The inevitable question is asked over the holidays. At the family functions, work events, and during the casual encounter. The answer to this question is something that I always struggle with. Unless I know, specifically, why the person is asking, I give the same canned response.
See, as a Real Estate Agent, I view the market much differently than some reporter on CNBC or Yahoo Finance that ‘reports’ on the housing market or the forecast for the coming year. Yes, I keep tabs on the national and local statistics and trends, but they are not something that I put total faith in. Most individuals hear data from a reporter or read trends in the newspaper or online and think that it applies to them. I’m here to tell you that is untrue. Real Estate markets and trends happen on such a local micro level that unless the data is viewed specifically for your home, they are inaccurate.
I know that numbers can be massaged for political reasons. As an example, the latest unemployment figures for the U.S. Bureau of Labor Statistics were 5.8% and this is seen as progress from 7.8% just 2 years earlier. However, what these stats fail to tell you is how many individuals have just given up. Have stopped looking for work. No longer are collecting unemployment. Have started their own business. Unless you know the deeper meaning behind the statistics they are just window dressings.
National sales statistics for real estate can detect macro trends in the housing market, but are useless in determining the value in your home. Even data disseminated at the state and county level can be misguided and inaccurate. Why? Because there are variances and trends from neighborhood to neighborhood and even street to street. It always amazes me when people are moving from a different part of the country and compare the market they are leaving to the one here in Maryland, in Frederick. They think that what might have been true in Florida or Texas or Colorado holds true here in Frederick. A 4 bedroom, 3 bath colonial might cost twice the amount in Frederick compared to where are moving from. Their entire mindset has to change, and they have to reposition their thought process in order to grasp the price difference as they move to the area. Or, I’ll get this response, “Prices have gone down the last 2 years in my area, and I’m looking at homes here that seem to be increasing in value. Why is that?” The answer is: like unemployment statistics, the national housing statistics reported on the news do not directly apply to you if you are in the process of selling or purchasing.
So, instead of asking “How’s the Real Estate Market?” Most want to know, “How is MY market?”
This too is a loaded question. I actually consider this ‘Price Driven’ Valuation of properties an inferior approach. If you are looking to sell, the first thing that I’d suggest is that we find ways to extract hidden VALUE and increase bottom line profits for your home sale. Having studied Warren Buffett and his investment strategies, I’ve found that he takes a ‘Value-Driven’, not a ‘Price-Driven’, approach to valuing his companies and potential investments.
We do the same thing with your home. Treating your home as an investment with a stock price instead of a structure with 4 walls, a roof, and a sales price. We treat your home as a business, and if you owned a business and were preparing it for sale, you would spend time properly preparing that business for sale. You’d clean up your balance sheet. You’d eliminate unnecessary expenses, and you’d make sure profits were accurately stated. We teach our clients to do the same thing with their homes. We have fundamental strategies, borrowed from Warren Buffett, that help increase the value of your home. These fundamental strategies help to eliminate objections and put additional profits in your pocket at settlement.
Maybe a better question is, “How can I increase the value of my home?”
To this question, my answer is simple. I have written many times on this subject, and I’m always happy to answer this question. The answer: You need to eliminate fundamental mistakes that other sellers unknowingly make as they look to sell their home.
I don’t blame the sellers that make fundamental mistakes. Typically people move 2-3 times in their lifetime and don’t understand the intricacies and the process. I blame the person advising the seller, the ‘professional’ that sells homes for a living. Imagine walking into a home that you are looking to purchase and the first thing you smell is cat urine. You trip over 8 pairs of shoes as you walk through the front door. Then you walk through the living room to the kitchen, you run into cobwebs, and there you see the sink overflowing with dirty dishes. Do you think you’d put this on your short list of homes to purchase?
Having seen thousands of homes for sale over 12 years, this is, unfortunately, how more people than you can imagine live. These people fail to properly prepare their home for sale. Their advisor or agent fails to inform the owner that when you are selling your home, it is no longer ‘yours.’ Yes, you still own the property and live there, but now your home is on the market and needs to be presented a certain way.
This is exactly why I teach my sellers how not to make these fundamental mistakes.
You want to have your home properly prepared to attain the highest profits. We do this by doing a diagnostic assessment on your home. I analyze key variables in your home and present a solution on how we can tweak these variables to enhance the perceived value of your home. The changes might be subtle, others could be more drastic, but the benefits (profits in your pocket) are huge. With each home, sellers get a personalized solution or game-plan that is aimed at increasing value and eliminating fundamental mistakes. We’ve found that, once eliminated, sellers have achieved amazing results. Last year, 3 of my sellers achieved the highest price per square foot in their neighborhood by following personalized strategies
If you are thinking of selling your home, taking a macro approach, looking at national statistics, and listening to reporters is a flawed approach and will not accurately predict what is going on with your home. Having someone that can help you increase the perceived value of your home and give you a solution for eliminating fundamental mistakes can put up to $30,000 additional profits in your pocket when selling, as many of my sellers have realized.
So, if you want to know, “How’s the real estate market?” but you really mean, “How’s my market?” I’m happy to answer the latter and give you a specific game-plan for increasing the value of your home.
Thanks for reading, I’m taking suggestions for next months ‘Story from the Street.’ If you have a question or topic you want answered, email me at Eric@ClientProfitSecrets.com
Stories from the Street is a series of monthly articles, using real life examples, told in story format to give you more knowledge of what actually happens behind the scenes of a Real Estate Transaction. I am often asked what exactly happens from the time you list your house until the time you sell or, if buying, what happens when you first make an offer on a home until you are handed the keys at settlement. Stories from the Street are real life situations that can, do, and may occur during a transaction. Most people never know the intricate details and the behind the scenes work that is done on behalf of my clients. I analogize this by telling my clients that they will only know the tip of the iceberg. Much like an actual iceberg that might rise from the water a few hundred feet, they sometimes are miles wide and deep below the surface. As a consumer you know and understand the ‘tip of the iceberg’. As a professional with over 11 years’ experience, it’s my job to know all the intricate details and the ‘below the surface’ aspects of a transaction.
Since each transaction ‘has a story’ or a twist that we have to overcome, the depth of this segment is going to be unlimited. I’m going to try and bring these to you in an entertaining and informational format. I have found through the years, that people learn best by ‘Stories’, so each month I’m going to bring you a new ‘Story’. If you have a question or a topic that you would like me to cover I encourage you to reach out to me by email: Eric@ClientProfitSecrets.com and just ask me the question. It might be, “How do you handle appraisal issues?” Or “When can I lock in on an interest rate?” Or “I’m thinking about building; do I call a builder first or look for land?” I have a ‘Story’ for pretty much any topic that you can think about, so shoot your questions over and I’ll be sure to cover one in an upcoming issue.