Thomas Millar's Blog

I COULD BE WRONG, BUT...

Thomas Millar (Century 21 New Millennium) — Thu, 12 Jun 2008 22:05:58 -0700

One of the best ways to approach a possible conflict is, "I could be wrong, but...". People will open the doors for a transparent, humble attitude rather than a presumptive, arrogant one.

I sell foreclosures, and one of the hallmarks of a foreclosure sale is that we all only get paid on the net to seller, usually, at least with the bank I deal with. And I always put "Commission based on net to seller only" in the agent remarks section of the MLS. Yesterday, the selling agent of one of my listings that was closing call me up rather indignant that I would advertise 3% to selling agent (which I always do, no matter what the commission is from the bank) but that he should only be receiving 3% on the net.

Here's where assuming the best would have been handy for this gentleman. There's a wise saying from the bible that's quite apropos: "Be quick to listen, slow to speak, and slow to anger." You see he jumped in with an arrogant attitude assuming I never made mention of the commission base limitation.

As he was telling me this I was thinking I was pretty sure I had it in there, but I was frantically checking my listing since I was sitting at the computer. I suggested, "Well, it was in the bank addendum you signed, too." To which he replied, "Doesn't matter, you advertised 3% in the MLS, and we have a problem."

Eventually I found what I was looking for, and with my confidence re-fortified, I politely told him it was in the remarks (I held back on the way I wanted to say it). He smugly asked if I had put it in the internet remarks because he was looking right at a printout from the MLS dated from the time of the contract. I told him that no, it was in the agent remarks.

Then there was a short pause on the other side following which he gruffly remarked, "Oh, I see it. OK then."

You see, had he said, "Hey Tom, I could be missing it, but it looks like you advertised 3% on gross, and the HUD is showing only 3% on net to seller..." or something like that, he could have walked away with dignity instead of embarassment. I can't tell you how many times I've had what I am certain is increased cooperation from title companies and other industry service providers for information and help. Many times they go way out of their way because I'm not presumptuous. Treat people how you would like to be treated, that book says. Great advice!

TRADITIONAL SELLERS CAN COMPETE IN THE FORECLOSURE MARKET

Thomas Millar (Century 21 New Millennium) — Thu, 12 Jun 2008 10:57:16 -0700

While at times it seems most listings on the market right now are foreclosures, there are many sellers who need to and can sell their house in this market. I heard a statistic the other day, though I have not verified it, that one in every 38 listings in Prince William County in Northern Virginia are foreclosures. That, of course, depends on your specific area, too.

I personally sell mostly foreclosures, but I have a few listings that have a live human behind the door who simply needs to sell and move for one reason or another. I've found there are at least four features of a traditional sale like those that differentiate themselves from every foreclosure on the market.

1 - ATMOSPHERE: An occupied house presents a warmth in this market that seems to be appealing to buyers after they've gone through endless vacant, cold (in the winter or hot in the summer), and dark (many of them have no power on) foreclosures. Many of these are dirty and have been abused, too. So seller, leverage that warmth just as you would have in other markets. Lights on, temperature comfortable and refreshing, clean and relatively clutter-free.

2 - CONDITION: The banks are selling most of the Northern Virginia homes in "as-is" condition and have shown little interest in replacing carpet, painting, cleaning, repairs, and caring for the landscaping. Many of the buyers that aren't bottom-fishing are looking for move-in condition. A live seller can rise to that and really make the home sparkle. Invest in a carpet cleaning or replacement, if necessary. A few thousand now could save a lot of time on market and successive reductions. Clean up the paint, and make the landscaping attractive.

3 - PRICE: If you HAVE to sell in this market, you NEED to have some amount of equity to compete unless you have funds to bring to the table. So assuming you have the equity, please realize the equity you had a year or even six months ago was never in your bank account. You never had it, and if you need to sell right now, you never will have it from this house. Price your house aggressively. Here's what happens if you don't, taking a "let's try it at this higher price for a while" approach: you'll likely reduce to match falling prices, then reduce again and again, trailing the market as it declines (depending on your area). So what you need to do is price it at the first or second price reduction and get AHEAD of the market to sell now. I have seen many a seller wind up selling for less than they could have if they had priced aggressively to begin with. Resist the temptation to seek that special buyer that might be willing to pay the Zillow "move me now" price.

4 - MARKETING: For some reason, agents that generally place pictures online for traditional sellers put only the front picture of their foreclosure. I have had many sales of my foreclosures, I believe, because of the combination of price and buyers surfing online that have seen quality pictures with useful information. There's often just a greater ownership of the listing with a traditional seller. Now my recommendation would be to get a listing agent that takes as good of care of their foreclosures as they do their traditional listings, if the agent has foreclosures.

These, in my opinion, are a few of the more significant ways a traditional seller can beat the foreclosure market. Look for a future post, and I'll tell you the story of a successful seller that did just that!

BABYSITTING THE APPRAISAL CAN MAKE A DIFFERENCE

Thomas Millar (Century 21 New Millennium) — Wed, 04 Jun 2008 20:44:39 -0700

It was one of those listing appointments you could tell was going to be a struggle when it came to price. I had already asked the seller what they thought their home's value was, and it was about 10% higher than my CMA was suggesting. They had a nice home, though, tastefully decorated with some value-added upgrades including an overdone but succulent master bathroom for that neighborhood and age/style of home.

We started on the market at $419,900 about $20,000 higher than I would have liked but I had helped them see that a higher price than even that would be counterproductive. The wife was very initiated and did a lot of research online, and she often had suggestions for me which we talked about. Some I incorporated, some I didn't. She even took the initiative and printed some postcards to mail to a target area she felt would be good to send to.

The first offer came in around $380,000, and after some negotiating they all settled in at $400,000, and I thought, "This is very good!" Then the appraiser came and did his thing. When the selling agent came back a couple days after the appraisal with a $375,000, I thought, "I don't think I was that far off." I realize appraising can be an art, but this one was out there. Well, the long and the short of it is that the sellers wouldn't come down, and the buyers (despite having put more than 20% down for the loan), wouldn't come up a dime. No Deal! And three days later, the competition was under contract for the same price with the same settlement date (I called the agent...it was the same buyers).

Back on the market. The sellers wanted to have an independant appraisal, so I put them in contact with an appraiser my broker had used before. End result, $385,000. They were disappointed but refused to lower the price significantly. I was recommending $399,900, tops. Well, we were back on with a $10,000 reduction to $409,900 for about three weeks when we took another offer. After some short negotiations, again we were in a contract for $400,000.

Needless to say, we were all anxious about the appraisal. Even the new buyers were anxious because they had the same thing happen to them on their previous contract. The seller said she had heard that when the listing agent accompanies the appraiser on the appraisal that it could make a difference and she suggested I go. I had never gone to an appraisal before and was (admittedly) a little indignant. But I put on my best service face and fixed my attitude and met the appraiser with the husband bright and early for the appraisal.

The husband had the coffee ready and the muffins warm! So we met the appraiser, we schmoozed, we asked him about his family, and we showed him into every nook and cranny of that house. We showed him the upgraded fixtures, the island with the granite counter, the ceramic tile, and we even showed him the fantastic storage crawl space under the living room. It was impressive and shameless all at once!

Then the appraised value came in...unofficially. $400,000! I couldn't believe it. It was unofficial because the appraiser didn't dot an "i" somewhere, but it was a done deal. I really learned something in that experience...well two somethings. First, I can learn from a seller or client who isn't in the business but thinks they have the best strategies (BTW, these were VERY likeable people, I really enjoyed working with them). Second, at least with one data point in hand, it appears the appraisal may be affected by a little warm welcoming and attention. If I ever feel the appraisal may be an issue, I'll have to try it again!