Home Owners' Hot Topics: Property Taxes, Income Taxes, and Refinancing

Property Taxes: Property tax bills are arriving in mailboxes. If you don't like your assessment, read about the appeal process and deadlines here, and how to build a successful case here.

Income Taxes: At least being a homeowner takes the sting out of income taxes. Remember mortgage interest, property taxes, certain mortgage insurance premiums, and points are deductible. Limits apply so check with your tax preparer.

Refinancing: Rates have ticked up from last month's historical lows, but it's still a good time to explore refinancing. I even refinanced my own house last week! But it can be difficult to see if it's worth it for you, as this article points out. Read more at my blog post "Should I Refinance?" here. And contact me if you need a recommendation on some excellent lenders and settlement companies!

Thinking of selling? This Spring could be a good opportunity - the market is not as bad as you think (see Regional News post). Contact me to discuss listing your home!

What Should I Be Doing Now To Sell My Home This Spring?

Spring is going to come early to the DC area.

No, not the weather (well, I hope so, but we'll see.) I mean the Spring real estate market. Buyers are out there, even now. Low prices, low rates, and the imminent expiration of the $7500 first time home buyer credit have them circling and looking for the right property, in the right condition, for the right price. And for those properties that are positioned and marketed properly, this could be your best shot at a smooth and quick transaction.

But putting your home on the market takes a significant amount of preparation. The first 30 days your home is on the market is absolutely critical, because those buyers who are circling will come look—once—and if your property is not exactly right then they will just continue their circling, and likely will never return to your property. You will anxiously watch the days on market tick up, and the price tick down. Buyers ARE buying, but they expect a property to be in pristine condition right out of the gate.

To catch the biggest buyer waves, typically you should plan on putting your home on the market in March or April. This year, however, I think there’s a strong argument to go out early for the reasons outlined above—buyers ARE out there. However, you can’t just throw your home into the MLS and expect the buyers to pounce. Your first chance is your best chance.

Here’s a short list of things you should be doing now to get your home ready:

• De-clutter. I can’t stress this enough. If it’s not something you use every day, get it out of sight. Put away out of season clothing. No collections of knick-knacks, no personal photos, no college degrees or awards. You want the buyer to be able to imagine themselves in the property, and trust me, buyers are easily distracted by your personal items. Don’t pile things into closets and cabinets—buyers look there too, and if everything is crowded they thing there won't be enough room for their things. Get things out of the property and into storage if you have to. Same for extra furniture pieces. Less is more. Doing this right takes weeks (or for some people, months). Start now!
  
• Paint & Clean. A fresh coat of paint does wonders, and is cheap. And clean like you’ve never cleaned before, especially the kitchen and bath.
• Make all minor repairs. The buyer is going to make you do them anyway and it will be cheaper for you to do it now.
• Start monitoring the market, both broadly and in your specific neighborhood. Pricing is absolutely critical, and you need to be realistic. Don’t get stuck chasing the market down. Work with an agent to start getting property updates now.

When you’re ready to put your home on the market:

• Consult a stager. I hire both an interior stager and an exterior landscape consultant for all of my listings. They look at your property with fresh eyes and have extensive training in how to create a neutral, yet welcoming canvas for buyers.
• Photos, photos, photos. Buyers start their search on the internet, and if you don’t have photos they will skip your house completely. Use professional photographers, or at a minimum, a wide-angle lens if you (or your agent) insist on taking them personally. If you have photos of the exterior of the home during Spring or Summer, consider using them to show your yard in its greenest state.
  
• If your home has unique features, consider how to best market them. For example, if the house has an unusual floorplan or is bigger than it looks, consider including professionally drawn floorplans in with the photos. (I do this for some of my listings.) Using an agent that has worked with a lot of buyers might help in this area--they know what buyers want and how they react. (That's not to say that you should use an agent that engages in dual agency, that is, where they will represent both the buyer and the seller in a same transaction. I feel VERY strongly that using a dual agent is a TERRIBLE idea, but that's a subject for another post.)
  

If you’re interested in hearing more about how to get your home ready, or want to learn more about the home selling process, register for my free home seller class, or just contact me for an appointment. The market is still very volatile, and the story complex. Contact me if you're interested in an in-depth view of market conditions in your neighborhood.

Read More: Seller Resources

Read More: Working with Katie as Your Listing Agent

Home Seller Classes Now Available in Northern Virginia

Equipping Home Sellers to Make Better Decisions

Our home seller classes are educational sessions designed to give an overview of current market conditions and the home selling process. We cover a recap of the market, current trends and market stats including days on market, average sales prices, and inventory levels.

We'll also discuss how to price your home, marketing channels, staging and showing your home, real estate fees and commissions, and how to choose an agent.

There's never any cost or obligation to attend our classes.

Home Seller Classes in Arlington County
The first classes of 2009 are now scheduled at Arlington County Library. As in the past, there is absolutely no cost or obligation to attend this one hour educational session where we will recap the current market conditions, discuss the future outlook, and provide an overview of the home sale process. Simply email katie@katiewethman.com to register so that we may have materials available for you. Details are as follows:

Tuesday, February 17, 2009
6:00 pm - 7:00 pm
Arlington County Library
1015 N Quincy St, 2nd Floor Mtg Room
Ballston (Orange Line)

Though there is no cost to attend, you must contact us to register since seating is limited.

Read More: Seller Resources
Read More: What to Expect when Working with Katie as your Listing Agent

Home Seller Classes in Maryland and DC
The class schedule for 2009 has not yet been determined. Classes will begin in February and will be held at various sites in Montgomery County and the District of Columbia.

We're always happy to meet with first time buyers over coffee to give a quick overview (with no obligation) if the class schedule does not fit your needs. Just drop us a line!

Contact us to be notified of the class schedule when available.

Read More: Seller Resources
Read More: What to Expect when Working with Katie as your Listing Agent

How do you know if your listing agent is doing a good job?

I was out showing homes this weekend and I went to a community to see 3 townhouses on the same street. I reviewed the showing instructions. The first house had instructions to call a showing service, which I did, to receive the combination to the lockbox. (As an aside I HATE combo lockboxes…it’s such a disservice to the seller…there’s no record of who came by and when, and no way to tell how many people have the combination. But I digress.) The other two were labeled ‘show anytime, electronic lockbox’. I dutifully took my buyer—who, by the way, is pre-approved and ready to write an offer as soon as she sees something she likes—only to find that the two ‘electronic’ lockboxes were actually combination lockboxes. No combination listed in the MLS printout. I called both agents and got voicemail. We walked around the community for a few minutes, then left. Later that day I got a call from one of the agents with the combination. I never did hear from the second. And my client? She decided to buy somewhere else.

It’s really too bad that there isn’t a standard level of service provided to—and expected by—sellers. Here is a short list of questions to ask and ways to check up on your quality of service:

1. Does your property have multiple pictures in the MLS? Have you looked at them? Too many times I see a picture taken with a point-and-shoot that is really a picture of the furniture rather than the room. You can’t get wide enough angles from a run-of-the-mill camera. Buyers DEMAND pictures. I work with a LOT of buyers, and they assume that something is wrong with the property if there are no pictures.
2. Is there an electronic lockbox (this is for the seller’s safety)? Does it open properly (Ask your agent to check periodically...I tried to show one last week and the box wasn’t working so we weren’t able to get the keys.) Are there keys in it? (Yes, I’ve had this happen, too, when trying to show a property to a buyer.)
3. Web Site – Does your property have its own website (e.g., www.1225NStreet.com) These sites aren’t for search engine ranking, but rather for your marketing materials—the brochures, the open house ads, the signs. Buyers want as much information as possible. Buyers DO look at these sites (my listings get dozens of hits per day), and they show them to their friends for opinions, and I want buyers spending as much time as possible looking at information about my listings versus others.
4. Open Houses – I’m a big fan of open houses. (See my open house post here.) Any agent who says “No one buys off an open house” is WRONG. I’ve had several of my buyer clients buy a house that they saw for the first time when it was held open, and I sold one of my listings to someone who saw it at an open house. Do you want to be denied that chance? Make sure the ad in the paper has your property’s web address (see #3) in it – buyers are more likely to make the time to see your home if they’ve seen it online and the pictures are good—see #1. See how all of these fit together to form a marketing strategy?
5. Updates – Make sure you get a full market analysis from your listing agent at least every week. Market conditions change, and it’s important that you know what your competition—those other listings—is doing.

This is just a brief list of some of the most common mistakes (or, dare I say, lack of effort) that I see out there. Make sure you optimize your chances of selling by demanding the best from your agent.

To discuss what I do in addition to the above for my sellers, email me.

Read more: Open Houses and Route Optimizer

Read more: 5 Mistakes Listing Agents Make

FAQ: Buyer's Closing Costs

Many buyers are aware that they have fees related to the purchase of a new home—a rough guide is 2.5%-3% of the transaction value--but what are these fees, and are there ways to minimize them?

First, a few clarifications. Both buyers and sellers have closing costs in a transaction; the sellers’ are typically much higher (because they pay both real estate brokers) than the buyers’. These fees are typically paid at closing—they come out of the sellers’ proceeds, and the buyer can either pay cash, or can negotiate to have their portion of the closing costs paid by the seller (read more here.)

For this post, I’ll focus on the buyer’s fees. A lender should provide you with a Good Faith Estimate (GFE) when you apply for a loan. This GFE is essentially an estimate of your “HUD-1” form, which you will receive at closing. Each lender has their own preferred format, but you should be able to compare apples-to-apples by looking at the section headers, or, even better, the line item numbers. It’s important to note, though, that lenders only control certain sections, while others may be simply based on their own experience. When comparing lenders, it’s important to focus only on the line items that the lender actually controls.

The fees vary by jurisdiction, broker, and settlement attorney, but a good way to categorize them would be:

• Prepaids – These are generally required by the lender, and may include prepaid insurance, prepaid property taxes, and prepaid interest. Another common prepaid item is condo/HOA fees. These vary based on the day of the month that you close, since they are pro-rated between buyer and seller.
• Points – A point represents 1% of the loan balance and are charged by lenders. This, along with the fees, can easily amount to thousands and thousands of dollars, so it’s important to discuss this with your agent and your lender.
• Fees – These are fees charged by real estate brokers, settlement attorneys, and lenders, and are the toughest to judge for "reasonableness" without experience. These vary widely, particularly among lenders. Some real estate agents will pay their broker’s fee on your behalf—be sure to ask them. For lenders, whose fees can be substantial, it’s important to know early in the process what they’ll charge. These fees can generally be found on your Good Faith Estimate in the 800 section, but look in the 1300 “Additional” section too. Broker's and attorney’s fees are scattered throughout the closing statement sections.
• Title Insurance – This is paid by the buyer and, depending on the policy, can amount to thousands of dollars. It’s a one time charge that covers you in the event of a problem with the chain of ownership. See my post on how to save some money with title insurance here. This is in the 1100 section.
• Government and Transfer Charges – Paid to the local jurisdiction. These can be quite substantial—for example, in the District of Columbia, the transfer (paid by the seller) and recording taxes (paid by the buyer) are 1.1% each. Northern Virginia sellers just had big increase (from $1 per $1000 in value to $5 per $1000) in their transfer taxes.

Read more about how to spot “junk fees” in my post here. This is just a high level summary of some of the most common items on a HUD-1, so be sure to ask your agent to walk you through the expenses and strategize with you on how to keep them to a minimum!

FAQ: Seller Subsidies/Contributions to Closing Costs

I'm often asked how seller subsidies, (also known as “seller contributions” or “closing cost assistance,” work. When a buyer purchases a property, he can expect closing costs of about 3% of the transaction price. (This varies widely by jurisdiction—consult a local REALTOR for more details.) The closing costs are a combination of (1) fees to lenders, brokers, appraisers, and attorneys, and (2) prepaid expenses, e.g., paid-in-advance property taxes or hazard insurance. Many of the prepaid charges vary depending on the day and month in which you settle. For example, if you settle on the 25^th of the month, you typically pre-pay 5 days of interest, whereas if you settle on the 10^th of the month, you typically pre-pay 20 days of interest. For this reason, if a buyer needs to keep closing costs low, it sometimes pays to negotiate an end-of-month settlement. As a general rule, buyers cannot finance closing costs, so a buyer needs to show up at settlement with funds for both their down-payment as well as their closing costs.

Closing costs come off of the seller’s “net” or the amount of proceeds after expenses. Let’s say the seller is listing his home for $450,000 and his selling expenses (fees, etc.) are equal to 8% of the transaction. If he were to receive his full asking price, his “net” would be 92% of the total, or $414,000. In this example, the buyer would need to pay $13,500 in closing costs (3%) + his down-payment.

One negotiation tactic that is very common in this buyer’s market is to ask the seller to pay a buyer’s closing cost ($13,500 in our example), so that the buyer minimizes the amount of cash they need to spend to get into the house. The buyer may actually have the cash, but might prefer to hold onto it as savings, or apply to his down-payment, remodel a bathroom, to buy furniture, or whatever. Tip: You may see “seller contribution” clearly advertised in a listing—don’t let this drive your decision too much—in this market, almost any seller would be happy to contribute to your closing costs whether they advertise it or not. By stating it in a listing, though, in essence these sellers are simply saying “I’m willing to take less than list price.”

Now, getting back to our example, let’s say that a buyer wants to make an offer on that $450,000 home, but after discussing it with his agent, wants to pay only $430,000. (And for purposes of this example, let’s assume that the seller wants to “net” the fair market value of $430,000.) The buyer may offer less, or may ask for closing cost assistance, or a combination. So if the buyer wants his closing costs paid for, he might offer $443,500 and ask for a seller contribution to closing costs of $13,500. The seller then nets $430,000. The buyer would borrow the full $443,500—in essence “financing” his closing costs across the life of the mortgage—but would only need to write a check for the down-payment at closing.

Taking it one step further, if a buyer were to ask for both a price concession AND closing cost assistance, the seller would apply both to his net. In our example, it’s unlikely the seller would accept an offer of $430,000 AND provide a full $13,500 contribution because his net would only be $416,500 rather than the market value of $430,000.

From a buyer’s perspective, asking for closing costs is a good way to minimize cash out-of-pocket in the short term, but the trade off is that the buyer is paying interest (via the higher mortgage) for potentially years. Be careful, though—many lenders have a limit of how much a seller can contribute; they want you to have some “skin in the game” in today’s market! Additionally, review your contract carefully—sometimes any excess contribution is returned to the seller.

From the seller’s perspective, the financial difference of giving a price concession or a closing cost contribution is usually immaterial—the impact to the net is essentially the same. (The only difference is that any fees that are based on a percentage of the transaction price will be slightly higher; in our example, they would be based on the $443,500, and not the net of $430,000. Still likely a very small price to pay to get a buyer to the table!)

2008 Regional Outlook: "Fundamentals Sound"

George Mason University has updated their 2008 Outlook for the Washington, DC, metro area. It’s fairly consistent with previous presentations (perhaps slightly more positive, in my opinion.) Here are the key findings:

• Local job market continues to be very strong, with Washington, DC, having the lowest unemployment rate of the largest 15 job markets (US average = 4.4%, DC = 3.1%.) (See slide 5.) As I have commented here before, the job market is a great indicator of the housing market to come—people go where the jobs are, and they need a place to live. Because this area doesn’t have particularly high vacancy rates in rentals, that translates into pressure on rents (thus providing an incentive for renters to buy), or more demand for homes.
• This area has significantly fewer foreclosures (as measured per 10,000 units) than most large metropolitan areas in Florida, California, and the rust belt. DC (22), Arlington (27), and Alexandria (34) have the fewest foreclosures of any local county. (See slide 13) Think about those numbers for a minute. For every 10,000 homes in the District, just 22 are in foreclosure. This is consistent with other posts I’ve made about this area having two different markets—close in neighborhoods versus outlying suburbs.
• Days on market has increased significantly. (However, this can easily be misinterpreted—see my post on “Some Sellers Get It—And Get It In 30 Days!” Total units sold have declined (duh). Total active listings have increased (again, duh.)
• Percentage change in inventories has slowed dramatically and is consistent with 2003 levels. (See slide 23). We still have quite a backlog to work through, but at least for now it doesn’t appear to be getting any worse.
• Outlook: “Fundamentals are sound, 2008 will be moderately better than 2007.” (And by “better,” of course, they mean better for sellers.) “Housing prices will be flat until at least Spring & will be a mixed story across the region—some jurisdictions will be negative and others showing increases.”

So in summary, all real estate is local, and the DC market is, all things considered, not a bad place to be right now.

(If you found this interesting, see my related post: When will the DC real estate market turnaround?)

Some Sellers Do "Get It" - And Get it in 30 days!

The average Days on Market (DOM) is a good yardstick to measure whether housing inventory is moving. Generally, the higher that number goes, the more leverage a buyer has in negotiating. As the number ticks up, sellers get more and more anxious; buyers start to think: “What’s wrong with that house that it’s been on so long?”

There are two DOM statistics – Days on Market (MLS) and Days on Market (Property), or DOMM and DOMP. DOMM measures the days that a property has a particular MLS code attached to it. The MLS code is a two letter county abbreviation and 7 digit number, so something like AR1234567. DOMP measures the days that a physical address has been listed (though there are ways to cheat the system on this.) DOMP is a better indicator for buyers to use.

The average DOMP for active listings in Arlington right now is 107. (The average DOMM is 87, FYI.) That means, on average, each listing has been sitting for over 3 months. Looks pretty heavily in the buyer’s favor, right? Sellers appear to just not understand that they’re priced too high. But let’s look closer.

Looking at the 174 successful settlements for October 2007 in Arlington, I’ve graphed how long they were on the market prior to sale. We can see from this chart that the average of 107 (which would fall into the last column) isn’t a good representation of “successful” sellers. In fact, 45% of successful sellers had a contract in under a month, and almost 60% had a contract in under 60 days!

What are the implications of this?

• There are buyers out there for properties that are priced correctly.

• If a property is priced correctly—that is, the sellers “get it,” there is a good chance it will be under contract in 30 days, and a very good chance it will sell in under 60.

• On the other hand, for those sellers that don’t “get it”, the property will very likely sit for a long time—over 4 months. Right now there are 295 active listings in Arlington that have been on for over 4 months. In October, 34 settlements had a DOMP of that long. That means only 34 of 329, or about 10%, sold. Sellers, if you've been on for over 4 months you have only a 10% chance of selling. If you list a home and think, well we'll have an offer in 3 or 4 months--you're just not getting it!

In summary:

• Sellers – Price it right quickly, and it will sell quickly. There are buyers out there, but they are savvy and demanding.

• Buyers – Don’t assume that you have 3 months to make up your mind on that home you love—it could very well be gone if the seller already "gets it." If it’s priced well, the market will respond accordingly. How will you know if it’s competitively priced? Work with an agent, track micro-markets, and be actively looking in those micro-markets. Looking at an “average” won’t be enough.

Negotiating a December or January Settlement?

Then this post will tell you how to potentially save a few thousand dollars in closing costs. Beginning January 1, 2008, the grantor's tax (charged to the seller) will increase from $1 to $5 per $1000 in value (so on a $500,000 home, the seller will pay $2500 to the state, rather than $500.

The localities affected by the increase are: the City of Alexandria, Arlington County, City of Falls Church, City of Fairfax, Fairfax County (including the Towns of Clifton, Herndon and Vienna), Loudoun County, City of Manassas, City of Manassas Park, and Prince William County.

So sellers, push for a 2007 closing. And if you're a buyer who is indifferent about when to settle, offer to settle in December and ask for half of that savings back as a closing cost credit - it's win-win!

Thanks to Marcus Simon at MBH for this reminder!

Attention Sellers: 5 Mistakes Listing Agents Make

Sometimes I'm shocked by the lack of attention to detail on the part of listing agents, and unfortunately sellers usually don't even realize it. There are at least 10-15 significant ways that a listing agent can differentiate themselves--and, by extension, the listed property, and they do not all involve spending more money. In fact, sometimes it's the activities that require time, not money, that get a property more attention. I work with a lot of buyers, so I see exactly how buyers react, and as their agent, I know which inconveniences I'm willing to tolerate to still show your home. Believe me, it's not enough just to list the property in the MLS!

Here are a few "quick hits" that sellers can easily check for themselves. If your property is currently listed, see if your listing meets these criteria. Though they may seem obvious and easy, you'd be surprised at how many listings don't do these simple things that encourage easy showing of your home. As your agent (or check for yourself) to see if your property is "buyer-friendly." In a market where there are so many options for buyers to choose from, combined with buyers who are part of the internet's "instant gratification" generation, it may make the difference between getting your house shown and not.

Obviously you want to make sure your property is listed. But ask your agent to send you the listing (or even just search for it yourself on any of the major broker or agent sites, like this one. Here's a sample of what a property will look like in the MLS (this is one of my recently sold listings.) There are 5 simple yet very important things to check:

1. Photos - Does the listing have multiple photographs (either via still shots or a "virtual tour")? On the top left corner of the sample listing, you can see a small camera with a number next to it (the stills) and a movie reel (the virtual tour). I'm partial to the stills because they load more quickly, which is critical for the internet-savvy buyer. There are also some really bad virtual tours out there that focus more on the music and zooming rather than actually showing the property. A lot of photos is an absolute must--buyers assume something is wrong with the property if there is just an outside shot (or even worse, no photo at all!)
2. Directions - You'd be shocked how often directions are incorrect. I often send my buyers on a "drive by" of properties before we go see it together. If the directions are wrong, and they're already out driving and can't easily mapquest it, they will quickly give up on your property. (A corollary to this: if your agent is doing open houses for you, check the ad that runs on the day of the open house.)
3. The description ("Remarks") - What does your agent say about your property? Is the description accurate? Do you think it presents the most positive features? Are there typos or spelling mistakes? What does that say about their attention to detail?
   
4. Showing Instructions - This isn't publicly viewable so you will have to ask your agent to print out their own version of the listing for you. It tells a buyer's agent where and whether to call before showing, and where to find the lockbox. It's important that it not be too difficult to arrange viewings (e.g., "Call two owners and agent prior to showing. Show only M-F 9-5pm.") If I have to make 3 phone calls to coordinate a visit--not to mention coordinating my schedule and my client's--versus the unit across the street from yours that says "Go anytime," which one do you think will be the one we will visit when we just have time for one or two showings? Or if a client calls at the last minute--as they often do--to say "Do you have time today to show me some units in X development?" Also, ask your agent where the lockbox is, and if it's on a fence with 10 other lockboxes, as is often the case of a condo building, make sure it's clearly labeled as belonging to your agent and/or your unit. Better yet, go check out that fence yourself and make sure you can tell which one goes to your unit. If you can't, chances are a buyer and their agent can't either. If you can't find the box and the key, then how can the person that wants to show it to a buyer? It's so frustrating to have planned all week to spend the afternoon with a client, then we can't find your lockbox. I call your agent but get their voicemail. If I can't find the box and key, unfortunately I have no choice but to move on, as there are plenty of other units out there.
5. Online presence - is your home listed on sites other than the MLS? There are dozens of places that agents can list your home for free, if they take the time to do it. Go to Craigs List, Yahoo real estate, GoogleBase, Trulia, and other sites and search for your home. Study after study show that the majority of homebuyers start their search on the internet, so you want to cast as wide a net as possible. If you can't find it, ask your agent why not.

These are just a few of the ways you can make sure that you raise the expectations bar for the quality of services you receive. To hear more about how listings agents can differentiate themselves, please contact me.

Two Buyer's Agents You Should Never Use

One of the projects I'm working on is an article about agents you should never use. No, I'm not naming names, but rather categories of people that you should think twice about hiring if you're buying a home. Two of them were mentioned during a "Chat Plus" column in the Washington Post (read it here.)

The first category of "agent" you shouldn't use--though it's perfectly legal if the right disclosure forms are signed, and no doubt many agents would argue with me on this one--is the listing (or seller's) agent. This is the agent that has been hired by the seller to get the best deal for them. They have a legal and moral responsibility to keep information confidential, and to look out for the seller's best interests. In DC and VA, it's legal for an agent to be a "dual agent", meaning they can represent both sides. I wish someone could tell me how it's possible to have both people's interests at the top of their mind when negotiating a deal. My clients look to me for advice, and in a world of negotiation, it's quite frequently the case that what's best for one side is not what's best for the other. Yes, I've read the "win-win" books, and "getting to yes" strategies, but seriously, in today's real estate market, isn't 90% (or more in many cases) of the deal price? Maybe not for the agents out there, but I have yet to come across a buyer or seller who, if forced to rank what's important, doesn't say "price". And if I'm fairly representing both sides, isn't every dollar I negotiate hurting at least one of my clients?

Now the argument I hear from buyers is "I'll save x% if I don't have an agent." And that's a big myth. The truth is that the commission is negotiated between the seller and the listing agent before the property ever even goes into the MLS. That (full) commission is getting paid even if you don't have buyer representation. The only way around that is if the buyer negotiates with both the seller for the property, and the seller's agent (for the commission). So that agent is taking on more risk (because you're not represented), more work (because chances are you don't know the paperwork that's required and how to interpret it), for less pay. Not impossible, but I know a lot of agents who wouldn't do it. And of course if there's another potential buyer who DOES have representation, isn't it fair to argue to a seller that the buyer in that case is less risky? There's less risk of something falling through the cracks and blowing up at the last minute because there isn't someone guiding that buyer through the process.

The other issue is that the x% is already "priced in" to the list price. The seller knows that, the agents know that, and the buyer knows that. So if a buyer comes in and says "I don't have an agent, so I want x% off," don't you think the seller wants that same x% back?

Of course these are all generalities, and there are exceptions to the rule, etc., etc. My point is simply that it's not as straightforward as saying "I'll just negotiate the x%."

This is a complicated issue, and one that people get passionate about. (Don't they always when money is involved?) There are lots of qualitative reasons buyers should use an agent too, but I'll save those for another post.

By the way...I mentioned that the WP chat discussed two agents you should never use. The second? Yourself, to avoid the very issue discussed in the chat--signing documents you don't understand.

Listings & Dedicated Websites

Most people don't realize that agents have basically complete control over how they market--or don't market--their clients' listings. It's important to ask your agent what, exactly, you'll be getting from them. Of course anyone who works with a reputable broker has the usual fluff--listing in Multiple Listing Service, realtor.com, Broker "X" websites. Unfortunately most of the sites they list automatically populate from the MLS. You need a broader exposure on the web, where 80% of buyers begin their search.

I have a host of standard services that I provide to my listings, including

- Multiple photos in the MLS (Agents used to have to pay for these, but now up to 20 photos are FREE...yet, it's embarrassing to the industry how few agents take the time to upload them.) Almost every buyer I work with says that if there are no photos, they skip the listing, assuming that the seller is hiding how bad the house must be.

- A home warranty that transfers to the buyer. Buyers are nervous, and want to know that the home's systems won't fail right after they move in.

- Postcards to the neighborhood and/or area renters announcing the listing.

- A professional photographer. The majority of agents have neither the equipment nor the training that a professional photographer has, and you need your home showcased in the best possible light.

- Professional printing of brochures. A xerox copy isn't going to stand out amongst 20 other brochures the buyer picked up that day.

- Professional staging consultation. I don't try to be a "jack of all trades." I hire professionals to do a professional job.

- And my newest service, dedicated websites. Check out one of my sold listings at www.eastview914.com . These sites provide a showcase for your home beyond the 3 lines of text in the MLS.

If you're thinking about listing your home, contact me for information about some of the OTHER services I provide to my listings, too!

A Tale of Two Markets

Here's a little tidbid that you won't see in the headlines: April's Days on Market statistic dropped 20% from March's stat! What exactly does that mean? 'Days on Market' is a measure of how long the "average" house was on the market before it sold. So if we take all of the houses that settled in April, on average each was on the market for 82 days. Why is this significant? Because for the 3 months prior it was over 100 days.



In April 2006 the DOM average was 54. In April 2005? 15. Clearly buyers still have a much more comfortable window in which to make their purchase decision. But they have 3 weeks less this month than they did last month. What's going on? Let's take a look at the distribution of DOM for April in more detail.



What we see here is that half -- HALF!--of listings are selling in under 30 days. Who are these 'lucky' sellers? Sellers who are in a good location, at a competitive price, have a house that shows well, and have wide market exposure. Another 19% who have some but not all of those things going for them sell in the 2nd month. So 3 out of every 4 sold homes sell in under 60 days. Not so bad for sellers! The message? There are plenty of buyers out there for the right properties.

At the other end of the bar graph, we still have those dog properties dragging the average down. Slowly but surely they are dropping--whether because the sellers finally came to their senses and dropped the price, or whether they're just expiring unsold, I can't say.

How do you make sure you're one of those sellers at the left end of the graph? Hire an agent who is realistic about pricing, who helps you make the changes to your home to showcase it in the best possible light, and most importantly one who will spend the time and money necessary to market the property correctly. If you or someone you know is thinking of selling, please contact me to discuss how I can help you get your home sold more quickly.

Data Source: MRIS. All data believed to be accurate but not guaranteed.