Three Things – Considerations before Pricing

Many of us (myself included) tend to follow market statistics — each month waiting for the REALTORS® Association of Edmonton to publish the monthly MLS® satistics so we can begin our monthly ritual of digesting the data, make attempts to draw conclusions about what is happening in the market now, and from there endeavour to predict what will happen in the coming months. Some REALTORS® (myself included) make the numbers available to Clients and prospective Clients as quickly as possible. As I’ve alluded to before, I am unaware of anybody capable of predicting the future with any degree of certainty and I believe buyers and sellers should be weary of anyone that guarantees where the market is headed.

With all of the updates, speculation, and the I-know-what-the-market-is-going-to-dos out there it is easy to lose sight of some basic facts. With that in mind, instead of crafting another market update or market prediction post, I thought I’d jot down three things prospective sellers may wish to ponder while they are trying to figure out what their homes may be worth.

First Thing – Stats are only a guide
…don’t get seduced by market statistics…

Second Thing – Remain objective
…don’t let your needs or wants get in your way…

Third Thing – Get a second opinion
…consult more than one professional before jumping in…

Stats are only a guide: Market statistics (over time) can begin to paint a picture of trends and may provide insight into where the market is headed however, don’t forget that all the statistics you see are historical. They show what has been happening, not what will happen. Look at the prices from last year — based on the rise from January to May, would you have guessed prices would drop in June? Would the drop in values between July and September have led you to believe we’d realize increases in October and December? You need to evaluate in real time what is happening with the market when you price your home for sale. You need to promote what your home has to offer over the competition; for many home owners that tends to be a better price. That is your ace in the hole. Sellers tend to overlook the fact that what their home has for features is present in many other homes on the market that are competing for the same pool of buyers. When the market is competitive your best advantage is often price.

Remain objective: It is easy for home owners to inject their emotions, memories, and feelings about their current home into the sale price. How often have you heard (or even thought yourself) “My home is nicer inside than that one”, or ”I have more upgrades than that one”, or ”My neighbour told me that one is in terrible shape so mine must be worth more”? Remember, just because you want or need to get a certain amount for your home does not mean someone will pay it. Think of it this way: if I took you to see a home and you liked it so much you wanted to write an offer on it but I told you it was $20K overpriced, would you pay the extra $20K to get it because the sellers told us during negoatiations they needed to get their price so they could afford to buy their new home? Of course you wouldn’t. When it comes right down to it, you cannot justify overpricing your home just because you need to realize a certain amount from the sale of your home. Focus on your goal and what you have to do to get there.

Get a second opinion: As with many big decisions in life, you should always get a second opinion. During listing presentations I’ve had potential Clients tell me the price I am suggesting for their home is lower than what another REALTOR® has told them. My response is always, “Tell me how they justified that price to you”. You should be able to ask your REALTOR® general questions about how the price was determined and you should expect answers based on logic and fact. After hearing the answer(s), you should feel comfortable and confident the price that is being suggested is the right price (even if you don’t like what you hear). You have to be comfortable with and confident in the REALTOR® you choose and if you’ve never met your REALTOR® before, how can you tell if he or she is full of it? Maybe they were a referral from a friend who had a great experience. Fantastic, but that doesn’t mean should follow along blindly and automatically sign the listing contract. Isn’t it worth another 90 minutes of your time to get a second opinion and make the right choice the first time?

Price is one of the most important determinants in whether you will sell your home in a timely fashion or not. I take great care in arriving at the appropriate and fair price for my Clients’ homes and there’s nothing I hate more than someone who hasn’t done their homework or who is fishing for a listing. Believe it or not, there are some REALTORS® that will list a home at whatever price the Client pushes; either because they don’t have what it takes to give the seller the truth or so they can get the listing. Once they’ve got the listing and things aren’t moving, they will begin to solicit the seller for a price reduction, citing the fact the home is likely overpriced and that is why there isn’t much activity.

In closing, use available market data as a guide, try to keep your emotions out of it, do your homework, and choose the right REALTOR® for you, and you should be okay – in any market.

///…CP

Three Things – Shoot Me Now

The folks over at the Edmonton Real Estate Blog posted another article last week on how important photographs are (and should be) in the marketing of a Client’s home. It’s the third post on this topic I’ve read on their blog going back to August of last year. After reading their most recent post and thinking about just how poor some (okay, many) of the images are on the MLS® system, I felt compelled to write about another three things and add my two-bits on the subject.

I have conversations with my buying Clients almost daily about pictures of homes they are interested in viewing and their level of frustration with said pictures; both before viewing and following viewing. Generally speaking, many of the listings I see tend to fall into one of the following categories when it comes to photos:

First Thing – Get a camera
…there is absolutely no excuse to justify “No Photo Available”…

Second Thing – Get a good camera
…the likelihood of poor quality photos can be minimized with a good point-and-shoot digital camera…

Third Thing – Don’t mislead buyers
…buyers are truly disappointed when the home doesn’t match the hype…

Get a camera: Come on…’No Photo Available’!? I can forgive REALTORS® that do not load pictures of their listings the second they hit MLS®. As REALTORS® we have the flexibility to conduct our business and leverage our experience in ways we think best serve our Clients; at times we have differing opinions on just what that entails. Personally I load photos of my Clients homes as soon as I’ve hit the submit button on their listing and been granted the MLS® number by the system — but that’s just me. I happen to believe that the faster I can get the images online, the faster prospective buyers can begin to form an opinion as to whether my Clients’ homes suit their needs. As a home seller, the online marketing of your home to potential buyers should be one of the things you consider before signing any listing contract.

Get a good camera: REALTORS® don’t need to spend a thousand dollars on the latest-and-greatest in digital hardware and image processing software to be able to put up good photos that represent their Clients’ homes in the best possible light. A decent point-and-shoot camera that will more than suffice under most circumstances can be picked up for two or three-hundred dollars these days. I happen to use a $250 (three years ago) Olympus D-something-or-other model camera that allows me to take SHQ resolution photos with a resulting image quality that more than satisfies the requirements of my graphics artist (she produces the custom brochures for my listings). I definitely don’t consider myself a great photographer but attention-to-detail helps me overcome my shortcomings in this regard. I always ensure there isn’t any background ‘noise’ in my photos (e.g. TV remotes, yesterday’s newspaper, etcetera). Another way I ensure I have the best photos (within my abilities) is to turn on every available light source in the room and then take multiple photos from multiple angles of each room; both with the auto-flash setting and the manual flash setting. By the time I am done I usually have somewhere in the neighbourhood of fifty photos of my Client’s home.

Don’t mislead buyers: I am of the belief that good photos of a home are ones that actually show the home the way it is (i.e. the home does not show better or worse and is no more or less dramatic ‘in person’ than it is in the pictures). Buyers should not leave a home disappointed or deflated after a viewing because the property they were expecting to see didn’t exist at the address we saw. The photos my buyers see during our pre-viewing homework should match what they see when they walk through the door.

Pictures are an important part of the marketing process (especially when many buyers are doing their own snooping online) and are often overlooked and not given the attention they deserve during the listing process. Having said that, I don’t think photos should be altered, doctored, or otherwise re-touched to make a home look any different than it does when you are in it. In my opinion you don’t have to be a professional nor do you have to go to the lengths these guys do to get the ‘perfect picture’ however, if you have the tools and the technical know-how a bit of extra effort can go a long way.

///…CP

Three Things – Now or Later?

It is typically while driving between appointments that I have the most time to reflect on time spent with Clients and the dialogue we’ve shared. It is during these ‘periods of reflection’ that I tend to recognize and be reminded that people often have the same questions in mind when I see them. Recent visits with Clients got me thinking about some of the common questions that seem to come up; regardless of market conditions: When is the best time to list? Is the market going up or down? Is it a buyer’s market or a seller’s market? Is now a good time to list? Should I wait to buy?

Delivered in one form or another, these are pretty much standard and expected questions under any market conditions; and at times they can be difficult to answer. With the above in mind, I offer three things (in no particular order) buyers and sellers may want to consider while contemplating any form of the questions above:

First Thing — Assess your needs and goals
…what do you need and/ or want to accomplish…

Second Thing — Buyer’s market vs. seller’s market
…under your circumstances right now, does it really matter which side the market favours…

Third Thing — Now or later
…buy low-sell high doesn’t apply to everybody everytime…

Assess your needs and goals: In terms of the “best time to list”, it really comes down to what you need and/ or want to accomplish. Like most home owners, you likely want to get the most amount of money out of selling your existing home while paying as little as possible for your new home – but consider the following: if you need to sell your existing home before buying your next home and are entertaining the idea of waiting a month or two so that you can try to get a better price for your existing home, isn’t it likely that the as-yet-unidentified property that is to become your new home will also increase in price? Typically any increase in value in your home is an overall market increase and as such, will be a relative increase affecting both the property you are selling and the one you want to buy. Is it really worth getting and extra $10,000 for your home at the risk of paying an extra $25,000 or $30,000 for your new home?

Buyer’s market vs. seller’s market: When it comes right down to it, does it really make a difference? Understand that I’m not being flippant about this nor am I discounting the fact that for some people this can be particularly important; and may in fact be a significant determinant to whether they buy or sell. What I often discuss with my Clients is context – consider the market in the context of your personal circumstances. I ask them to consider (among other things) their motivation for buying or selling and then consider whether it really matters to them which side of the buy/ sell equation the market is favouring. In other words, if they need to buy or sell and have a sense of urgency driving them to do so, then the sidedness of the market is somewhat immaterial. The market is what it is at that time and (for better or worse) happens to be the market in which they will have to negotiate the best result they can under the circumstances. If they are simply toying with the idea of moving and are contemplating doing so only ‘under the right conditions’, then making a move in an extremely one-sided market may not make sense for them and they should give some consideration to waiting it out until the market begins to balance again.

Now or Later: It’s a personal choice — what works for you. Its true that many people have timed the market just right and have sucessfully employed the ”buy low-sell high” strategy. In my opinion this is a great strategy if you’re an investor, but not necessarily the rule to follow if you are a home buyer or home seller. If you are buying a house to call home for a long period of time without any intention of selling any time soon (i.e. its not a ‘flip’ or a rental), then the buy low-sell high strategy shouldn’t really matter much. So what if the market takes a slight dip after you buy your home and its now worth $10,000 or even $20,000 less than when you bought it six-months ago? You weren’t planning on moving again soon anyway, right? I’m not dismissing the value of money; we all work very hard for it and most of us would be at least a little bit upset if we lost even a hundred dollars. Now I know as well as anybody that circumstances change, life moves quickly, and sometimes the polar-opposite of what we planned is what actually happens. The result – we’re forced to make a move sooner than expected. My point is, if you plan on staying in your new home for awhile then don’t get too hung up on the buy low-sell high philosophy. Find the home that’s right for you and don’t worry about the rest of it. Time-and-again history has proven that over the long-term real estate is almost always a good investment and typically speaking you will likely come out ahead.

///…CP