Click 50oldfuller.com to view seller disclosures, complete property / offer information, and 80+ photos. Purchase Price is $670,000 for 5,007 sf of finished living space that includes 6 beds (master and additional bedroom on main), 5… More
Know your obligations. Put more bluntly, know the law. This applies to those selling a house with or without a listing agent. And, whatever advice is directed at sellers often applies to buyers, and vice versa.
The duty to disclose is a very important topic and was recently addressed by Seth Weissman, long time general counsel to the Georgia Association of Realtors. (Don’t take any action based on this information, instead seek legal advice from a real estate attorney.)
The featured image does not tell you much about the house and appears to say, “HERE IT IS!”, leaving it up to the buyer to find the good, bad and ugly. Notating that a property is being sold as-is and/or without a disclosure seems to be an all too common strategy among investors, heirs and even owner occupants to sidestep their obligation.
Sellers – Regardless of the circumstances or conditions of the sale the seller is legally obligated to report latent defects of which they are aware and which a buyer could not discover through a reasonable inspection.
With this understanding it may seem the way forward is clear. But what about when:
- A seller does not want to disclose a latent defect because the previous owner who must have known did not disclose.
- A seller disagrees with a pre-listing inspection or one produced by a buyer.
- A seller receives but does not read the buyer’s inspection report.
- A buyer ignores a seller’s instructions and sends the inspection report anyway.
- A seller asks the listing agent not to divulge a material defect that is unlikely to be discovered.
Buyers – Conduct your due diligence or forever hold your peace! There is little to no chance of winning a case against a seller if the issue could have been discovered through a reasonable inspection of the property, including current and pending zoning, boundary lines, flood insurance rates, past insurance claims, city/county/state long range plans, sex offender whereabouts, etc.
Home improvement plans? Two more things to consider.
First, is a building permit required? This question usually creates a lot of discussion, most of which seems to favor avoiding the process or downplaying the need as if it is optional.
The county has defined the work requiring a permit, and without question there are some gray areas and permitting does impact the financial and scheduling components of a project. Homeowner reasoning not to have work permitted may be shortsighted.
Often I hear a seller disclose, when asked, that the work in question was done without a permit but they are quick to point out that it was performed by a licensed contractor or a licensed tradesman. In most every case, the seller is unable to name the “licensed” person or company! It surprises me how often buyers proceed on hearsay and don’t attempt to negotiate an offset in price for the real or perceived added risk.
Second, the impact on the Guaranteed Home Replacement Cost feature of the home insurance policy. Have a conversation with the insurance agent before, during or immediately after the work is complete to be sure there is sufficient coverage in the event of a loss. Based on limited personal research, it appears that permitting (or lack thereof) is not a factor in determining insurance premiums and claim payout.
With that said, it is my personal belief that erring on the side of getting work permitted has little downside compared to the range of issues* that may occur from not pulling a permit when it is clear that one is required.
* potential higher sales price, less time on market, safety, etc.
What’s happening the in the Walton High School area?
The standard answer comes from the MLS reporting, but the best answer comes from an in-depth study using FMLS raw data which requires an extensive manual process. This step is regarded as critical because it is very revealing and relevant when counseling sellers on how best to prepare and position their property to improve the opportunity to net more at closing, in less time. It is the MGR business model, local knowledge, and depth of experience that brings about the delicate balance between these opposing forces. So why the need for hours of work when push button MLS reporting is available?
First, the MLS “Original” List Price is a bit of a misnomer as the OLP comes from the most recent listing and not the initial listing in a multiple listings scenario; i.e., when more than one listing has been used to market a property. As show below, the average homeowner goes through about 2 listings in their effort to sell.
Second, the MLS “Total” Days On Market does not always reflect the entire amount of time a property has been offered for sale, and especially so in a multiple listing scenario due to MLS reporting rules.
Third, the MLS system is not currently built to segment results based on whether or not price changes were introduced.
Fourth, is the granularity needed to isolate the events down to the elementary school and price range level. More detailed information leads to better and more confident decision making.
The featured chart (in seasonal colors of red/green) illustrates two things; a) what happens when property is initially offered for sales at the Right Price (no price changes were required), and b) how this ratio varies among the upper price ranges.
Directly related to the falling SP/OLP% is the corresponding increasing days on market when the Right Price has not been identified.
These stats are for the higher value resale Walton High School single family detached homes in just four elementary schools (East Side, Mount Bethel, Sope Creek and Timber Ridge) because it is the focus of my business, and clients that fall into this slice of the market appreciate and benefit from this concentrated effort.
Below is the summary section of the reporting for the List Date 1/1/18 – 11/20/18 with List Price $800k – $999k, comparing among other things the variance between the MLS TDOM and MGR SDOM (seller days on market). It is very enlightening!
Contact me when you plan to sell and I’ll be glad to review this information in detail and other aspects of the MGR Best Home Marketing approach to selling higher value property.
For Sale, or grave marker? Honestly, it is sometimes hard to tell which it is.
Unless a house sits at the end of a cul-de-sac the first thing a buyer sees is the yard sign. This featured photo is not staged, it was the greeting I received upon arrival.
I can’t image an agent installing a sign for a new listing in any manner other than perfect, as it is a reflection on the profession and is part of the first impression buyers associate with a house. I can only image the buyer later referring to this house as, “the one with the falling down sign”.
Assuming signs are plumb when first installed, a sign that is leaning over or worse can indicate:
- agent does not live in the area,
- on the market for an extended period of time,
- does not show well,
- seller is not motivated,
- over priced, and/or
- agent and seller have lost interest.
It seems that I witness yard signs in mourning for just as many luxury estates as lower priced property. This is very surprising as I would expect the market to demand better at the upper price ranges as sellers at the lower end to surmise it is what it is.
With that said, the perfect presentation has a short shelf life when it comes to delivering maximum impact on a seller’s net at closing. And although the best marketing in the world cannot sell an overpriced property the yard sign is still on public display, not under a bushel basket. It is for this reason that I’ve been known to replace a bent sign or one plastered with grass clippings (thanks to the lawn maintenance crew) to order to keep the appearance of a fresh, new listing.
One chance to be NEW. Similar to, “You Get Only One Chance To Make A First Impression”.
Deciding to sell is a big deal. It is also exciting and fun to share your plans.
Once the public hears a house is for sale, from quite conversation with neighbors, friends, a FSBO sign, through services like NextDoor.com or the all-out full-blown publication on consumer home search websites and MLS, a baseline, for better or worse, has been established. This becomes THE first impression and first shot at being new inventory for buyer consideration.
Recovering from a False Start can be a challenge and in my experience almost always results in a lower net at closing and more days on market. (see below)
I associate the term False Start with two conditions.
- Broadly speaking, anything that adds to the days on market and/or reduces the net at closing, and
- More specifically, a listing that ends without a sale (expired / withdrawn), a sale or pending listing that incurs price reductions in order to attract an acceptable offer, and an active listings that has been on the market longer than the average amount of time.
Efforts to recover from a False Start may include one or more of the following activities.
- Reduce the price
- Withdraw the listing or let it expire in order to re-list to appear “new”
- Change the description/remarks
- Change the photos
- Offer buyer and/or agent special incentives
- Change and/or stage the house to address buyer/agent feedback (i.e., new paint color, new carpet, etc)
- Schedule additional Open House and/or Caravan days
- Spend additional advertising dollars (marketing to buyers and/or agents) on social media, print material, etc.
- Contact surrounding neighborhoods (by phone and/or mail)
It is my personal experience that these actions, beyond the first two, have a very low return for the effort (the proverbial needle in the haystack) and generally produce more benefits for the agent than the seller.
Deciding to sell is simple. Preparing to sell with the objective to net more in less time takes careful planning and execution because there is just one opportunity to be truly NEW and have the buyer come away with a positive experience.
Avoiding False Start conditions produces a huge win for the seller. Here are some facts based on hours of YTD 2018 data gathering using my area of focus (the higher value Walton High School single family detached resales in just four elementary schools (East Side, Mount Bethel, Sope Creek, and Timber Ridge). Find more stats by elementary school and price range on MillerGroupRealty.com.
A gradual decrease in the SP/OLP% is experienced as the List Price increases; however, the SP/OLP% is significantly higher for those that go under contract without incurring price reductions.
Shown above is the drastic difference in terms of Seller Days On Market when price changes are and are not involved. Sellers listing their house at the right price have a totally different view of the market than their counterparts. At the end of the day it is not about the “market” but starting at the “right price”. (The Miller Group Realty SDOM more accurately reflects the seller’s true effort to sell in contrast to the often quoted Total Days On Market stat which falls short of more accurately recording the events when more than one listing is used to produce a sale.)
The above chart illustrates the percentage of sellers that become “spectators” rather than true “participants” in the race to actually transfer title to a new owner. Spectators are those that go on the market and fail in their efforts to sell because either they were not serious about selling or are ill advised before or during in the process. Participants are those that actually cross the finish line…close on the sale!
Not surprising is that the number of False Starts increases as the home value increases. I owe this dynamic to the challenge of identifying the right price for luxury property. Deciding to sell is simple. Selling with the dual goal in mind to net more in less time requires someone with keen local knowledge, significant experience, and a business model and approach to selling that provides the best opportunity to sidestep the False Starts to achieve this delicate balance.
I welcome an invitation to discuss these findings in more detail. The best way to reach me is via mobile number 678-933-7780 and Brady@MillerGroupRealty.com.
What is “right pricing” and why is it so important?
For me, “right pricing” is the research and analysis that goes into identifying a price range and a pricing strategy.
The end result is a specific price that will prompt offers. Too low and the house may sell quickly but at lower price resulting in a lower net at closing. Too high and the house may never sell without one of more price adjustments and then, like the too-low scenario, may generate less cash at closing.
My experience tells me that the right price must be within certain limits to attract offers, and those limits vary with the value of the property and amount of time it has been exposed to the market.
The penalty for overpricing is huge, both in days on market and net at closing, and not to mention the additional emotional stress and the negative impact it can have on many areas of life. No one expects to become the one to catch what I refer to as Seller Fatigue but it will materialize over time, and it can take as little as 30 days.
I dig into the details to be in a position to give my clients real numbers generated from my area of focus (i.e., the higher value resale Walton High School homes in just four elementary schools: East Side, Mount Bethel, Sope Creek and Timber Ridge). This effort is necessary because the MLS search and reporting capabilities don’t provide this micro market detail (which is so important for those in Walton) nor does the firm Keller Williams Realty hires to produce custom stats.
It is also important to understand that the MLS reporting does not always (in fact, most of the time) illustrate the real challenge facing sellers. My SDOM (Seller Days On Market) captures the full number of days the property has been exposed to the market which can be significantly different from the TDOM (Total Days On Market) reported by the MLS due to their restrictive guidelines.
Another must-know, but not reported, is the number of days that transpire from the last price change to when a listing goes under contract and ends with a sale. It is important to have this information as a guide when considering the timing of price changes.
In general, as house value increases, so does the amount of time it takes go under contract (aka, Binding Date). Also interesting is that the data reveals that listings go under contract in less time when the house was first listed for sale with the right price (i.e., price changes were not involved) compared to the elapsed time from the last price change to the Binding Date for those listings incurring price changes.
Picking the right price is simple, but not easy. The benefits are clearly in favor of getting the price right, right out of the gate! One can be lucky and guess the right price, or improve the odds by hiring a Realtor with hyperlocal market concentration and expertise…Brady Miller, 678-933-7780.
My seller asked this question recently, and on another occasion I set out to see what the numbers would say about a house a client was about to purchase.
Since I concentrate on the higher value Walton High School homes in East Side, Mt Bethel, Sope Creek and Timber Ridge I used this market to illustrate the challenge.
As shown below the results are can vary widely depending on the start and end periods. Starting in an off month (such as January) and ending in a peak period (such as July) can set the wrong expectation.
- May ’08 to August ’18: 29.0%
- May ’08 to July ’18: 17.1%
- May ’08 to June ’18: 9.1%
- May ’08 to May ’18: 8.9%
- May ’08 to April ’18: 0.3%
- June ’08 to August ’18: 51.8%
- June ’08 to July ’18: 37.7%
- June ’08 to June ’18: 28.4%
- June ’08 to May ’18: 28.1%
- June ’08 to April ’18: 18.0%
Perhaps the answer is that your house is primarily a place to call home and secondarily an investment. The appreciation is what it is.
Call me when curious about the price of your home, and especially so if it falls in this area, $600,000+, and has not been previously listed as you only get one chance to truly be “new” inventory for buyers to consider.