How is the real estate market doing?

I get this question about a bazillion times a week. It's honestly the hardest question for me to answer each and every time it is asked. A client and friend just emailed me asking if waiting to list their home would hurt or help them. Here is how I responded.

Will the market get better/worse? Your guess is as good as mine. Buyers are waiting, waiting, waiting but yet some things are selling. There is no rhyme or reason except for price. When a property is priced very aggressively it moves. Everything else is somewhat of a waiting game. Buyers have been looking and watching listings reduce, reduce, reduce. So why pull the trigger when another reduction is right around the corner? Just wait. That is how buyers feel, and the feeling is justified when you look at the evidence out there. Presentation and condition of the property is still as important as ever. No one wants a project. And the nice homes are typically the ones that are selling. Giving clients a time frame has become tougher in the last 90 days. My listings were moving fairly quickly in the first quarter and now I seem to be getting a lot of showing activity but no offers. Does that mean all of my listings that aren't selling are overpriced? I'm not sure I even know the answer to that question right now. I pride myself on initial price positioning but I have been having to go to my clients and recommend price reductions. Not sure if that is indicative of the market as a whole but it's making me reevaluate the price of each and every one of my listings. And unfortunately the numbers still don't offer much of a solution.

I didn't mean to come across as whiny because things are moving. But buyers are testing not only the seller's patience these days, they are testing their own real estate agent's patience as well. It's just how it is and we need to respond to the market! So I'm going to get back to work now!

Agent to Meet? Or Not to Meet? That is the Question.

I've been showing homes to an out of town couple around the $2 million price point over the past few weeks. Each time we view approximately 6 to 8 homes. I give at least 24 hours notice as most of these properties are "agent to meet"...the last thing any Realtor wants to see in the showing instructions section for any listing. I'm not exaggerating when I say at least 5 of the agents attempt to reschedule the 30 minute time frame I give them because they "can't make it at the time we've requested".

On the surface that sounds fair but you have to look at it from a buyer's point of view - and their agent's. When you're looking at 8 homes from Russwood Acres to Jan-Mar to Bluffview to Greenway Parks to UP/HP the listing agents should be THRILLED that I only gave them a 30 minute time frame. Let me give you an example you probably won't care much about. And that's ok. This is my own form of therapy time so let me have it, dammit! :)

You have to have a starting point so let's pick Jan-Mar (Royal and Hillcrest) at 11am. From there we're heading to Russwood Acres (Royal and Midway). Then down to Bluffview and Greenway Parks. And shoot across the toll road to the Park Cities. We'll probably end around 2pm.

But...The first agent can only meet me at 1pm so we'll need to reschedule that one. But then what about the other home in Jan-Mar we just scheduled with the other listing agent for 11:30am? I guess we can move her to 1:30pm.

And then...The second agent can't do 1:30pm because she has a massage appointment.

And then...Both of the Russwood Acres homes we want to see are having an Open House from 2pm to 4pm so it would be nice if we could reschedule our times to view the homes at that time instead of from 12pm to 1pm.

So now...I have to call the Greenway Parks listing agents and the Park Cities agents to reschedule with them and hope they can make the new appointment time after they've probably already made plans.

You see what I'm getting at. It's a pain in the arse and we typically have to cancel at least 2 of the homes on our orginal list because the agents can't meet us to show the home.

I am not, nor have I ever been, a fan of "agent to meet" showings. They are pointless and my buyers find the listing agents more distracting than helpful as they prattle on about how "special" their listing is while following us from room to room.

In my opinion, no home in the Park Cities or Preston Hollow areas under $3 million is special enough to require a Realtor's presence at the home when it is being shown. If you want to brag about the special features of your listing then open up Microsoft Word and prove it by placing an information sheet in the home. You running your yapper and rattling off the 1,000 special things about this home is lost on every buyer that walks through the front door. I don't care if Lambert's did the lawn or the guy standing by the DART bus stop. If it looks nice then it looks nice. That is not a special feature of any home.

The saddest and most important part of all this is that sellers of these homes will never know someone tried to show their $1.8 million dollar home. No wonder it has been on the market for 178 days. I mean seriously, do you think the listing agent will tell their sellers they couldn't make the showing because they were too busy? I didn't think so.

Ridiculous.

Stupid Realtor Comment of the Day: Virtual Tour vs. Multiple Photos Edition

A real estate agent posted the following comment on this post - anonymously of course - saying that virtual tours are a must and that I am a fool for thinking otherwise and need to consult with the Almighty Google to reinforce my foolishness. (My comments are in italics.)

THIS IS INSANE

A prospect has pictures in the MLS to view anyway. Really!?!?!?!?

Adding a virtual tour gives them the sense of being there. Kay....

The Real Question to ask is: If you found a house you thought you really wanted to see, that truly caught your interest, and that exact same house had two viewing options one had pictures only and the other had pictures and a virtual tour would you pass up the virtual tour? The answer would be emphatically NO! This is your question. Not mine. This is also a stupid example.

The virtual tour connects all the dots. What dots are you referring to?

Sure it takes more time then looking through A dozen pictures and less convenient...IF YOU'RE NOT INTERESTED IN THOSE HOMES. But when you find the one you want. You take that virtual tour and call your husband and email your kids and let your friends see it to get their opinion, not 15 pictures. Not sure where to begin with this one...

I know, because that's exactly what my buyer and seller clients have told me. What do seller's have to do with virtual tours?

Virtual tours are priceless, just ask Google you fool. Ouch. *crying*

Look Anonymous, if that is your real name, before you go around calling people "fools" you should brush up on your reading comprehension and pay more attention to the logic behind your argument.

As I said in my post, the purpose of online photos and virtual tours are to attract potential buyers and to make them want to view the property in person with their agent. The "real question", as you so eloquently put it, isn't whether or not people will view a virtual tour of a home they are interested in. That's a stupid question. OF COURSE A POTENTIAL BUYER WILL VIEW A VIRTUAL TOUR OF A HOME THEY LIKE BECAUSE THEY LIKED THE 15 PICTURES THEY CLICKED ON SECONDS BEFORE!

Please do the real estate profession a favor and send your license back your local and state associations.

Love,

Jeff Duffey

Florida Homeowners Sue Habitat for Humanity

A tip o' the hat to my good friend Mark for sending this link my way. Homeowners in a Florida neighborhood are suing Habitat for Humanity for building them a house they say is substandard and contains mold and other harmful substances. They are also upset because the development was built upon an old rubbish heap.

After I read the article my take away is that some people probably haven't maintained their homes properly and therefore, it is deteriorating. So instead of paying for proper maintenance they would rather sue and try and get more free stuff.

When will America learn? People are ungrateful and don't deserve free stuff because they don't know how to take care of what they're given. Sound familiar, Extreme Home Makeover?

Ways to Lose Your Client's Trust

This is a short but accurate article from Realtor.org outlining 3 mistakes a Realtor can make to quickly lose their client's trust.

I can relate to Rule #3:

Saying what your client wants to hear. When I hired the father of one of my son’s friends to sell my last home, I asked him if we could get a very ambitious price for it. He said what I wanted to hear: "No problem." Well, he got the listing but couldn’t sell the house.

So I brought in the top salesperson in town, and she promptly told me what I didn’t want to hear: "Replace these windows and lower the price by $125,000." She sold the house in less than a week. I recommend her to everyone.

I know for a fact I have lost listings to competing Realtors because I told the clients what they didn't want to hear. But I also admit that I try and educate the client and can forget that building repoire is also an important part of earning someone's trust.

Anyone out there have similar stories? Like when you hired your friend only to fire them 6 months later, hired a top producing agent, they show you statistically why you need to reduce your price by $100,000 and the house sells 30 days later?

I'd love to hear them.

Did foreclosures really kill our economy? The numbers don't add up

According to this 2007 report by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, there are (were) 128,203,000 housing units in the United States. Of those, 64,231,000, or 50%, are owned free and clear.

If 1.2 million homes are in foreclosure at any point in time that would equate to less than 1% of all homes in the country or 1.9% of the 63,972,000 homes that have at least 1 loan on the property.

Then let's assume that each quarter 1.2 million homes go into foreclosure. That equates to less than 4% of all homes in the country (4.8 million homes) or 7.5% of homes with at least 1 loan on the property.

Are we really to believe that because 7.5 out of every 100 homes in the country went into foreclosure our economy was thrown into a recession, mutliple financial corporations were forced to shut down and the stock market tanked? Unless I'm severely off on my math the numbers just aren't adding up.

The $50 trillion credit default swap market theory on the other hand is beginning to make more sense with each passing day.

How did we get into this economic mess? Gambling.

In Vegas you can bet on pretty much any sporting event. Even some you've never even heard of. Turns out our economy is the same way. But it hasn't always been that way. I recently watched this 60 Minutes special on Credit Default Swaps and how they contributed to our current economic downturn. Enlightening to say the least. Check out the written transcript here if you don't want to watch the video. Even for a financial novice like myself it makes perfect sense. And it's extremely worrisome.

What are credit default swaps? Steve Kroft of 60 Minutes states,

"Essentially they are side bets on the performance of the U.S. mortgage markets and the solvency on some of the biggest financial institutions in the world. It's a form of legalized gambling that allows you to wager on financial outcomes without ever having to actually buy the stocks and bonds and mortgages."

Kroft goes on to say,

"Think of it for a moment as a football game. Every week, the New York Giants take the field with hopes of getting back to the Super Bowl. If they do, they will get more money and glory for the team and its owners. They have a direct investment in the game. But the people in the stands may also have a financial stake in the ouctome, in the form of a bet with a friend or a bookie."

This type of betting and gambling used to take place in what was called "Bucket Shops" which were outlawed around 1907 after the stock market fell 50% from it's peak the previous year. In 2000 Congress exempted this "Bucket Shop" law and the credit default swap markets went soaring from roughly $100 billion to more than $50 trillion dollars. Yes. Trillion. According to the report,

"You could bet on anything from the solvency of communities to the fate of General Motors...A lot of the money was made financing what seemed to be a never-ending housing boom, selling mortgage securities they thought were safe and credit default swaps that would never have to be paid off."

And then the housing market took a turn for the worse and there was not enough money to pay off the debts which is essentially what ruined Bear Stearns, Lehmann Brothers and AIG. The scariest part of all this is that these credit default swaps are completely unregulated so we have no way of knowing how much money is still floating out there.

Hedge funds operate in a very similar manner and I posted my thoughts about this a while back and how I feel it can be conflict of interest when a person who is influential over a particular market or industry can bet for or against itsself and reap the rewards. This just doesn't make sense to me. But again, I'm no financial guru. What I took away from this report is that we simply allowed anyone to bet (Trillions of dollars) against our own housing market which at the time was similar to betting against the race horse who is favored to win. Then when the housing market started suffering people demanded their "winnings" and there simply wasn't enough cash to go around and the gears quickly grinded to a hault.

So...I contend that while the housing market has seen better days, it's certainly not what got us into this mess. A law was created roughly 100 years ago in order to prevent a stock market crash. Here we are eight years after the law was overturned and look at where we're at. It's funny how history repeats itself and we'll just never learn from our mistake.

I know you have opinions on the matter so bring it. Watchoo got?

"Property features plenty of natural light"

Seriously? This house obviously has electricity since the breakfast room chandelier is on. How hard is it to flip a switch before taking a picture?

Someone puh-LEEZE tell me how these people's clients can possibly be happy with this type of service.

Ugliest kitchen ever?

I thought Pepto Bismol was supposed to soothe your stomach, not make you nauseous. Not only am I baffled as to why someone would paint their kitchen this color, I'm more confused as to why someone would actually buy this house. It's under contract and is severely overpriced.

Check out these interest rates!

My good friend Norma Minnis, a mortgage broker with Travelers National Mortgage, sends me this email regarding mortgage rates:

"Did you know that on a jumbo loan with good credit, 20% [down], you can get a 5 year ARM at 5.625 and a 7 year ARM at 5.875%?"

It's a great time to buy a home and if you're in the market you should definitely give Norma a call. She'll take great care of you.

Phone: 214-887-9544
Email: normaminnis@aol.com