The three "P's" that you control when you sell

When considering the sale of your home, there are three things that you control:

Preparation:


Preparation refers to the work that you do on your home, prior to the actual listing of your home for sale. At a minimum, all of the "deferred maintenance" needs to be done. If you're not sure whether or not to work on something in preparation for selling, ask your Realtor.


Presentation:


Presentation refers to how your home looks to buyers during a showing (or open house). There are many things you can do to make your home more attractive during a showing - too many to go into here.



Price:

Price is a reflection of the two previous “P”s, relative to market forces.





As long as you are consistent between these three factors, you have a better chance of selling. Note that I didn't say that you would sell (for sure) - only that you have a better chance of selling. See my previous post, about Greg and Katie's recent experience in selling, to gain a better understanding of what that "better chance" really means in our present market.

What is it like selling in this market?

Along with the question "How's the Market?", I am also frequently asked "What is it like selling in this market?" Let me give you a recent example.

Greg and Katie were recently referred to me by a client, for whom I sold their home back in the "good old days" of 2001. You remember what it was like back then, don't you? You could be assured of selling your home near the top of your market range, and even then, it wouldn't take longer than 90 days.

Greg and Katie knew that they were in for a rude surprise in this market. They had heard the horror stories of friends, whose homes were still sitting on the market after a year! They had seen the "For Sale" signs in their neighborhood being overgrown by the weeds growing up in the lawn around them. Their hopes weren't high.

Against this backdrop, I came in with my "Total Market Overview". For regular readers of my posts, you have seen glimpses of my TMO with my monthly market statistics. The TMO gives a big picture of the total real estate market for our area. When Greg and Katie saw that the inventory of homes in our area had reached 19 months worth of sales, their expectations fell even further.

One thing about the TMO - you sure get to understand that your home is not "unique". Your home is competing for attention with many other homes - sometimes, more than 100! The only way to even have a chance at selling amongst so much competition is to offer a terrific value. And, you have to be among the top 3 in homes like yours on the market. When agents go to show homes, they'll show the top 3 similar homes, and maybe a few more. If you're not among those 3, your home will likely never be shown.

Having worked all summer to prepare their home for sale, Greg and Katie were able to offer a great home. What they learned from the TMO was how they would have to price their home in order to gain that "top 3" position.

Well, let me quote here exactly what Greg wrote about the effectiveness of our strategy.

"If we can sell our home in under 3 weeks in this market I will be tickled pink."

In fact, we closed on the sale of Greg and Katie's home yesterday. Here's the proof!

The moral of the story?

A professional Realtor knows their market, inside and out. They will listen to your needs and wants, and will do their best to help you achieve them. But realize that it's a huge market for homes out there, and you have to know what your competition is doing. If you tell your Realtor that you want to sell at the top of the price range, and have it all done in 30 days - well, that's just not going to happen in this market.

Instead, ask your Realtor - "What price will it take for me to sell my home in the next 90 days?" While you may be disappointed in the amount, at least you will know what it will take. Only then can you know whether to even bother trying to sell. If you're not willing to consider a price that will get you in the top 3 of your competition, then you need to be prepared for your home being on the market a long, long time.

For sure, it won't be on the market for only 3 weeks, like Greg and Katie!

Friday photos

The fall colors are definitely changing around here. Despite some windy days and nights, the colors are hanging on.



Here's a recent beautiful sugar maple tree I spotted. Do you know where it's located?

Market Statistics

As regular readers of this blog know, I update my market statistics around the middle of each month. For October, let's take a look at both the Ann Arbor and Saline markets.

As you can see in the chart above, the Ann Arbor market has a tremendous imbalance between available homes and those where offers have been accepted. We see the typical seasonal decline in the number of homes available, as those who didn't sell during the summer take their homes off the market for the winter months. Snowbirds, maybe?

A very positive sign for the fall season is the uptick in pending sales in Ann Arbor. Typically, we don't see an uptick until mid-winter, as we approach the spring selling season. Maybe this is a good omen for the winter?

In Saline, however, we saw an uptick in the number of available homes, and a downturn in the number of homes where offers have been accepted. If the pace of sales continues to slow, while the number of homes available continues to rise, the Saline market will be looking at further price erosion, as we work off the inventory of homes available.

If you have any questions about these statistics or what they mean for your particular situation, please don't hesitate to e-mail me or call me. I love to talk about the Real Estate market!

Friday photos

It's October here in Michigan, so that means that the wonderful fall colors are with us - only briefly.

While travelling down a country road the other day, I stopped to take this photo. The colors are just turning, so they could be brighter, but you get the idea here.

Now, does anyone know where this picture was taken?

Third Quarter Statistics

The Ann Arbor Area Board of Realtors has just released the statistics for home sales through the 3rd quarter of 2007.

Sales of homes fell 10.1 percent through the third quarter, with 2,388 homes having been sold through September, down from the 2,657 recorded in the same period in 2006. Listings decreased 5 percent, and the median sale price fell $6,000 to $217,000.

Sales of condos fell 15.7 percent through the third quarter to 537 units. In 2006, 637 condos had been sold in the same period. Listings for condos rose 3 percent, but the median price fell by $3,600.

While you could easily interpret this as gloomy news, I look at it this way: Nearly 2400 homes have new owners this year! It's not like NOTHING is selling.

When you notice that the median sale price has fallen since last year, you must understand that the homes that are selling are those that are priced right. See my earlier posts on this subject.

On another note, if you know anyone facing foreclosure, I read an interesting article recently on how to prevent foreclosure. Worth reading!

Some Good News

Today I had the good fortune to attend the most recent luncheon held by the Washtenaw Economic Club, held at the Eagle Crest Marriott in Ypsilanti.



The speaker today was Chris Wallace from Fox News. His topics ranged from the War in Iraq to the 2008 Presidential Election.



But more importantly than the topics was the positive energy in the room!



Yes, there were economic leaders from businesses spread all around Washtenaw County. I overheard discussions about how many new people certain businesses were going to be hiring, and soon. I overhead some loud exclamations of business success so far this year in 2007.



Certainly there were some gloomy faces, but only a few. For the most part, there were smiles and excitement all around the room. It was really refreshing to be around such positive energy.



So, no matter what the headlines in the newspaper scream, just know that there are many good things in store for us here in the Ann Arbor area!

What are buyers thinking?

A long time ago, one of the things that I learned about negotiating is to do your best to understand your counter-part in the negotiation. If you can figure out what's important to them, and give them something that's important to them, you can get something that's important to you.

In today's real estate market, which is clearly a strong buyer's market, it's helpful to gain an understanding what today's buyers are thinking.

What I'll attempt to do in this post is to share my recent experiences working both with buyers and with offers on my listings.

What I define as a buyer is someone who is "ready, willing, and able" to buy a home. There are many people out there looking at open houses who aren't necessarily ready, willing, or able to buy right now. That's OK - the early lookers eventually turn into buyers.

For those serious buyers out there right now, they know that they hold all the cards. That said, they also know that one day they'll be sellers and may be in a similar situation to today's sellers, so they generally won't go to far in pushing their requests.

It's fair to say that a ready, willing, and able buyer today will ask their Realtor for a comparative market analysis of any home that they are considering. The results of that analysis will drive the basis of the terms of their offer.

What I've tried to do throughout my 14-year career as a Realtor is to get buyers to make their "best" offer right away. I've also encouraged other agents to have their buyers make their best offer right away on my listings. While it's exciting, and sometimes fun, to negotiate the back-and-forth of an offer between buyer and seller, it's also a serious energy drain for both parties. Rather than suffer that energy drain, I prefer my clients focus on the offer at-hand as the best offer.

It's critical for every buyer and seller to know their "walk-away" point. If the best offer satisfies the walk-away point, then we have a deal. If not, both parties walk away and move on.

Having closed more than 250 transactions in my career, serving both buyers and sellers, I've learned that it's better to negotiate when you understand the other side better than they know themselves. I hope this post helps you to understand yourself exceptionally well before entering into any real estate negotiation.