they are manipulative and often focused on their own needs rather the home buyer or seller. Could it be that real estate agents are narcissists? Samuel Lopez De Victoria, Ph.D. describes a narcissist in the World of Psychology blog (psychcentral.com/blog) as someone who is preoccupied with “self, personal preferences, aspirations, needs, success, and how he/she is perceived by others.”  How can you tell when you are dealing with narcissistic real estate agents?

In an industry that relies on self promotion, it’s not as easy as you might think to spot narcissistic real estate agents.  They initially don’t often come across as manipulative or self centered. Dr. Lopez De Victoria describes. Extreme narcissists as being able to portray themselves in many ways to attract others to get what they want.  They will seem likeable  and be the “nice person.” They may often seem to be the “proper diplomatic” person.  They often appear to care about you, but it is not authentic empathy.  And of course, they are often a charming person.

Dr. Lopez De Victoria says that having some amount of narcissism is normal and even healthy. So even though most agents are not extreme narcissists, it does not address the remorse expressed by some about the agents they chose. Even though industry experts recommend interviewing several agents before buying or listing a home, the majority of home buyers and sellers do not. According to the National Association of Realtors® 2014 Highlights of the Profile of Buyers and Sellers (realtor.rog), 70% of home sellers and about 66% of home buyers only contacted one agent before listing or buying a home. Regardless of the remorse expressed by home buyers and sellers about their agent, maybe they would have chosen to work with other agents if given the chance.

Although interviewing several agents before you buy or sell a home won’t eliminate all remorse over your choice of agent, it can certainly increase the probability of your satisfaction. If you choose to interview several agents, you might consider having a conversation about their experience, knowledge, and expertise. Additionally, knowledge about the local neighborhood market and surrounding neighborhoods is extremely important because market trends are hyper-local. You should also talk about the agent’s specialized experience, if your buying or selling situation is unique.

You should also ask about the agent’s limitations. This is an area where some agents get themselves into trouble is by not knowing, or are unwilling to disclose their limitations to potential buyers or sellers. By discussing the agent’s limitations, you can understand what the agent can and cannot do as well as know when the agent will refer you to other professionals for advice; this can also frame your expectations.

To get some insight into the agent’s way of thinking and service, you might consider asking atypical questions too! Surely an agent is more than happy to talk about their accomplishments, number of sales, and even name drop a past client or two; but what about the listings that didn’t sell? Have they been fired by a client?

The ratio of expired to sold listings can be telling; is the agent focused on servicing your listing or is it a “numbers game” for them? If an agent is open to sharing those figures, ask for reasons why the listings didn’t sell; was it about price or the marketing? If an agent has a history of being fired, it could be a possible indication of issues with the quality of service, including over-promising and not meeting expectations.

Original published at https://dankrell.com/blog/2014/11/14/narcissistic-real-estate-agents/

© Dan Krell
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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.

Home Selling Tips

Because not all listed homes sell, you should be strategizing how to make the most of your sale. What to do? Here are some home selling tips .

Think about the basics that go into a successful home sale. The first is to price the home according to the comparables in the neighborhood. The second is to consider the condition of the home. The third is to have a marketing plan. And lastly, you should have a close working relationship with your Realtor.

Home selling tips

Of course your home should be priced according to the comparables in the neighborhood, and progress should be gauged with the other homes on the market in the neighborhood. That means besides pricing according to the homes that are comparable, your Realtor should expect results within the parameters based on those sales also. Regardless of what you hear, the seller sets the selling price. Your Realtor is only an advisor providing you the data and opinion.

Sale price

Comparing your home to similar homes that sold is critical in deciding a sale price. Comparables are homes that match your home in style and size. If you have a three bedroom rambler, you should compare your home to other three bedroom ramblers in then neighborhood.  Typically, comparables are restricted within a subdivision or within about 0.5 mile to 1 mile. And sales not older than six months (unless there is a lack of home sales).

Home condition

Why is your home’s condition important when deciding a sale price? If your home has deferred maintenance or hasn’t been updated for twenty years, it’s not going to get the same price as the renovated similar home across the street. Be honest with yourself about the home’s condition.  If your home is not in move-in condition, think about the cost of renovating in the price along with market conditions.  If it’s a buyer’s market, you may have to consider a lower price or the home will languish waiting for a buyer.  If it’s a seller’s market, there are more home buyers willing to buy a home with the intention of renovating it.

Marketing plan

You need a roadmap to success. If your Realtor has not yet presented you with a marketing plan, ask for one. Your Realtor should have a plan of action to sell your home. Putting a sign in front of your home and entering the information in the MLS is not typically enough sell a home. Market conditions frequently change, and your Realtor should have a concrete plan to sell your home. The plan should include not only how the home will be marketed, but how the agent will take you from contract to closing.

Your listing agent

The final aspect that is important in selling your home is the relationship between you and your Realtor. Besides having confidence in your Realtor, you should feel comfortable being honest (for good and bad).  It’s not a good sign if your Realtor is often defensive when you express concerns and needs. Your Realtor, on the other hand, should also be honest, as well as timely with information concerning your home. Besides communicating the activity of the potential home buyers, they should also keep you up to date with the neighborhood market keeping an eye on the other homes on the market.

How will you market your home and what will you do if the market changes? When you are interviewing Realtors to sell your home ask about their marketing plan. Ask about a home pricing strategy.  Ask how your home’s condition affects the price.  Ask how the agent communicates and what you should expect from them.

Disclose disclose disclose

It is not unreasonable for home buyers to seek assurances about the homes they purchase. One method for obtaining a sense of confidence about the home is having a home inspection. Sometimes it is not as much as wanting to know what needs to be fixed as much as wanting to know what they were getting into, as one of my clients casually stated. However, home inspectors are not perfect and there are numerous conditions in the home that could go undetected.  The home seller golden rule is disclose-disclose-disclose.

In the past, it used to be buyer beware. Unscrupulous home sellers racked up complaints. Consumer advocates pushed some legislatures to enact a property disclosure law. Property disclosure laws have been enacted in about thirty states. Here in Maryland, the law has been was around since 1994.

It had been incorrectly thought by home sellers (and some real estate agents), that if the disclaimer is given, the homeowner did not have to provide any information at all about the home- including relevant material facts and latent defects. In fact, some home sellers would wrongly choose the disclaimer statement to not reveal material facts or latent defects.

The disclosure addenda are constantly changing. A significant change at the time of this writing to the required Maryland disclosure still requires the homeowner to provide either the disclosure statement or disclaimer.  Except the added burden of disclosing known latent defects is also required, even if you disclaim.

If you are selling your home or thinking of selling your home in the future, you should discuss with your Realtor the Maryland disclosure/disclaimer statement and recent changes to the disclosure laws. If you have any doubt about your obligations as a home seller or do not understand the disclosure law, you should consider consulting an attorney.

The golden rule of disclosure is to disclose. An issue that is disclosed to a home buyer before they enter into a contract with you is a piece of information that the home buyer will keep in mind as they purchase the home. However, undisclosed issues can come back to bite you, even after the sale.

by Dan Krell © 2005