There are a few things that stand out for me in this project. They are:
- The importance of a good process
- The importance of a good team to implement that process
- Standing firm on price when appropriate, and
- The importance of managing the appraisers visit
As I left this property after meeting with Angie and James about listing it, I called my wife, who calmly said toward the end of our call: “Well, I think it is going to happen tonight.” It was the birth of our son, Tommy. It turned out that he wasn’t born until the next day, but…Holly’s labor sure happened that night. Thankfully, I have a process, and a great team to support me, so we were able to get the property listed and enjoyed great success.
We had considered listing at $1,400,000 based on other local inventory, but decided to push the number based on the premium we felt the home deserved. We considered lowering the price at two weeks on the market (the sellers had their own infant at home so showings were inconvenient, and also wanted the proceeds for a home they were under contract to purchase), but decided to hold the line on price, as we still believed in the value. We soon heard of one offer coming, and were able to use that offer to encourage another party to get off the fence which…encouraged that first party to make their offer better.
We sold at $1,665,000 and created what I call “an appraisal problem.” It is a goal of mine to create this dynamic whenever I represent sellers; a house that is under contract for more than the appraiser is likely to see the value for. I met the appraiser at the house with my version of the “comps” for the property. She pointed out that the actual square footage of the home – per her calculations – was less than the city record. I argued that that it didn’t matter; that the quality of the property stood firm, and shared an example of a smaller-sized home that had recently sold at a similar price (across town). The appraiser agreed and the sale closed. The family moved closer to their extended family and we all smiled.
View listing details here.
This project was a study in:
- Exercising restraint until the "right" time
- The importance of pre-inspection
- The importance of great staging
- The importance of great photography
- The importance of my getting in front of the buyer when possible to establish trust (for them) and to see first-hand their motivation (for my clients)
- Picking the right Buyer's Agent
This project was at first interesting in that we could have listed it for sale a month or so before we did. The owners had the ability to hold it until the right time, though, so we used that to our advantage and used the extra time to button up maintenance items that came out of the pre-inspection, get the home staged and then adjust the staging, have good photographs taken and then take a few more. The Sellers were not excited about the items that came up on pre-inspection (before listing) but having the inspection proved to be of great value. Not only were they able to get some maintenance items out of the way that buyers would have seen as important, but they were able to demonstrate to buyers that they knew the condition of the home (very good over-all) and had priced it with full knowledge.
The staging was good when first installed, but we made some tweaks to it before photography. One challenge with stagers is that they often use what they have. The Sellers and I felt that this home needed a “significant” dining room table in order to fit with the architectural design of the home, and also to show that home as one that would accommodate a family. We knew we were fighting a bit of a battle on this one, as many young families prefer at least three bedrooms on one level (one for the parents and the others for kids) and the house simply didn’t offer that.
Once the staging was perfect, we shot good photographs in good weather. There were a few angles that we then thought should be re-shot, so we did. It was nice to have the time to merchandize and market correctly. We held a few open houses, and everyone in the neighborhood showed up. I was personally able to spend a few moments with one of the eventual Buyers; this was important – I believe – as he needed to trust me later in order to get across the line.
On offer review day, the importance of the pre-inspection was reinforced when I had a prospective buyer ask me to see the report and then made an offer not subject to inspection based upon what they saw. More offers normally means a higher price, and this case was no different. We had a priced at a number that the Sellers would have been happy with, but were able to push that number, and our confidence in closing at that number. The Sellers chose the offer they wanted to work with, and we were able to make it better by having the buyer’s agent ask her clients if they would waive their financing protections. They did.
When we met the appraiser, we were sure to show the appraiser all of our offers, and to indicate how completely the Buyers wanted this house. The appraisal came in “at value,” the Buyers arrived in town and all were happy.
View listing details here.
Interesting article from GeekWire regarding residential rents in Seattle (my nowtown) as compared to SF (my hometown). It makes me wonder: Without SF-like rent control laws, do Seattle renters actually have more to fear than SF renters over the long term? Is the incentive to buy more significant here than there? If it is, at least the purchase prices are lower. And the competition, while fierce, may not be as ruthless as it is on that peninsula.
I am always intrigued by the $/unit number in these apartment building sales. I would think that this would be a relevant number for renters considering buying. This is the price that an investor is willing to pay to rent this space to you (presumably a premium for the right to use it to generate future revenue and a discount for volume). Would you pay that much to own it (or something similar) and control it yourself? Any other thoughts on this data point?
I get this question a lot. My observations: the best opportunity often seems to come when the property has been on a while at the current price. When the Seller drops the price, they are likely to dig in at the new number, and less likely to take a lower offer before giving it some time. If they manage price drops correctly, they can always keep the pressure up.
I’m seeing a lot of focus recently on Millennials.
First, I was interviewed for this article. After about thirty minutes on the phone during which I felt I said all kinds of interesting things, the reporter decided that brevity was the soul of wit and distilled my comments: http://seattletimes.com/html/homesrealestate/2022051165_hrerentersowners20xml.html#.UmVzjkc2TF4.facebook.
The longer version of what I said is that we used to have four general markets for downtown condo dwellers: committed urbanites, downsizers, 2nd home buyers, 1st time buyers hoping to use that purchase as a stepping stone into townhomes/single family homes. In the downturn, that fourth category saw their dreams dashed; there was a year or two in which we heard very little from them. Even the youths (“the two _yutes_”: http://www.youtube.com/watch?v=B1QpyGa61zs ) who didn’t purchase saw their friends/older siblings get hurt and so have come back in somewhat reluctantly and with an aversion to: total monthly housing expense higher than current rent, rental caps, potential future assessments, potential loss of view.
Then, I read an interesting article in The New Yorker, penned by a Millennial, about my hometown, San Francisco. What most took me was the full-on embrace of self-direction; of owning one’s own time, perhaps of living genuinely. A dear friend pointed out how exhausting it must be to hold three different jobs and then to have to find an unique, artisanal hobby to add to the mix. Agreed. http://www.newyorker.com/reporting/2013/10/14/131014fa_fact_heller
And finally, today’s insight from Inman News, possibly writing off the entire generation when it comes to homeownership: http://www.inman.com/2013/10/24/cant-find-work-or-save-for-a-down-payment-are-millennials-becoming-real-estates-lost-generation/ For some reason, the fear seems a bit overblown to me, but…the assertion that “adolescence actually extends to about age 25” is fun to consider.
I get a lot of questions about the changing Seattle Waterfront (not the Big Wheel, the real estate!). Here's an informative article: http://www.djc.com/news/ae/12044999.html
This is interesting from last week. 1) If the numbers are relatively accurate (Q2 relative to Q1) the downward trend in underwater homeowners is a good thing. 2) Empirical evidence of why we are experiencing a shortage in supply, and 3) interesting bell curve based on age of owner/borrower; I’m guessing those numbers are due to frequency of move, appetite for risk and the high income/lower savings rate often associated with the top of the curve. "http://www.prnewswire.com/news-releases/negative-equity-falls-in-second-quarter-nearly-half-of-borrowers-under-40-remain-underwater-167166435.html?