home seller Archives - Page 19 of 31 - Real Estate News and Commentary

July 9, 2015November 23, 2021

Are you feeling lucky? Belief in luck may boost home sale

Luck is not an attribute that real estate agents will talk about during their listing interview. It’s true. Agents are apt to discuss many things, such as their success, their view of the market, and hopefully what they will do for your listing; but they won’t acknowledge that luck, or serendipity, may have had something to do with the success of some of their transactions. Recent research indicates that luck is actually an important characteristic in sales; and some are “luckier” than others.

Joël Le Bon, Professor of Marketing at the University of Houston’s Bauer College of Business, has been studying the relationship between sales and luck for some time. He recently discussed his research for the Harvard Business Review (Why the Best Salespeople Get So Lucky; hbr.org; April 13, 2015) saying, “…downplaying the power of luck, you stand to fall behind competitors who have learned how to manage it.”

That’s right – managing (or provoking) luck. Even though many “de-emphasize luck” and focus on tangible and measurable actions, Le Bon’s studies show that the combination of the belief in luck and specific sales behaviors have a mutual positive relationship. More precisely: believing in luck has a positive effect on sales behaviors; and exhibiting a specific set of behaviors increases the person’s luck in sales.

Le Bon gives an example how managed or “provoked” luck effects sales. A study of students selling golf tournament sponsorships revealed that those who believed in luck increased their sales 41% over those who relied on “standard sales practices.” And that “76% to 88% of the luck circumstances were incidences of provoked luck.”

Among the luck boosting behaviors that Le Bon listed, includes: competitive intelligence, mindfulness, and change circumstances are relevant to home sales. Those who are luckier tend to be: knowledgeable about the market, competitors, customers and prospects; mindful about their customers’ objectives and open to unexpected opportunities; and thinking outside the box by going outside their comfort zone and seeking new opportunities outside their sphere of influence.

Many successful listing agents also have these traits. Although not attributed to luck, their success could be viewed as “provoked” serendipity. However, they are often able to convert Le Bon’s list of actionable behaviors into successful sales and satisfied clients. Pricing homes accurately requires knowledge of local neighborhood sales trends, not to mention the overall market. Successfully negotiating transactions requires an understanding of buyers and their agents, as well as communication skills. Servicing a listing and being attentive to their clients requires being aware and addressing their needs. And of course, going outside their sphere of influence allows contacting and connecting with more prospective home buyers to sell their listing.

Even though luck, as such, is not recognized as an asset for your listing agent to possess; belief in luck seems to be part of a repertoire of beliefs typically described as a positive attitude – which has been demonstrated time and again as having positive effects on sales outcomes.

However, it’s not just your agent’s beliefs and actions that can affect your home sale. Your attitudes and beliefs can also facilitate or interfere with the sale. If you have a strong emotional attachment to your home, or have unrealistic expectations; your home may not sell, or you may be unsatisfied if it does –regardless of your agent’s skills. But then again, maybe all you need is a little luck.

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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.

May 30, 2015July 6, 2019

Hot regional housing markets change reliance on MLS listings

Good news for home sellers, in most US regions. Tuesday’s news release from S&P/Case-Shiller Home Price Indices indicates a nationwide home price gain. The 10-city and 20-city composites continue to show home price gains, as the composites realized a 4.7% and 5.0% year over year gain respectively (month over month gains were 0.8% and 0.9% respectively). The nearby Washington DC region was not as robust as the other US regions in the composite, however, as home prices gained about 1% year over year and about 0.8% month over month (us.spindices.com).

The S&P/Case-Shiller index seems to be in agreement with the U.S. House Price Index Report issued by the Federal Housing Finance Agency (fhfa.gov), which indicated that national home prices gained 1.3% during the first quarter of 2015. However here in Maryland, home prices did not fare as well with a 0.38% decline year over year.

Hot markets in western regions of the US, such as Washington, are making news besides strong home prices. In one of the hottest markets in the nation, a Seattle Washington broker has decided to drop out of their MLS. Counter intuitive to the idea of maximizing listing exposure, Rob Smith of the Puget Sound Business Journal reported that Quill Realty is dropping out of their local MLS (Here’s why this Seattle realty company just ditched the MLS; bizjournals.com, May 18, 2015).

Instead of MLS placement, Quill intends to place listings on a number of websites, including Zillow, Redfin, and Realtor.com. The rationale is that sellers will save money from the 1% commission that is charged by Quill; while buyers of Quill’s listings “… will become responsible for working out a financial arrangement with their own broker.”

Of course, this is not an entirely new idea. There have been a number of seller oriented business models that have been devised over the years; with new variations popping up during hot markets. Many discount brokers and MLS placement services, which have survived the housing downturn, have continued to market their business model successfully.

Innovative or not, hot markets tend to make brokers become more protective of their listings by seeking ways to make them proprietary. Low housing inventory in some markets, along with increasing home prices and buyer competition can make a home listing a hot commodity. I will remind of the recent report indicating that pocket listings are on the rise. Pocket listings are listings kept out of the MLS and shown only to a select network of contacts and clients. And although pocket listings are often associated with luxury real estate, pocket listings in hot markets can occur across all price ranges because of the increased home buyer competition.

In response to recent trends, several regional Realtor® groups and brokers have been formulating a nationwide consumer MLS to provide the consumer with up to date relevant information (brokerpublicportal.com). Board member of the Broker Public Portal, Robert Moline (Home Services America) stated, “There is a tremendous amount of support and momentum throughout the MLS and brokerage communities to create a new choice for how and where to display their listings…”

And even though many home sellers are taking advantage of a seller’s market in their respective markets, home buyers are becoming increasingly resourceful as well. Many buyers are learning how to find home for sale in places other the MLS. Besides alternative listing websites, many buyers are also relying on neighborhood listservs (internet email lists) and internet groups for home sale notifications.

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By Dan Krell
Copyright © 2015

May 8, 2015September 24, 2018

Basements, humidity and dehumidifiers

There seems to be a misconception of the relationship between basements, humidity and dehumidifiers; which probably results in the dehumidifier being one of the most misunderstood and least respected household appliances. This is apparent because many first time home buyers are turned off to any home where they see a dehumidifier, thinking there is a moisture problem. The dehumidifier doesn’t even have to be running; it could be turned off and tucked away in a closet.

The battle that all home owners deal with is keeping moisture out of the basement. Of course, regular maintenance can retard water penetration from the exterior: having the proper grading and extending downspouts will keep rainwater away from the home’s foundation. And serious water penetration issues should be resolved by licensed professionals. However, if the home doesn’t have a foundation or water penetration issue, basement humidity is still an ongoing battle. And if your home has an in-ground basement, chances are you know what I am talking about.

Believe it or not, it’s not necessarily a water problem that dictates humidity in a basement; but rather it’s physics. More precisely: thermodynamics and entropy. Put simply: temperatures in your home seek equilibrium, and warm air will move toward cooler air. Basements tend to be cooler than the upper floors because warm air rises. However, as the temperature seeks equilibrium, the warm air will also move toward the cooler basement air. When warm air meets cold air, the air condenses and develops humidity.

Basements, humidity and dehumidifiers

Although humidity is generally thought of as the amount of moisture in the air; according to Dehumidifier Basics(energystar.gov), it is most commonly referred to as “relative humidity” or RH. “RH is the amount of water vapor actually present in the air compared to the greatest amount of water vapor the air can hold at that temperature.” An RH between 30% and 50% is considered to be optimal. When RH is above 50%, bacteria and mold may grow.

If you don’t have a dehumidifier, you might consider buying one to help maintain the optimal RH in your basement. Dehumidifiers are differentiated by capacity, which is described as pints per 24 hours (measured by the size and conditions of the area where the unit may be placed). Energy Star provides a chart to help you decide the capacity best suited for your needs.

If you already have a dehumidifier, you might be surprised to know that most units are not meant to be operated in areas that are below 65°F (according to Energy Star); however, there are models that are designed for lower temperatures. If you use your dehumidifier in temperatures below 65°F, the unit may not function properly even though you may hear the compressor running. Below 65°F, frost can form over the condensing coils inhibiting the unit from removing moisture from the air. If your unit frosts, it should be unplugged and allowed to defrost.

Although some units are designed to be placed against walls, Energy Star recommends placing your dehumidifier in an area that allows free circulation of air around the unit for optimal operation. And of course, refer to manufacture’s manual for operation and electrical safety warnings.

Maintaining a comfortable RH level in the home can be achieved, and it starts by proper home maintenance. However, a dehumidifier may be necessary for optimal comfort. Energy Star (energystar.gov) provides consumer information about selecting and safely operating a dehumidifier.

Original published at https://dankrell.com/blog/2015/05/08/basements-humidity-and-dehumidifiers-whats-the-problem/

By Dan Krell

April 2, 2015

Home seller expectations are high for 2015 market

Have you ever waited to be seated in the new trendy restaurant? You’re anticipating the menu, and thinking about what you might eat. If the wait is too long, your patience wears thin; you begin to calculate the time to the next open table. You might even scan the dining room trying to determine how much longer individual diners intend to stay at their table. If your wait is too long, you might even decide to leave. If you do get seated, you might be disappointed with an over-priced and limited choice menu.

Today’s housing market is much like the visit to that restaurant. Home buyers are motivated to jump into the market and eagerly await the next home listing; and like the restaurant menu, are often disappointed with limited choice and high prices. Additionally, low housing inventory, much like the restaurant’s long table turnover, may leave many to look for other options; some would-be home buyers are putting off their purchases and renewing leases for another year.

One of the factors that contribute to low housing inventory is the velocity of home ownership (how often a home gets sold). And indeed, home owners are staying in their homes longer before selling, according to a special study conducted by the National Association of Home Builders (nahb.org). Dr. Paul Emrath, of NAHB’s Economics and Housing Policy, provides details in a follow up study showing a decline in home owner mobility since 2007. Single family home owners stayed in their homes for an average of 12 years between 1987 and 2007. However, since 2007 the average time the home owner stayed in their home increased to 16 years. And since 2001, first time home buyers stayed in their homes 4 to 7 years less than move-up buyers.

If you’re one of those who feel that your stay in your home has been long enough, it may seem as if the market would favor a home sale. You might believe that the low inventory environment should make your sale quick, and possibly resulting in multiple offers. After all, the low number of homes listed for sale was cited for price growth by National Association of Realtors® Chief Economist Lawrence Yun in the NAR March 23^rd press release (realtor.org). And it makes sense to think that that first time home buyers should be motivated by relatively low interest rates and higher rents.

But before you set your expectations too high, consider that not all homes sell quickly – even in today’s low inventory environment. The Montgomery County average days on market during February exceeded 70 days. And even though the NAR reported a 7.5% increase in the average home prices across the country during February; the Montgomery County average sale price during February decreased 5.4% compared to the previous February and decreased 2.1% compared to January, according to RealEstate Business Intelligence (getsmartcharts.com).

If you’re putting your home on the market, don’t take home buyers for granted. Just like diners at the restaurant, home buyers have high expectations and want choices. Home buyers typically look for a combination of location, quality, and value. And just because inventory is low, buyers are not compelled to purchase your home – especially if the home is perceived to be over-priced.

For best results this spring – work with your listing agent to prepare your home, and price it according to neighborhood trends.

January 1, 2015July 5, 2019

Relief and uncertainty for short sellers

Although we’ve come a long way, the housing market is still feeling the effects of the financial and foreclosure crises. Consider that the CoreLogic’s October National Foreclosure Report (corelogic.com/about-us/news.aspx) indicated that there were 41,000 “completed foreclosures” (the total number of homes lost to foreclosure) during October, which is a 26.4% reduction of the 55,000 recorded during the same time last year; and about 65% lower than that of the peak during September 2010. Although moving in the right direction, the 41,000 completed foreclosures is a far cry from the 21,000 average monthly recorded completed foreclosures before the housing downturn (2000 and 2006).

Also seen as progress is the increasing number of home owners who are paying their mortgages; which is observable from the decrease of mortgage defaults since 2010. The November 2014 S&P/Experian First Mortgage Default Index, was 0.97%; and although this is slightly higher than the 3 months prior, there has been a -3.72% change from the November 2010 index of 4.69% (us.spindices.com).

Negative equity mortgages are making headway too. CoreLogic reported on September 25^th (CoreLogic Reports 946,000 Residential Properties Regained 1 Trillion Dollars in Total Equity in Q2 2014) that “950,000 homes returned to positive equity” during the second quarter of 2014. The number of underwater borrowers dropped to 5.3 million (compared to 6.3 underwater borrowers reported in the previous quarter). However, as of Q2 there were 3.2 million underwater borrowers with first mortgages, and an additional 2.1 million underwater borrowers with first and second mortgages.

The number of home owners that continue to be underwater may have been the impetus for Congress to pass the Mortgage Forgiveness Debt Relief Act before adjourning for break; the legislation was subsequently signed by the President. A December 17^th National Association of Realtors® press release (realtor.org) praises the passage of the legislation meant to help “distressed home owners and commercial property investors with transactions made during 2014.” NAR President Chris Polychron stated, “Realtors^® strongly supported the bipartisan Mortgage Forgiveness Tax Relief Act, which was included in the package to prevent underwater borrowers from paying taxes on any mortgage debt forgiven or cancelled by a lender in a workout or after their home was sold for less money than was owed.”

The Mortgage Forgiveness Debt Relief Act of 2007 was initially passed and signed into law December 20^th 2007; which, if you remember, was a time when the housing market was in a sharp downturn. Any debt forgiveness from lenders (either from a mortgage refinance/ modification or a short sale) typically resulted in a huge tax liability (debt forgiveness is usually considered income). The legislation provided tax relief through 2009 to qualified underwater home owners and sellers seeking to avoid foreclosure. The legislation was extended several times thereafter.

Since the last extension expired December 31^st 2013, the recent passage of the Mortgage Forgiveness Debt Relief Act was received as a reprieve by many underwater home owners expecting tax relief from debt forgiveness of short sales that closed during 2014. However, since the recent extension only covers mortgage debt forgiveness during 2014, those who have a short sale planned to close during 2015 find themselves in a tentative situation.

Current politics and economics have many pundits believing that any further extensions of the legislation may not be forthcoming. If you have a short sale planned for 2015, you should consult with your tax preparer about any potential tax liability you may incur.

By Dan Krell
© 2015

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Basements, humidity and dehumidifiers

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