What is the most important thing a seller should look for when hiring a real estate agent to sell their house? We are often asked this question. Is it the size of the
company they are licensed with? Is it their marketing program? Their years
experience in the business? Should you choose the agent who suggests the
highest listing price?

There are many things that should be taken into consideration when hiring someone and giving them the responsibility for selling your home. In our opinion, the most important question you can ask a potential listing agent is a simple one:

Do you truly believe that now is a good time to buy a home?

Why should this matter when hiring someone to SELL your home? Buyers are nervous about purchasing right now. They want to know they are making an intelligent choice. We believe, especially in today’s market, you need to hire someone who realizes that this is one of the best times in American real estate history to buy. If an agent doesn’t believe that, how will they be able to convince a potential buyer to buy your home?

When interviewing a real estate professional, ask them to explain why purchasing a home makes sense today. They should be able to explain it simply and effectively. See how many of the following facts (which should be shared with every potential purchaser) the agent knows:

The Wall Street Journal last week stated:

“With home sales starting to improve, and with prices now possibly forming a bottom, real estate could well be the asset class that represents the best low-risk buying opportunity out there today.”

Donald Trump was just quoted saying:

“I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I‘m glad I listened to Donald Trump’.”

John Paulson, a multibillionaire hedge fund operator and the investment genius
who made a killing betting against housing a few years ago, is now bullish on
residential real estate market. He recently said:

“If you don’t own a home, buy one.  If you own one home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.”

A recent Gallup Poll showed that 67% of American’s think that now is a
‘good time’ to buy a home. The Gallup Organization went on to say:

“Overall, there is good reason for most Americans to think now is a good time to buy a house. Interest rates remain near historic lows. Home prices are down sharply, providing many incredible buys.”

The iconic financial paper in this country, the country’s most famous real estate investor, the most successful prognosticator of the housing market and 2/3 of all Americans say now is the time to buy a home. Shouldn’t your agent agree?

Bottom Line

Selling is nothing more than the transference of conviction. How can agents transfer that conviction if they themselves are not convinced? Find a listing agent who truly believes that someone should buy your home – TODAY! This is the single most important thing you should look for in a potential listing agent.

Here is why.   The quicker you get your home off the market, the more money you will net from the sale of your home.  Again – the quicker you find that buyer – you will put substantially more money in your pocket.  You will also have much less emotional stress for your family… you cannot put a price on that.

Let’s look at the figures for the last three years on sellers that listed their home and did
not have a price change during the listing period.  The sellers that priced their home right the first time successfully sold their homes and realized 96% of their list price
in about 60 days.  That is fantastic!  And just over 50% of our market’s sellers
achieved these results.

What about the other 50%?

Well, the others listed their homes too high.   The reasons they give… “Let’s start high and we can come down”.  Or “We need to sell for this much so we can buy our next home”.  “Let’s leave some room for negotiation.”  Or my favorite – “My friend in Florida said we have the nicest house in Williamsburg and that we are giving it away”.  All
valid reasons in the sellers mind – but quite honestly irrelevant to the housing market and potential buyers.

How did the other 50% perform?  They had at least 1 price change during their
listing period, their homes realized only 86% of their original list price, and took a whopping 204 days to sell.

So which scenario do you feel better about?  Certainly the first one!

A look at the real dollar impact is even more startling.  [Remember this is an example
based on every sale in our market over the past three years.]  Seller A and Seller B both live in the same large community in Williamsburg, Virginia where the median home price is about $260,000.  Seller A lists their home for $260,000 and Seller B overprices their home by 10% – and lists it at $286,000.  Seller A receives a contract and sells their
home for 96% of the price or about $250,000 and in 60 days.  Seller B, because they overpriced their home sells for 86% of their original list price or about $246,000 in 200 days.

Seller B believes they will make more money because they priced higher to start and have more room to negotiate.  Well you can’t negotiate an offer if it never comes to you and Seller A will always get the first offer.  Seller A has just made an additional $4,000
and done so in 140 less days.  Once Seller B calculates in the extra 5 months of mortgage payments, taxes, insurance, and utilities, etc. their loss becomes even larger.  Not to mention that buyers now wonder why Seller B’s house is still on the market – adding just a little more emotional cost for the next several months.

So which scenario do you feel better about?  I hope it is Seller A!  Sellers pricing their homes properly the first time, sell in less time for more money.  

Okay – so you are convinced.  As a seller, what do you do?  The first thing you need to do is consult a top notch listing Realtor.  Ask them for their listing results – see how they are pricing listings, how long they take to sell each listing, and did they have to make any price adjustments.   This is invaluable to you as a consumer because you must find the Realtor that will price your home properly the first time…if you don’t it will cost you thousands.

A good Realtor will provide you with a market price based on comparable sales of similar homes.  And please, listen to your Realtor – they’ve priced hundreds of homes over the years and they can get yours priced properly too.  Also remember that your Realtor is a member of your community; they know it, they’ve been inside numerous homes and can give you very good information on your competition.

Bottom line you must base your home’s price on the market value – not what you “want or need” out of the home.   If you succeed in pricing your home properly the first time – you will put thousands of dollars in your pocket, save months of time, endure less stress, and your family will be on the way to your new home.  

I’ll leave it for each of you to determine whether it is bad news or good news.  I read a national survey a few weeks back and something like 63% of buyers thought it is a good time to buy a home and 18% of sellers that it was a good time to sell a home.  An interesting difference of opinion – because that tension comes across exactly like that during negotiations of many contracts.

So here goes….

Pending sales are down 3% from 2010, but are only down 2% from 2009

Inventory of homes for sale is down 7% from 2010 and is also down from 2009 levels.  This is a good sign, we need to work inventory down because we still have a 14 month supply in our market-which creates pricing pressure.  A 6 month supply of homes is considered normal.

Days on the market are about the same as it was in 2010 – 90 days.  But down from 98 days in 2009.  I believe sellers are pricing their homes better and actually realize the type of market that exists.

Sold price to list price ratio is at 93%.  In our “bubble market” this number was almost
99%.   *** Please see next week’s blog post on how 50% of the sellers actually achieve 96% or higher when selling their homes.  They gain thousands of dollars and spend less time on the market.

Median Prices are down 4.8% from last year and down 6.5% from 2009.  I fully expect
prices to continue their downward trend in 2012 – we simply have too many homes
for sale.

So there you go – some positive signs and some bumpy signs. And it is going to be like that for the foreseeable future.  Remember to tune in next week and find out how to achieve the best price for your home.

Two years ago I was in the process of moving my parents from Ohio to Williamsburg.  Not a fun process, but a necessary one for sure.  During the move there were many things that needed donated, many things given away to our family, and a lot of stuff just thrown away.

As I walked through our family room I removed some pictures from the wall and noticed a small frame with a canceled mortgage in it.   I must have seen it before as it was paid in 1980, but never really actually thought about it.  So I asked my parents about the mortgage and why it was framed.

They bought the home I grew up in, in 1960 for $16,000 and took out a 20 year 4% loan at a local bank in the town we lived.  Their payment was about $85 a month (Rates really are good today aren’t they?). According to my father, the best part of taking out the mortgage is the President of the local bank didn’t take an application from my parents.  My father was a teacher and going to be the head football coach – the President of the bank already knew all about him, how much he made, and approved him on the spot.  (There was not a Fannie Mae or Freddie Mac then, just bankers who knew their clients and held their own loans).  My mother interjected that her hope was the home would be paid off as my sister and I went through college so she could use the $85 a month to pay for  tuition.  (With the ravages of 1970’s inflation, she was a bit off the mark on that one!)

I asked mom and dad if they had ever thought of moving.  Both just shook their heads no.  They were proud of their home and were so proud to own a home.  They loved the schools (that may have been a bit self-serving)and the house had everything they needed (3BR and 1.5BA).  Both being products of Depression era parents, they did not like debt of any form and it was their priority and their pride to pay off that note.

They told me the mortgage burning party they had with all their friends was a blast, they burnt a copy of the mortgage, and felt a great sense of accomplishment.  And their friends all had their own mortgage burning parties too.

Times are a little different today, we are just a number with FICO score ratings and lenders that have never met us; homes that appeal to all our wants (and priced accordingly high), but not necessarily our needs; and a more transient work force.

Call me old-fashioned but I want the relationship with my lender, a home that I need and take pride in, and I want to have my mortgage burning party.

This is a fun and exciting time for you and your family, so enjoy!

Click the link to access a PDF file of Common Mistakes and Helpful Guidelines

As you drive up to the home you love the feel of the neighborhood, the house looks great, and your heart is beating a bit faster. This is the first one you’ve looked at – could it be love at first site? You can’t wait to see the inside.

A friendly Realtor greets you at the door, makes some small talk, and starts to talk to you about the home…the features, the condition, and the fantastic price. You love it all – it’s better than it looked in the paper, you can’t believe it. You are ready to buy!!

The Realtor showing you the home sees that you are interested. Now what?
There is one simple thing to remember. Who is representing you in this transaction?

The best Realtors – upon meeting you and having specific discussions about any property – will always ask…”Are working with an agent?” This is critical, why – because in the Open House scenario they represent the Seller, not you. Yes, the Seller. You’ve probably just spilled your whole life story, what you want to spend, how much you love the house, and how the home is so perfect. Do you see what I’m getting at here? The seller now knows your motivations, your emotions, and your bottom line. It will be difficult to get your absolute best deal on that home, won’t it?

So before you step foot into the whole “I want to buy a home process” – think about how you want to proceed. You may want to find your Realtor first, or not – either is okay. But if you start looking at properties prior to having representation – just remember who the Realtor showing you the home represents.

This is interesting, though I’ve never been one to judge somebody based on their appearance, my doctor, dentist, and CPA always wear suits, ties, and dresses when I meet with them. I never really noticed, but somehow I don’t think that makes them a
better doctor, dentist, or accountant. Though they do wear some really nice ties!

Does it make them better (at what they do) than say someone who doesn’t dress so fabulously?  I don’t think so… I think of nattily clad Wall Street financiers spending time in jail and also of Sam Walton or Bill Gates casually dressed for success.  All I really want is my doctor to give me the absolute best advice about my health (and future longevity).  I want my dentist to keep my teeth clean and not jab his dental instruments into my gums.  And I want my accountant to accurately complete my returns, and this is
a MUST, keep the IRS away from me!

So back to my Realtor friends – does their apparel choice matter?  Probably not – maybe a newer car, fancier clothes, latest gadget would give me a good first impression that they are a successful real estate salesperson, but I like to dig a little deeper.   I really should care more about the agent’s real estate activities than how they dress.  As a consumer I just want the best advice on getting my home sold or finding the perfect home for my family.  I want to feel comfortable and confident that my Realtor is working hard for me.

You can find a Realtor in any manner – referral from a friend, advertisements, walking into a firm’s office – but no matter how you find them, or how they are dressed, please take the time to ask a few very simple questions.

If you are purchasing a home ask…  How many buyers have they worked with in the
past year?  How many have successfully closed?  Have you had experience helping
buyers with (pick your specific situation)… investment properties, short sales,
foreclosures, first time home buyers, etc.?  Tell me about the firm you represent.
May I speak with one or two of your past clients?

Thinking of selling your home, then ask…  How many homes have you listed in the past year?  How many have sold?  What is your marketing plan for getting my
house sold?  Tell me about the firm you represent.   And may I speak to one of your past clients AND someone that is currently listed with you?

It’s not hard really, a few simple questions.  The true professional will have this
information for you already, no matter what they are wearing.  They will make you feel comfortable and confident that they can get the job done for you and that is what you really want from your Realtor.