SarahGray Lamm ~ Chapel Hill / Carrboro / Durham Real Estate Blog ~ Agent Outlier

You need to sell your Durham home and you've been interviewing Realtors. Let me stick my neck out a bit and say you aren't exactly hearing what you'd like to hear...maybe it's what you expected to hear on some level but there was always that little glimmer of hope, right? Maybe, just maybe, you could hold out for a bit higher selling price than what you’re being told. After all we live in a wonderful, vibrant part of the country and of North Carolina. We have an enviable quality of life. We never saw the outrageous appreciation that some states saw so we couldn’t possibly be seeing the depreciation they keep reporting in the news. Surely there are folks looking to move here who understand this and will open up those pocketbooks a tad wider to accommodate the price you know your home is worth.

“What harm is there in trying it just for a while?” you ask. “Besides, don’t we need some negotiating room built in to the price? A little something to make the buyer feel like they got a good deal?”

You need to hear me say this: You are talking about over pricing and it is a very, very bad strategy. Here are the facts.

The red bars show the percentage of the original list price which was achieved at closing when the original listing price was the same as the final listing price at the time of sale for Durham County, NC homes. In other words, the listing agent and seller PRICED THE HOME CORRECTLY and did NOT have to lower the original asking price before accepting an offer.

The yellow bars show how much LESS homes in Durham County, NC sold for when the listing agent and seller OVER PRICED THE HOME TO START and were forced to LOWER the asking price before getting an accepted offer. The percentage achieved at closing was negotiated off the final list price, NOT the original list price.

The red bars show the average Days On Market for a Durham County, NC home when the original listing price was the same as the final listing price at the time of sale. In other words, the listing agent and seller PRICED THE HOME CORRECTLY, did NOT have to lower the original asking price before accepting an offer and the home sold significantly faster.

The yellow bars show how much longer it took to sell homes in Durham County, NC when the listing agent and seller OVER PRICED THE HOME TO START and were forced to LOWER the asking price before getting an accepted offer. The average Days On Market is significantly longer. Time is money and sellers who over price undoubtedly paid a few more mortgage payments than those who do not over price.

You can see that over pricing, as a strategy, has never been a good idea but in an unforgiving market like we are experiencing now it can mean the difference between the seller bringing money to the table or not.

The value of significant real estate experience can not be overstated in 2010. If you are serious about accomplishing your real estate goals, give me a call. I'll give you all the facts you need to make the right pricing decision.

~These charts reflect the latest data available from the T.A.R.R. Report. A subscription publication for Triangle real estate practitioners~

You need to sell your Chapel Hill or Carrboro home and you've been interviewing Realtors. Let me stick my neck out a bit and say you aren't exactly hearing what you'd like to hear...maybe it's what you expected to hear on some level but there was always that little glimmer of hope, right? Maybe, just maybe, you could hold out for a bit higher selling price than what you’re being told. After all we live in a wonderful, vibrant part of the country and of North Carolina. We have an enviable quality of life and some of the best schools in the state. We never saw the outrageous appreciation that some states saw so we couldn’t possibly be seeing the depreciation they keep reporting in the news. Surely there are folks looking to move here who understand this and will open up those pocketbooks a tad wider to accommodate the price you know your home is worth.

“What harm is there in trying it just for a while?” you ask. “Besides, don’t we need some negotiating room built in to the price? A little something to make the buyer feel like they got a good deal?”

You need to hear me say this: You are talking about over pricing and it is a very, very bad strategy. Here are the facts.

The red bars show the percentage of the original list price which was achieved at closing when the original listing price was the same as the final listing price at the time of sale for Orange County, NC homes. In other words, the listing agent and seller PRICED THE HOME CORRECTLY and did NOT have to lower the original asking price before accepting an offer.

The yellow bars show how much LESS homes in Orange County, NC sold for when the listing agent and seller OVER PRICED THE HOME TO START and were forced to LOWER the asking price before getting an accepted offer. The percentage achieved at closing was negotiated off the final list price, NOT the original list price.

The red bars show the average Days On Market for an Orange County, NC home when the original listing price was the same as the final listing price at the time of sale. In other words, the listing agent and seller PRICED THE HOME CORRECTLY, did NOT have to lower the original asking price before accepting an offer and the home sold significantly faster.

The yellow bars show how much longer it took to sell homes in Orange County, NC when the listing agent and seller OVER PRICED THE HOME TO START and were forced to LOWER the asking price before getting an accepted offer. The average Days On Market is significantly longer. Time is money and sellers who over price undoubtedly paid a few more mortgage payments than those who do not over price.

You can see that over pricing, as a strategy, has never been a good idea but in an unforgiving market like we are experiencing now it can mean the difference between the seller bringing money to the table or not.

The value of significant real estate experience can not be overstated in 2010. If you are serious about accomplishing your real estate goals, give me a call. I'll give you all the facts you need to make the right pricing decision.

~These charts reflect the latest data available from the T.A.R.R. Report. A subscription publication for Triangle real estate practitioners~

“We hear what you're saying but we NEED to list at our price. We have FAITH in you...besides if we get the price we NEED, you make more money. Isn't that what you WANT?”

I am always dumbstruck by that logic coming from an otherwise intelligent seller.

I have just finished explaining that you have a 90 day window to sell your home. A 90 day window in a market averaging 10 months supply of available homes at the end of 2009. The qualification period for the government tax credits, love 'em or hate 'em, will end in 90 days. Over. Not coming back. You NEED to have your home under contract by then and the supply of housing in this area is more than triple that.

I have explained that every single day agents all over the Triangle are hitting the SUBMIT button on another new listing.

It's the third week of January 2010 and there are over 700 new listings in the last seven days alone in Wake, Durham, Orange and Chatham counties.

Another new listing which has been freshly painted, decluttered and staged for sale. Another new listing that opens the possibility of owning a great home for a qualified buyer who WANTS a deal...a great deal. And why shouldn't s/he? It's a buyers market and this buyer either has nothing to sell in order to buy because s/he is a first timer or was wise enough to take the advise of a real estate professional and get their previous home perfectly positioned to be at the top of another buyer's wish list. Done. Gone. Cash in the bank.

I have explained that you purchased your home at the top of the market. I know you were excited to move into this wonderful home and with such a great mortgage that you barely had to touch your savings. In a few years, when your house had appreciated normally (not those crazy appreciation rates we heard about in Florida or Nevada) but 'normally' at 5-6% a year (excuse me while I pause to reflect on how many times over the last 30 years I have said that the real“normal” in my book was 1-2% per year) you would be able to “break even” in a year or two, sell your home at a modest profit, pocket the difference as your next down payment and move on to do it all over again in another town. Well, that WAS the plan, wasn't it?

I have explained that the pool of potential buyers for your home is limited by several things beyond your control. First, they must have a job. Second, they must have some savings. Third, they must have good credit, not OK credit, good credit. They must be able to get an interest rate that allows them to afford the payments on your home. Those interest rates are available at least through March. But once the government stops buying mortgage backed securities (in March) they will have to get that loan from a bank. I think it is clear that banks have no intention of loaning money to home buyers at the current rates of under 5%. It isn't rocket science that rates are going to go up. An interest rate rise of just 1% will mean a potential buyer for your home must pay $10,000 less for it in order to have the same mortgage payment.

Which brings me to the other thing we just talked about: Sellers care about Price but Buyers care about Cost! Remember back a couple of years ago when you were the buyer? Did you care what you paid for the house or did you care how much your mortgage would cost you every month?

So I guess the answer to your question is: Thanks. I appreciate your faith in me but really, shouldn't faith be reserved for things which cannot be proven? I'd prefer you simply trust me and my actual facts. I have absolutely no special skills which allow me to unerringly locate the one buyer out there who has cash, no television or internet access allowing them to find out that this is a buyers market, no real estate professional working for them and who WANTS your home so much they will pay whatever you NEED.

As for my commission? I make no commission on a home that does not sell. I create no good will by making a promise on which I cannot deliver. I have yet to list a home on which the commission I made would allow me to retire with no worries about the future. I don't expect to ever list one.

I expect to work hard, offering my hard earned wisdom to my clients and to rely on their appreciation of my skills and services so that they feel good about referring me to their friends. It's a good business plan. I do what I have done for over 30 years because I love it, I'm good at it and I can make a profit at it. In that order. So can we rephrase the question?

I have FAITH that after you have processed all of the information I have provided, you will understand that if you NEED to sell your home and are not one of the millions doing so in distress, you will WANT to make it as attractive as you can, both in price and condition, to the well informed and qualified buyers out there. If you do that I can predict that you will move forward as one of them yourself...a well informed and qualified buyer...now that's a good business plan!

“Cherished Family Memories Reluctantly For Sale To Highest Bidder…
and we do mean high so don’t offend us with a lowball offer.”

I see this ad all the time; in community newspapers and magazines, print, online and in my email. I see it every time I pull up the day’s New Listings in MLS.

You’re kidding…no one would ever run such an ad, would they? Guess again; this is exactly what a seller is saying when s/he decides to ask their real estate agent to “just try it” and put an overpriced home on the market to see if anyone is willing to pay. (Never mind whether or not a lender is willing to lend money to a buyer to overpay for your home but that’s another discussion…)

We all think we are capable of being perfectly objective when it comes to selling our homes. “I know it’s just a house,’ we tell ourselves, “an investment, bricks and mortar, ‘a house’ not a home.” But the problem is that, for you, it is a home.

When you start to ‘de-clutter’ as your agent suggested, you find memories; in the closets, in the attic and under the beds. Memories in your families cherished collections, your children’s school art and your kitchen junk drawer. The pantry holds the ingredients for your loved ones favorite recipes and the walls hold family portraits and local artwork purchased on family vacations and outings.

You start to think about all the good times you’ve had in the kitchen during holidays, family evenings spent in the living room, putting the kids to bed in the bedrooms decorated to reflect their favorite things, the backyard parties with neighbors and friends and the satisfaction of completing a do it yourself project in the garage. You know how much a new family is going to enjoy doing those same things in your beloved home. Someone will appreciate how valuable it is, right? Then there’s the new flooring, the updated bathrooms, the new HVAC system and isn’t your lawn beautiful and well cared for? Surely the next owners will want to keep the custom made draperies that match the Pottery Barn paint in the Dining Room. You’ll leave them; for a price. The washer and dryer are only two years old; a great deal and you’ll throw those in; with the right offer.

Folks, you have long since passed the point of even being capable of objectivity. Loss of objectivity is the first step down the short road to unreasonable pricing. But can’t we just try it? Surely you, my faithful and capable real estate agent, can make them see how valuable all this stuff is? That is your job isn’t it?

My job, dear seller, is to help you understand the realities of the market and to offer up my years of experience to help you prepare your home to appeal to the largest segment of qualified buyers out there and this includes proper pricing. Then I will market it in such a way as to get those buyers through the door so they can see for themselves what a great home you are selling; maybe even get them to imagine all the great memories they can create there so that we can begin to strategically negotiate the selling price. Don’t think for one minute that your offering price is not part of the strategy or the appeal.

Your best buyer may not even get a chance to see your home if their agent tells them it is overpriced. Nobody has the time to be the guinea pig who teachs a seller that their pricing strategy is in need of some serious review. “Make us an offer”, you say, “we’ll be reasonable.” But the buyer has moved on. They are busy preparing an offer on your neighbors’ home. You see your neighbors finally decided that they really want to get on with it, no more trying; they’ve opted for doing. They just dropped their asking price by $20,000 and the buyers can’t wait to get started negotiating for their new home. They’ll be moved in before Christmas and already creating their own memories just about the time you call your agent to say “Let’s price it where you originally suggested…it’s time for us to move on.”

Life happens and sometimes a home seller has to move out of a home before it is sold. On occasion there are even circumstances that would lead me to suggest that they move out early to facilitate the sale. But that's not what I'm talking about here.

I'm talking about the fact that vacant homes are homes that present their own unique challenges since there is no one in them to notice if a pipe bursts, the newspapers pile up or the yard looks untended. Many home sellers who, for any number of reasons, end up having to vacate a property during the marketing period, seem to feel it is no different than going away on vacation for a couple of weeks. Everything will be ok, right?

The law of unintended consequences is always lurking, waiting for just this combination of circumstances. And let me point out something about human nature. While your neighbors may be willing to bring in your mail or water your plants while you are on vacation, and will almost certainly call the police if they see a moving van in your driveway while you are beaching it; they may be quite a bit less willing to become involved if they feel you have moved on and abandoned your home to the dreaded For Sale sign. After all, they don't know what folks might think if they are seen walking around your house, picking up debris or checking the doors. Besides, you've broken the bond. You moved on and they have no idea who they will have to deal with once the house sells...after all, it isn't likely you will call them for approval of the new owner. Trust me, neighbors can become a tad bit conflicted over these issues.

Do yourself a favor. Make sure this is a topic of discussion between you and your real estate agent if there is even a remote possibility of your leaving the home during the listing period. This should trigger your agent to begin an entirely new line of discussion. If it doesn't, don't say I didn't warn you.

If you tell me you might move while I have the keys to your property we will immediately discuss the following:

• I take my responsibility to go the extra mile to protect your property seriously; within reason. But it is STILL your property. I am happy to arrange for someone to cut your lawn or blow the leaves from the driveway and even to facilitate payment from you to them for the service.
  
  
• I will make sure to physically check your home more often BUT I cannot be responsible for watering the plants or changing out seasonal decorations. Let's approach one of your friends or neighbors and ask if they would help you out on this score. If not, let's get rid of the plants and decorations or replace them with staging items that don't require tending.
  

Just to be clear, the best option for a vacant home is to get it sold quickly! You'll be happier, your neighbors will be happier and your insurance company will be happier. Let's price it right, keep it in good condition and get it done!

When it comes to today’s challenging home purchase market, the objective for those of us who take pride in providing the best representation to buyers and sellers is to find common ground that is win-win for both. Buyers want the deal of a lifetime and Sellers want to get as much equity out of their home as possible so they can move forward and become Buyers!

I’m thrilled that Allen Tate Company, has taken the lead in offering two new programs for Carolina sellers to help make their homes attractive to more buyers!


Announced today, Allen Tate Sellers can offer two new, optional programs, Rate Relief and Job Loss Protection, to Buyers in order to tip the balance toward making an offer on their Allen Tate listing!

What a great way to get more potential buyers through your Allen Tate listed home and increase the odds of finding a qualified buyer for your beautiful home! For more information on these programs and how they compliment ‘my magic marketing bag of tricks to get your home sold’, contact me!

SarahGray Lamm, Realtor

sarahgray.lamm@allentate.com

919-819-8199