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It has been weeks since I last updated this blog, and it isn’t writers block, indifference, or slow news days. I am busy.
I don’t mean active, or experiencing the typical cyclical upswing of the spring season.
I am busy. Really busy.
I started the firm in late 2005, and it took me 9 months to prime the pump with any significant number of clients. By mid 2006, I had clientele for sure, but the market was then going through what was then referred to as a “soft landing.” A year later, the sub prime crisis hit. The year after that, Wall Street’s sinkhole almost brought on a barter economy. I have never really participated in any exuberance, rational or otherwise, as a broker.
Until now.
I am in the midst of multiple bids on three listings as I type, several quick accepted offers on others, and inventory has shrunk to a level so low it is almost absurd. Consumer confidence has come roaring back, and I am seeing buyers drop inspection contingencies, mortgage contingencies, and doing as much as they can to get their offer accepted ahead of the competition.
There was a time when I would go over market activity with sellers to price out their home and the MLS would have a very long list of active, unsold properties and an all to short list of sold properties. That ratio has now flipped: there are as many sales as there are available properties, and in some case fewer available homes than the closed properties. Buyers have fewer options, and it is making them act. The leverage that buyers could exert just a short year ago has all but evaporated, and sellers have regained leverage with a vengeance.
I recall 2007 when banks severely curtailed their underwriting guidelines to minimize risk and remarking how quickly the pendulum had swung to the disadvantage of home sellers back then.
How quickly the pendulum has swung back.
This is not to say that overpriced homes will sell or that happy days are here again for good. Overpriced homes still get stale. But homes priced right, instead of inexplicably sitting lonely and unsold in the lean years of 2008-2011, are now selling briskly to eager buyers with some robust competition. Buyers no longer possess the leverage to hold the seller over a barrel anymore. Balance is back. Values have stabilized and in some cases, gained strength.
I have not had the time to post market stats locally, but I will soon. My observations are that of a guy out in the field, watching this all firsthand. It is a sight to behold. It isn’t “easier” for a variety of reasons, not the least of which is the return of neophyte agents who don’t know their job too well and the accompanying headaches, the consumption of time to handle multiple agents regarding the same property, and the endless work of quality control on higher volume. But consumer demand is back, sellers can sleep better at night now, and we no longer risk giving away the farm- literally- to consummate a sale. I am almost ready to say the R(ecovery)-word.
As I stated to a seller client who wondered aloud if we had under priced their home after a huge bidding war on their property, we are witnessing the transition to a new market where, finally, the wind is at our backs.
The Blind Spot in Consumer Research
In my recent experience at Hear it Direct, a solid 18 out of 18 consumers said their broker was worth their service fee (commission). Most, if not all, would use the same broker again, or at least use a broker in their next transaction.
So here is what is so funny that I pointed out to in our meeting. Consumers, who agree that brokers are necessary to their home purchase, research everything about their prospective home, such as schools, neighborhoods, crime, demographics, market stats, municipalities, local laws, and almost anything else you can think of.
EXCEPT their broker.
I can’t tell you how many times I have spoken with people who knew incredibly granular data about their community of choice, but then either dealt directly with a listing agent with no advocate of their own, acquiesced to dual agency, or just used some guy they met at an open house. Time and time again, especially in stories of less than positive experiences with agents, when I get to how the consumer chose their representative, they reveal that they didn’t really research or vet the person who would broker the largest financial event of their life.
That blows me away.
Yes, research. Learn about the community, the walk score, the schools, crime, and neighborhood amenities. But for God’s sake don’t trash all that hard work by using a sub par agent to represent you.
Roughly two thirds of our company listing inventory are homes that were listed with another brokerage that expired unsold before hiring us. Typically, their last agent was a family referral, social friend or neighbor, or casual acquaintance. Many of our buyer clients worked with other agents before engaging us as well. They didn’t interview multiple agents. They just figured that the Multiple List was the Multiple List, or that all buyer agents unlock doors the same way, and that their agent would do. And they lived to regret it.
I don’t blame these folks for researching everything carefully but their agent. I blame our collective industry for failing to educate the public. HOW you research an agent will be for another post, but suffice to say that a little thing known as Google, track records, personal references, and transparency go a long way. THAT you research an agent before hiring them, however, should be an absolute given necessity for any consumer. We are not all the same, and I’ll take it a step further and say that an agent who doesn’t sell a lot may be a better match for some than someone who closes lots of deals. The important thing is to find the right match, and when consumers know to do that the rising tide will carry all boats.