Your home: When your home is no longer really yours

Front Door

In the exciting world of selling a home, one might imagine closing day as the day that a seller relinquishes ownership, after the keys have been handed over and all of the papers are signed. You might picture the moving truck pulling out of the driveway as Mr. and Mrs. Seller wipe the tears from their eyes and another chapter closes in their lives.

If the seller waits until closing day to “move out,” they will be setting themselves up for a world of hurt. Though they may physically move on closing day, they must mentally move out way before then. When you ask? The day they decide to sell.

After an exciting 10 years in the world of real estate, I have learned many lessons. One lesson is that the second a homeowner decides to sell his or her home, they must mentally move out.

I have to give credit where credit is due, and that is to our stager, Kendra Garwood with Staging in Style. Early in my career, when Kendra and I began working together, I overheard Kendra offer some of the best advice to our clients. Often during the staging consultation the homeowner will ask, “What can I get started on today?” This is a great question for a seller who is eager to get the process started. Kendra’s answer was a gem. “Start packing, because you are moving,” she would say. Brilliant!

I still use those words today. And when I say them to a potential seller I see either relief or panic in their eyes. Either way, they have mentally made a shift. And either way, we intend to deliver on the sale of their home so the process should begin with them mentally accepting the fact that we are going to honor our commitment and get the job done.

So let’s say that the sellers don’t have this “Aha!” moment when they realize they are moving and it starts with them accepting this fact. How will this lack of acceptance affect the process?

Here are some examples:

1. Pricing: Often when we discuss pricing with our clients, we ask them to take their “seller hat” off and put their “buyer hat” on. This allows the seller to look at pricing more objectively. We ask them, “If you were looking at your house and all of the others like it on the market, what price would be a fair price for it?” When a homeowner is pricing his “home,” it is very personal. How can you place a value on a home where years of memories have been born? Conversely, when a seller is pricing a house (just like pricing a baby stroller on Craigslist, for example), the seller tends to price competitively to get the house sold.
2. Staging: When staging a home, often sellers will say that their home no longer feels like home after the staging is completed. That is the sole purpose of staging. It should no longer feel like your home, just a home. When your personal items and pictures are throughout your home, imagine them as the anchor behind a boat. The only way the boat can move forward (without slowly dragging the anchor along), is to pull up the anchor. Likewise, the only way sellers can move forward is to remove their anchors, also known as their personal affects. Remember Kendra’s brilliant words, “Start packing, because you are moving.”
3. Inspections: During the inspection process, a buyer is often going to inspect your home from top to bottom. Oftentimes a seller feels picked apart. The lovely home that they have owned for years is getting raked over the coals. Okay, so that is a little dramatic. In our experience, the inspection process is taken personally when you have not mentally moved out. Most defects with a home are factually based. Some can be subjective, but most are pretty black and white. You can’t really argue with the facts, and most sellers want to convey a great home to their buyer. Therefore, once you have mentally moved out, it is much easier for a seller to accept the condition of their current home and make the needed repairs to convey a safe and sound home. Sellers with this mindset tend to leave a home better than they received it when they bought it. That is what I call go real estate mojo
I am a firm believer that what you focus on shows up in your world. So sellers out there, pack your mental bags and move out of your home. Once you mentally move, you will be surprised how fast a SOLD sign will show up.

Photo Credit: Liz West on Flickr.com

RIP Liz/Calliope/Muffet 1943-2017

Your home: The market shift is here!

A couple of weeks ago I shared with you that I had been at a national convention and had learned that many major markets are seeing a shift. By shift, I mean more specifically that their overall demand for housing has slowed and their inventory had in some cases doubled. Well, we are not in double inventory territory yet, but we have definitely seen a shift. I will get to our local market here in a minute. First, I wanted to discuss how this shift is nationally affecting home prices.

As you can see from the slide below, we have seen an increase in home prices every month for over a year now:

Home Price - year over year

Please note that these increases are comparing the month listed to the same month the previous year. With the exception of December 2013 and January 2014 when there was a brief spike, home values compared to the previous year have still been increasing. However, the rate of the increase has consistently dropped. For example, in June 2013 home values were up 13.3 percent compared to June 2012. Jump ahead to July 2014 and home values are only up 4.9 percent from July 2013. Big difference. So what is the moral to the story?

I remember that toward the end of the recession, Lawrence Yun (Chief Economist for the National Association of Realtors) said that after the recession he predicted a market of slow annual appreciation. Somewhere in the neighborhood of 3 to 4 percent each year. He described this as what would be called the “new normal.” I believe we may almost be there.

So back to our local market. Here is the juicy stuff!

If you look at the slide below, you will see a line graph showing the number of contracts received on homes for sale over the last two quarters.

KW_Slide - market dynamics

This graph represents essentially the state line corridor market (northeast Johnson County and northwest Jackson County). As you can see, the shift is here. The number of contracts received in the third quarter is down 34 percent. And as you can see, the shift started slowly and then dropped suddenly.

Although some of it represents a seasonal shift that is normal in most markets, there is a school of thought out there that believes it is more than that. They believe that during the recession, there was a huge amount of pent up demand that wanted to make a move but did not due to the lousy market conditions. Then 2013 arrived, the markets improved, and the flood gates opened. Homes were selling with multiple offers, values were on the rise, and interest rates were unbelievably low. The good times were back!

Over the last 21 months, this pent up market has bought and sold like crazy and now we are back to the normal pool of buyers and sellers. The new normal. I believe this to be true.

Please don’t get me wrong. We are still in a much healthier market than we were just two short years ago. We just have to accept that the previous 21 months were unique, not normal. Now we are back to the market where pricing and conditioning are more important than ever. As demand lessens, only the best of the best in value and condition will sell. In many parts of town, during the winter months, only two to three homes will sell each month. So the question becomes, “What must you do to make sure that you are one of those two or three?”