This month: This month: A new number in the market, Fighting Clients, Emotions in the market, and HOAs.
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A lot about market pricing this month; more than I expected.
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“Maybe it’s a different number now.”
Of the offers for buyers that I have written and lost in the past month, the average losing price is 109% of asking price — that’s the losing percentage. Yes, there were some where we offered 100% of asking price, or even just below, and some where we increased to 125% but the average was 109%.
- If you’re a buyer and not competitive, consider looking at houses only after they’ve been on the market for at least 8 days (see: price matters)
- I was telling a client that based on the comps in the data, I just could not validate going to a certain number above the asking price, and he replied, “Maybe it’s just a different number now.” He’s right, especially when making an offer in the first few days on the market.
Agents see some things
We walked into the back room of the basement. There was a wood table covered with dried blood and blood stains on the concrete floor. My client loved it. It was the owner’s room for dressing deer, and my client was a big hunter.
Contrast that with another set of buyer clients in a different house: we walked into a room filled with a bunch of taxidermied game hung on the wall. They both got choked up and had to leave.
There’s a buyer for every house. Had those been my listings, I would have asked my respective sellers to clean up the killing room and to remove the trophies from the walls.
Both houses sold.
A Tip for Sellers (and Buyers)
Check your gas fireplace for crayons. A seller told me once that it took them a few weeks to figure out that the smell they smelled in their new house was melting crayons that one of the kids who’d lived there previously had stuffed in the fireplace. It took about a year for the smell to dissipate.
John Oliver and HOAs
Two clients sent me the John Oliver piece on HOAs; it, like everything he does, is very good. It’s 25 minutes long and worth your time.
A few comments
- I can’t think of an HOA in the Charlottesville area (okay, maybe one), that has an equivalent egregiousness to it as those referenced in the piece.
- If you don’t want an HOA, good luck.
- As of 13 April 2023, in the MLS in Albemarle, Attached + Detached:1,937 homes sold since 1 January 2022. 69% of those are marked in MLS as having an HOA or POA. I didn’t include condos because those obviously have associations. I can’t think of many neighborhoods in Charlottesville City with an HOA.
- Don’t be a butthead. Most HOAs aren’t that bad. I tell all my clients the same thing – don’t be a butthead*. If you want to paint your house, pink or lime green, don’t expect to do that in an HOA, and don’t get upset when you can’t do it. Don’t let your house fall into disrepair, don’t be a bad neighbor. It’s not that hard.
- *This autocorrected to “Butthead” and I almost left it.
Don’t fight the client
I was young and knew less. The buyer from a big city found a rural property he loved. Commented that it was silent and had no outside lights so it had dark skies. The property had been on the market for a while.
He said he loved it and we discussed offering full price. As I recall, I said that it had been on the market for a while, so what did he think about going in lower?
He agreed, made a lower offer, and got beat by the offer that came in for full price.
Buying homes is emotional, much like many things. If you love it, you might overpay, but you might find it worth it.
Humility is a good life lesson, and skill.
On Emotions and Ethics
“Do you have an obligation to tell buyers they are overpaying?” A buyer asked me that recently.
Short answer: I think so. But I also know that I’m not the one making that decision. I tell my buyers that whether they are competing or not, they should make an offer they are comfortable winning or losing.
If the asking price is $800K, and they offer $777K and lose, I hope they’re okay with that. (And they will probably lose in this market.)
If the asking price is $800K, they offer $1.2M and they win, I really hope they’re okay with that. They will probably win and have a hefty appraisal gap to cover if they’re not already paying cash.
What I’m Reading
- Suddenly, the US is a climate policy trendsetter
- A quick note from JK about Nest and back to the future
- Patriotism, religion, community involvement, having kids – interest in all is down
- “Nature prescriptions” can improve physical and mental health: study. Now, to build more houses while preserving nature.
- “The stars have moved”: how climate change is impacting the planet at multiple scales
- Angry customers are a gift. Amen; this is one of the best (and often painful) ways to learn.
- Car payments are $1,000 for a lot of consumers. Here’s why. Yet we build more houses and communities that require cars. Why?
- After Marriage, How Long People Wait to Have Kids — Important ramifications on the residential real estate industry.
- As Podcasters Pivot to Video, Independents Don’t Buy the Hype. Nope. See my Pivideo post from 2018.
- Home Prices in March Posted Biggest Annual Decline in 11 Years
- A divided housing market: Zillow says these 294 markets to see home price gains while these 102 markets tick lower
- What Can We Tell the Young? “Don’t be poor.”
- Why Measures of Existing Home Inventory appear Different
- Existing-Home Sales Slid 2.4% in March
- A masterclass in trapping and debating
What I’m Listening to
- Nest’s Sweat the Details; we’re having a lot of fun with this podcast.
- 99% Invisible – De Fiets Is Niets
- Taming AI
- Scarcity by Scott Galloway; this is a must-listen.
Next month – This lawsuit is going to be a big deal, insurance addendum amid rising rates, and I’m sure I’ll have a few more ideas.