Tuesday, December 17, 2013

Wrong Attitude About Home Sales Increase

A news story in the San Antonio Express News was intended to be a positive reflection of the local Real Estate market. Finally. But talk about looking a gift horse in the mouth! The two key people quoted in this story cast more of a negative on it than enforcing it for the positive it should be.

And these two key people are supposed to be there to HELP get more homes sold. This turns into another example of how it is careless advertising and marketing which is hurting the real estate industry as much as anything else.

Please understand this is not a personal attack. It is to make an important point to realty agents and to those in the industry about how much they can hurt their own cause.

The Express News story quotes the Chairman of the San Antonio Board of Realtors (SABOR) about the 25th consecutive month of a local rise in home sales. Instead of using this opportunity to point out how wonderful it is that this is now a 2-year trend, he is quoted as saying "Even with things not being as big of an increase, it's still an increase".

Say what? The head honcho of the realty association gets quoted in the major local newspaper as saying this increase in home sales is not a big deal. Sheesh.

But there is more. He also claims, in this story, that housing inventory remains limited, as he sees it, with an average of more than four months to sell a listing. Four months? To make it worse, he is quoted as saying that "Anything less than six months is a seller's market".

Sorry, but this is a horrible quote for a potential buyer to read. If you are looking at homes for sale in an area of San Antonio, and see that most of the homes you are looking at have been listed for more than FOUR months, wouldn't you think there must be reasons why these homes are NOT selling?

Then, later in the story, an agent from a prominent local realty firm is quoted as being concerned that appraisers have to "go back as much as six months" for comparable sales figures. As if what most appraisers, who have contributed a ton of harm to the real estate market by including distressed property sale prices within their valuations, need to do is of concern to a potential buyer and seller.

Here is what could and SHOULD be a very positive story about the local home market being turned into a "Gee, we don't know" mood. All both people quoted had to do was comment about how "This trend is helping all concerned since more homes are being sold each month".

A sorry "half empty" approach when the cup is finally more than half full.


Friday, December 6, 2013

How the IRS Could Help The Real Estate Market - Soon

January 1, 2014 is scheduled to be the end of the "Mortgage Foreclosure Debt Forgiveness Act" that Congress passed in 2007 but finally expires at the end of this month. This action figures to significantly reduce the number of "short sales" around the country, and that is GREAT news for thousands (if not millions) of potential home sellers.

Here is why. Not having this "Act" in place will mean that a property sold via a "Short Sale" (from which the bank approves a reduced amount to satisfy the loan amount due) will no longer relieve the individual home owner/seller of the tax responsibility for the remaining value of the house. Of course, no one wants to see property owners who have lost their home suffer any more of a financial hardship of thousands of dollars more.

For example, suppose a home with a mortgage of $150,000 is sold (after Jan. 1st) as a "Short Sale" for only $100,000, as approved by the bank holding the loan. Without the Mortgage Foreclosure Debt Forgiveness Act" in place, it will mean that the home owner would now be held responsible for taxes on the "remaining" $50,000. This could mean a tax bill of $10,000 to $15,000 for that "owner".

The positive in this, as I see it, is that this situation is likely to discourage the majority of short sale candidates from going this route. The fewer short sales there are, the better, since the biggest reason for the stall in the real estate market is the sales of distressed properties at unfair prices.

Not having short sales and foreclosures taking up a percentage of available listings in most cities will mean that "real" home sellers will be able to ask and receive realistic prices once again.

What kills me is that the National Association of Realtors President has actually spoken out against this Act ending. I suppose that is an "in the public eye" comment to appear not in support of higher tax bills for home sellers. But I don't get it.

The NAR is actually part of the housing problem, based on their members "accepting" short sale and foreclosure property sale prices as if they reflect on the value of area properties. These short sale and distressed property sales are really to satisfy a loan, and should not reflect upon home sale statistics. But they have for these past few years, and that has destroyed home sale prices.

With fewer and fewer short sales resulting, home prices will get back to reality sooner, and that is good for the majority of the people. Again, I don't like to see people get a hefty tax bill, but it should be them taking a financial hit ahead of millions of people losing money on their homes.


Tuesday, December 3, 2013

When One Picture Destroys A Thousand Words

Those who wonder why I am now putting the finishing touches on an entire book about the right way to sell a home should take a look at the ad I randomly found for a townhome in Seattle.

It is another example of "what NOT to do", as advertised by an agent with a nationally known real estate company in the Seattle Times and on its web site.

The primary photo that shows is "1 of 10" photos, but is the only photo that shows up, and provides the all-important first impression. However, the only reason I looked at the other nine photos was because I knew this needs to be presented here.

The "first impression" photo is deadly. It shows a car parked in the driveway in front of one of three garage doors. First of all, it is NOT good practice to show a parked car on a property in a public forum, for security reasons among others. In this context, it makes a viewer wonder if there is room enough to park a car inside the garage.

Furthermore, the first two words of the primary description copy are "Modern townhome". Since the primary photo shows three garage doors (not to mention the car parked outside of one of them), a viewer is immediately confused as to whether the building shown is all ONE unit or if the townhome for sale is one unit within that building. Frankly, after reading the entire ad, I still don't know.

In addition, the description includes some confusing terminology. The first sentence is "Modern townhome with creative spaces and fantastic finishes". Huh?

The next sentence starts with "Enjoy radiant concrete flooring". So help me. Makes me wonder if the furniture is located behind the garage doors and that is why the car in the photo is parked outside. How many homes are you aware of with "concrete flooring" as a selling point?

A later sentence tells us that "The kitchen is a 'work horse' and features a gas range". Are you ready to offer the $295,000 asking price yet?

At the end of the description copy we are informed that this ad was "Updated: 10-02-13". The day I discovered this ad was 12-03-13, more than two months later. This means that nothing about this ad, or the asking price, has changed in more than two months.

Why is this so aggravating? Because I then clicked to see the remaining photos. And most of them are quite impressive.

That is why it is so important to have the primary photo enhance the description copy, and vice versa. A potential buyer is not given ANY solid reason to click to see more. Especially not with 29 other listings which came up within the same area and price range I had entered.

Had one of the good interior photos been used and the description copy been written more realistically, chances are pretty good this townhome would have been sold by now.