So here goes. I just read a post on the Realtor Blog about being two faced if you tell your buyers and sellers that "its a great time to buy or a great time to sell" in this market. Both buyer and seller in the same market and their reasons for buying or selling could make a difference in how you answer. Does that make you two faced? Don't we all analyze our client's needs based on their circumstances and answer them accordingly? I would say most Realtors do.
And, I am thinking that the public, stagers and others need to understand some of these concepts before accepting such a statement as black and white, without knowing the circumstances and details of the conversation. There are always two ways to look at things, including a down market. The old saying when life sends you lemons make lemonade.
For some these are the opportunities for lemonade.
It IS a great time to buy because interest rates and prices being low at the same time gives them a lower payment and just like the stock market ... when stocks are down is when you should buy. It is also true that people tolerate ups and downs in their stock portfolios and just ride them out or sell, depending on when that is the right decision for them based on their circumstances.
Correct me if I'm wrong, for the same reasons the below is true for a move up seller, and it is true for a buyer. However, there are circumstances that could change your answer to either or both if you look further. Simplistically, I have no problem saying the same thing to sellers or buyers in this scenario. What about you?
If a seller wants to know if it's a good time to sell, depending on what they are doing, the answer would be something like this. If your home was worth $300,000 3 years ago and you buy up to $500,000 that's a $200,000 difference. The down payment at 20% of the $500,000 purchase price is $100,000 and your payments are based on $400,000 loan amount.
If your property has dropped 20%, then your home now is worth $240,000 and you sell and the property you are buying is $400,000 because it dropped 20% too, then the difference is $160,000 and the 20% down payment on $400,000 is $80,000 and the payments are based on a $320,000 loan. Isn't that a good time to sell for the move up seller? You bet it is, YES they take less but buy for less and their property taxes are less, payments are less for 30 years, etc.
I don't see a conflict and NO I am not a two faced agent. I am helping them analyze the market to assist them in THEIR decision making in terms of what they can do with their investment and their purchase or sale. That's my job, the decision is up to them.
Terrylynn Fisher, Expert Negotiator, Realtor, CRS, SRES, GRI, CSP Staging Consultant, Diablo Realty, Walnut Creek, California loving selling real estate since 1977 in Contra Costa County, California...
Also Co-Owner of StagersLIST.com THE Resource for Stagers, Realtors and Homeowners in North America, CSP Realtor Elite and the first CP designee and LGLS Realtor Trainer for Live Green, Live Smart, realtor designation green build science training, with programs for corporations, non-profits and everyone.
And, there could also be a pretty big difference between the two homes. In our market, the higher in value the home was, the larger the drop in % value. Great post and great job with the math.
No comment on the blog but I like both the chair and bench posted. I may have to look getting them.
Terrylynn- Excellent math! Excellent post, should get featured! I am flagging it for a feature, fair and balanced! I totally agree with you. We have another issue here of which I commented on the other post. We have buyers getting great deals on short sales and sellers who have to do short sales, a win/win for both. In this situation, it is a good time to buy and a good time to sell. It is a matter of perspective and the reasons why you need to buy or sell. If you are just testing the market than no, this is not the right time to sell.
Mark, in our area, it's interesting that we're pretty close in most cities, but from City to City, it can differ some. In general our county has been hard hit, but then so has California as a whole. I guess the point it that there is no perfect answer without the counselling session with the client, right? Thanks for your comment
Terrylynn,
I think this is the very best market we've seen in decades for move up buyers. They can get a contingent offer accepted and even though they probably won't get multiple offers on their house they will most likely have an easier time selling it than the sellers of their move up house did.
I'm still advising my clients who don't really have to sell to hold off for awhile.
Nestor and Katrina, you are so right. So past clients and referrals, are the foundation of most Realtor's business and you are not going to advise people to do what is not in their interest. Your future income depends on their trust of you, and that you will base your advice on what is best for them. Any other type transaction is just a "deal" and you aren't likely to make clients for life.
Susan, you are so right, I recently have had 12 listing appointments and 8 were advised by me to wait. That's just good business, we assess their needs and goals and give advice accordingly, with THEIR interests in mind. It's what makes you a great Realtor and I have no doubt get repeat business and referrals. That's the goal. Take care, my friend.
Great analogy. I wish I had funds right now to buy I would in a minute. Great interest rate, great prices and houses are staged inside and out so they are move in ready. What's not to love! Kym
Thanks Kym for the comment. How right you are. IF we had the funds, we'd be buying lots too. It's easy to get excited when the market is up. When the opportunities are there is now. The flip side of course is that it is a bit sad that people are hurting and the lending industry is in an uproar. Hopefully that will work itself through soon.
Taking your profession seriously means that you treat each client as unique - there is no blanket situation for everyone. That means, you have to evaluate each client individually to see where they're at and what they need to accomplish from buying or selling. Good for you all for realizing that you can't just say this market is only good for buyers or sellers!
~Renae
Terrylynn, Great blog! It's this type of thinking that sets you apart from all the others! I did a little exercise in our area and went looking for a home to buy, to actually sell our current home and move into the new one. But, I did not want to raise our property taxes or raise our mortgage. I could buy another home in our current zip code but for half the square feet we have now, no view, and no dressers or end tables in the master bedroom. Guess what? NOT MOVING!
That is the greatest thing about you Terrylynn... you tell it like it is, honestly! You are so for your clients, and so helpful to others. If I had the funds... I would buy right now... but it is all relative and I need to check my lottery numbers ;) Ciao....
We were hoping to move-up this year but... we remodeled our kitchen instead and are planning a bathroom remodel so when we do sell... anyways thanks for the perspective I hadn't looked at it like that
I am also a realtor in addition to an interior designer. I agree with you regarding that this market is a great time to buy.
My Sellers are also doing well, they undertand this current market and pricing their homes fairly. They are able to walk away feeling satisfied and doing well on the buying end.
I am always truthful with Buyers and Sellers regarding the current real estate times. No surprises for anyone.
Joyce
Very well stated and the math example pretty well sums it up in black and white. Excellent marketing in a slow Real Estate market.
One of my agent clients and I have this conversation ALL THE TIME if you are moving up, it is a great time to sell & a great time to buy! She is actually doing the exact same thing right now. She knows she'll 'lose money' on her current home, but the one she wants she wouldn't have been able to afford 2 yrs ago. Now she can. Losing $20K on her current one to save $100K on the new one... well, that's still an $80K net! Seems like a smart move to me!
Hello Terrylynn, the point that Melissa makes is dead on. The trick is selling in a market where there are 100 homes for for sell for every couple of buyers. But if you can position your home to be attractive to one of those few buyers, oh man can you make out on the other end of the transaction.
Renae - Exactly!!! Thanks for your comment.
Nancy, I get that. Sometimes there are other factors that influence decisions like this, like property taxes, etc. Although the property taxes will be 20% less too if prices have dropped 20%...so like the house you are in or make it what you like and stay until you are 55 or more and take the tax base with you in our county anyway.
Lori - yes my friend, save, save, save, this is bargain basement time for buying. And the sooner buyers realize it the better the market will be and the markets that are fed by this market and we'll be out of the real estate doldrums. Baby steps.
Ronelle, after 30+ years in real estate I've learned that there is always more than one way to look at things. I try to find the "other ways" when I can, because it gives options to clients when I counsel them.
Joyce, yes, Realtors without integrity generally have a very short career. All home sellers need to do is look around and see who has been in the market through thick and thin. Those are the pros who know the scoop on the market and marketing regardless of the market conditions.
Excellent advice about looking for an experienced Realtor Terrylynn. They have seen it all and remain calm and collected through times like these. They have good advice for their clients and guide them through to a sale.
Excellent advice about looking for an experienced Realtor Terrylynn. They have seen it all and remain calm and collected through times like these. They have good advice for their clients and guide them through to a sale.
Michelle, thanks, yes just like an experienced stager has experience and has seen it all and remains calm and can help the realtor through the challenges too, right? Your Realtors are lucky to have you there as you seeking out the experienced ones increases your chances of having properties priced right and sold because you are a good team. You good at staging and that piece, they good at the real estate piece. A perfect compliment.
And Michelle, thanks again!!!