Over the years as one is ensconced in the real estate business, those of us who act and conduct ourselves in a professional and transparent manner are constantly learning, absorbing and educating ourselves to expand our knowledge to better serve our clients.
This, in turn, becomes an extremely valuable asset and tool that we use to assist, guide and share with our sellers, investors, purchasers and tenants of residential and commercial properties. Those who choose this path of becoming educated and wiser through careful listening while practicing and performing our business to become quite adept at understanding how our sellers and buyers and even investors think and sometimes go about their pragmatic, systematic and in-depth process of selling and purchasing.
Their method of tradeoffs and fine-tuning the approach to their sale and/or purchase may be similar or quite different. However, while sellers are determining and figuring out their prices and proper marketing being tantamount to luring the most qualified purchasers they are also relying on us as experts to providing them information backed up by accurate facts.
However, some rely on their “feelings” as to what they believe their property is worth or the better way by requesting the more accurate and actual comparable sales over the previous 6 months by receiving a well laid out value analysis of as little as 10 to up to 80-plus pages by their potential listing broker.
This will compare what is available on the market, what is under contract, what is sold (most critical) and what has expired or withdrawn and released as they were most likely overpriced! The buyers are determining and learning the key points to figuring out their budgets and getting qualified with a lender and this should be the first step.
Moreover, I would suggest that prior to making any offers, the buyer should be astute, smart and methodical enough to ask their agent to provide them with this information providing the most accurate and valuable data also with comparable sales for the previous 6 months in the towns that they are considering residing in.
This in turn will provide a basis to go by and provide a better idea of prices comparing what is on the market. A buyer should always try to ascertain how long a property has been on the market; the longer the number of days on the market the greater the chance that the home is overpriced right from the beginning of their listing, which will vary between 5-10-plus percent or more of the actual final sale price.
The exception might be the current market that shows prices continuing escalating and those fortunate enough in selling in an upwardly increasing market, with strong demand, historically low-interest rates with low inventory.
However, many will wait way too long and then try to time the market as it is turning downward resulting in less than stellar results and less money in their pockets at closing. This example is very similar to the stock market, where there are losers that enter the market too late and who then run scared and sell short and contribute substantial sums to the winners who are more knowledgeable and in sync with the market.
My belief is that luck equals timing and it surely isn’t an exact science, but when greed and/or fear takes over the mindsets of many, we lose perspective and a sense of reality and become euphoric, thinking things will continue to go higher and that is where losses occur.
One must be prepared to sell, while at the same time become as knowledgeable as possible as to the trends to what is going on in the market, avoiding scare tactics and “doom and gloom” scenarios.
One must be as realistic and sensible as possible while using as much common sense as possible; and you know my thoughts on “common sense, if you follow my column. There is a terminology called, “tailgating the market” whereby a seller’s property is not priced correctly and seems to always be above where the buyers are purchasing.
Then the purchasers ricochet off those homes to other places because the prices and/or locations have more value and are more desirable. So all those overpriced sellers are doing is helping everyone else sell their homes.
As the seller reduces their price, so do other sellers as well as buyers whose expectations have changed in the value and worth of those homes. As I have conveyed in previous columns “seller’s feelings” are generally not relevant or realistic to market values. However, when one or more sellers become more realistic to what their price should be via listening to their broker’s analysis and recommendations, the market reacts and then many other “smart” sellers begin lowering their asking prices to be in line with what today’s values are within that current market environment.
This in turn creates more activity, leading to offers and acceptances resulting in more closings.
However, feelings by purchasers are many times much closer to reality because many have done their homework and more research than their agents or sellers have. In the end, sometimes they actually become the best individuals who should be in the business. Most information is more attainable today, compared to 25 years ago when information was much more proprietary and not easily available to sellers and purchasers.
I remember way back when we use to receive our weekly listing inventory books from MLS and we couldn’t wait to scour and search out the new inventory.
Looking back it was a much, much slower process, no different than comparing our old forms of pager communications and dial phones and today’s high tech instantaneous cell phone communication technology, using FaceTime, Skype, and Zoom, IM and texting.
One must be fast on their toes and be able to service and truly understand the seller and buyer and to do our best in servicing their “needs and wants.” It is critically important especially in our Covid-19 Pandemic environment to truly develop a clear and concise understanding of how they “tick” and think to be as successful as possible in helping sellers, buyers, investors and even renters in today’s fast-paced market.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 39 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com