Some Very Broad-Brush Generalizations To Consider

Occasionally, I will pull the current crop of properties that were unable to attract a buyer while their listings were active. This listing is referred to as the Expired Listing.

Of course, I always pull up expired listings whenever performing Broker Pricing Opinions or Comparative Market Analyses… but on days like today - I simply pull up every one of them that expired on a particular day.

As I scroll through the list - and that list is fairly long these days - I scan for obvious reasons why the home didn’t sell. Sometimes it’s obvious… other times it’s not. But it’s often entertaining… at least to an agent.

Although purely anecdotal, it seems like there are fewer expired listings from inexperienced agents. One might attribute that to fewer inexperienced agents getting listings in this tough market; fewer inexperienced agents still working as agents; or a combination of the two. Nevertheless, there are still many listings from inexperienced agents… just fewer than in the past.

The overwhelming common denominator I could see is the utter lack of curb appeal for so many of these listings… that and awful front view pictures obviously taken by the listing service. Yuck. Since a picture is worth a thousand words, there simply isn’t enough room in a listing to counter the impact of a bad image… not to mention that if a buyer or agent is turned off by the front picture - they’re not likely to read any of the ad copy.

While it seems like more properties have interior images… the percentage seems to still be low, all things considered. What good is ad copy that reads "Great renovation! Fresh paint! New appliances!" with no pictures to back it up? To most agents and buyers - that looks suspicious.

I noticed that there are fewer 90 day listings than in the past. When the market was moving quickly, a longer listing period for a properly priced and merchandised property was not necessary. Times have changed. Under no circumstances would I take a 90 day listing these days.

I am always surprised by the number of agents who are selling their own homes… unsuccessfully. Putting your own home on the market as "bait" is an old method used by many new agents to prospect for buyers - but so many of these properties are old school experienced agents desperate to shed themselves of a mortgage payment that they can no longer afford.

I am also surprised by the number of listings that offer a low buyer agent brokerage fee. On high-end homes - I can understand it. But on median-priced or lower than median-priced homes… it makes no sense. It could easily be a factor in the home not selling.

Pricing is always in the equation… but instead of focusing on whether or not a property is actually worth its list price, I will comment on the ridiculous pricing methods some agents use. $317,212? What kind of a price is that?

Look - I can appreciate that you want to convey that you arrived at your list price after careful consideration… but really - do you think that a list price like that conveys such consideration? It is more likely that a buyer or agent will think the seller is trying to squeeze X dollars out of the property - and in a buyer’s market, that could spell disaster.

Equally silly is the notion that you should have a list price that ends in 900; 990 or 999. In fact, it could be detrimental. If your home is priced at $324,900 it will not come up in any searches for homes priced between $325,000 and $350,000. Since buyers and agents are searching within certain price points, you should try to be on a price point that covers the largest number of searches… and prices ending with 900; 990 or 999 aren’t going to cut it.

Here’s a listing that was priced at the price point… but reduced by ONE dollar to a price ending with 999. They actually thought THAT one dollar price reduction was going  to help. The only way a one dollar price reduction will ever help is when you go from, for example, $300,001 to $300,000.

Here’s another example of pricing gone wrong:

First, we have the silly "precise" price. After six months of no action, the price is reduced to a respectable $135,000. Too bad they couldn’t leave well enough alone, as three weeks later they raise the price $500. Like that was going to help. Eight months later, the listing expires. A total of 458 days on the market. Or twice as long as the listing agent had a real estate license when the listing was taken.

And not to be outdone:

With a home on the market since last December - with that silly 777 price point - the seller and agent thought they might raise the price $30,000… and keep the silly 777 price point. To top it off….  it’s owned by the listing agent.

I show the pictures, as I could not make this stuff up.

These are a few of my musings about this particular batch of expireds today. Obviously, each listing and property has its own set of circumstances… and if your home was one of them, none of the aforementioned issues might apply.

Ultimately, there are still more properties for sale than there are buyers to purchase them - so you need to make sure that your home stands out as the best value when compared to other similar homes in your area.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Getting Away From The Herd Mentality Can Be A Good Thing

This last weekend, I had the wonderful experience of driving up to Charlotte, NC to celebrate my best friend’s mother’s birthday. Later in the evening on Saturday, my friend and his wife wanted to swing through a McDonald’s for their famous Big Mac.

So I pulled out the Garmin GPS and found the closest McDonald’s. Mere moments later, we were in a long line of cars slowly making our way around the restaurant.

When we were the sixth or seventh car back from placing our order, I could see that this McDonald’s was obviously understaffed - so I suggested that we find another McDonald’s.

I punched our request into the Garmin - and we were directed to another Mcdonald’s one mile away.

"You’ll be eating your burgers before the people in front of us place their order, " I told my passengers.

In a couple of minutes, we pulled into the next McDonald’s which - if not for all the lights - we could have easily mistaken for being closed. No cars to be seen in the parking lot. Not a single car in the drive through. More like a ghost town than anything.

A friendly voice promptly greeted us as we drove up. I hadn’t had a Big Mac in so many years - I succumbed to the temptation and ordered one… as did my friend and his wife.

When we drove up to the window, we could see that there were at least three employees working the front - which was two more than the previous McDonald’s. In no time at all, we had our order in hand and were on our merry way.

Amazingly enough, I found my Big Mac to be extremely tasty… in spite of the fact that I had eaten a wonderful meal at the Hilton just a few hours earlier. Even my friends were surprised at how good these burgers were… commenting that they thought the meat had been seasoned. Every single ingredient was fresh, tasty, and in the proper quantity.

There is a lesson in this, if you look carefully.

The first McDonald’s might be a better known location… and undoubtingly serves more burgers than the second one. But there was obviously a big difference in the customer experience. Personally, I don’t care how many burgers you’ve sold or are selling - I only care about the one you’re making for ME.

I suggest to you that this lesson can easily relate to real estate.

Just because an agent or broker claims to have sold X number of homes does not mean than someone who sells fewer homes can’t make you a very satisfied customer.

Additionally,  when an agent has a lot of listings… s/he might not have the time or staff the keep you happy.

I’m just saying.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

You Need To Take The Hype With A Grain Of Proverbial Salt

Hardly a day goes by that I don’t read something that is 180 degrees from what I know is true. I believe that most of the time it’s just an innocent mistake. We’re only human, after all. Other times, I’m not so sure.

You can’t believe the major media all the time, either. Recently, and article in the Atlanta Journal-Constitution featured the headline "Vinings home sales hot in frigid market" with the subheading "While last year’s home sales fell 22 percent metrowide, Vinings’ prices jumped up 57 percent".

Shame on the AJC. A little "real" journalism would have shown that there had been a large number of new homes built that were priced well above the median average… so as these new homes are sold, they bring the median average UP. A lot.

The prices did NOT jump 57 percent in Vinings. And I know for a fact that there are builders in that area who are selling for lower prices than they were last year for comparable properties.

Agents can be just as bad. Many of them will act as if the market is just soft for other agents… but not for them. That is usually only true if they specialize in foreclosures… as foreclosures are the vast majority of what is selling right now.

And with a slow market comes desperation. And desperate agents may tell their clients anything to make the sale. They’ll tell them their home is worth more than it is to get the listing… then tell them later that it’s overpriced and must be reduced or no one will buy it.

Depending upon the metrics used, we have anywhere from a 12 month to 27 month supply of single family homes on the market right now. The number of homes that are sold each month is not much higher than the number of foreclosures.

Not good if you’re a seller. Fantastic if you’re a buyer.

And buyer’s are frequent targets of hype. "Oh this is a great community… I’ve sold many homes in here." Give me a break. McDonald’s has sold billions of hamburgers, but that doesn’t make them taste any better - or any better for your health.

The Atlanta real estate market is a challenge for sellers, so my suggestion is that if you are needing to sell - find someone who will tell you the unvarnished truth without the hype. You do not need hype… you need a big dose of reality. And before you set the list price for your home, it would behoove you to actually tour the homes of which you will be competing.

If you are looking to buy, then the combination of large inventory (many choices); reasonable interest rates; and affordable pricing makes this a great time for you - but don’t get talked into any particular property. Make sure you are  working with someone who is patient and skeptical. If your agent thinks that every home is a good one - and seems to want you to buy every property you see… you might want to find another agent.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Many Listings Are Short Sales - Even Though It’s Not Stated

As I review listings, I often see properties that should be listed as "short sales" - but are not. It doesn’t really bother me, as I study the tax records and mortgage liens to determine if a short sale would be likely… but not all agents do this.

I remember making an offer on a property which required the seller to provide evidence that they had the financial ability to pay off their mortgage at closing… which they refused to do.

Why? Because they didn’t have the money, and were hoping to get their lenders to accept a short sale.

To me, that is totally unacceptable.

That simple condition saved my clients $700 for an inspection and appraisal that would have been wasted, as I could plainly see that the short sale would not be approved.

Many buyers are not afforded this guidance.

It also amazes me by the number of agents who are advertising short sale properties that obviously will NOT be approved.

A short sale must usually allow the second mortgage holder to get something at closing… and in a market where values have fallen, that is a very unlikely event. In some cases, the first and second mortgages are held by the same lender - which gives the deal a chance.

When a short sale does NOT allow the second lien holder to get something, then the property will usually go to foreclosure before the second lien holder will lift their lien.

You can’t blame them, really.

So if you are looking for the best values in today’s buyer’s market - be careful not to get caught up in a contract that will waste your time - and money.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Exactly How Much Money Do You Need To NOT Go Broke?

This one hits close to home for me. Evander Holyfield, the only four-time world heavyweight boxing champ is likely to lose his massive 200+ acre estate to foreclosure for a $10 million mortgage that he cannot repay.

This Is Getting Downright Ridiculous… Really

Ed McMahon, best known as Johnny Carson’s sidekick on The Tonight Show, is trying to avoid foreclosure on his Beverly Hills home. He is currently $644,000 behind on payments on his $4.8 million mortgage.

This comes as quite a surprise to many of us in the real estate industry, as Mr. McMahon, 85, has had a lengthy career with substantial earnings - including his stint as the host of Star Search. He has also been a TV pitchman for a variety of products, most notably with American Family Publishers.

McMahon has his home listed for sale at $6.25 million - and it has been on the market for two years, according to his agent.

This may sound harsh, but three things come to mind.

First, if you are 85 and you have a mortgage just because you want to live in the big house - you screwed up.

Secondly, if you have made millions and millions of dollars over the years and you still have a mortgage - you screwed up.

And finally, if you have your house on the market for two years because you refuse to lower the price to what the market will bear… and would rather lose it to foreclosure - you screwed up.