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Detailed Real Property Research a MUST!

No matter where you go there has been some kind of decline in the housing market. Honolulu County is not an exception and it is imperative that both sellers and buyers have a seasoned agent who knows how to run comparable properties before listing a property for sale or submitting a contract for a buyer.

Example 1:

Listing for a single family home is not easy when you're listing a home built in the 50's and just an average kind of property. I have an eye for looking under clutter and seeing the ‘value' in the property. After going through everything with the sellers we appropriately listed it for a little above value of the land but below the ‘highly upgraded' homes in the area. A few days of heavy showing appointments and we were IN contract on the 11^th day. Listening to a client's needs was definitely the key to a workable solution. (They interviewed other agents and went with us because we LISTENED)

Example 2:

Setting showing appointments and writing contracts for a buyer: It's not just showing a property and writing a contract. Make sure and research comps. Over and over I have seen overpriced homes from sellers who bought the property at the height of the market and listing it for the same price. Their ‘strategy' is to get offers and then counter the buyer with an ‘if appraisal does not meet offering price the buyer will pay the difference'. In most of these cases they are looking at $20,000 to $50,000. So it's either the buyer or the seller bringing in the ‘extra' money at closing.

These are just two short examples of the things a Real Estate Professional has to do to think in the best interests of their clients and the market surely hasn't been kind ......but with a seasoned agent there ARE workable solutions.

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Celeste "Sally" Cheeseman is a Realtor-Associate with Century 21 Liberty Homes in Mililani, Hawaii. With a sharp understanding that a listening ear is the key to a client's needs, she serves the island of Oahu (Honolulu County) and all Hawaii Military Relocating to Hawaii, Hawaii Retirees, Hawaii Job Transfers and Hawaii Residents. Website: www.hawaiihomesmarket.com

Supporting Hawaii Local Businesses!

Posted by Celeste "SALLY" Cheeseman HAWAII Relocations & Real Estate on 09/03/2009 04:20 PM

Comments (36)

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Originally posted at: Hawaii Real Estate & Relocations : Detailed Real Property Research a MUST!

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36 Comments on Detailed Real Property Research a MUST!

SEP

For sure, any agent, whether listing or selling has to pay attention to the details of the property they're listing or the contract the buyer is writing.

A contract without an appraisal addendum to protect the buyer is negligence. A listing for a house that is overpriced is a waste of everyone's time.

Hi Sally - I agree, and it is a bit frustrating too when there is an overpriced home on the same street with a seller whose listing I am trying to get. My seller will think their house is worth "at least as much" as that other house, and the only response I can give is that the other house hasn't sold, and neither will theirs at that price, and I try to show them the comps and what has sold.

Then, of course, the other agent will call and complain if you have a lower listing, because you are hurting her chances of getting her high listing price! It's a real tug of war, and some agents can't resist those tugs and they give in to the overpriced listing too.

Sally - Agents definitely need to do their homework and they also need to listen.

This is profound in its simplicity.

It's our JOB to be 'intimately familiar' with the properties we transact. There's no excuse not to be, really.

I find the research one of the fun aspects of this profession . . .

Sadly, I know I am in the minority.

Sally, very good points that each listing is very unique and the real estate professional can bring REALITY to the situation.

It's definitely part of our job to bring reality to the situation and to educate our clients, but at the end of the day, the client is the "boss" and they don't always listen. You will always have some buyers out there that just "must have this house" even if its overpriced which leads sellers to believe that there will be someone out there that will "fall in love with their house" and offer more than market price. It just makes our job tougher!!

Excellent Sally! These points are so essentially simple yet so important. Almost like Agent 101 ; ) I'm going to re-blog because I couldn't have said it better!

Sally - These are great points. I am often asked by buyers to 'tell me what you think this house should sell for'. I am always tempted to give a price, but always defer to 'let's go back and check the most recent comps'...It reminds me of CSI. The evidence doesn't lie.

I have seen quite a few different homes lately still priced at the highs of 2004

Hi Sally -- I totally agree and see this all the time in our market -- sellers hoping to break even when they bought at the top of the market.

Indeed, Sally. it is one of the main reasons why doing market reports on communities is so valuable. Along with running comps, it gives the agent the knowledge they need to successfully convince a potential seller or buyer of the true value of a property.

Sally: Yes... 2 things come up for me, from my side of the fence... 1. Listening to the client's needs, and 2. Look over those comps several times. I've helped y'all with those for 25 years... It's so easy to just run sales and assume values... No, no, no... you need to groom and fuss... break them out, look at them all and decide, "do I have REAL COMPARABLES" or not...

Sally - seems like completing your homework and listening are pretty basic stuff that all agents should be doing. Too bad a reminder is needed.

Jeff

Sally:

Just because they paid top dollar or bought at the top of the market doesn't mean my client should pay for their mistake.

What was it you said about good listening skills? I didn't hear it? ;-)

SEP

Lenn: I have no time to waste when I have to sell a property. Being detailed means a transaction in escrow :)

Susan; And sometimes it backfires like a son of a gun too. No contracts and a house sitting on the market.....and buyers without a home. Let's get real people!

Michelle: Yes they do :)

Candice: I've been working on that :) (the simplicity) And the details and research I can spend hours and be having fun too lol!

Gary: It's a gift....to look under it all and put myself in the others shoes. Gives a whole different perspective!

Lora; Of course there will be...and it's up to us to educate too. Listening doesn't mean telling them what they want to hear...but being straightforward....so in the end I sleep well at night.

Thanks Erin...I think so too...if I may say so myself :) :)

Christianne: Oooo....I love CSI too :) :) and I do believe that some may be blinded...but with a little education and a whole lot of confidence...they usually will listen too

Russ...me too:)

Chris: I think we're all ...still....seeing that.

William: Homework...research...and facts. Sounds like a good plan to me :)

Rene: Hours..and hours of valuable researching time...to come to a common goal...selling that home!

Jeff: Reminders are only good if they're heeded :)

Carol: Ha! Good listening skills works both ways....so what does one do when one side isn't listening? Well....for sure there is no real conversation going on... A good relationship means communication is open and both sides are contributing. :)

An agent representing a buyer had better do those comps very very well if s/he is going let the buyer agree to a clause that says "if appraisal does not meet offering price the buyer will pay the difference".

That's a lawsuit or a license hanging in the balance -- even in the wacko appraisal environment we have now.

Good points about research needed by both listing and selling agents, Sally. I am still wondering why the sellers in the transaction would think that buyers would want a particular home so much that they would pay more than appraised value for it. That is like asking the buyers to pay for your misfortune at buying high and needing to sell now that the market is lower. Not happening for my buyer clients. Should not be happening for anyone's buyer clients.

Sally,

In June, I presented my buyer's offer to the sellers and their agent. My market research was so solid that the sellers took their home off the market - then and there! It was clear their minimum price was way over market - and no appraisal would possibly come back that high.

Your post is a great reminder!

Sometimes the public doesn't understand that we have better tools at our disposal. Furthermore, we have experience to know where to look.

There are very few agents out there who understand how to interpret the data that the MLS provides, and even less who bother to gather it. I do, every Friday around 6 a.m., and it is my information that many local agents use in their business. See this weeks report at http://MiltonBlog.ca

It is not a fast process to set up for gathering this kind of information, as the MLS does not provide any of it to us, so agents tend to rely on incomplete data and inaccurate data, or, worse still, they buy into the myths that the mainstream media promulgate.

I'm not clear on why MLS's don't provide better data, and why they lable the limited stuff they do provide as 'FOR INTERNAL PURPOSES ONLY' and can cancel one's membership in the MLS if they find you disseminating it to the public.

Interesting.

In North Atlanta, we have a great market for buyers, but they need an experienced agent who sincerely cares about them. This housing market will truly separate the "sheep from the goats".

If my child was a first time homebuyer, I would check out the credentials of that buyer's agent very closely. Listening and buying into the goals of that buyer are very important credentials to bring to the table. Willingness to do the necessary research and do it promptly is very important because good deals sell fast in this area. But I am ever mindful of the fact that just because it looks like a "great deal" on the surface does not necessarily a great deal make!

I learned at UGA many years ago that stats can prove anything--and it is defintely true in real estate today.

I love referrels in North Atlanta where I have lived my entire life.

Freida Knight, 1st Knight Realty, Inc. 770-867-1901

Knowing how to find the true value of a property is so important. Putting the wrong price on a listing can waste a lot of time for you and the seller. If a house can't appraise for a price, that's a whole other issue for the seller and would be buyer.

Knowing the correct price, especially in today's market, requires research, AND some knowledge of the properties that have sold.

How appraisers and agents can hope to make valid comparisons to houses they have not seen is beyond my imagination. Yet evaulations are submitted that way all the time.

It reminds me of our local County Appraisal system. An appraiser told me once that they didn't need to know anything beyond the square footage and number of bedrooms and baths. The house got the same valuation whether finished with high end fixtures, carpeting, cabinetry, etc. or had plywood for floors and counter-tops. And they have the nerve to say their assessments are based on "Fair Market Value."

Pricing property is an art and science combined; especially when most the homes are unique; not track homes.

I just wrote an offer on a property today...the buyers had their needs and a very small choice...but I did suggest we run comps in order to decide what they wanted to offer.

great points. yes, we must listen to what our client is saying. These overpriced homes just sit on the market.. I know a lot of these sellers bought at the top of the market, but it seems they may have to wait quite a while for the market to get back up there, for them to make a profit. thanks for sharing

Sally: You are right. Agents need to make adjustments much like an appraiser in order to provide a real fair market value. Too many agents use the MLS average price or use cost per square foot failing to factor depreciation. Great Post!

Sally that second example would not fly around here. First of all with the number of properties on the market they would most likely not get an offer, and I highly doubt that if they did that Buyer would go along with that appraisal stipulation. Goes to show how no two market are alike.

I am seeing way, way too many houses on the market that will never comp out. Too many agents are taking listings that will not sell....and for what?

SEP

Things are really strange with pricing right now Sally. My Buyers get really confused when they see a "deal of a lifetime" only to find that there are 40 offers 50 to 60K above asking price.

Research and knowledge are the keys here to be sure! I keep trying to tell my listing appointments that the Buyers are more savvy than ever before. They know when something is overpriced. It's not a SELLER'S MARKET where you can set a price high and come down. If the Buyer doesn't come and look, who are you going to negotiate with?

I had an offer on a WELL-PRICED listing after it was on the market with me for 8 days that was $12,000 less than list price. The Buyer's Agent told me that her reasoning was that was how much she had to come off of her home and reasoned that was a fair offer. It wasn't! We countered and she saw the light. The other Agent agreed with me that the list price was A GOOD DEAL...

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