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First
let me make something perfectly clear, I make my living selling real estate in
this town. The whole “need” versus “want”
thing has cost me dearly over the past several months but I feel like this, you
have to make this determination right up front, at your first meeting. This will save you much pain in the end. When I meet with sellers and discuss this
they have that puzzled look on their face, “What is Vinnie talking about?”
Very simple, a need to sell is a situation
where a seller is motivated to get the transaction done. It could be a job loss or change in
employment, a family crisis, a divorce, or an illness. Some type of hardship is causing them to
sell. They tend to be more realistic
with what the market is yielding and realize that in this market you have to be
priced at market or under. No chasing
the market with these sellers. They get
it and have a sense of urgency. This is
a need seller.
The want is a seller who just wants to
relocate, maybe sizing down or the family has grown up and moved out ant they
don’t need the big home anymore. The
conversation with them goes something like this, “I really don’t have to sell”,
or “I want to sell but I’m not giving my house away.” When I hear this I want to say, “If you
really don’t want to sell then why am I here?” The want sellers are much harder
to sell or reason with. No matter how
much you explain on that initial meeting about offers and to have thick skin
they tend to take it all too personally, easier said than done.
This is a fine line for some people and in
this market buyers and sellers have to look to what they are going to get in
the final product. They might not be
happy with what they are getting when they sell their home but they are real
happy with their purchase. My best advice
with this whole “Need versus Want” is if you don’t have to sell, this just
might not be the right time.”
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This one really confuses the public. In this business I’ve worked with all kinds of
buyers, from surgeons to hourly laborers, they can perform open heart surgery
or lay a new patio in your yard but they don’t have a clue as to how to be
properly represented when purchasing a home.
I recently met a buyer
at one of my open houses who was relocating to Birmingham. I asked him if he was working with a local
agent and his response to me was, “No, we do a lot of our own research, then we
drive around, attend open houses or call the number on the sign. When we find one we like we will probably
work with that agent. I can save
commission that way, so why do I need a buyer’s agent?” I explained to him some of the advantages of
working with a buyer’s agent in their search for Birmingham
homes but then he said
to me “With my company, I’ve moved around a lot, you know this isn’t my first
rodeo.” With his last comment I was
about to cut him loose, let him ride off into the sunset but then I thought let
me try this one more time. What I said
to him was this. “You do you have a
computer, right?” His answer was yes.”
Do you look at a lot of homes on the net?”
Sure was his reply. “Do you have adequate antivirus protection, like
Norton or McAfee? “Dude, of course I do. I would never go on line without
having adequate virus protection.” Well,
look at hiring a buyer’s agent as your antivirus protection of real estate, you
should never go out and look at homes without being properly represented, a
buyer’s agent will have your back, his fiduciary responsibility will be to you
not the seller. That agent you meet at
an open house or the one who answers the phone when you call off a sign is
working for the seller, his loyalty is to get the best price for his seller,
and not you! I shook his hand, gave him my card and wished
him well. I think he got it, but only time will tell.
Typically
at my initial consult I explain to my prospective client the various
representations and in the outset I will be representing them as a single
agent. This is the most common form of
representation and seems to be the most desirable in the buyer’s eyes. I mean why not have someone work exclusively for
you? Agents
who represent clients under single agency owe a fiduciary responsibility to the
client. Those agents cannot share confidential information with the other party or the
other party's agent. Single agency agents must use care and due diligence to
perform duties, disclose all material
facts and be honest.
Once this single agency relationship is established, the real
work begins. The home buyers puts all their trust in
me, it is my job to find them their dream home. I have to prove to them that there is a
real value to working with a buyer’s agent.
From that first meeting I suggest that they get with a local
lender and get prequalified so they know how much to go “shopping for”. No sense looking at $200,000 homes if you
only qualify to buy one for $150,000. The buyers have discussed with me their ideal location,
number of bedrooms and baths, possibly school systems, and price. From here I prepare for the buyers a list of homes
that fit their criteria, fill up my gas tank and hit the road.
There are many misconceptions regarding
representation and here in Alabama the scenario becomes even more complicated
because not only do we offer single agency and transaction agency, but we allow
consensual dual agency. Consensual dual
agency is when the agent can represent both sides of a transaction. It sounds complicated
but it’s not and in some cases people feel it is a conflict of interest. If a Realtor uses common sense and are fair to both
parties dual agency can work well, and I have closed many transactions representing
both parties. I prefer this type of
dual agency representation for several reasons.
Having control of both the buyer and seller and knowing all the “pieces
of the puzzle," as I call it helps me get to the closing table without any
bumps in the road.
Oh yea,
remember the buyer I met at my open house?
The cowboy who told me this “wasn’t his first rodeo?” Well, he
called. I was a bit skeptical at first but
after sitting down with him I realized he was a contender and not a pretender,
so I took him on as a client, gassed up the car and hit the road (or should
I say trail)…..
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In this type of market we often find sellers who have
unrealistic expectations. I mean why
not? They have put in a new kitchen,
painted it from top to bottom, and in some cases have finished off that “man
cave” in the basement. They’re expecting
to get this back and in the past that was the case. Unfortunately, we are in a very unique market,
and if not educated by an experienced realtor, you can find yourself “Chasing
the Market”.
Recently I met with a FSBO in my community and sitting there
at his kitchen table I said, “Lou, where did you come up with your price?” His answer to me was, and it didn’t surprise
me at all, “well I thought I would try it there for a while and we can always
drop it down if I don’t get any offers. I
want to build in some negotiating room.”
This might have worked in the past but all a seller is doing is driving
buyers away rather than attracting them.
This is a typical case in Chasing the Market and several things can
happen. First, the buyers who are out
there now are educated. There is so much
information available on the net that they know what homes are selling for in
that neighborhood and in their mind have established fair market value. You lose all credibility with buyers and send
a message that you are not serious about selling. Secondly, when a home sits on the market for
an extended period of time you could be sending two different messages to the
buyer. Some might feel that you are not negotiable
and others could interpret it that you are desperate and come in with a low
ball offer. In this type of market I
tell my sellers to have thick skin because there are those buyers who are going
to present insulting offers. Properties
priced to market sell. Over priced
properties sit and appear to be stale and don’t sell. Lastly and most importantly, data is clear
that the longer a home sits on the market the final selling price is lower than
it would have been if it had been priced correctly out of the gate.
Below is a chart that shows a typical seller “Chasing the
Market”. 
When you price your home over market value you do nothing
but send a message to the buyers that you are not serious about selling. Current sales in the area have determined your
Market Value. What this charts shows you
is a Market Value line, your home Value on the left and Time line at the bottom. When you start out listing your home above
the Market Value you are in the beginning stages of Chasing the Market and
nothing good happens from here on in. Here’s what happens..Say your home has
market value of $250,000. In the past you could list your home for $275,000 or
$280,000 leaving room for some “negotiation”.
Unfortunately that traditional pricing worked in the past and leaving
that room for reduction was a wise pricing strategy but not now. It sits on the market for sixty days with no
lookers and then you agree to reduce the price to $265,000. Unfortunately, now with current market trends
your home has dropped another $10,000 to $250,000. This goes on again for
another sixty days and, you decide to another price reduction but the market
has adjusted and your home is worth less.
This is Chasing the Market. In
the past, if a home was priced too high the market would eventually catch up
and the home would sell. In today’s real
estate environment if a home is not priced at market or below market value you
will become very frustrated at the results and the home will not sell.
Here is my suggestion to you, and I do it all the time. I ask my seller to have an appraisal done
before their home is listed. It’s a
small investment in the big scheme of things to get to a successful
conclusion. Like I tell my sellers, put
a set of trained eyes on the home. I can
do my best to provide comps and sales in the neighborhood but nothing is as
good as a full appraisal. This can
really benefit both seller and realtor. An experienced appraiser can also be
very helpful to a seller and prior to contract point out things that might need
to be done to help his final number. He
can make suggestions on minor repairs that might help yield a significant
return. Nothing is worse than going to
contract and then being faced with the home not appraising after having spent
all that time in getting it listed, marketed and so on. Just a suggestion, see how it works…
If you are
thinking about investing in a home in Birmingham Alabama, either buying or
selling or both, please don’t hesitate to call @ 205-453-5345. Remember it’s not the sign in the yard but
the name on the sign. Vinnie Alonzo and
RE/Max Advantage South “Two Names You Can Count On”
You have many choices in Real Estate but only
one right one!
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With the current real estate market
conditions, many of my customers sit on the fence of “to rent” or “to buy”….such
a dilemma, but both good questions. In this article I will get into why it is
better to buy a Birmingham home rather than rent in this market. If you watch the news or listen to the radio
you will hear how hard it is to get a mortgage, how soft the real estate market
is, and this is probably not the best time to buy, WRONG! What you have to
understand is that much of that news is national and their numbers are based on
national statistics. Our market here is more localized and it is the right time
to buy versus continuing to rent. I use
this analogy often, “paying rent is like leaving cash in your mailbox each
day.” It is no secret that real estate
sales have softened over the last several years, even here in Birmingham, but
nothing like other areas of the country such as Florida, Texas, & California,
once again, this is the difference in local versus national markets.
When considering buying a home you
may think it wiser to wait until the market adjusts or starts its upward turn
but it’s a catch twenty- two, especially if you’re selling and buying. I just had this conversation yesterday with
one of my clients. This seller who will
be a buyer in this market gets it, and that’s very rare. Most people want it on both ends. We
discussed selling his home, where the market is, and what he will get. He sees this as an opportunity to “buy up”
with the many opportunities that are out there. He realizes that if he waits until we see
things start to turn he might get more for his home but he will wind up paying
more for the home he buys. Owning a home is the largest single
investment that most people will make in their lifetime and now is the time to
cut that rental umbilical cord and jump into this market as a homeowner. Consider this, “According to the most recent
S&P Case Shiller price index, residential real estate home prices have returned
to the first quarter of 2003 levels.” That’s huge, add to that these crazy low
interest rates, high inventory up and in some cases some very motivated sellers.
In 2003, 30 year mortgage rates stood
around 5.9%, today they are 3.75%. How
does that impact the actual COST of owning home?” I saw a similar chart on a
fellow blogger’s post and thought this really drives the point home.
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Date
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Loan Amount
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Interest Rate
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Monthly Payment
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2003
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$250,000
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5.90%
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$1,479
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Today
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$250,000
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3.75%
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$1,158
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Difference in mortgage payments
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$321
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So why rent when these types of
savings are available in today’s market? Where else can you invest your money? Real estate still yields the highest return on investments over
money market accounts and the stock market. The pessimistic
buyer might say so why shouldn’t I wait? Well understand this, even if home
prices go down further, with the interest rates at these record lows, the cost
of buying a home has decreased significantly.
Now this isn’t going to last, once the interest rates go up, so will
that American Dream of home ownership, so why wait?
Well I can tell you why. Many of these fence sitters are disregarding
homeownership because they see their friends and family end up in short sales
or foreclosures. They view renting as
low risk and this assures them that they will never wind up in that same
financial nightmare that has attacked their friends and family members. The problem with renting is this, a homeowner
with a 30 year fixed mortgage paying $1,500 a month would still be writing the
same check twenty years later. In 2011 the
Consumer Price Index included a .4% increase in monthly rents, the largest
increase since 2008, which represents an annualized increase of 4.8%. Think about it, if you paid rent for 30 years
you would be paying over $900,000 and the same $1,500 mortgage payment would be
only $540,000 with an end in sight. Waiting to get a home at a better price or for
the rates to go lower could cost you more when you finally buy a home. So, what are you saving by renting?
If you are thinking about investing
in a home in Birmingham Alabama, either buying or selling or both, please don’t
hesitate to call @ 205-453-5345.
Remember it’s not the sign in the yard but the name on the sign. Vinnie Alonzo and RE/Max Advantage South “Two
Names You Can Count On”
You have many choices in Real
Estate but only one right one!
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Huge Seven Bedroom Home!
• 6,090 sq. ft., 5 bath, 7 bdrm 2 story "Custom Built Huge Corner Lot"
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MLS®
$749,000
- Priced to Sell!
Greystone Legacy, Hoover
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Immaculate 7BR, 5 1/2 BA Executive Home. Main level features 2-story foyer w/double entry doors & wrought iron coach lamps. This home features hardwood floors & crown molding throughout. Lg master suite on main level w/beautiful spa like master BA, his & her closets, granite vanity w/2 sinks, sunken jetted tub & separate shower. Oversized 2nd BR on main level plus 3 BR's upstairs with additional bonus area. Formal DR w/arched openings & old world chandelier plus transoms, 2 story hearth room w/textured walls, stone fireplace! 2 story GR w/vaulted ceiling, columns, arched openings & gas log fireplace. Huge chef like kitchen w/custom cabinets, large island w/breakfast bar, second island, granite countertops, tile backsplash, huge walk-in pantry, stainless steel appliances including gas cook top, range hood, dishwasher, microwave, double ovens. The basement is finished w/den, media room, 2nd Kitchen, exercise room, & 7th BR and BA. Huge 3 car garage with circular drive. Don't miss this!
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Oh yea, yes, and for sure! I can’t tell you how many times I get this
question lately…..where ever I’m at, having coffee at Starbucks, grocery
shopping, walking my dogs, or at a Christmas party. People just seem to be starving for real
estate information and this question always comes up, “Do Birmingham Homes
really sell at Christmas?” ACRE (Alabama Center for Real Estate) just published
their November report and it indicated that November residential sales in
Alabama experienced a 12.6 percent increase when compared to November
2010. The last time our state’s real
estate market experienced positive sales growth when compared to the previous
year, was November 2009. The fact is, buyers
who are out there looking now are serious, typically have sold their home, cash
in hand, and have a real sense of urgency, I see it year after year. As I look back over my years selling real
estate I can tell you that some of my best months have been December, go figure. There seems to be many factors that drive
these people out into the Christmas shopper traffic and what I hear over and
over again is, want to be in by Christmas, moving, relocating NEED to be in by
Christmas, everyone wants to be in their new home, Christmas tree up, and enjoy
that ho, ho, ho with Santa on that special morning.
Why not buy now? Rates are crazy low, stop watching the
news, all they’ll tell you is that it is sooooo hard to get a mortgage, not
true! There are so many programs out
there, get with me and I will put you in touch with some local people who are
great to work with…..and please, please, please don’t get a internet lender. They
are just like their ads say, out there somewhere in the internet, in space
nowhere to be found especially when you have a question or a problem. Big red flag, trouble, trouble, trouble! Be sure that the person you choose to handle
this so very important purchase is LOCAL.
You want to be able to meet with them in their office and see a real
face not just a voice on the phone…. just take some advice and use a local
lender. They have a pulse on what’s
going on here in our LOCAL market, most of them have their underwriters in
their office, and can get it done typically with in thirty to forty five days.
Over the past sixty days I’ve picked up several new
buyers, all they want to do is get out and find a home, and now! They are
preapproved and tired of paying rent, that’s like putting money by the mailbox
every month and bunking with the in-laws or like my last client said the
outlaws. Inventory is up, rates are low
so give me a call, email or text and I would love the opportunity to help you
find your own Birmingham Home.
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Fabulous Lake Front Home!
• 3,588 sq. ft., 3 bath, 4 bdrm 1 1/2 story "4 Sided Brick"
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MLS®
$469,900
- Priced to Sell
Highland Lakes, Shelby
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Spectacular custom built home in Highland Lakes located on a cul-de-sac street with a 170 ft of lakefront. This is a fabulous lot, just a short walk out your back door to you own 38 acre private lake. Custom built & maintained to perfection inside and out, nothing has been overlooked, main level living, large BR's, tile, chef kitchen, spa like master BA & move in condition. Soaring foyer opens to a oversized family room complete with large transom windows that provide a bright light environment. Hardwood flooring through out main level, BR's are carpeted, large eat-in kitchen with granite countertops, gas cook top, tile backslash w/breakfast nook and custom decorative lighting. Stainless kitchen appliances, fresh paint, neutral colors, heavy moldings, fireplace w/gas logs, and custom built in bookcases. Finished daylight basement includes an office, full bath, kitchenette area, and a large rec room or BR which opens to a flat fenced backyard. This home is a delight to show!
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Meadowbrook, Birmingham
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Announcing a price reduction
on 3157 Bradford Place, a 4,989 sq. ft., 4 bath, 4 bdrm 2 story "Georgian Home w/ Circular Drive". Now
MLS®
$539,000
- Fabulous 4-Sided Brick.
Property information
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Brook Highland, Shelby
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Announcing a price reduction
on 1817 Stone Brook Lane, a 2,427 sq. ft., 3 bath, 4 bdrm 1 1/2 story "3 Sided Brick". Now
MLS®
$232,500
- New Listing.
Property information
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Greystone Legacy, Hoover
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Announcing a price reduction
on 1336 Legacy Drive, a 6,387 sq. ft., 4 bath, 5 bdrm 1 1/2 story "Golf course views". Now
MLS®
$849,900
- So much home for the size.
Property information
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Mt. Laurel, Shelby
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Announcing a price reduction
on 105 Elyton Street, a 3,624 sq. ft., 3 bath, 3 bdrm 2 story "Custom Built w/front porch". Now
MLS®
$524,900
- Priced to Sell!.
Property information
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Highland Lakes, Shelby
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Announcing a price reduction
on 2000 Bluestone Circle, a 4,516 sq. ft., 3 bath, 5 bdrm 1 1/2 story "4-Sided Brick w/mortar wash". Now
MLS®
$524,990
- New Lakefront Home!.
Property information
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Custom Built Arthur Howard Home
• 2,896 sq. ft., 2 bath, 3 bdrm single story
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MLS®
$274,900
- REDUCED TO SELL!!
Highland Lakes, Shelby
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Come see this gorgeous 3 bedroom, 2.5 bath home situated on a quiet cul-de-sac street. OPEN HOUSE SUNDAY MAY 29TH FROM 2-4! Only steps from Grove Park, this house is beautifully landscaped with a fenced backyard, large patio area, and full sprinkler system. Well maintained with fresh paint inside and out! The main level features an open floor plan including: a Grand Foyer entry, Great Room, Formal Dining Room, and a large Eat-in Kitchen with a breakfast bar. Also located on the main level is a spacious Master Suite with a generously sized walk-in closet. Not to be out done, the second level has two large bedrooms with walk-in closets, and is connected by a true Jack and Jill bath. In addition, there is an ample sized room perfect for a cozy family/media room. Storage is no problem since the upstairs has three attic entries, one which is a full sized walk-in that could be easily converted to a office. All of this, plus much more make this the perfect place to call home!
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Want perfection, this is it!
• 3,624 sq. ft., 3 bath, 3 bdrm 2 story "Custom Built w/front porch"
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MLS®
$549,900
- Priced to Sell!
Mt. Laurel, Shelby
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Fabulous custom built home the the heart of Mt. Laurel with all the bells & whistles. Chef's kitchen including professional Wolf gas stove & double ovens with a custom hood. Stove features 6 burners & griddle with pot-filler. Microwave drawer, dishwasher drawers, wine cooler, granite counter tops, honey-onyx backsplash, farmhouse sink, counter-depth LG refrigerator, garbage disposal, under counter adjustable lighting, & crumb catcher. Master BR features gas fireplace, ceiling fan, & 2 large walk-in closets. Master BA features chromatherapy whirlpool by Maax & large walk-in shower for 2 with 3 shower heads, 6 body massage sprays, & programable faucets, dual vanities, custom cabinetry. Large media rm with custom built cabinetry, mini frig, surround sound system, built-in dual desk with overhead cabinets. Detached 2 1/2 car garage with finished carriage house above. Carriage house has LR, Kitchen, Lg BR, Walk-in Closet, all with hardwood floors, separate full BA and laundry rm with tile.
Property information
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Mt. Laurel, Shelby
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Announcing a price reduction
on 105 Elyton Street, a 3,624 sq. ft., 3 bath, 3 bdrm 2 story "Custom Built w/front porch". Now
MLS®
$549,900
- Priced to Sell!.
Property information
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