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!

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

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.

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.

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.