Tales of the Recovery: Embracing It

OpenHouse_01A few weeks ago I held my first open house for a wonderful property I just listed in Encino. The home itself is a family home; the kind with traditional bones, and a feel of comfort and belonging. It has a good floor plan, gets good natural light, and has a big yard for entertaining, parent-kid romping, or simply relaxing in the shade of the mature trees that dot the backyard. It’s also situated in a neighborhood where kids on Razors do what kids on two wheels do; and parents push strollers with occupants that are just a few years away from joining the scooter crowd. A great place to call home.

And that’s where the challenge begins. Or, the Recovery.

On that day, I had well over 120 people come through the house during a three-hour open house. Before the end of the day, I had three offers on the property. Less than 24 hours later; I had two more. Agents representing Buyers were calling my cell phone at 10:00pm; well-intended, and looking for any guidance or additional information that might best position their client’s offer in the mix. Some version of this went on for a period of weeks. During that time, one Buyer was replaced with another; several Buyers got the bad news that their offer was not chosen; and a couple of agents that liked me fine at the beginning of things when their offer was still being considered by the Sellers; well, let’s just say I’m not expecting a Christmas card from them this year. Basically, the process ran its course– for better or worse. Ultimately, the property sold for over the asking price; but not a crazy amount like days gone by. It went to a younger couple who just had their first child; a perfect fit all around.

That is where we are at right now. On the other side of the coin; I spend this past Sunday with a young couple expecting their first child, who are buyers shopping for a home. This couple is very qualified, very informed, and very active in their search for a new home, and they’re smart about their choices. A few of the homes we saw on Sunday had small crowds coming to see them. You had to actually look for a parking space on the curb. The way things are now on the buying side, the strategy one has to embrace requires acknowledging the upward trending of the market, and to the extent that you can, resist the natural tendency to haggle over price. It’s a Seller’s market right now; there’s very little haggling going on. Despite that dynamic, unlike in years past, right now it’s very difficult to do two things when buying or selling a home: (1) Underprice your home, and (2) Overpay for a home.

#1) The market demand will bring your property up to the level it should be at to sell. Even though the inventory right now is very, very low, the price points will (and are) working themselves out to an equilibrium that is resulting in a moderate, but healthy growth pattern. It only feels a little crazy right now, because Buyer confidence and the action that results from that, is outpacing action (or participation) on the Selling side.

#2) Unless you’re an all cash Buyer, overpaying for a house right now is difficult. The reason is the banks simply will not loan on properties that are overpriced and do not appraise. It used to be that the appraisal was an afterthought by lenders, if not irrelevant altogether. Nowadays however, it is the critical element in the equation. Because of that, it’s challenging agents to be better at what they do in a variety of areas, including pricing the home to begin with, and, communicating with  a Seller the reality of the market, and working under a realistic framework where expectations are in line with what’s actually going on; and not necessarily what the Seller would hope to see happen.

Over the past several months, I’ve heard a lot of chatter in the media from a variety of sources, about the perceived difficulty in getting a loan from the bank to buy a home. Inevitably, that information disseminates to the general public, and becomes a matter of fact to many. The reality is quite the opposite. Long gone are the wild days of recent years when nearly anyone could qualify for a home loan. We all know how that turned out. However, lending now and getting a home loan now, is very promising. I’m seeing people in all income ranges qualify for loans every single day. Banks are definitely lending; they’re just asking the potential borrower a few more questions than they used to; which of course is a good thing. Bottom line: Access to funds for a home purchase is not difficult; it’s just a better “normal” now than compared to a few years ago.

It’s an interesting time to sell, and it’s an interesting time to buy. Managing expectations on both sides of the transaction is all about the relationship you have and build with your agent; and, the agent builds with their client. The path of a deal is definitely not a linear one– it’s a moving target. There are a number of considerations in play for a sustained real estate recovery, to be sure. However, I really believe that whether you’re toying with the idea of selling your home, or debating the idea of jumping in and buying a property to call home or as an investment; the real recovery is going to come from relationships sellers and buyers have with an agent that is built on trust. And maybe a healthy dose of patience as well.

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Author:Marino Real Estate

Specializing in residential and commercial real estate sales for the better part of a decade, my approach to real estate involves establishing a trust with my clients, that contributes to the ultimate success of our transaction. Whether it is a personal residence, or an investment property, I am committed to negotiating the best deal for my clients, and have enjoyed a history of meeting the important and unique needs of the many clients which have entrusted me with thier real estate goals.

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