Many Questions, Few Answers
For those keeping an eye on the interest rate picture it's not news that rates are moving, or have moved up. Rates now for "A" credit, conventional 30 year fixed rate with a 20% down payment are ranging in the 6.5 to 6.75 area. Still cheap money, but up from recent history. If you watch the 10 year treasury note, its movement will give you a feel for the direction and the probable extent of coming mortgage changes. There are a lot of sites providing this information. One I like is http://www.smartmoney.com/bondmarketup/ Read the interpretations of the experts with your tongue in either cheek. If these people actually knew what was going to happen next the national lotteries would be taking some serious hits. Still fun and informative though.
The questions I referred to in the title have to do with people behavior, and so I'll describe a couple of recent situations and let you ponder with me the appropriate mechanisms we should consider for our reaction. First is a listing we had been competing for. We made our normal presentation, major appearances on web sites, print media, regular reporting on number of hits the property received, and etc...We were pressed by the seller to offer a virtual guarantee of being able to locate a buyer within 30 days. We pointed, realistically we thought, to the average days on market in the entire Sierra North Valley MLS, which naturally includes Chico as the major market. Those statistics YTD are 85 days, and I have indicated in past blogs that those numbers can be fudged, or not entirely accurate. With the knowledge that we would very likely not make the promised date should we agree to the seller demand, we didn't make such a commitment. Another guy did. The seller listed with a conventional percentage fee broker and is on the hook for almost $15,000 in commission, three times our best case offer and about $5,000 higher even if an MLS office should have sold our listing. We know for a fact our advertising which is heavily skewed to take advantage of the shopping habits of modern real estate has no peer. Should we have lied to the man and prayed for a lightning strike? We don't think so.
Second case is an Orland problem. One of our agents has three different potential sellers with homes in an upscale subdivision talking about listing. They all feel their homes are worth in the $400,000 range. They are not, we can't come up with comparable sales to support such a price, and with brand new homes in nearby areas that are 500' larger selling for $365,000 the hopes for an overpriced listing are dismal. The owners are essentially charging our agent with trying to keep the price down to insure a quick sale. I'm particularly proud of our agents and their client focus and integrity, and a quick sale is the last thing on their mind. Protecting the client's interests is foremost. So far nothing unusual here, just the inflated hopes of some sellers. But Wait. Some nut case appraiser appraised a home in the same general vicinity for $410,000. How our agent asked? The appraiser told our agent he couldn't find comps in the area so he used some from an estate subdivision several miles away, all 1 acre or larger estates with homes ranging up from the middle $400's to $800,000. Word of this appraisal "leaked" out and here we are. Owners misled, real estate agents looking bad, yet again. As a mortgage broker I can assure you that if that appraisal was to satisfy a loan application it did not get past GO. It would have been sent back for a revisit, or more likely subjected to a peer review. Meanwhile substantial damage has been done.
Last note. Don't want this to sound like a dreary exercise, or certainly not "poor us". For home buyers and sellers the real estate industry is viewed a some monolithic whole, lots of credibility in the training and ability of the practitioners, and some level of comfort derived from consulting with professionals. Would that it were so. The entrance requirements for licenses in our business are very nearly a joke, and the oversight in most offices has to do with making sure the paperwork is complete so as not to be sued. There are many agents and some offices with high standards and high regard for clients. Seek them out. If you only want someone to tell you what you want to hear, call anybody.. When your body is ailing you can consult with Dr.Feelgood who will smile and send you home with some happy pills, or you can find a real Dr. who will tell you exactly what you need to do to fix whatever it is. The news may not make you feel good, but the treatment will.
As usual,
thanks for visiting.
The questions I referred to in the title have to do with people behavior, and so I'll describe a couple of recent situations and let you ponder with me the appropriate mechanisms we should consider for our reaction. First is a listing we had been competing for. We made our normal presentation, major appearances on web sites, print media, regular reporting on number of hits the property received, and etc...We were pressed by the seller to offer a virtual guarantee of being able to locate a buyer within 30 days. We pointed, realistically we thought, to the average days on market in the entire Sierra North Valley MLS, which naturally includes Chico as the major market. Those statistics YTD are 85 days, and I have indicated in past blogs that those numbers can be fudged, or not entirely accurate. With the knowledge that we would very likely not make the promised date should we agree to the seller demand, we didn't make such a commitment. Another guy did. The seller listed with a conventional percentage fee broker and is on the hook for almost $15,000 in commission, three times our best case offer and about $5,000 higher even if an MLS office should have sold our listing. We know for a fact our advertising which is heavily skewed to take advantage of the shopping habits of modern real estate has no peer. Should we have lied to the man and prayed for a lightning strike? We don't think so.
Second case is an Orland problem. One of our agents has three different potential sellers with homes in an upscale subdivision talking about listing. They all feel their homes are worth in the $400,000 range. They are not, we can't come up with comparable sales to support such a price, and with brand new homes in nearby areas that are 500' larger selling for $365,000 the hopes for an overpriced listing are dismal. The owners are essentially charging our agent with trying to keep the price down to insure a quick sale. I'm particularly proud of our agents and their client focus and integrity, and a quick sale is the last thing on their mind. Protecting the client's interests is foremost. So far nothing unusual here, just the inflated hopes of some sellers. But Wait. Some nut case appraiser appraised a home in the same general vicinity for $410,000. How our agent asked? The appraiser told our agent he couldn't find comps in the area so he used some from an estate subdivision several miles away, all 1 acre or larger estates with homes ranging up from the middle $400's to $800,000. Word of this appraisal "leaked" out and here we are. Owners misled, real estate agents looking bad, yet again. As a mortgage broker I can assure you that if that appraisal was to satisfy a loan application it did not get past GO. It would have been sent back for a revisit, or more likely subjected to a peer review. Meanwhile substantial damage has been done.
Last note. Don't want this to sound like a dreary exercise, or certainly not "poor us". For home buyers and sellers the real estate industry is viewed a some monolithic whole, lots of credibility in the training and ability of the practitioners, and some level of comfort derived from consulting with professionals. Would that it were so. The entrance requirements for licenses in our business are very nearly a joke, and the oversight in most offices has to do with making sure the paperwork is complete so as not to be sued. There are many agents and some offices with high standards and high regard for clients. Seek them out. If you only want someone to tell you what you want to hear, call anybody.. When your body is ailing you can consult with Dr.Feelgood who will smile and send you home with some happy pills, or you can find a real Dr. who will tell you exactly what you need to do to fix whatever it is. The news may not make you feel good, but the treatment will.
As usual,
thanks for visiting.
posted by Douglas Doss | 9:06 PM
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