What you need to know vs. what you want to hear

If an investor or buyer wants to purchase a home and is ready to write up the offer and move forward, what should a good Realtor do? Unfortunately, many will of course write up the deal immediately and mentally deposit the commission, and perhaps already have it spent. This isn’t the type of Realtor you want to work with.

Instead, you want a Realtor who will ask a lot of questions and provide more information. One who will, in a sense, make you justify why this purchase is the one that best accomplishes the outcome you seek.

Purchasing real estate is an emotional decision, but one which must be supported and justified by non-emotional considerations, namely the financial side of the equation. In helping the number of buyers we have, Sylvia and I observe, as one would expect, that different buyers operate from each end of the spectrum, from emotional to financial, and at all points in between. But no decision made entirely based on emotion or numbers can be the best decision. A balanced blend of the emotional and financial considerations will result in the “smartest” decision.

Some buyers are so fixated on the “numbers” that they are blind to other realities, such as the fact that the cheap crackerbox starter home being contemplated is way too far from everything and comes with serious risks due to it’s stage in the neighborhood life cycle, poor schools and unpredictable and undefined development of the surrounding areas.  But it’s “cheap”, and that seems to override the thought process if left unchallenged.

Others fall so in love with a property that they engage in a willing suspension of scrutiny on other important considerations, and operate instead from a place a happy denial. The home doesn’t fit with the stated criteria or needs, it’s over priced and it has misfit attributes such as a super steep driveway or backs up to a very busy street, yet the buyer fixates on something mundane such as, “it has a magnolia tree … we had a magnolia tree growing up and I’ve always wanted a home with one. My mother loved Magnolia trees”.

This is the point of recking for the Realtor. As a buyer, do you want to “hear what you want to hear” or do you want to “know what you need to know”?

Should the Realtor say, “oh, I love magnolia trees too, and if your heart is saying this house is the one, then let’s do it!”

Or should the Realtor say, “you can purchase and plant a 10ft tall magnolia tree at any home for about $200-$300, so let’s not allow that to be a deciding factor”.

Read more

Rental Moveout Walk-through in South Austin

Yesterday, September 1st, I walked through a rental property in South Austin that had been vacated the day before. I had my Flip Mino Video Camera with me so I decided to make a short video of the walk-through and share a few things about what I look for when walking a vacant rental property after a tenant move out.

The result is one of the worst videos I’ve ever seen. I have no idea what I’m doing, or how to make a good video. I move too fast, muddle my words, don’t hold the camera steady, etc. I look like a dork and sound stupid. My Inner Critic is telling me to forget it, don’t post it. It’s terrible. Learn some video editing first. But if I wait until I know what I’m doing, it will never happen.

I have the camera mainly for vacations and recording family stuff, but I’ve thought for a while now that it might be fun to start making some video blogs, so this is what I’m starting with, for better or worse.

Here goes …

If you wonder what it’s like being a landlord, you’ll find it interesting (if you just watched the video) that the tenant emailed me the same day, after not following the instructions provided for returning keys, and stated in the email, “I spent a lot of time cleaning the house. I hope it was up to your standards.”

This is why I don’t allow tenants to walk through properties with me, or meet them for move-out walk-throughs. There is too big of a disconnect between what I observe and what a tenant deems to be acceptable. For more on that, read my past article “Why I Never Do Move-out Walk-throughs with Departing Tenants

Back to video making and why I decided to go ahead with my first rough draft right out of the gate.

Read more

Austin Real Estate Market Update – May 2009 Stats

The Austin real estate market continues to chug along in a manner that would be considered unimpressive if not for the fact that it was expected to be doing so much worse by so many. Average sold prices are down about 3.5% and the Median is down about 2.25%. We’ll take take that. I’m not complaining.

Austin Real Estate Sales Market Update May 2009
Houses only (condos, duplexes, etc. not included) compiled from Austin MLS data

Apr 2009 May 2009 May 2008 Yr % Change
# Sold 1522 1610 2060 -21.84%
Avg List $245,130 $268,001 $274,380 -2.32%
Med List $198,170 $199,970 $203,037 -1.51%
Avg Sold $234,444 $256,603 $265,878 -3.49%
Med Sold $190,000 $195,250 $199,788 -2.27%
Sold/List % 95.64% 95.75% 96.90% -1.19%
Avg SQFT 2136 2208 2154 2.51%
Med SQFT 1950 1989 1945 2.26%
Avg $ SQFT $109.76 $116.22 $123.43 -5.85%
Avg DOM 74 75 61 22.95%
Median DOM 44 43 36 19.44%
# Expired 391 383 516 -25.78%
# Withdrawn 648 590 598 -1.34%
Not Sold 1039 973 1114 -12.66%
Not Sold % 40.57% 37.67% 35.10% 7.33%

One interesting thing to note is that the “Not Solds” have dipped down to 38%, barely higher than the 35% for the same month last year. This is the first time the Pending/Withdrawn listings (not solds) have been less than 40% of the total departing Austin MLS listings since June 2008, when they represented 37% of the departing listings. We hit 61% in Jan 2009 and 62% in Nov 2008, which meant a lot of sales efforts were ending in failure last fall and winter, but things have improved a lot since then.

Personally, Sylvia and I have 6 closings this month and we are really, really busy. It’s starting to feel like 2006/2007, but the numbers don’t look like 2006/2007. We’re running really fast on our hamster wheel, but putting together transactions that stick is as hard as ever.

Below is the Year to Date (YTD) chart for Austin, followed by several other charts and graphs that will bring you up to date on current conditions in the Austin real estate market.

Read more

The Real Estate Agent of the Future

This news article came into my email today, about the “Real Estate Agent of the Future”. Like a lot of the drivel fed to Realtors, this story is a jargon-filled write-up of nothingness, but it did get me thinking about how much things actually do stay the same, with regard to relationships, no matter the technology.

via Realtor Newsletter

The Real Estate Agent of the Future
Asked what skills future realty agents will need to compete, Saul Klein–president and CEO of InternetCrusade and CEO of Point2Technologies–cites product knowledge, sales competency, access to customers, and service with integrity.

More specifically, he says an agent working in 2015 will need the ability to communicate effectively across generational spans as the different age groups move up and out.

Uh, that sounds like the Realtor of 1908, 2009 and all years in between. But I wonder what sort of class we need to take to learn how to “communicate effectively across generational spans”. Communication skills for an agent depend more on recognizing which of the four main personality types a person possesses than how old they are.

This generational stuff sounds good, but in practice, one’s generation tells us less about what makes them tick than does their personality type. We work with slow, plodding, careful detail oriented people in the same patient and detail oriented way whether they are 28 years old or 68 years old. Those buyers really are the same, trust me. And the excitable, exuberant buyers who love everything they see and can’t decide which home is the right one for them?… they come in all generations too, including married grandmas and young single dudes with earrings.

An agent who can listen to you, understand your motivations and “get” what makes you tick will be of far greater value in helping you than one who makes trendy assumptions based on nothing more than your age.

Another key skill of the future, he says, will be the ability to negotiate successfully. To increase access to clients, the Realtor of the future will need to be technology-oriented.

Prospecting and marketing will have become automated, says Klein, and client management and online transaction management software will become more important.

Negotiation skills have always been important, and always will. No news there. Being technology oriented? I won’t argue with that, but many non-techie agents do well by simply surrounding themselves with knowledgeable help. I know one that doesn’t even check his own email but instead delegates it to his assistant. He’s a top producer and I bet he can’t burn a CD or send a text message. For some agents, knowing how to leverage the talents of others is the only technology they need. That way, they can spend their time building and maintaining relationships with past, current and future clients instead of trying to figure out how to set up a new printer.

Read more

Austin Realtors continue to disappoint me

I just finished entering the last listing we’ll take this year (that I know of) into the Austin MLS. I know, it’s Christmas Eve, but I’m all done shopping and don’t have anything better to do before we have a house full of relatives later tonight.

Anyway, we signed the listing agreement earlier this month, but had to wait for the tenants to move out, then get the home cleaned and touchup painted, then get our stager in and then the virtual tour people. Now that it’s in “model home” showing condition and ready to sell, I’ve entered it into the MLS. It’s really not a good idea to enter a listing before it’s 100% ready for the market, and we try never to do so.

After I enter a new listing, I always do an MLS search for the subdivision and take a look at how our listing sits among the competition with regard to price and presentation – to see it as other agents will see it in a search result. Let’s take a look at how we stand up against the competition on this one.

Read more