Well, first, let me apologize, for being away from the blog for so long. I try to never let a week go by without posting something, but I have been busy being a good buyer's agent. (and a good listing agent, but that isn't the point of this post) If you are currently in the market, I am sure you have had this experience. You are looking around, maybe on http://www.metroatlantagarealestate.com/ , you find the exact perfect listing. You call an agent, and low and behold, the home is under contract, or even closed already. Or, lets say you are working with an agent, and by the time you are finding out about things, they are already under contract, you have missed the highest and best deadline, or you are competing against 60 other offers. Nope, that is not an exaggeration. 1818 Stonebrook Way, Lawrenceville, GA 30043 had over 60 bids. This can grow frustrating and disheartening. So, what does a good agent do? Well, first, a good agent should be setting your expectations. It is one thing to know all this going in, it is another to have missed out on four or five homes a month into it and then find out about this. A good buyer's agent should also set you up on a market alert system of some sort. If you are not getting daily emails with anything new that has come on the market that fit your criteria, then by the time you meet with your agent again and find it, it will be too late. If you have objected to the listing alerts, rethink your position. If your agent has offered them, rethink your agent. A good buyer's agent should know what is going on and be able to pull comps for you so that you understand what the true market value is and also show you what the current market is doing. Your offer is up to you, but if you are putting in unrealistic offers, that does nothing but waste time and cost you an opportunity to own the house you want. However, the flip side of that, bidding way over list price and buying well above market value isn't smart either. Yes, homes are appreciating. Yes, you are competing against other buyers. Yes, you will need to pay market value. No, you don't need to pay 10% OVER market value. As agents, our income and livelihood is not determined by how many clients we have or how many offers we write. Our ability to fee our families is determined by our ability to getting the offer accepted, and ultimately, you closing on that home. That puts pressure on the agent to, perhaps, push you farther than you should go. Again, remember, I led with the fact that you should be putting in realistic offers. But, your agent should be able to counsel you on that and why. Paying above market is fine and perfectly understandable in this market. So long as you love the house, and you KNOW you are paying at the top of the market if not above the market. A good buyer's agent should have a network of resources. The most important is a lender. So much of how well a transaction goes, is resting solely on the lender's shoulders. A bad lender can cost you the earnest money and the ability to close on the house you want. Not to mention loads of stress and frustration. A good buyer's agent doesn't get anything from a referral to that mortgage company other than the peace of mind that you will be well taken care of. Okay, so we also feel more comfortable that you will be able to close and that we will be able to get a paycheck. A good buyer's agent should also have a few good inspectors and home warranty companies as well. That is stuff that all buyer's agents should be doing. So, what is above and beyond. Well, we all know there is limited inventory and countless bidders. So, is your agent finding homes that aren't listed? If I can't find something that someone is looking for on the market, I knock on doors. Some seller's don't realize that they can easily sell their home right now. Does this work? Absolutely. I have several clients right now looking in the 130K and below price point. (this price point is in the highest demand of any) I have found two of them unlisted houses that I expect to go under contract this week. In a balanced market, you can afford to wait for the 'right' listing to come along. In this market, your agent needs to go above and beyond. A good buyer's agent take fiduciary responsibility seriously. Recently, I was helping a couple. I flat out missed a landfill that was proximate to the home they had just put under contract. You are probably wondering how you miss a landfill. I knew about the landfill. I did not realize that it was that close to the subdivision they were buying in. The entrance is well away from the home, it just covers a much larger area than I expected. Well, we found out about this AFTER they had put down a non-refundable $5000.00 deposit. It was new construction, and they were paying for upgrades. I knew that they were depending on me to inform them about anything like that. I made a mistake. So, I guaranteed that they would either get their money refunded, OR I would pay it from my pocket. Was there any legal requirement for me to do this? No. It clearly states in the contract that this falls under the buyer's responsibility. But, I knew that they were depending on me. That is why you get an agent, right? In the end, I was able to get their money back. (It is amazing how much weight it carries when your brokerage has such a huge market share in your area that the builder knows that a bad reputation would cost far more than $5000.00) Remember, you are hiring the agent to guide you in all parts of the transaction. Not just 'sell' you a house. This isn't a used car, and your agent shouldn't act like a used car salesperson. A good buyer's agent should be available and be able to give you answers. I am perplexed about how many calls I get from other agent's clients. Their agent is on vacation and they would just like to look at a house. Their agent can't figure out what is going on with a listing and on and on. Everyone should be allowed to take a vacation, but an agent should never expect someone to put their home search on hold while they take time off. I have other agents I refer things to when I go on vacation. (Well, if I ever to decide to go on vacation, I have other people to refer clients to) There is no excuse for not having another agent lined up to help in the event that they are unavailable. Buying a home is a big deal. And, there are important time frames that must be met. As far as the answers part of this. I admit, I have things that I look at that some agents don't know about, or don't think to look at, or are too lazy to deal with. Having the experience as an appraiser, loan officer and investor has taught me to be able to dig a little deeper than most agents. But, MOST of the time, any agent can answer most of the buyers questions about a property if they just took the time to look. Finally, a good buyer's agent is your advocate. When you look at the property, they are looking for any potential issues. They aren't directing your eyes away from them. When they talk to you, they make sure to explain the situation fully and all the ramifications, but when they are talking to the other party, there is no sign of weakness or lack of unity. They write the contract to best protect you, not obligate you. They negotiate the best they can to get the other party to compromise, not get you to compromise. So, if you are like me, you have a lot of logic built into you. You see that home prices are rising, and of course, we are still way off the highs that we saw a few years back. So, why not wait it out?
Excellent Question! I am so glad you asked, and there are so many factors, this is a long post. (If you start to get tired, at least skip ahead to 5-C, you do not want to miss what very few if anyone is talking about) Interest rates are incredibly low. This can affect you in three ways. a. If you are going to buy a home, then you are obviously going to be able to purchase more home with lower rates. b. In the same way, rates will affect your pricing as well. Once rates start going up (and they will), your homes appreciation, will slow, stagnate, or even fall. c. And something that you may not consider, the urgency will be gone from buyers. Sure, there will always be buyers. But, right now, buyers are worried that they are missing out on a great opportunity to buy when the market is off it's highs and the interest rates are so low. 2. Recovery to the highs of just a few years ago will not be seen anytime soon. a. Home prices grew well in advance of the affordability index. In other words, home values appreciated well above where they should have. Will that happen again? I am sure it will. It happened in the late 80's through early nighties. Then it happened in the mid 2000's. So, you only have to wait 10-15 years. (If then, if you read further, you will see why this may never happen again) b. Home prices were pushed up because buyer's buying ability continued to increase. The ability to get a loan at that time was much easier, and many loans were made that should never have been made. They had stated income loans, and if the person's occupation didn't 'reasonably' make that amount, then they would just do a 'no doc' loan. The lender was able to charge a higher interest rate, and the buyer was able to get a home that they would not otherwise have been able to. And, of course, real estate is always going up, so it was a smart...'investment'. c. Appraisal guidelines have gotten much stricter. The reality is that an appraisal is an opinion of value. And, appraisers are licensed or certified, they train under a mentor and they are required to perform their work ethically. Unfortunately, appraisers have proven to be corruptible on occasion. To combat this, the lenders have tightened the guidelines to require appraisers to provide much more documentation. Additionally, now, the appraisers have an appraisal management company review the appraisal even before the underwriter. So, even actual appreciation is harder for the appraiser to prove. And, as we progress in the information age, so many things are put to computer modeling. Home values are no different. As this has become more prevalent, the appraiser's discretion has become less so, and there is no reason to expect any reversal of this trend. So, any rapid rise in prices above the affordability index will be harder than ever to realize. 3. Scarcity. a. Believe it or not, there are many more buyers than there are houses. Our total inventory is about 3 month’s supply of inventory. And, this number is a little skewed because if we had more houses, we would have more sales. And, with sales occurring so quickly, agents struggle to keep their system updated and a large percentage of homes that are ‘available’ in the MLS systems are actually already under contract. So, the actual number is LESS than a three month’s supply. In many areas, homes below the median price point for the area are actually at less than a two month’s supply. b. Many homes that are priced right and in good condition are getting multiple offers and selling for above list price. (not kidding) c. Buyers are less selective, because they have to be less selective. 18 months ago, your home had to look like it belonged in Better Homes and Gardens to get market value. And, if not, your home would just sit on the market for months, or even years. Now, so long as the home is in reasonably good condition, buyers are willing to pay full market price. Remember, there is a sense of urgency combined with the scarcity. d. Homes, especially below $150,000.00 are being purchased at an alarming pace by investors. And, believe it or not, these investors are paying market value for homes. Why? They are basing their decisions on market rent and the low price of money. Foreclosures are first offered to owner occupants and non-profits. And, owner occupants are given preference for these homes. So, these investors now focus their efforts on sales from regular homeowners, just like you. 4. You are buying in the same market that you are selling in. Assuming of course, that you are actually buying another property. And, assuming of course that you have a good agent, like the wonderful and eloquent writer of this fine informational blog. Shameless promotion, which of course is the kind of promotion you need when selling your home. ;) a. This has been a valid point for the entire time of the down market. Especially if you were moving up in homes. However, many people were so upside down, that this was not even a possibility. b. The only way this doesn't prove out is if you are downsizing. I would still point out that you would be purchasing a home at what is most likely a much lower interest rate and that could greatly offset any losses that you would take on. 5. Your competition is coming. a. As the message gets out more and more about the market, there will be more and more listings from other owners. That will give the buyers more selection and they can be pickier. b. There is still a lot of foreclosure inventory that isn't on the market. Now, much of this has been sold to foreign investors and hedge funds, and it is being used as rental property. So, this may not come on the market anytime soon. And, banks, most likely, aren't going to turn loose of a bunch of property at the same time crashing the market again. But, they will start to offer more and more as time goes along. c. Builders are coming back....and at prices that will compete or even undercut you. So, the buyer will have a choice between your lovely home or a brand new home with the latest finishes and upgrades for about the same price, if not even lower. i. Before a brick is bought, before a foundation is poured, historically, a builder has to first purchase and develop the land. However, with the recent real estate implosion, many builders went out of business. That left large tracts of land and subdivisions that had already been developed there to be snatched up. And, snatched up they were… and for pennies on the dollar. In most cases, these already developed lots were purchased for less than ten cents on the dollar. Do you think that doesn’t factor into the bottom line? ii. The builders that have been sitting on the sidelines have been operating on a shoestring budget with a much smaller infrastructure. And, much of the land in our area has been acquired by large national builders that can produce a home at an even lower cost per square foot due to standard blueprints and materials sheets. They are able to cut the time of production and the waste of materials. They, bottom line are a leaner, meaner hungry competitor that is just salivating at the current market and lack of inventory. iii. Despite our improvement in the housing market, the job market has not improved. Therefore, these builders will be able to hire skilled craftsman at a much reduced price. Many of these people are still looking for work or vastly under employed, so they will come cheaper. I know that this is a long, long post. But, there are so many factors that indicate that the best time in the next three years or so to sell your home, that I wanted to make sure I pointed them all out. And, explain them to a point that you can see this isn’t just a ploy to get listings, but a heartfelt urging of you not to forego a great opportunity to sell your home and accomplish your goals. And, as with everything on this blog, this comes from the perspective of a Georgia Realtor and Inactive Certified Residential Appraiser with 15 years of experience in the Metro Atlanta area, and more specifically, the Gwinnett, Hall, Forsyth and Jackson counties. If you are outside of these areas, all of these factors may not apply to you. And, if you are in any of these counties and would like me to come show you the market specific to your area, and your neighborhood, contact me. Every market is location specific. Every price point offers different statistical variables and is affected by different market influences. You can contact me via phone at 678-318-4977, via email at dblantonkw@gmail.com, or via the contact form on this website. |
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Testimonials 557886 David is awesome to work with. He knows the area very well. He is extremely responsive, always took my calls and answered my emails and txts. He truly ... more 5.0/5.0 by philipkupersavage 557657 David was extremely helpful.....We were very picky buyers & he never pressured us to look at a house outside of our parameters or place an offer... he ... more 5.0/5.0 by dwcourter 309784 Mr. Blanton helped us find the home of our dreams and he did by listening to what we wanted. He taught us about the housing market, guided us in the ... more 5.0/5.0 by user30821228 Archives
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