Monday, October 20, 2014

Mortgages, Real Estate, and Elections

Why has the market slowed down this fall?  The most obvious answer is that we often see a lull before elections, as people wait for a sign about the future of whatever district is voting that year.  We are seeing it now in Connecticut, where there is a heated battle for governor, with some real philosophical differences between the two candidates, about how to spur growth and recovery in our State. 


Another side effect of looming elections, however, is a good one for consumers, and we are also seeing that.  Mortgage rates tend to hit their lowest point in a year right before elections occur (surprise, surprise, if politicians have anything to do with it!), and that is true now.  Mortgage rates are currently at their lowest level since June of 2013, and it would be a very good idea for buyers to pay attention to that fact.  They almost always rise after elections, so there is a window here of a few weeks, when buyers may be able to qualify for rates that they won't see again.  If legislators are trying to put you in a good mood before you vote, why not take advantage of that fact, and get yourself a good mortgage while you're at it? And, since the market is in limbo waiting to see what happens, you can buy at a favorable price at the same time!

Wednesday, October 8, 2014

What To Do About Low First Offers

One of the most frustrating situations for real estate agents is how to advise buyers and sellers about making or responding to the first offer on a home.  It doesn't come up all the time, because some homes are clearly going to move quickly, and some are so obviously priced to sell that buyers know that they cannot play around.  However, it happens more than one might think, that the buyers put in (usually with advice from outsiders and not from real estate professionals) an offer so far below the asking price that sellers are insulted, and often do not even counter it.

It's a little baffling as to why this should be so common, because I've written many times about buyers knowing what homes are worth, from doing their internet research and seeing so many that are for sale.  The buyers should have a pretty good idea, in many cases, about not only what the property is worth, but about what it will fetch on the open market (although those numbers are arguably the same, we all know exceptions).  Yet somehow, they frequently come in with a first offer twenty or more percent below that figure.  Sometimes, it's because they like the house, but can't really afford it, so they are taking a flyer, much like applying to a "reach" college.  Lot of times, though, they are hoping that they can reap the benefit of a still-depressed market, and get a bargain.

While bargains do occur, sellers also know, in many cases, what they think their home will bring.  Putting in a very low offer insults them, both from the point of view that they think their home is desirable, and should be appreciated as such, and also because they think buyers are trying to take advantage of them.  Our job then is to get them to look beyond those feelings, and deal with what's on the table.

 So many people think that the price ultimately paid will fall in the middle between the asking price and the first offer that we wonder why--how is real estate different from any other field in that regard?  Plenty of other things sell at the asking price, or near it.  However, there is a common perception that, if you lower your price up front, you will get less in the end. Again, why?  No one forces a seller to take a particular offer.  While you can always hold firm, holding firm at the asking price means that you think it will sell for that.  Unless you are confident, and your Realtor agrees, you should counter at some number--it doesn't have to be far below asking, just enough to keep the ball rolling.  We need something to work with, and we need the buyer to stay interested.  It's just the fact, unfortunately, that you can't make the buyers' first offer for them.  Remember, though, that it's often the second round that indicates what they really think, and how high they can really go.  And it's easier to get another offer, if other agents and clients know that someone is serious enough to bid.  It deals with the current problem that buyers think everything will still be for sale when they are ready to act.  Wouldn't it be nice for sellers if that weren't true?

Tuesday, September 30, 2014

Sellers Take Note

Many people read the national news when it comes to real estate and forget that, like politics, all real estate is local.  In the past couple of years, most news has been about prices rising once again, and inventories running low across the country, especially (of course) in California.

We don't like to dwell on bad news, but our region was one of only six out of the top hundred metro markets around the nation whose average price fell from May 2013 to May 2014.  Three of the past few months have also seen declines.  I hate to bring it up, but sellers considering offers, or even listing price, should take those statistics into account.

There are multiple reasons for the fall in prices here, and some will certainly go away over time, but, for now, we are in stasis at a lower price point for most real estate, and we should accept that during the fall market that lasts until Thanksgiving.  Buyers will have choices, and it's fine to stick to your guns about price, unless you want to sell in the short run.  The spring market may be different, so buyers, who may expect that low selling prices and low mortgage rates will last forever, should act now.  Everybody will be better off if everyone is realistic.

Thursday, September 18, 2014

Live Time Chat

As we tread further into the brave new world of digital marketing, we try new ways of reaching and serving our clients all the time.  This week, we have begun offering "live time chat" on our Pearce website.  People who log onto our site between 8 AM and 1 AM will see a pop-up box after they begin browsing, that will offer them the chance to talk to a person immediately.  While that person is not an agent, and will ultimately be referring certain questions to our offices during business hours, it represents our latest attempt to give buyers and sellers what they want, when they want it.

It's certainly been a long journey since the days when buyers had to come into a physical real estate office, and sit down with an agent to go through "the book".  That was the MLS compendium of currently listed real estate properties, and it came out every two weeks, with the latest in inventory available twice a month.  Twice a year, we could buy a book that had the sales for the past six months chronicled for our use.  We didn't give out maps or addresses of listed properties, and most information we did give out was only available on little cards, that we kept in a little box that looked like something in which you would store recipes. It seems strange now, but it was what we had, and it seemed normal to us!

We've gone all the way in the other direction now, and you can find out almost anything about a property, currently listed or not, with the flick of a finger on a mouse.  It may not all be accurate, but it is readily available.  Real estate agents, on the other hand, have morphed too; they've become consultants and counselors.  They no longer control the information, but they are adept at interpreting it, as well as in streamlining the process of buying or selling.

So, if you are scrolling the internet at midnight, and you happen to talk to our live receptionist, think for a moment of how much things have changed!  And how much they still remain the same--we're still here to help you in any way we can, to make the very best real estate decisions for you, your families, and your firms.


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