"Buy land, they're not making it anymore." Mark Twain said that. Will Rogers paraphrased to explain why he was putting money into ocean frontage, "...they wasn't making any more".
Looking at Madison from Lake Mendota this summer I counted eight cranes towering above the skyline. They're raising high rise apartments from the UW Campus to Downtown Madison Where Madison added apartments.
Not one condominium project has been built, none are planned to my knowledge. I haven't verified this, but a finger on the pulse of the downtown high rise condo market feels like the values might be up 10% and time on the market down. The condo construction ended with a glut of units when the recession came to town. Maybe owning a condo in downtown Madison is a good idea. After all, they're not making 'em anymore.
Wednesday, September 17, 2014
Tuesday, February 4, 2014
Be The Buyer of Every Seller's Dream---Real Pre-Approval With Maximum Purchase Price
Let's say you have found the home you want to own. You think you are in a good position to negotiate a favorable terms with the seller. Your lender provides you with a "Pre-qualification" letter to include with your offer. This is what the lender gives you---boiler plate:
Based on the information you provided and not yet verified, it appears you may meet the requirements to qualify for a mortgage with us....This is not a commitment letter, and a commitment letter may only be issued after verification of your income, assets, and credit report. We will also need an accepted offer and an appraisal of the property supporting the purchase price. After all of this information is submitted and we have a complete file we will submit the package to underwriting for review....
Your offer is submitted to the seller of a property with an asking price of $295,000. You offered $285,000. The seller sees your offer and your non-committal letter with no indication of an amount you may be "pre-qualified" for (based on information not verified). What do you think the seller might be thinking?? If you guessed "WTF???" you are right.
Let's say the loan officer wanted to "help you negotiate" so while you have asked for a pre-approval of a maximum purchase price, the lender gives you a price that he thinks is will help protect your negotiating position. He includes a dollar amount below your actual maximum and makes it for the amount of the asking price of the property you are trying to buy:
We have pre-qualified you for a purchase price of $295,000. Put yourself in the seller's shoes; what thought does this trigger in the seller's mind?? YES! You are right! "Ah, these people are barely qualified, if they are qualified, and any tiny change will sink this ship. Give me a better buyer please!"
The wise alternative is to take the time, before starting to look at properties, to get an actual preapproval letter from a lender by providing all of the information you will need to provide anyway. Do that and a version of this is what the lender can provide for you:
Congratulations. You have completed the steps of the mortgage loan application with our bank to be approved for a maximum purchase price of $325,000 as required by our underwriting guidelines. Your credit report, income, and deposits on hand have been verified. Once we have an executed purchase agreement and an appraisal of the property supporting the purchase price, we will submit your application to underwriting for final approval.
Your offer of $285,000 AND this letter are viewed remarkably differently by the seller. $285,000 might be a little less than they wanted, but you are the buyer they need---SAFE. You are approved and you are well within your budget. It's much harder to take the chance to counter your offer because now their is the risk of losing the GREAT buyer.
Yesterday, (and time and again I hear this) a lender told me he didn't want to include a maximum dollar amount to help us negotiate. Goodness gracious, if we end up in competition with a person with the smart letter, we may not get a chance to negotiate. Information is key in negotiating and we have to use the information we have to help our position. Holding back on showing how strong we are would be like the seller not showing us they have brand new appliances in the kitchen, or the roof is new, or the HVAC system is new.
Does this make sense? OK, you are thinking "If the seller knows I can afford more they will want more money." First of all, I doubt it because the need to have a strong buyer trumps the risk of squeezing a buyer for a fraction more money. Secondly, if you know the values and you know what you should pay, it doesn't matter if the seller holds out for a price that you don't want to pay. You're not going to pay what you won't. Thirdly, I bet you think a CASH offer is attractive, right? Wouldn't that attractive cash offer also suggest to a seller than you have $ and they should then squeeze you for a few dollars more?
Go out today, find your lender, and do the process of Pre-Approval. Then, get the letter that tells the seller everything they need to know about you to say "We found the buyer of our dreams!"
Based on the information you provided and not yet verified, it appears you may meet the requirements to qualify for a mortgage with us....This is not a commitment letter, and a commitment letter may only be issued after verification of your income, assets, and credit report. We will also need an accepted offer and an appraisal of the property supporting the purchase price. After all of this information is submitted and we have a complete file we will submit the package to underwriting for review....
Your offer is submitted to the seller of a property with an asking price of $295,000. You offered $285,000. The seller sees your offer and your non-committal letter with no indication of an amount you may be "pre-qualified" for (based on information not verified). What do you think the seller might be thinking?? If you guessed "WTF???" you are right.
Let's say the loan officer wanted to "help you negotiate" so while you have asked for a pre-approval of a maximum purchase price, the lender gives you a price that he thinks is will help protect your negotiating position. He includes a dollar amount below your actual maximum and makes it for the amount of the asking price of the property you are trying to buy:
We have pre-qualified you for a purchase price of $295,000. Put yourself in the seller's shoes; what thought does this trigger in the seller's mind?? YES! You are right! "Ah, these people are barely qualified, if they are qualified, and any tiny change will sink this ship. Give me a better buyer please!"
The wise alternative is to take the time, before starting to look at properties, to get an actual preapproval letter from a lender by providing all of the information you will need to provide anyway. Do that and a version of this is what the lender can provide for you:
Congratulations. You have completed the steps of the mortgage loan application with our bank to be approved for a maximum purchase price of $325,000 as required by our underwriting guidelines. Your credit report, income, and deposits on hand have been verified. Once we have an executed purchase agreement and an appraisal of the property supporting the purchase price, we will submit your application to underwriting for final approval.
Your offer of $285,000 AND this letter are viewed remarkably differently by the seller. $285,000 might be a little less than they wanted, but you are the buyer they need---SAFE. You are approved and you are well within your budget. It's much harder to take the chance to counter your offer because now their is the risk of losing the GREAT buyer.
Yesterday, (and time and again I hear this) a lender told me he didn't want to include a maximum dollar amount to help us negotiate. Goodness gracious, if we end up in competition with a person with the smart letter, we may not get a chance to negotiate. Information is key in negotiating and we have to use the information we have to help our position. Holding back on showing how strong we are would be like the seller not showing us they have brand new appliances in the kitchen, or the roof is new, or the HVAC system is new.
Does this make sense? OK, you are thinking "If the seller knows I can afford more they will want more money." First of all, I doubt it because the need to have a strong buyer trumps the risk of squeezing a buyer for a fraction more money. Secondly, if you know the values and you know what you should pay, it doesn't matter if the seller holds out for a price that you don't want to pay. You're not going to pay what you won't. Thirdly, I bet you think a CASH offer is attractive, right? Wouldn't that attractive cash offer also suggest to a seller than you have $ and they should then squeeze you for a few dollars more?
Go out today, find your lender, and do the process of Pre-Approval. Then, get the letter that tells the seller everything they need to know about you to say "We found the buyer of our dreams!"
Thursday, January 23, 2014
Appraisers Are Adjusting To Reason
I could surely be wrong, I often am, in 2010 when Congress was rounding up their usual suspects (anyone but themselves) to pin blame to for the housing collapse, appraisers ran scared for cover. Easier for lawmakers to penalize people who were small enough to fail and didn't have the power of a lobby, so the appraisers were targets of least resistance. Appraisers responded accordingly: their appraisals would state conservative opinions. So conservative that the values were understated. The pendulum had swung.
In 2013 the pendulum moved back toward the right. Lenders adjusted to the rules and their focus is on documentation of the buyer's income. The appraisal is still scrutinized, but the pool of recent sales is growing and the evidence is being adjusted by common sense appraisers to support values consumers are willing to offer in a market regaining a competitive balance.
There will always be the appraiser or underwriter out there who has a motive, a fear, or god-complex, but hopefully Karma has minimized their numbers. If you run into one with illogical conclusions, request a review or move to another lender. With inventory limited, demand may push prices north. Expect 2014 to be a year where qualified buyers and reasonable sellers have a cleaner playing field to move from offer to closing with minimal stress. That is if appraisers and underwriters don't fear for their careers.
In 2013 the pendulum moved back toward the right. Lenders adjusted to the rules and their focus is on documentation of the buyer's income. The appraisal is still scrutinized, but the pool of recent sales is growing and the evidence is being adjusted by common sense appraisers to support values consumers are willing to offer in a market regaining a competitive balance.
There will always be the appraiser or underwriter out there who has a motive, a fear, or god-complex, but hopefully Karma has minimized their numbers. If you run into one with illogical conclusions, request a review or move to another lender. With inventory limited, demand may push prices north. Expect 2014 to be a year where qualified buyers and reasonable sellers have a cleaner playing field to move from offer to closing with minimal stress. That is if appraisers and underwriters don't fear for their careers.
Tuesday, December 10, 2013
Zillow's Zestimate is a Good Starting Point
Humility is a fine, fine attribute and Zillow deserves compliments for being humble. I know I'm not perfect in my evaluations of property values and my subjective opinion always factors in. Zillow, to their credit, explains their process of price evaluation via algorithms and they admit the system isn't without flaws. What Is a Zestimate? My trust in Zillow as a responsible real estate partner is high because they acknowledge their weaknesses and give people an opportunity to improve the results.
Starting the process of buying or selling, looking at homes through the eyes of Zillow is a good idea. The more we know the more competent we are. Competency translates to confidence and we know the competent confident consumer is in a strong position to have favorable results.
Zillow is a good place to start sharpening skills to prepare for your real estate adventure.
Starting the process of buying or selling, looking at homes through the eyes of Zillow is a good idea. The more we know the more competent we are. Competency translates to confidence and we know the competent confident consumer is in a strong position to have favorable results.
Zillow is a good place to start sharpening skills to prepare for your real estate adventure.
Wednesday, March 13, 2013
Smoking Hot Seller's Market, The Near Westside of Madison
A lawyer was giving his client some negotiating advice regarding a near west side property the other day. He said, "It's a buyer's market. Come in low with your offer and see what the seller does." What the seller did was they took another offer.... and the lawyer's client is still looking. Time to get out and take a walk around the block. It's a new day out there. OK, there are buyer's markets but not in the near west side of Madison. Those tried and true neighborhoods located close to everything, with well built older homes are selling like it's 1999...or 2005. You know the neighborhoods, Westlawn, Nakoma, University Heights, Sunset Village, Westmoreland, Midvale Heights, University Hill Farms to name a few.
Forty eight out of ninety six homes listed on the South Central WI MLS have accepted offers. * That's an incredible number... and not just because the sold homes are exactly one-half of the total. If you own a near west home you can make an offer on another house without selling your house first and know you're moving. Your house is probably money in the bank. Be careful when you put that sign in the front yard; the couple driving by are probably going to run you over to get inside before the next couple comes down the road and beats them to the door.
Hey, what about the 48 that aren't sold? To live like the other half, the lower 48 need to look close at Price, Condition, and Location. If the condition isn't GREAT, fix it. Smart buyers today are not settling for work you should have done. If the location in the neighborhood isn't ideal....well, you can't move off of an unattractive street, but you can move off of an unattractive price. There are buyers in the near west neighborhoods for every house. There will be a buyer for the less attractive neighborhood locations--like busy streets, or crummy lots on corners of two streets with double sidewalks to shovel. They maybe can't afford the better locations but they want the neighborhoods and the quality of the house. Check your price if your home isn't sold and you've been on the market 21 days.
*Data is based on active and pending listings of single family homes in areas w11, w12, w13, w14 of the RASCWMLS at 3:30 PM 3/13/13.
Forty eight out of ninety six homes listed on the South Central WI MLS have accepted offers. * That's an incredible number... and not just because the sold homes are exactly one-half of the total. If you own a near west home you can make an offer on another house without selling your house first and know you're moving. Your house is probably money in the bank. Be careful when you put that sign in the front yard; the couple driving by are probably going to run you over to get inside before the next couple comes down the road and beats them to the door.
Hey, what about the 48 that aren't sold? To live like the other half, the lower 48 need to look close at Price, Condition, and Location. If the condition isn't GREAT, fix it. Smart buyers today are not settling for work you should have done. If the location in the neighborhood isn't ideal....well, you can't move off of an unattractive street, but you can move off of an unattractive price. There are buyers in the near west neighborhoods for every house. There will be a buyer for the less attractive neighborhood locations--like busy streets, or crummy lots on corners of two streets with double sidewalks to shovel. They maybe can't afford the better locations but they want the neighborhoods and the quality of the house. Check your price if your home isn't sold and you've been on the market 21 days.
*Data is based on active and pending listings of single family homes in areas w11, w12, w13, w14 of the RASCWMLS at 3:30 PM 3/13/13.
Tuesday, February 26, 2013
Zillow Zestimates, A Good Starting Point
Informed people are happy people...provided the information is accurate. Real estate buyers have loads more information to process today and the value of that info is directly related to how much effort is put into the processing. Zillow.com is one source of the new information home owners and buyers are looking to for real estate values. I'm a fan of Zillow for it's value as a starting point in the real estate pricing conversation.
Zillow calls their value estimate a Zestimate. It's a number arrived at using automated software designed to be neutral and unbiased. The Zestimate may factor in too much information, such as too broad of an area crossing neighborhood and school district boundaries. On the other side Zillow may have considered too little information, such as overlooking location in a neighborhood, or improvements.
Zillow does a terrific job of cautioning the user of their site and disclosing their limitations on accuracy. For example, go to Zillow.com and scroll down to the bottom of the page and click on: Zestimate. Selecting Wisconsin, and then Dane County, I see they disclose that their data includes 165,400 property sales. They claim their Zestimate is within 5% of the sale price for 42.5% of the properties. However, they are within 20% on 84% of the properties. If your goal is to not overpay for a property or to not leave too much on the table when pricing to sell, you will want to fine tune that 20% in Dane County where ten and twenty percent can mean twenty and forty thousand dollars.
Realtors and appraisers who know the market area and know how to make adjustments for the differences of value between neighborhoods, streets, homes, and amenities can get the price zeroed in the way a telescope brings into focus the fine details.
This is Zillow's explanation (copied from their web site) of a Zestimate:
The Zestimate® (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow's estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home's value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow's information by doing other research such as:
Zillow calls their value estimate a Zestimate. It's a number arrived at using automated software designed to be neutral and unbiased. The Zestimate may factor in too much information, such as too broad of an area crossing neighborhood and school district boundaries. On the other side Zillow may have considered too little information, such as overlooking location in a neighborhood, or improvements.
Zillow does a terrific job of cautioning the user of their site and disclosing their limitations on accuracy. For example, go to Zillow.com and scroll down to the bottom of the page and click on: Zestimate. Selecting Wisconsin, and then Dane County, I see they disclose that their data includes 165,400 property sales. They claim their Zestimate is within 5% of the sale price for 42.5% of the properties. However, they are within 20% on 84% of the properties. If your goal is to not overpay for a property or to not leave too much on the table when pricing to sell, you will want to fine tune that 20% in Dane County where ten and twenty percent can mean twenty and forty thousand dollars.
Realtors and appraisers who know the market area and know how to make adjustments for the differences of value between neighborhoods, streets, homes, and amenities can get the price zeroed in the way a telescope brings into focus the fine details.
This is Zillow's explanation (copied from their web site) of a Zestimate:
The Zestimate® (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow's estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home's value. The Zestimate is calculated from public and user submitted data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. We encourage buyers, sellers, and homeowners to supplement Zillow's information by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent
- Getting an appraisal from a professional appraiser
- Visiting the house (whenever possible)
Friday, February 1, 2013
Spring Market 2013 is Underway and It's Still Deep Winter
I've always known the spring real estate market to start in Madison on the first day of business after New Year's Day. That's when people who are thinking of selling start to ask about making plans to be on the market in March and when people who want to buy start planning to look at homes in February. The eagerness of people this year is surprising---buyers are fast out of the gate and way ahead of the sellers.
A recent report on homes for sale showed the inventory of available homes is down all over Dane County and December sales were higher than previous years. I know that's carrying over into January. Buyers I'm working with are having a tough time finding homes in some of the historically higher demand neighborhoods. The homes that have lingered on the market are getting offers finally--not close to the original asking price, but with price reductions and some concessions, there are buyers who don't want to wait for the higher priced spring market homes to come on.
The best prepared buyers will have the best chance of getting their offers accepted this year. Sellers want security and price in the hot markets. For security give the seller an offer with a rock solid pre-approval letter. No wishy washy language such as "appear to be qualified" or "information not yet verified" will cut it. If the owner is asking $200,000 and you are approved to buy up to $250,000 tell the owner. Hold nothing back. Let them know you are WELL qualified, not just getting by. If you are in competition, be aggressive with giving the owner what they want--peace of mind. Sure they want price too. But there you are wise to be careful. Make sure that the price you are willing to pay is verifiable. If there is no evidence to support the asking price and you have to offer that price to get your offer accepted, make sure to include an appraisal contingency. That might give you the ability to open up negotiations on price.
Owners might be smart to move up their time frame this year. March is typically a key date for placing homes on the market. With as much demand as we are seeing this spring (winter) I think February could give you an advantage. Buyer numbers are up, inventory is down, and inventory will rise in March---looks like February is a gap month favoring owners of well priced, well conditioned homes.
A recent report on homes for sale showed the inventory of available homes is down all over Dane County and December sales were higher than previous years. I know that's carrying over into January. Buyers I'm working with are having a tough time finding homes in some of the historically higher demand neighborhoods. The homes that have lingered on the market are getting offers finally--not close to the original asking price, but with price reductions and some concessions, there are buyers who don't want to wait for the higher priced spring market homes to come on.
The best prepared buyers will have the best chance of getting their offers accepted this year. Sellers want security and price in the hot markets. For security give the seller an offer with a rock solid pre-approval letter. No wishy washy language such as "appear to be qualified" or "information not yet verified" will cut it. If the owner is asking $200,000 and you are approved to buy up to $250,000 tell the owner. Hold nothing back. Let them know you are WELL qualified, not just getting by. If you are in competition, be aggressive with giving the owner what they want--peace of mind. Sure they want price too. But there you are wise to be careful. Make sure that the price you are willing to pay is verifiable. If there is no evidence to support the asking price and you have to offer that price to get your offer accepted, make sure to include an appraisal contingency. That might give you the ability to open up negotiations on price.
Owners might be smart to move up their time frame this year. March is typically a key date for placing homes on the market. With as much demand as we are seeing this spring (winter) I think February could give you an advantage. Buyer numbers are up, inventory is down, and inventory will rise in March---looks like February is a gap month favoring owners of well priced, well conditioned homes.
Tuesday, January 22, 2013
Where The Mad Men Grandchildren Want to Live
Don and Betty Draper, married in 1953, divorced in season three, lived in Ossining, NY a city comparable to Madison, WI in its housing stock; modest to luxurious. The Draper home is a style common to Nakoma, Maple Bluff, Shorewood Hills, University Heights, Vilas, and University Hill Farms.
The attraction of these neighborhoods is the same today as when the Drapers were raising their 3 children...proximity to quality schools, shopping, work, and parks. With modern updates like thermopane windows, high efficiency furnaces, central air conditioning, and added insulation, to complement the plaster walls, wood floors, and large yards, a 1950's house may be as wonderful to own as any home built in the last 10 years.
With an eye on family life, ease of getting to work and children's schools, without long commutes, we're seeing young people (30 somethings) looking close at the classic Madison neighborhoods where their grandparents lived. The move to inside of the Beltline is good news for home sellers who may have taken a beating on their retirement funds. Competition is good for prices and it certainly will make it easier to make that commitment to get on with downsizing when you can see that some of your lost equity in your home is back.
After a string of maddening years of down markets and slow activity, 2013 may be the year to cash out on the recovered equity and take advantage of still low interest rates.
Thursday, November 29, 2012
Zig Ziglar and Mount Everest
Success is inconvenient. That's what I heard Zig Ziglar say when I was a young man on a mission to build a career in real estate. My car didn't have a cassette player built in, I listened to Zig on a battery powered player sitting on the front seat next to me. When I would sacrifice something important in favor of work I would repeat, success is inconvenient. When I bought my first car with money made in real estate it had to have a cassette player... achieving success. Twenty five years later I understand there is more to success than money. I don't doubt there was more to Zig's message than I gathered at the time.
Help enough other people get what they want and you will get everything you want in life. Zig said that too. There is not much I want in life anymore.
No one gets to the top of Mount Everest by wandering around. Just today I read that quote attributed to Zig in an article about his death. I believe Zig reached the top.
Help enough other people get what they want and you will get everything you want in life. Zig said that too. There is not much I want in life anymore.
No one gets to the top of Mount Everest by wandering around. Just today I read that quote attributed to Zig in an article about his death. I believe Zig reached the top.
Monday, October 29, 2012
No Such Thing as Buyer or Seller Markets...until someone gets nervous
There are buyers and there are sellers. One has the money, one has the real estate (let's say it's a house). There may be many houses for sale and very few buyers---that's a formula for the popular buyer's market. There is one other ingredient that is not in equal measure but it makes all the difference in the world in switching a buyer or seller advantage to the other side. It's fear and it looks like nervousness.
If you've got the house I want and I fear losing it to another buyer or I fear I won't get it on my terms, I become nervous. If you remain calm, in control of your emotions, and are willing to let my money walk away with me, you have the power. As the buyer, I have a lot to fear: other buyers who materialize out of thin air, you who I don't know, you who could decide to not negotiate with me, other people who I imagine could give you advice not favorable to me, interest rates that could move up before we get an accepted offer. Everything I fear is out of my control. As long as I can live with that nervousness I can keep from paying a fair price and terms to free myself from that fear.
As the homeowner who is without fear you are not going to over pay me for peace of mind. Of course, if you fear there may not be another me in your near future, your anxiety may rise and then....you give the power to me.
If you've got the house I want and I fear losing it to another buyer or I fear I won't get it on my terms, I become nervous. If you remain calm, in control of your emotions, and are willing to let my money walk away with me, you have the power. As the buyer, I have a lot to fear: other buyers who materialize out of thin air, you who I don't know, you who could decide to not negotiate with me, other people who I imagine could give you advice not favorable to me, interest rates that could move up before we get an accepted offer. Everything I fear is out of my control. As long as I can live with that nervousness I can keep from paying a fair price and terms to free myself from that fear.
As the homeowner who is without fear you are not going to over pay me for peace of mind. Of course, if you fear there may not be another me in your near future, your anxiety may rise and then....you give the power to me.
Wednesday, June 27, 2012
Consumer Confidence
When sentiment draws back, home buyers hold tight. When buyers hold tight, competition diminishes. Without competition, offers made come with few seller-favorable terms. By terms I mean, price, closing date, inspections, appraisals, and acceptance of inspection related defects. Buyer's commitments to close become as certain as a giant Maybe. As in, if you agree to my terms, maybe I will buy your house.
Maybe if buyers understood that home seller's attitudes figure into consumer confidence they might not be so confidently cautious. People not confident as consumers are rarely whole heartedly committed sellers. Their maybe translates to: Maybe this isn't a good time to sell. The confident buyer can remain a buyer for a long time if unconfident sellers leave the market and leave too few good houses to consider.
Wednesday, June 6, 2012
Not So Big Doesn't Mean Small, or Cheap
Design Shelters is one of those design-build firms with a full grasp of home, life, quality, and budget. They built 6959 Apprentice Place when few homes of modest size were available to people conservative with housing dollars. A builder of some of Madison and Middleton's most expensive and elaborate homes, Design Shelters design staff knew how to create lovely space where the owners will find inspiration, pleasure, and balance. First they created activity pockets outside: the front porch with an expansive roof is a transition space from the elements to the front door, to the living room. By detaching the garage the designer created a small courtyard for a green play space or small garden.
The kitchen is has wings of light enhanced by the corner window and nine foot ceiling. By placing a spacious center island in the kitchen the counter top space for baking, preparing meals, and lunching at the counter is maximized without closing off the area from the dining and living space. As an owner's budget permits, higher quality counters, back splash tile, and other artistic features can be added. The space is a perfect canvas for personal touch.
Upstairs is big enough for 3 bedrooms, but that would be imbalanced with the family living space; better to make the area pleasant for the people who will live here. The two generous sized bedrooms each have a private bathroom. The front bedroom is the main bedroom. Its orientation is north but with a little eastern exposure for morning sunlight.
The way to get more living space at the lowest cost is to finish the basement. A 16 x 14 family room has natural light from the window well built for egress. A full bathroom allows the area to be an ideal place for guests. A laundry room on the main floor may sound like a good idea except when the space is limited and you're left with a cluttered area in the heart of the living space. Knowing it's more appealing to have the space necessary to do the utility type jobs of life, a reasonable space was designed with terrific light.
Life in Middleton Hills is easy for walking or biking to schools (including the UW), parks, shops, restaurants, the pool, and tennis courts. Life at 6959 Apprentice Place is lovely, inspirational, and balanced.
Saturday, May 26, 2012
Precision Pricing. Getting the price right is money and time in the bank.
Every real estate broker has a graph or chart that shows prices go down as time goes up. Those visuals are based on data from somewhere. We've showed those images to owners at least as long as I've been a Realtor, back to 1989. While they may have made some impression at one time, in the run-up of prices, all those fear invoking images lost their power. Time on the market was negligible for even the people who tested the market to its max. Today time is once again money and the evidence is local.
The new economy home buyer is smart. The tools available to them to discect markets are sharp. Negotiating strategies give the buyer control, even in would-be Seller Markets. A simple tool is to offer the owner their price, with no right to cure defects, and an appraisal contingency. This approach locks out the competition, locks in the owner. Throw in a relatively quick closing and quickly the buyer has flipped a Seller's Market to THE Buyer's Market. The power of leverage is immense and price will be reduced to where the buyer wants it more likely than not.
Leverage for the Owner is in precision pricing. The ingredients of precision pricing is a market analysis which includes appraiser used adjustments to account for real differences between the most recent sale relevant houses in the neighborhood, and a realistic understanding of deficiencies in the home. A pre pricing inspection by a home inspector will reveal the nickle and dime items buyers may use to adjust price by half-dollars and thousand dollars. Fix those items and you pay fair price. Leave them for the buyer and you will pay dearly.
A price established by adjusting for differences in a home will place the house perfectly in the appraisal window. Leaving no risk of an under appraised price, there is no chance that a buyer will have a late in the game lever to force the price down when the seller is most vulnerable.
I looked at 15 sales in the near west Madison market including University Heights, Vilas, and Shorewood Hills. Homes that sold without a price reduction sold in an average of 38 days. Those that sold with at leastt one price reduction were on the market for 80% longer. The prices those owners accepted were 2% lower than the seven who sold without a price change. For what it's worth, the people who sold without a price change grossed 96% of their asking price. Those that reduced price settled for about 87% of their initial asking price! One person who expressed great confidence to me at the start gave in after a year and ended up about 28% below the price he/she was so sure of.
Almost no one is in a hurry or wants to give away their house when they start. But after some time of dissapointing results, it seems owners are giving away what they would not have had to had they pricision priced in the beginning. Pricing is essential in this economy. Accepting the reality is the difference in time and money. The view of reality is clear with precision pricing.
Sunday, May 20, 2012
University Heights, Madison's Higher Ground for Real Estate
We watched with confidence as the price of real estate rose along with the Madison skyline until a few years ago. Confidence in our university, government, health care, and private sector professional driven economy contributed to dismissal of the warning signs of a bubble about to burst. Neighborhoods where the leaders of these industries live might just be the higher ground to stay above water.
Just before the Great Depression the area where University Heights sits was prime location for the people who built the foundation of the Madison economy. University, government, health care, and private sector professionals built the homes that make the neighborhood at a time of economic and American pride expansion. The location was a bit out of the city but it had modern access to Madison. Dependable roads were key to draw people to build in the Heights. Horse power was the primary source of transporation with few automobiles bought or sold in Madison in the first years of the '20's. In the midst of the "Great Recession" the Heights is again the destination of choice by the similarly employed. Now the area is absolutely urban, and perfectly served by the modern mode of transportation---bikers, hoofers, and commuters in autos the size of a buggy. The super highway of high speed internet, googles of electronic devices and wifi everywhere make it easy to stay connected from home or nearby shops and nearby restaurants.
In the last 12 months 20 homes have sold in University Heights, three more have offers pending, and eight are on the market today. I don't believe any neighborhood outside of the Beltline can boast the same demand today. If there is evidence of a trend toward living simply, University Heights may be an indicator. With typical homes ranging in price from the $400,000's to the upper $600,000's, this is not the average Madison home owner's neighborhood. (It's not the most expensive either.) University Heights is a neighborhood of people who make commitments in real estate and those commitments move our market. When these homes sell, owners typically buy somewhere, and someone who sold something somewhereis a most likely buyer. I'm going to assume the average educated people moving in, out, and around University Heights could be described as "well". What a well educated person may be likely to have in addition to diplomas is a good grasp of reality. I think it's acceptance, and a plan; acceptance of what is and a plan for what to do regardless of the economic unknowns.
University Heights was the higher ground in 1920 and it's the high ground for Madison today. Regardless of where we live, there are lessons to be learned from University Heights...location always matters, and accepting reality is the way to see what is probable.
Home featured above is 177 N Prospect Ave. offered for sale by Tom Meyer, Restaino & Associates as of May 20, 2012.
Just before the Great Depression the area where University Heights sits was prime location for the people who built the foundation of the Madison economy. University, government, health care, and private sector professionals built the homes that make the neighborhood at a time of economic and American pride expansion. The location was a bit out of the city but it had modern access to Madison. Dependable roads were key to draw people to build in the Heights. Horse power was the primary source of transporation with few automobiles bought or sold in Madison in the first years of the '20's. In the midst of the "Great Recession" the Heights is again the destination of choice by the similarly employed. Now the area is absolutely urban, and perfectly served by the modern mode of transportation---bikers, hoofers, and commuters in autos the size of a buggy. The super highway of high speed internet, googles of electronic devices and wifi everywhere make it easy to stay connected from home or nearby shops and nearby restaurants.In the last 12 months 20 homes have sold in University Heights, three more have offers pending, and eight are on the market today. I don't believe any neighborhood outside of the Beltline can boast the same demand today. If there is evidence of a trend toward living simply, University Heights may be an indicator. With typical homes ranging in price from the $400,000's to the upper $600,000's, this is not the average Madison home owner's neighborhood. (It's not the most expensive either.) University Heights is a neighborhood of people who make commitments in real estate and those commitments move our market. When these homes sell, owners typically buy somewhere, and someone who sold something somewhereis a most likely buyer. I'm going to assume the average educated people moving in, out, and around University Heights could be described as "well". What a well educated person may be likely to have in addition to diplomas is a good grasp of reality. I think it's acceptance, and a plan; acceptance of what is and a plan for what to do regardless of the economic unknowns.
University Heights was the higher ground in 1920 and it's the high ground for Madison today. Regardless of where we live, there are lessons to be learned from University Heights...location always matters, and accepting reality is the way to see what is probable.
Home featured above is 177 N Prospect Ave. offered for sale by Tom Meyer, Restaino & Associates as of May 20, 2012.
Wednesday, March 21, 2012
Middleton is Destination of Choice
Middleton, Wisconsin is a hot destination for relocating home buyers today. Part of the drive is pent up demand of persons who moved to the area 12 or more months ago and rented before buying. Their time was well spent discovering and researching the market, schools, neighborhoods, housing stock, and commuter routes. These well prepared people are making offers from a place of knowledge and their offers are getting accepted. Times they are a changing.
The consumer of real estate services is a much sharper and cautious consumer in 2012. Home owners who know the reality of their situation (All markets are not buyer markets and home prices are not all down and out) are able to negotiate reasonable prices for their homes and purchase another home at a fair price and an unfair interest rate...if financing is even necessary. The relocating buyer comes to town well schooled in price points, but without the sharper eye of someone on the ground to guide them. We see over and over where well qualified buyers are losing out on their first choice home because they believe they have no competition; not a correct assumption in Middleton. People who are not otherwise motivated to move off the fence stack up until somebody gives them a reason to jump in. All it takes is one person to try to acquire a property at below fair market value and other ready, willing, and able folks will make offers in line with recent sales.
In the first 10 weeks of this year 61 homes in Middleton are showing on the SCWMLS as sold or pending. Forty one of those are over $250,000. It looks like the high demand is between $275,000 and $565,000.
To get a good look at homes selling in your neighborhood and homes offered for sale, use one of these sites:
Zillow, Trulia, Homes, or even Tom Meyer. Once you get the big picture, you are free to look to me to sharpen your view. It doesn't matter to me if you are staying, selling, or just looking to evaluate your current assessment. I'm a resource for anyone who wants to make a smart real estate related commitment.
The consumer of real estate services is a much sharper and cautious consumer in 2012. Home owners who know the reality of their situation (All markets are not buyer markets and home prices are not all down and out) are able to negotiate reasonable prices for their homes and purchase another home at a fair price and an unfair interest rate...if financing is even necessary. The relocating buyer comes to town well schooled in price points, but without the sharper eye of someone on the ground to guide them. We see over and over where well qualified buyers are losing out on their first choice home because they believe they have no competition; not a correct assumption in Middleton. People who are not otherwise motivated to move off the fence stack up until somebody gives them a reason to jump in. All it takes is one person to try to acquire a property at below fair market value and other ready, willing, and able folks will make offers in line with recent sales.
In the first 10 weeks of this year 61 homes in Middleton are showing on the SCWMLS as sold or pending. Forty one of those are over $250,000. It looks like the high demand is between $275,000 and $565,000.
To get a good look at homes selling in your neighborhood and homes offered for sale, use one of these sites:
Zillow, Trulia, Homes, or even Tom Meyer. Once you get the big picture, you are free to look to me to sharpen your view. It doesn't matter to me if you are staying, selling, or just looking to evaluate your current assessment. I'm a resource for anyone who wants to make a smart real estate related commitment.
Wednesday, March 14, 2012
Powerful Real Estate Owning or Renting Tools
Powerful tools are at your fingertips, and I don't mean the yellow pages. The revolution in empowering the American consumer of real estate and related service is picking up steam. Here are a few links to know about for getting the most value out of the building you call home:
Pillar to Post has a beautiful home tips page. Take a Saturday morning to view the room by room, item by item walk around to identify the little problems which you can fix on Saturday before they become big defects.
Use their Cost or Repair Guide to begin planning a home improvement strategy. Starting here will empower you to know the approximate costs so you won't be boondoggled by contractors who might charm an inflated bid past you.
Using regional data is the better way to know a return on your investment (ROI) for repairs. Making improvements to better enjoy your home is good enough reason to spend a little time and money this year. But, before you commit to a project that you think is a big payoff in ROI, check your thoughts against the 2011-12 National averages at Remodeling.
I'm an ally for people who live with roofs over their heads. Go forward. Live in your home free of stress.
Pillar to Post has a beautiful home tips page. Take a Saturday morning to view the room by room, item by item walk around to identify the little problems which you can fix on Saturday before they become big defects.
Use their Cost or Repair Guide to begin planning a home improvement strategy. Starting here will empower you to know the approximate costs so you won't be boondoggled by contractors who might charm an inflated bid past you.
Using regional data is the better way to know a return on your investment (ROI) for repairs. Making improvements to better enjoy your home is good enough reason to spend a little time and money this year. But, before you commit to a project that you think is a big payoff in ROI, check your thoughts against the 2011-12 National averages at Remodeling.
I'm an ally for people who live with roofs over their heads. Go forward. Live in your home free of stress.
Thursday, March 8, 2012
Do Right By the Customer
I am in this business to give a real estate safety edge to people. Informed people make safe commitments to do what is evidently wise for them. Infused with certainty, real estate choices are easy, financially probable, and emotionally healthy. No person should ever be manipulated into making a commitment to own, sell, or rent real estate, pay property taxes, or be denied refinancing based on unverifiable data. I'm a rigorous ally for peole who live with roofs over their heads.
Bubble? What bubble? Best time to buy. Best time to sell. Affordability index. Absorption rate. American Dream. Homeowners are more involved in community than renters. Appreciation. Investment. Cliches. The manipulation to move people to buy, sell, don't rent, is constant and dangerous to the well being of Americans; it's stressful. Consequences of real estate decisions made under stress include lack of commitment, resentment, bitterness, and fear to name a few emotional stressors. Loss of money, bankruptcy, and foreclosure are likely when unprepared people are stressed into commitments they can't keep. Divorce, failing health, and even death spawn from high stress related to loss of control. Prisoners and hostages have much in commone with people who are hostage to commitments they can't keep. They hurt from the consequences of loss of freedom.
Freedom is the gift of knowledge and insight. The tools available to the public to rise above the barage of assertions based in opinions are incredible. Multiple dozens of practicle aps and web sites are easy to use and relatively reliable for people to know what appraisers and assessors know. Access to homes for sale right next to data on homes recently sold are at your finger tips. There is no reason the widow or widower should be assessed 120% of their verifiable fair market value while the new owner next door is assessed at 100% or less of their homes value. Never again should a person who wants to refinance be denied because an appraisal showed their home is worth slightly less than what's required for approval. Every decision that works against a property owner can be disputed...having the evidence is your power to appeal.
No renter should ever be stung into owning because they have been pushed to do what they know isn't best for them. The financial part of the equation is simple in the hands of experts. The personal part of the formula can be resolved with patience and reflection on values.
There are reasonable prices to pay or accept for home buyers and owners. Reasonably accurate data exists to determine what is probable. Freedom from clinging to what's possible, but not probable, will allow people to move forward with health, wealth, and peace of mind.
I'm committed and free to do right by the customer.
Bubble? What bubble? Best time to buy. Best time to sell. Affordability index. Absorption rate. American Dream. Homeowners are more involved in community than renters. Appreciation. Investment. Cliches. The manipulation to move people to buy, sell, don't rent, is constant and dangerous to the well being of Americans; it's stressful. Consequences of real estate decisions made under stress include lack of commitment, resentment, bitterness, and fear to name a few emotional stressors. Loss of money, bankruptcy, and foreclosure are likely when unprepared people are stressed into commitments they can't keep. Divorce, failing health, and even death spawn from high stress related to loss of control. Prisoners and hostages have much in commone with people who are hostage to commitments they can't keep. They hurt from the consequences of loss of freedom.
Freedom is the gift of knowledge and insight. The tools available to the public to rise above the barage of assertions based in opinions are incredible. Multiple dozens of practicle aps and web sites are easy to use and relatively reliable for people to know what appraisers and assessors know. Access to homes for sale right next to data on homes recently sold are at your finger tips. There is no reason the widow or widower should be assessed 120% of their verifiable fair market value while the new owner next door is assessed at 100% or less of their homes value. Never again should a person who wants to refinance be denied because an appraisal showed their home is worth slightly less than what's required for approval. Every decision that works against a property owner can be disputed...having the evidence is your power to appeal.
No renter should ever be stung into owning because they have been pushed to do what they know isn't best for them. The financial part of the equation is simple in the hands of experts. The personal part of the formula can be resolved with patience and reflection on values.
There are reasonable prices to pay or accept for home buyers and owners. Reasonably accurate data exists to determine what is probable. Freedom from clinging to what's possible, but not probable, will allow people to move forward with health, wealth, and peace of mind.
I'm committed and free to do right by the customer.
Monday, February 27, 2012
Sentiment Trumps Interest Rates
The experts do the reporting and I'm sharing their work. The data supports the evidence---regardless of the interest rates or home prices, how people feel about the present and the future have a lot to do with committing to spending commitments.
The Middleton Zip code sales data provided by HouseHunt.com shows the average price dropping last summer as consumer sentiment declined. It takes more buyers to move the average price up above the median. As buyers moved to the sideline, regardless of cheap money and glut of houses to choose from, the average price dipped. Then as the confidence improved, people came back and the averages went up.
Thursday, February 23, 2012
Part of The Solution.
Peter Zarov, attorney with Homestead Title, presents an excellent Distressed Sale seminar in three hours. Saw it today. His manual is valuable. Peter is part of of the solution. Education reduces uncertainty and paves the way for consumers to get offers accepted and closed.
The high rate accepted offers failing to close is related a lack of understanding. Educating the service provider and the service receiver is part of the economic recovery solution.
The high rate accepted offers failing to close is related a lack of understanding. Educating the service provider and the service receiver is part of the economic recovery solution.
Thursday, February 16, 2012
Time to Buy or Sell Depends on You...not factors you can't control, such as interest rates and prices
About 1.63 million search results show up on Google for "Best time to buy a home". That is exactly the number of times real estate leaders have said, "Now is the best time EVER to buy a house" ....each year for the past 10 years. Really, it's not much of a stretch; we Realtors have never seen an economy that wasn't "the right time" to buy and sell real estate. We've taken optimism to a new level.
I don't have all of the answers, but I do have some questions: If "now is the time to buy", because rates are low and prices have dipped, how can can it also be the time to sell? Especially if "real estate prices are coming back", it can't possibly be time to sell. The time to sell must be coming, but how can it be today?
If I tell people to buy now because this economy is the perfect storm of low rates, lower prices, and high inventory, what should I tell the people who miss the boat when rates rise? I've seen people who missed a boat and they're kind of bummed.
Maybe another way to look at opportunity is to take factors we don't control out of the equation. Things like prices and interest rates have a way of going up, down, sideways, regardless of what I do. What I can control to some reasonable extent is my savings, my employment, my credit score, my debt, and my knowledge about housing options and housing costs. If I focus on saving $40,000, boosting my credit score over 700, and eliminating my debt, I will have 20% to put down on a $200,000 purchase, I'll qualify for the best interest rate available, and I'll still be able to save for home upgrades and improvements that keep my home's value from dropping too far south in the next economic dip. When we jump to own because we want an interest rate and what looks like a low price we over extend, waste money on worthless expenses like primary mortgage insurance, and end up with houses that own us.
Responsible people in the real estate and lending fields may turn some business away because they know it makes a difference to be part of the economic solution. America does not need more unqualified home owners. America will benefit from a more aware real estate consumer whether they are renting or owning. A wise renter saving and building their credit score and financial position will be a powerful home owner...when they are ready.
Home owners who wait to sell when prices go up will be wise to take action on modernizing their homes today. The fixtures that were in style in 1997 can be replaced today along with the flooring, and bathroom fixtures. Who knows when or if home prices will move north? But if you are waiting for the day when your home is worth more than you owe, you might as well live in a better looking environment today.
I don't have all of the answers, but I do have some questions: If "now is the time to buy", because rates are low and prices have dipped, how can can it also be the time to sell? Especially if "real estate prices are coming back", it can't possibly be time to sell. The time to sell must be coming, but how can it be today?
If I tell people to buy now because this economy is the perfect storm of low rates, lower prices, and high inventory, what should I tell the people who miss the boat when rates rise? I've seen people who missed a boat and they're kind of bummed.
Maybe another way to look at opportunity is to take factors we don't control out of the equation. Things like prices and interest rates have a way of going up, down, sideways, regardless of what I do. What I can control to some reasonable extent is my savings, my employment, my credit score, my debt, and my knowledge about housing options and housing costs. If I focus on saving $40,000, boosting my credit score over 700, and eliminating my debt, I will have 20% to put down on a $200,000 purchase, I'll qualify for the best interest rate available, and I'll still be able to save for home upgrades and improvements that keep my home's value from dropping too far south in the next economic dip. When we jump to own because we want an interest rate and what looks like a low price we over extend, waste money on worthless expenses like primary mortgage insurance, and end up with houses that own us.
Responsible people in the real estate and lending fields may turn some business away because they know it makes a difference to be part of the economic solution. America does not need more unqualified home owners. America will benefit from a more aware real estate consumer whether they are renting or owning. A wise renter saving and building their credit score and financial position will be a powerful home owner...when they are ready.
Home owners who wait to sell when prices go up will be wise to take action on modernizing their homes today. The fixtures that were in style in 1997 can be replaced today along with the flooring, and bathroom fixtures. Who knows when or if home prices will move north? But if you are waiting for the day when your home is worth more than you owe, you might as well live in a better looking environment today.
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