Archive for the 'Selling a Home' Category
More Proof That Print Advertising Does Not Sell Houses
June 18th, 2008 Categories: Selling a Home
Several years ago I used to get lots of questions from clients regarding what newspapers and other print media I used to advertise homes for sale. There was a time when I used Homes & Land Magazine as well as the Raleigh News and Observer as a big part of advertising homes that I listed for sale here in the Raleigh area. When I came to Keller Williams Realty about three years ago, as part of the business culture here, I was encouraged to track every single detail of my business and measure results over time. When I did this with print media advertising, I was amazed by the results.
At that time I was spending about 40% of my advertising budget on the newspaper and homes magazines. I measured results over a six month period and discovered to my dismay that I could not attribute one single sale to print media advertising. I immediately changed a few things.
From day one in this business I had used the Internet to promote my listings and generate leads for my seller clients. The detailed analysis and tracking that the Keller Williams business model encouraged me to follow revealed that almost every single sale could be tied to a listing’s exposure on the Internet in some way. Many times the connection was very direct and clear.
Two years ago I went cold turkey and stopped using print media advertising altogether. My sales have increased year over year and my days on market continue to beat the average for the Raleigh real estate market.
Online advertising works. Print advertising simply does not.
The National Association of Realtors (NAR) data confirms my experience. According to exhaustive studies by NAR, 79% of home buyers used the Internet as a key information source during their home search. And 24% of all home buyers first saw the home they purchased on the Internet. The difference between the 79% and 24% were buyers who first found out about the home they purchased from their agent, who of course used the powerful MLS online database to research homes to show their clients.
In the same study, less than 5% of buyers first saw the home they purchased in a print newspaper advertisement.
The NAR study was done in 2006. I wonder how these numbers have changed in the past 18 months?
The number 3 newspaper publisher in the country, McClatchy, just announced it is cutting 1,400 jobs, 10% of its work force, due to dramatic reductions in advertising revenue. The local Raleigh newspaper, the News and Observer, is owned by McClatchy. The News and Observer will eliminate 70 jobs, about 7% of its workforce.
My sincere sympathy to anyone at the News and Observer who is caught up in this, and ends up losing a job as a result. As the Internet continues to mature and develop, this shift from print to online advertising will likely continue. It would be wise to be prepared for more turnover.
I learned my lesson several years ago. Online advertising sells houses. It sells houses here in Raleigh and it sells houses nationwide. Worldwide for that matter. My clients expect and deserve my very best. I will continue to invest in online advertising of listings and am very excited about some brand new, very consumer focused tools to accomplish this that are just around the corner. Stay tuned for more details!
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The Times They Are a Changing - Pricing Homes To Sell
April 24th, 2008 Categories: Selling a Home
I did a market analysis today for a new listing and the very first thing I looked at was comparable active listings. Last year I would have looked at comparable sold listings first. That was before we had 9,000 plus active homes listed for sale in Wake County.
The name of the game today is beating the competition. And there’s plenty of it too. Buyers have choices. Lots of them. Last year I could list a home and sell it in a couple of months, maybe a couple of weeks, as long as I priced it in line with recent sales.
Recent sales are still important for setting a max price. But the competition must be beat if you want to sell a home in the Raleigh market today. The value proposition, condition for a certain price, is king. I can get a little more money for my clients and sell their homes a lot faster if the home looks better than the competition.
As important as pricing is, presentation and marketing are just as important now. All this stuff has been important in the past. It’s just that now I can almost predict the order houses will sell in a neighborhood based on price and condition.
Preparation will make you money. Staging is money well spent. Inspecting your home and making repairs before putting it on the market helps too.
Thinking about putting your home on the market any time soon? Don’t take anything for granted.
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Raleigh Home Seller Seminar
April 22nd, 2008 Categories: Events, Selling a Home
| May 13, 2008 | ||
| 6:30 pm | to | 8:00 pm |
You’re invited to a FREE seminar on How To Sell Your Home For Top Dollar In A Challenging Market. Come hear a panel of experts discuss how to edge out the competition. With local residential real estate inventory up and home sales down, this is a message that needs to be heard.
Learn how to:
- determine a competitive market price that will net you more money
- stage your home to beat the competition
- create curb appeal that draws buyers like a magnet
- calculate net proceeds to determine your bottom line
- pre-qualify potential buyers to minimize your risk
Refreshments will be provided.
Tuesday - May 13th at 6:30pm
Reserve your place today by calling Tonya at 919-882-2175 or sending an email to tmartin(at)wrstarkey(dot)com
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2007 Wake County Real Estate Sales Results
February 11th, 2008 Categories: Buying a Home, Real Estate Market Trends, Selling a Home
I thought some of you might be interested to know how 2007 turned out for homes sales in Wake County. Here are the numbers straight out of the Triangle MLS.
2006 WAKE COUNTY HOME SALES
20,736 Homes Sold
$249,248 Average Sell Price
2007 WAKE COUNTY HOME SALES
19,314 Homes Sold
$262,786 Average Sell Price
The main thing I get from these numbers is that, on average, it cost $13,538 more to buy a home in 2007 that it did in 2006. That’s a 5.4% increase. All indications are that 2008 homes sales should follow the same pattern.
2007 sales were down 6.8% overall. If I look at Q406 versus Q407, I see that unit sales were 16% lower, so it is probably very safe to say that the downward trend accelerated late in the year.
Q407 also showed a 2% increase in average price over Q406. Interesting that no matter how we look at this, unit sales were down while the average price increased, isn’t it?
Taken as a whole, it looks like sellers are having to wait longer to sell their homes, but that is not motivating them to lower prices. Condition, presentation and marketing is the competitive difference for sellers right now.
I still attribute the slowdown in unit sales to the relocation market. People continue struggling to sell in other markets so that they can move here. Once that recovers, the Raleigh real estate market should be well positioned for a sharp increase in buyer activity. If supply drops, at that point we could see even stronger upward pressure on price.
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January Item of Value | How to Succeed When Selling or Buying a Raleigh Home
January 3rd, 2008 Categories: Buying a Home, Selling a Home
What does it take to be successful when buying or selling a home in Raleigh? Are the principles of success the same for buying or selling real estate as they are for success in other endeavors?
In my opinion, the principles for success in the pursuit of any goal are the same. These principles have been tested for centuries and have stood the test of time. This month’s Item of Value is a downloadable document that contains important goal setting information and a proven 10 step process that will lead to success in the achievement of any worthwhile goal.
Every year people from around the world create their list of New Year resolutions. And, unfortunately, each year many of these well intended resolutions fail. Making a list is simply not enough. But the good news is that succeeding in your resolutions is not complicated. It just requires following a methodology and a plan.
It has been said that most people aim for nothing and hit it with amazing accuracy. Most New Year resolutions are as fleeting as a passing thought that has been, at best, jotted down on a scrap piece of paper.
Despite the high rate of failure for New Year resolutions, people continue to make them year after year. Why is this? I think it is because most people realize change is obtainable and they also recognize that it is needed in many cases.
This month’s Item of Value focuses on setting and keeping resolutions, or as we call them any other time of year… goals. For inspiration, there is a list of examples of resolutions and a handy guide to help you overcome procrastination. There is also a convenient worksheet for you to fill out as you go about seeing your New Year resolutions become daily habits.
If you are planning to sell or buy a home this year, why not use this same process to help you focus on what may very well be the most important financial decision you will ever make? As always, please feel free to call me at 919–602–7000, or send me an email anytime you need to talk about the real estate market in the Raleigh area.
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North Carolina Voters Say NO to Real Estate Transfer Taxes
November 7th, 2007 Categories: Buying a Home, Selling a Home
Voters in 16 North Carolina counties sent a strong message to state and local lawmakers in Tuesday’s election. Sixteen counties, including our neighbors in Johnston and Chatham, put a referendum on the ballots to triple the real estate transfer tax. Voters clearly rejected the idea by margins of at least 3 to 1 in every county.
The word on the street is that the Wake County Commissioners were planning to put the transfer tax on the ballet in 2008. They may rethink their strategy now that the public has spoken in these other counties. Maybe they were uncertain all along. This would explain why we did not see it on Tuesday’s ballot here in Wake County.
Folks, this was doomed from the start. State lawmakers realized the potential opposition earlier this year. That’s when they resorted to sneaking the proposal giving counties the ability to vote individually into a Medicaid reform package. I seriously doubt it could have passed on its own merit. Obviously lawmakers had their doubts too.
The fact is taxes influence behavior. If your elected officials had their way, the tax on selling a $200,000 home would have risen from $400 to $1,200! As suppliers’ (sellers’) costs increase in a market, prices tend to rise to compensate. The end result of this tax increase would likely be higher real estate prices in Raleigh and surrounding areas.
The real estate and builder community did a great job of getting the word out. And because the public had all the facts, you voted against this bad idea. You did real good so far… but don’t take your eyes off this one. I wouldn’t be a bit surprised to see it resurface in a clever disguise in 2008 or even 2009.
Related Articles
How Proposed Transfer Tax Increases Could Harm Raleigh Home Sellers… and Buyers
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The Inside Story on Appraisals
November 2nd, 2007 Categories: Buying a Home, Real Estate Tips, Selling a Home
You would think that with such a steady real estate market as we have in Raleigh that appraisals would never be a problem, wouldn’t you? Well the truth is, from time to time, home buyers and sellers get a big surprise when an appraisal comes in below the contract price. Lets discuss how an appraiser goes about determining value and then spend a little time talking about what to do if you are ever in a situation where the appraisal fails to support the contract price of a home you are buying or selling.
It can be quite a shock to both the seller and the buyer in a transaction when at the 11th hour the lender lets everyone know that the appraised value is below the contract sales price. How can this happen? It’s important to understand how an appraiser determines value to fully appreciate what is going on in this process.
The first thing to remember is that the appraiser is completely independent from lenders, buyers, sellers, and real estate agents. Appraisers use guidelines that are dictated to them by the Uniform Standards of Professional Appraisal Practice (USPAP) and rules set forth by Fannie Mae.
The second thing to remember is it doesn’t matter if three buyers bid on a property and make offers above the listing price. In a situation like this you would think that the bidding activity might indicate the home is under priced. After all, that’s what a “market” does, right? Markets determine value based on supply and demand and what buyers are willing to pay. The appraiser does not take any of these indicators of value into consideration.
Basically, the USPAP and Fannie Mae guidelines help appraisers determine value based on past comparable sales in which the home is “bracketed” in size and value. A good example of bracketing is any improvement made to the property, such as a pool. A seller might put in a very nice pool and pay $40,000 to have it installed. So in this case, most reasonable people might think the value of the improvement is $40,000. What happens from time to time is that the appraisal guidelines might dictate that a pool in a certain area of the country is worth $25,000. As crazy as it might sound, regardless of how nice the actual pool is, the appraisal guidelines could in fact set a maximum value of only $25,000.
In this case there is an immediate $15,000 difference in value that sellers and buyers (even their Realtors too) will have a difficult time understanding. There are many examples of how these variances in value can occur on an appraisal.
I recently had a case where there was a 450 square foot finished space over an detached garage that one appraiser adamantly refused to value the same as the space in the main structure. There was a very expensive stone breeze way connecting the two structures and the detached space had a separate bathroom and its own HVAC system. It was done up nicely! And the buyer was very passionate about this particular property because of the detached space. He considered it at the very least the same value.
If you ever find yourself in a situation where the appraisal does not support the contract price, there are a few things that can be done. A second appraisal could be ordered. This costs extra money and the seller might have to pay this cost. If the buyer offered a higher amount, that means the home was worth that amount to him, so many times both parties want everything to work out. And the seller typically would pay for the second appraisal because he has the most to loose if a value equal to or above the contract price cannot be determined by an appraiser.
If none of this produces a satisfactory appraisal, the NC real estate contract says that the seller can either lower the price, or release the buyer from all obligation and return all earnest monies. If the deal falls apart over an appraisal, then everybody looses. The seller is back on the market with serious decisions to make regarding the listing price of the home. The buyer is starting all over again looking for a home. Keep in mind that any other expenses, such as loan application fees, the appraisal that just went south, inspection costs, surveys, and any other expenses incurred in the process cannot be recovered.
My final advice is to always work with a buyer’s agent who knows the area and can pull comparables before an offer is made. Sometimes, especially in older neighborhoods where there is a lot of variance in the size and style of homes, comparables are very hard to find. This is a service I provide for all my buyers and I tell them up front if I think there might be an appraisal problem. If I cannot find good comparables, I tell my buyers this too. I don’t like surprises and I find that most of my clients don’t either.
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North Carolina Home Inspection Reports Are About to Change
October 19th, 2007 Categories: Buying a Home, Real Estate Tips, Selling a Home
You may not be aware but a controversial issue is being decided by the NC Home Inspector Licensure Board that could affect how the inspection report on the next home you buy is structured. The issue is whether or not recommendations by the inspector on upgrades that could possibly enhance the function, efficiency or safety of the home can be included in the summary section of the report. Right now there is no standard and it is left to the inspector’s discretion as to whether or not these items are included in the summary.
The key thing to remember is this debate is over where these “non-repair” items will be mentioned in an inspection report, not if they will be allowed in the report. Currently an inspector is free to put anything he feels is worth noting in the summary regardless of whether it is in need of repair. The new rule would only allow items in the summary that do not function as intended and are in need of immediate repair, or warrant further investigation.
Under the new rule any item that is not eligible for repair consideration that an inspector wishes to mention for enhanced function, efficiency, or safety can be included in the appropriate section in the body of the report. It just will not be allowed in the summary. It seems that those opposed to the changes fear that buyers will not read the whole report and might miss some of the inspector’s recommendations for non-repair types of improvements.
Any recommendations for future enhancements to the home that an inspector wishes to provide will be right there in the body of the report. Hey, give the buyer some credit. Don’t you think they will have at least a little interest in reading beyond the summary section of a report for which they just paid hundreds of dollars? Especially when it contains important information regarding the condition of a home they are paying hundreds of thousands of dollars for!
From my perspective, I think this is a good idea. With the new rule the summary section will serve as a place in the report where items can be listed that more closely match the real estate contract’s definition of repairable items. The NC Offer to Purchase and Contract says that all of the major systems of the house, such as plumbing, electrical, HVAC, etc, “shall be performing the function for which intended and not be in need of immediate repair.” Previously the summary section of an inspection report could be cluttered with items that did not meet this repair standard.
The new rule for the summary section will make it much easier for buyers, sellers and their agents to focus on repair negotiations that are covered in the contract as agreed to by both parties. The only items that a buyer and their agent have any authority to request action on is these repair items. Why add more drama to the negotiations with discussions regarding items that the seller is under no obligation to address? The primary purpose of the home inspection is to discover any of the items listed in the real estate contract that need repair. It makes sense to me to have a clean list of those items that can be the topic of repair negotiations between the buyer, seller and their agents.
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3 Reasons Why Everyone Needs a Radon Test
October 18th, 2007 Categories: Buying a Home, Real Estate Tips, Selling a Home
Buying a home is a complicated process. There are lots of moving parts. There are many things that buyers need to be aware of. I write about many of these potential pitfalls on this blog and today want to let you know about one that could threaten your very life!
There are a series of optional inspections that I always consult with my buyer clients about before we look at the first home. One of these inspections is a radon test. This is, in my opinion, the most important test anyone could have done on their home. Amazingly, as important as this is, over half of my clients do not even know what radon is, or the potential health risks of breathing high levels for extended periods of time.
Radon is a colorless, odorless, tasteless gas that occurs naturally. It is actually a mildly radioactive gas that is released from rocks in the soil of the earth. Granite is one of the biggest contributors, but there are many rocks that emit this carcinogenic gas. As it escapes from the soil it can pass through the floor of your home and become trapped inside, leading to elevated levels that the EPA has determined are hazardous to human health.
Reason #1: Radon Can Kill You
As you may have gathered already, radon gas can be deadly. The EPA says that radon gas is the number one cause of lung cancer among non-smokers. Over 21,000 people die every year from radon caused lung cancer. Everyone talks about second hand smoke, but only about 1,000 people who have never smoked contract lung cancer from this source. Radon causes 21 times more lung cancer deaths every year than second hand smoke.
Reason #2: The Standard Real Estate Contract Requires the Seller to Correct High Radon Levels
The standard NC Offer to Purchase and Contract contains language that gives buyers the right to have a radon test performed and requires the seller to take corrective action if elevated levels are found. If the seller refuses, earnest money is returned to the buyer and the contract is voided because of the seller’s breach.
The correction procedure is to have a ventilation system installed in the foundation to evacuate the gas before it can enter the home and create elevated levels. This procedure can, in most cases, permanently eliminate the risk of elevated levels of radon in the home.
Reason #3: Not Testing Now Could Cost You When You Sell Later
Just because you choose not to have a radon test done does not mean the person who offers to buy your home in the future will not want to test. What a mess this could be. For the sake of saving $150 or so you could expose yourself and your family to deadly gases over time and be faced with the cost of installing a radon mitigation system yourself to make your home salable in the future. That’s called lose-lose and it’s not very smart either.
What should you do if your home has never been tested?
If you are reading this article and are realizing your home has never been tested, there are a few things you might want to do.
First, have a test done immediately. Email me, or give me a call and I can recommend a good home inspection company that can administer a highly accurate test that will answer the radon question once and for all.
And don’t go to the hardware store and buy a do-it-yourself kit. There are canisters available that you can set in your home and then mail off to have them analyzed. Don’t be a penny pincher with your life. If these canisters tests are not administered correctly, or if the lab makes an error, you may have an invalid test and never know it.
The other thing you might want to do is consider having a buyer agent represent you on your next home purchase. I always ask my sellers if they had a radon test done when they purchased their home, so that I will have some idea if there could be the potential for a problem with radon. Whenever someone tells me they did not have a test done when they purchased, it is always someone who bought directly from the builder, or direct from the listing agent. In both cases these people were unrepresented when they purchased and had no one to advise them of the risks you have read about here today.
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Future of the Raleigh Real Estate Market
October 15th, 2007 Categories: Buying a Home, Real Estate Market Trends, Selling a Home
What is the future of the real estate market in the Raleigh area? Will home values go up or down? Will buyers be able to get a good deal? Is buying a home in the Raleigh area a smart move? The answers to these questions vary quite a bit, depending on where you get your information and who you believe.
Usually every Monday morning here at Raleigh Real Estate Talk I give you a nice chart with the weekly stats for the local real estate market. I’m going to skip that today and try to answer some of the questions I get in my email on a regular basis. The buying and selling public seems to be uncertain about the future of real estate markets across the country. In some areas uncertainty is understandable. I don’t believe you have to live with that uncertainty here.
Inventory is rising, but being absorbed
I just checked active listings for Wake County. There are 8,389 homes listed for sale. Last year this time there were 6,537. That’s a 28% increase. Is that good or bad? To answer that question you need context.
The correct context for this question is found by considering the absorption rate. The absorption rate is the number of months that it would take to sell all listed homes if no more were placed on the market and the volume of sales remained steady. That rate is currently 4.9 months. Last year it was 3.7 months.
Last year I was having trouble finding the right home for some of my buyers. When I did, many times we found ourselves in a bidding situation. Now, there seems to be a lot more choices for buyers.
Sellers may have to wait another 30–60 days to sell their home if it is not adequately prepared. If it is prepared as I have suggested in a past article, the home could sell in a few weeks.
The National Association of Realtors (NAR) and most economists will tell you that over 6 months of inventory is a buyer’s market. We’re not there yet, but we’ve moved in that direction.
Sales have slowed
Sales are down 32% from last year. Sounds alarming doesn’t it? Just remember the absorption rate. At 4.9 months we’re doing okay. In September 1,204 homes sold in Wake County.
This number is more like a healthy January or February number, so sales are definitely off the mark. I’m sticking to my theory about relocation clients not being able to buy here because they cannot sell their homes in other markets. I think this has had a huge impact.
Again, for buyers there is more selection and less chance of getting in a bidding situation. For sellers you need better preparation and targeted marketing more so than last year.
Prices are appreciating nicely
August average sell prices are up 4% year-over-year. The Raleigh area market has maintained a healthy 3–5% appreciation for a long time. Looks like we’re right on track, doesn’t it? Economists will tell you that residential real estate prices should track just ahead of inflation and that’s what we consistently do.
By the way, later this week I’m going to a presentation by Stacy Anfindsen, publisher of the TARR Report. Stacy is a very well respected local expert on market trends and the TARR Report is the premier publication that the local Realtors use to help understand those trends. Stacy will be speaking at an annual market trends conference at our local Board of Realtors this week. I’ll be sure to let you know what he shares with us, especially regarding appreciation.
Price must be based on the competition
Putting a sign in the yard and listing on the MLS doesn’t cut it these days. Inventory levels are up and if you want to sell your home quickly, in addition to preparation and staging, pricing it to beat the competition is critical.
When sales are down and inventory is up, the line to be the next to sell can be a long one, if you are not well prepared. If you want to move to the front of this line, it’s possible, and easier than you might think. Check out this article I wrote about how to do just that.
Sellers have to be smart and buyers have choices
You see, I think this is a great market. Selling homes, in a reasonable time frame, has become more of a challenge. I love challenges and this give me a chance to really shine with my market and pricing skills. I can add more value for sellers now and quite frankly, that’s a very rewarding feeling.
Buyers want a great home. I get to use my knowledge of neighborhoods and communities to put you in the best possible home. A good amount of inventory really helps make this possible. This also makes me feel good about what I do.
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