"I'LL SEND YOU OUR CRITERIA!" HA! THERE ARE OFTEN ONLY TWO CRITERIA, PRICE and LOCATION.

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

"I'LL SEND YOU AN E-MAIL WITH OUR CRITERIA!" 

This trip down memory lane is inspired by Patricia Kennedy's article this a.m. about contacts from buyers who know where they want to live and buy a home, but due to a lack of market knowledge, have unrealistic expectations. 

LennSorry, Mr. Home Buyer, THERE ARE OFTEN ONLY TWO CRITERIA, PRICE and LOCATION.  Once you have your qualified price range, the next step is finding the area with homes in that price rangeTHEN, and only THEN, when you have determined your area and price range, the remaining "criteria" may be irrelevant or worse, totally unrealistic

WHAT IS THE AREA??   I recently received a call from a family seeking a buyer's agent to help them locate a home to buy in Bethesda, Maryland.  Their number one criteria and the source of their decision to buy in Bethesda was the public school ranking.  Since public school statistics are available on the Internet, this family had limited their search for homes by selecting the highest ranking public high school in Montgomery County

The area of Bethesda selected was in the 20816 and 20816 zip codes.  This is an area I know very well and, if experienced local real estate agents know one thing, we know that homes in Bethesda in the Walt Whitman High School cluster are some of the highest priced real estate in Montgomery County.  

What makes homes in this high school cluster so high compared to other areas?

Public School Rank
Access to METRO Train
Quick commute to Embassy area of DC
Quick commute to financial centers in DC
Luxury shopping
Luxury homes
Easy access to high tech area in Northern Virginia
High income averages
 

HOUSING DEMOGRAPHICS FOR 20816, 20817 areas of Bethesda, MD (all percentages approximate)

30% of residents earn $250,000 or more
45% of residents earn $150,000 or more
75% of residents earn $75,000 or more

UNREALISTIC EXPECTATIONS.  Once the buyers had selected the area for their home search, based solely on the public high school rankings, the rest was up to me to find the house for them.  Not a problem so far.  Or, was it??  Indeed it was a problem because, while they had selected the area in which they wished to buy a home, they had no market knowledge of real estate prices in the area of choice.  Next question??

WHAT'S YOUR ANNUAL HOUSEHOLD INCOME?   That's a question I have no hesitation asking because it gets right to the basics of determining a realistic price range for a home search.  The family was relocating to the area because the husband had accepted a job at the National Institute of Health in Bethesda.  Their new income, $120,000 was going to qualify them, with a minimum down payment, for a mortgage amount of NO MORE THAN ABOUT $500,000.    Homes in Bethesda

DISCONNECT BETWEEN EXPECTATIONS AND REALITYoften leads prospective home buyers to disappointment.  On many occasions, consumers will contact us about what to expect IF THEY ACCEPT A JOB OFFER.  The transferee is anxious to relocate because the move often represents a step up the employment ladder.  However, the spouce will support the move only if they can equal their existing style of living in this area.  In this case, the family was relocating from a town in Illinois where their existing 4 bedroom, 3 full bath, 3,500 square ft, home on an acre of land would sell for about $250,000, the same home in Bethesda is going to sell for much more.  The new home on the right on a 1/5 acre would sell for about $1,800,000 in Bethesda. 

PRICES of HOMES FOR SALE IN SELECTED HIGH SCHOOL CLUSTER

Low - $569,990
High - $8,999,990
Average - $1,996,279

WHERE YOU ARE COMING FROM MAY DETERMINE WHETHER OR NOT YOU WILL AGREE TO RELOCATE.  There are wide difference in income averages throughout the country.  Since the Washington DC and suburbs of Maryland and Northern Virginia are high income areas, folks from southern or mid-western areas of the country are surprised to find that their new higher income will not support their present life style and home size. 

BE BRUTALLY HONEST!   Don't give prospective relocating home buyers false expectations about what to expect in your market area.  Fact is, this family COULD find a home in MD comparable to their existing home.  However, it is NOT going to be in the school district from which they began their search.  Maryland public schools rank very high on national scales. Homes in south and south west

I'LL SEND YOU MY CRITERIA?  About a year ago, I received a call from a gentleman in Phoenix who gave me his home search criteria.  "WHERE CAN I FIND A HOMEto match my criteria??. 

Answer, "IN PHOENIX."

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Courtesy, Lenn Harley, Broker MD & VA, Homefinders.com, 800-711-7988.Lenn Harley

HOW WE HELP LOCAL HOME BUYERS FIND A HOME IN BETHESDA.
We know the neighborhoods, the values, and we will serve your interests from home search to settlement. A search for homes in Bethesda will show that homes sell quickly.  Our agents will watch the market and alert you when a home is for sale. Give us a call and we'll have an agent ready to show you homes tomorrow.  Contact Lenn Harley, Broker, Homefinders.com, 800-711-7988.

HOW WE CAN HELP RELOCATING HOME BUYERS IN BETHESDA.  Just call Lenn at 800-711-7988 and we can chat about real estate in Bethesda.

 

Posted by


_______________________________________________________________________________________________________


Want to learn more about Loudoun County, VA? Join Loudoun County, VA on Facebook!

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Market Trends
Groups:
AR Twitter Users
Real Estate Trends
Real Estate Market Reports for Maryland and Northern Virginia
Tags:
bethesda real estate
bethesda homes for sale
homes for sale bethesda

Spam prevention
Show All Comments
Rainer
88,302
Michael Simcock
Coldwell Banker (Elk Grove, CA) - Elk Grove, CA
Elk Grove, CA Realtor 916 425-1084

I think you hit this one right on the head for all of us. First time buyers who want a move up home on a starter home budget. Location on the water for mainland prices. It just goes on and on.

With the huge price drops in my area, people think that they can get any home they want for the price THEY want to pay. We all know it does not work that way in this world.

Feb 07, 2011 04:43 PM #53
Rainmaker
104,164
Robert Slick
Beach and River Homes - Georgetown, SC
NRBA, RDCPro, Trident/CCAR MLS

Cool blog, I like the formula approach.

Feb 07, 2011 05:39 PM #54
Ambassador
2,660,292
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Lenn- LOL- I am still laughing about "In Phoenix.." I can't even comment further because that was so funny! 

Feb 07, 2011 05:59 PM #55
Rainmaker
635,672
Maria Morton
Chartwell Kansas City Realty - Kansas City, MO
Kansas City Real Estate 816-560-3758

LOL Very well put, Lenn! Cost of living expenses will also shock these relocating people going from the midwest to DC/Maryland/VA.

Feb 07, 2011 06:19 PM #56
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Maria.  I send folks cost of living data regularly.  Not everyone because not everyone will understand it.  They are focused on the homes.

Katerina.  HA!  Sometimes things just come to you.

Robert.  Thanks.  Works for me.

Michael.  I have seen that far too often. I believe it comes from non-factual information they read in the media.  Real estate writers trying to gain readership from consumers by giving consumers false hope about what they can buy. 

Lorie.  Indeed.  Folks coming here from Tulsa are not pleasantly surprised.

William.  It has been clear to me for many years that overcoming consumers' preconceived notions of our market is the first obstacle. 

 

Feb 07, 2011 09:12 PM #57
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Missy.  I suppose it will never change.  The smartest buyers are the ones who tell me what they will be earning here and then where the job is located and I can then tell them about the market in their price range and location.  The market isn't going to change.

Chris.  I've seen that too.   Over the years, when a buyer finds out what their money will buy here, the simply decide to stay put.

Ruthmarie.  HA!  I have the same thing every week.  Callers want a detached home with great public schools in an area where they can qualify for a one bedroom condo.  Their choice is to buy a one bedroom condo or buy 30 miles farther out.

Christine.  Around here, it's all proximity to DC and folks just have to understand that.

Karen.  Thanks.  Far too many folks want to replicate their home in another state when they move her.  Not going to happen.

John.  I want only the income to qualify and the job location.  The criteria is fungible.  The market isn't.  I can't county how many transferees I've had to tell, "the market is what the market is."

I remember one gentleman moving from a Chicago suburb who insisted on giving me his 25 line criteria.  I found two homes that matched his criteria and both were priced about $1Million.  However, his qualified price range was $300,000.  He purchased a $300K home. 

Nancy.  I never, never ask for criteria.  I want only annual income and job location.  That's where we have to start.

Margaret.  Indeed it does.  I've spoken to a number of buyers who are considering a job in downtown DC with a beginning income of $60K.  When I tell them how far they'll have to commute to get a home for their family with 3-4 children, they decline the move.  No sense misleading folks. 

ON THE OTHER HAND, by providing market information, cost of living indices to prospective home buyer transferees, they have successfully negotiated HIGHER STARTING INCOMES here.  Employers are not always fair when offering jobs to transferees.  The typical comparison is the employer located along the Route 95 corridor between Baltimore and DC who uses Baltimore cost of living numbers rather than DC numbers.  Slick, slick.

Todd.  I agree.  Folks appreciate that too.

Markita.  I'm sure you get as many of these calls as do I.

Chris.  HA.  I moved from 20814 to 20180 and exchanged a 55 year old 2100 sq. ft. Cape on 1/5 acre to a new 3400 sq. ft. Colonial on 1.6 acre.  Been there, done that.  And I didn't have to go to Cleveland.

Joan.  I've had that conversation many, many times.

Ellie.  HA!  I hope that they also know that private school enrollment in southern Mont. County hs waiting lists of 1-2 years.

Karen.  I had several extended conversations with that caller who was stubbornly determined to buy a $900,000 home for $400K.  Just not going to happen.

Michelle.  Good for you.  Neither am I.  Since we don't handle rentals, there's no future in investing very much time in consumers who want the market to bend to meet their criteria.

Elizabeth.  NO, I AM NOT.  Our market is NOT "turning around".  Some areas, close to DC, have "stabilized", but there is NO turnaround.  Thousands of folks are still prisoners of their mortgage.  It will be years before many folks have enough equity to be able to sell.  Unless they purchased their home prior to about 2004-5, they have no equity and are likely to be upside down for many years.

Melissa.  My goodness, walking distance to Whitman is some of the highest priced real estate in the area.  Precisely where that family wanted to buy based solely on the Whitman ranking.  I was in 20814, but I still sold my little 55 year old Cape for twice what I paid for it from 2003 to 2005. 

Margaret.  St. Mary's county had a good run in the mid 2000s but prices are low there again.  Pax River didn't benefit from BRAC.

Jeff.  Same thing here with waterfront.  The waterfront "premium" is rarely understood by prospective home buyers.  Then they say, "we'll take a fixer-upper".  HA, that's not going to save much if the home is on a waterfront lot with MLW to accomodate a sailboat.

Carol.  Yep, and I'm here in Loudoun to sell them a house.

Benjamin.  Indeed it works both ways.  Many folks from the west and southwest want to buy a "contemporary" here, of which we have very few.  What they finally buy is a 2 story Colonial or Victorian style home with an "open" design interior.  That's about as close to contemporary as they will usually see her.  We do have contemporary communities but they are way overpriced and hard to sell.  This is Williamsburg Colonial country, or New England bungalow country.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Feb 07, 2011 09:50 PM #58
Rainmaker
559,720
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Wow! If the average income is only $150,000, I wonder how that can support an average house of $2 million?  Isn't that in extreme bubble territory? I thought a normal affordability was having an average house be about 3 or 4 times the average income.  Do most people have a million dollars to put down? 

Feb 07, 2011 11:48 PM #60
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Valerie.  Thanks.  These experiences just might encourage some newer agents.

Tim.  That $150K average income is for zip code.  Census track averages show pockets of much higher incomes.

Bethesda has a huge number of foreign cash buyers, executive level home buyers with significant down payments or private financing.  There is no relationship between the incomes and home prices since many lease luxury homes in the area.  Most embassy employees lease for two years and then the embassy buys.  For families with incomes in the $150K range, the lower priced homes, $700K-$900K, will still get them in the schools they want.  This area is also home to bank, insurance company, multinational company, etc. executives with multi-million $$$ incomes. 

If we look closer at incomes, there are pockets in Bethesda and Potomoc where the income averages are $500K or more.  My high sale in Potomac was $5,000,000 and it was a cash buy.

Feb 08, 2011 12:08 AM #61
Rainer
29,130
Jimmie Graham
Keller Williams Realty - Ypsilanti, MI

I enjoyed the blog very much and again it's very true doesn't matter where you are in selling real estate. I like the fact that you are upfront and honest with your clients and give them the right expectations upfront...hence why you are the best in your area!

Feb 08, 2011 02:26 AM #62
Rainer
136,954
Brent & Deb Wells
LivingWell Properties - Prosper, TX
Prosper TX

Lenn,

Thanks for this, I am a believer! You were speaking to my heart when you said:"BE BRUTALLY HONEST!". I can't agree more. It seems everyone feels they should be able to buy in the best school district regardless of their income.

-Brent

Feb 08, 2011 02:32 AM #63
Rainer
78,789
Dee Bundy
Fort Collins Realtor @ C3 Real Estate Solutions - Fort Collins, CO
Helping You Make Colorado "Home"

I think i can hear the collective sound of agents writing down "In Phoenix" for use in future relo calls.  Relocation is definitely such a tough challenge for buyers who haven't really grasped the limitations and opportunities of their destination's market.  I had a recent buyer who spent twenty minutes telling me about all of the modern, 'loft-style' features he needed in a ranch home here in Ft Collins.  I had a hard time convincing him that there were not only no options for sale but none that I knew of in existence.  You just can't move LA to Ft Collins (or Phoenix to Bethesda), unfortunately.

Feb 08, 2011 05:29 AM #65
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Jimmie.  How sweet.  Thank you.  I try.

Brent and Deb.  I can tell when consumers are surprised to hear the facts.  But, it's important that we not mislead folks.

Erica.  That is alwasys the challenge with relocating buyer. I had some folks come from Plano TX to Northern Virginia who sent me photos of their home in Plano that was on the market for $275K.  I did manage to find a very similar Gulick built luxury home for them in Reston for $895,000.  That's just the way it is.

Danielle.  We do have folks who buy land and build custom homes here, but the market value is usually very much lower than surrounding properties that were built to market.

 

Feb 08, 2011 07:10 AM #66
Rainmaker
216,893
Mark Organek
And the United States of America - Mesa, AZ
On a journey to accomplish one huge goal.

Lenn - Great post showing how buyers think and what we have to work with.

Feb 08, 2011 03:59 PM #67
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Mark.  Thanks.  It happens more offent than we would like.  Unrealistic expectations.

Feb 08, 2011 10:33 PM #68
Rainmaker
150,469
Virginia Gardner
Roy Wheeler Realty Co. - Charlottesville, VA
Realtor, Charlottesville, Serving Central Virginia

I love when this criteria are added to a "max $300,000" price stipulation : mountain views.

Feb 09, 2011 01:14 AM #69
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Virginia.  HA!  I get them too.  We want 3 acres under $300K and out buildings and paddocks for our horses.

 

Feb 09, 2011 04:09 AM #70
Rainmaker
478,067
Lana Robbins Realtor ® Licensed Real Estate Broker
Aloha Kai Real Estate - Clearwater, FL
Licensed in Florida and Washington

Hi Lenn. Same here. I can't stop laughing at your honest and blunt response, "In Phoenix" LOL My twin sister lives in Newport News, VA and the prices in Virginia are so much higher even compared to Tampa Bay.

Feb 09, 2011 01:56 PM #71
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Lana.  It is sad to look at the real estate statistics of almost any place in Florida.  Yes, Virginia fared better in the recession-housing depression.  Our unemployment is about 6.8% today, probably about 1/2 that of Florida.

 

Feb 09, 2011 09:59 PM #72
Rainmaker
291,494
Robin Rogers
Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX
CRS, TRC, MRP - Real Estate Investment Adviser

Great post, Lenn! I didn't think of putting it in those terms, but that is exactly the way to think of it.

Cheers,

Robin

Feb 15, 2011 04:37 AM #73
Ambassador
2,733,701
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Riobin.  Indeed.  I've gotten criteria that was in no way related to the location or price range for a buyer. 

Feb 15, 2011 05:49 AM #74
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
2,733,701

Lenn Harley

Real Estate Broker - Virginia & Maryland
Ask me a question
*
*
*
*
Spam prevention

Additional Information