September 2007

I’m an admitted “homer”, but I don’t spend a lot of time here giving prop’s to Kris’ posts. Usually, we are resolute in our differing opinions and are not afraid to challenge each other, although from strictly a literary sense, she usually beats the crap out of me.

Once in a while she puts together a “really decent message” that I have to grudgingly acknowledge, today offering one example. Sadly, her remarks weren’t posted here, but on the Bloodhound Blog, and you may read it here.

The message (in Steve language) is this. Today is a new dawn in real estate. Actually it’s a rerun of an old dawn, just one that most practitioners (and many consumers) have not yet seen… a challenging market.

What’s necessary?? Without stealing all of her thunder (which she does to me on an almost daily basis, without proper credit), a business plan. No, not the old business plan that takes months and many consultants and $$ to complete only to sit on a shelf and gather dust, but a business plan that reflects one’s understanding of all the nice little necessities that it takes to succeed. Today that means that an agent needs to recognize they are their own little business, notwithstanding the infrastructure their Broker may provide.

Analyzing and understanding the market, contracts, technology, liability, and the like are all imperatives, but you must add the all important component of how to create a demand for your services. Your Broker can’t really do this. Only you can.

This may seem a bit agent-centric, but consumers benefit from this as well. It will help you to identify the agents who are best prepared to handle what is likely your largest investment. It really is a must read. Decent post, Kris!

Nothing says Happy Labor Day like a few market trend charts! As we all head back to school tomorrow in Scripps Ranch, I thought it would be valuable to take a quick glance at our notes on our local micro-market. These statistics are for single family homes in the 92131 zip code and are courtesy of Altos Research.

Here are the median listing price numbers by quartile, seven-day rolling average:

The lack of noticeable listing price decline suggested in this chart underscores the fact that sellers are still reluctant to accept the realities of our slowing and declining market. The market action index, which is a measure of market activity considering supply relative to demand, tells quite another story. Shown is the ninety-day rolling average.

Three of the four quartiles in this zip code are in the Buyer’s Market zone (Market Action Index below 30) with several month’s of inventory given the current levels of demand. Notice that Quartile 4 (the lowest priced group) is showing stronger demand than the others.

Where market times are concerned, all homes are (sort of) created equal, with average days on market for active listings in the 50 to 60 day range.

As for the inventory, it steadily climbs.

But this listing summary shows how little sales activity we saw in the past week.

We are just coming off the August buying doldrums, of course. We’ll check back in a week and see if things are looking any different. In the meantime, I will be back tomorrow to take a closer look at our actual sales, since listing statistics tell only half of the story.

Class dismissed.

Today I want to give the Big Props award to the couple who selected us yesterday to represent them in the purchase of their first home. The Big Props are not because they selected us (although, I do respect their nose for talent), but because they took the time to interview agents at all before embarking on their home purchase journey. Sellers have been qualifying their agents for, well, forever, yet buyers rarely take the time and initiative to do the same. For me, I have been asked to truly interview for the Buyer’s Agent job a total of three times in ten years. Buyers, you deserve better. Take a tip from the sellers out there.

If you are uncertain about how to tackle the whole interview thing, I offer the following excerpt from the Home Seller Handbook. (Note: It is currently 182 degrees in San Diego, and I am having a little trouble engaging the small portion of my brain assigned the Serious Real Estate Thought responsibilities).

Selecting Your Agent

If you are planning on selling your home, and assuming that you don’t already have an established relationship with “Your Realtor for Life”, the first thing you will do is set about selecting your agent. You will want to interview several successful agents in your area.

Q: How many agents should I interview and what should I expect?

A: You will start out fully intending to interview three or more qualified, licensed agents, but only the heartiest of souls make it past the first appointment. You should expect the first two hours to consist of an overview of the agent’s Credentials. These credentials will include a dissertation on the superiority of his Company, of the superiority of his Continuing Education expressed as a bunch of confusing acronyms (GRI, CRS, AAA, AARP, NCAA, WMD, SCUBA), and his Client Testimonials. Pay close attention to the testimonials; they should be current. Good testimonial: “The No Place Like Homer Team was exceptional through both the discovery and deposition phases of the transaction last month“. Bad testimonial: “Homer was sensitive to our needs, always scheduling showings and court appearances around the Ed Sullivan Show.”

The next 147 minutes will be devoted to his Marketing Plan, which will outline all of the ways in which he is going to use your listing as an opportunity to market himself, while the final two seconds will focus on Pricing Your Home. The price he recommends will be the price you want to get. You will, of course, ultimately select the agent who offers the lowest commission. One agent may even offer to pay you money to list your home and throw in a free Slurpee if he is on shift next time you stop by his other job. You think this would be a logical choice.

Not so fast! You will want your interviewees to be among the Top Tier of Neighborhood Specialists. The trick here is actually identifying this top tier, top tier being defined as those agents who are the most sincere, caring, ethical, experienced, knowledgeable and photogenic.

Q: There are 37 agents at this very moment milling around the front of my home looking hungry. How do I narrow the field?

A: You can approach the all-important Agent Section Process in one of several ways.

Approach #1: Ask for referrals. These referrals should come from friends and family whose judgement you trust; this “good judgement” thing is key. You may have enjoyed some great times and a pitcher or two swapping war stories with Randy “Duke” Cunningham, but he’s probably not your best go-to guy for character references. The guy who works at the liquor store or Crazy Aunt Margaret might be better choices, the latter only if you are certain she has taken her meds. If you are lucky, both may in fact be themselves licensed, which will certainly streamline the process. In this case, pick the guy at the liquor store. A well-stocked liquor cabinet could come in handy.

Approach #2: Utilize the resources at your disposal (as in, the resources that have been disposed of on your property). Strap on your hip boots and venture out to your front porch. At any given moment, you will find a veritable compost heap of flyers and leaflets from the more active Neighborhood Specialists promoting their talents (and, sometimes, even their listings). Of course, these Courtesy Informational Materials will be at first overwhelming. This is where the Random Selection Process comes into play. Grab a handful (don’t cheat by peeking), knock the snails off of the one on top, and start calling! Unfortunately, the Random Selection Process has been known to result in a home listed by Merry Maids.

Approach #3: Prayer. Pray to your Supreme Being of choice. If you are an athiest, this approach is obviously a little tricky. I once had a listing interview with a gentleman who informed me, “We are moving because God told me that my son should be playing football for (Another) High School.” That’s pretty cool, I thought. His God is the sporting type. At the conclusion of our meeting, he further stated that the family would be speaking to God again that evening to determine whom they should hire to represent them in their sale. Apparently I had made a poor impression on his God (I didn’t get the job), but, hey - Who am I to argue with a deity?

Approach #4: Public Transportation. This approach will require that you venture beyond your front door and navigate your way through the 43 Neighborhood Specialists (their ranks are growing) who have now pitched tents and are enjoying s’mores on your front lawn. If you are resourceful, you will leave your home donning the disguise of a Realtor, which will include a business suite, a name badge, and a steaming mound of papers which at first glance would appear to be MLS printouts but in actuality represents your last year’s tax return. Don’t make eye contact and, if they offer you a s’more, politely decline and say that you are late to a meeting with your client. They will follow, of course, so run, don’t walk to the nearest bus stop. Here, you will see the smiling face of your future agent.

Approach #5: Rock, Paper, Scissors. This will require a rock, paper, scissors, and a partner. Oh, and hip boots (since two of the necessary items will be secured from your front porch). Caution: In order for this approach to yield acceptable results, DO NOT run with the scissors!

Q: I was a hearty soul, took a leave of absence from my job, sent my children to Camp Muddywater for the month of August, and completed the three requisite agent interviews. Now that I have made my selection, how do I break the news to the others? And, can I finish my Slurpee first?

A: You can certainly call each agent who spent their countless hours preparing and their evening delivering their thoughtful presentation in your home while the family in their home ate meatloaf leftover from the Clinton Administration before attending their oldest child’s graduation from Harvard, or you can take the more popular path. Let them just figure it out when they see the yard sign go up. This will serve two purposes, the second being their signal to relocate their encampment to your neighbor’s yard. God knows (because he told you), you’ve been through enough.

It is 7:48 am and our outdoor thermometer is clearly broken. At the moment, it is registering the surface temperature on Venus… in pesos.

Our little Tax Deductions are restless. School starts on Tuesday. On Labor Day Weekend, carefree summer fun will take its last breath. And while summer is on life support, my children will be finishing required reading and art history papers, and will be getting a jumpstart on college and job applications. Where did summer go? And, I don’t mean this year. Rather, which year was it exactly that summer packed its bags of simple occupations and idle pleasures and caught a train for the city?

Rolling in the cut grass, drinking from the garden hose, playing in the sprinklers, and only returning home throughout the day with asphalt-blackened bare feet to hijack a Popsicle before rushing back to the game at hand: These are the things of summer which I remember. The joys of boredom and the spine-tingling anticipation of seeing friends on the first day of school before reality sets in - These were the emotions of my childhood summers.

Some days when I reward myself with a frivolous mind-wandering moment, I am stricken with the realization that our children have been orphaned, rendered summerless. This has come at the hands of our society, demanding more and better, a society which has established that the proper measure of self-worth is less in strength of character than heft of balance book. This has come at the hands of each of us, through our career choices or through our simple nonverbal communications. Demonstrating tremendous work ethic and drive to succeed are valuable gifts we impart. Taken to the extreme, our quests for success and financial reward become an endorsement for imbalance. Society may be robbing our children of their childhoods, but we are driving the getaway car.

You can easily pick me out of the line-up. For real estate agents, all the days are the same. The lines between weekend and weekday and workweek and holiday have become hopelessly blurred. In part, it is the nature of the business and the level of difficulty with which one (very few) can succeed, yet in part it is our own unwillingness to choose a different way.

So, today I choose to take the summer off. My summer begins today and, if I am successful, it will be endless. To be successful, I will need to resolve to a few behavioral changes:

1. I resolve to not take the important call from my client while my daughter is mid-sentence. While I may consider your call more important than the Jonas Brothers’ latest CD release, she does not.
2. I resolve to schedule time for my family with the same zeal that I schedule your listing appointment. And, much like I will not cancel your listing appointment for the last minute request to drive carpool to the movies, I will not cancel a planned trip to the mall for more of that cool lip gloss that “everyone is wearing” for your appointment. I am certain there is another time we could meet.
3. I resolve to limit my workday. By this I mean, I will not be answering my cell phone at 6:00 AM (I received two calls from a seller before 6:30 AM yesterday morning) or at 8:00 PM (I receive those almost every night), and I will do a better job of communicating reasonable expectations of my availability when we first meet so that no one will be disappointed.
4. I will take one day off a week, and I will respect it and request that you do the same. On this day, I may choose to hang with my kids, spend time with my husband, or blog, but it will be my choice.
5. I will attempt one vacation a year where I am truly on vacation. No cell phone, no laptop, no fax machine, no exceptions. A vacation defined as “working from a remote location” does no one any favors.

Many of you will relate, while many others will not, already having achieved the balance I long for and busy enjoying your summers. To the enlightened bunch from the neighborhood, I will meet you under the big palm tree at noon (this is, after all, San Diego), and I’ll bring the Popsicles.

But, not tomorrow. I have a 10:00 appointment.