Updated: Thursday, June 20, 2013
Is It A Good Time To Sell?
First, of course, we could note what others think. The recently-released May 2013 National Housing Survey by Fannie Mae showed that 40% of responders said that now is a good time to sell a home. That is up from only 16% in May of last year. At the same time, 76% of Fannie Mae's responders said that it is a good time to buy a home -- just a little more than the number of those who thought so last year. Redfin has surveyed real estate agents on the same issue. 82% said that now is a good time to sell, compared to 54% last year. On the other hand, Redfin found that only 57% of agents thought that now was a good time to buy, an 18% drop from last year.
It's interesting to know what others think, but we want to know what are the reasons for thinking one way or the other. We turn to those.
Probably the best reason for thinking that now is a good time to sell is because now is a good time to buy. "Wait a minute!", you say. "How can that be? Isn't it contradictory?" Well, no, it's not. Whether it is a good time to sell or a good time to buy isn't like a zero-sum game where what's good for one is necessarily not good for the other. Good conditions for buying can mean that there are more potential prospects to sell to. Moreover, just because the conditions for buying are good doesn't necessarily imply that prices must be low. Of course, if they are extremely high, then that won't be a good time to buy.
The low interest rates that have recently been available have done two things for sellers. They have created a larger pool of potential buyers and they also have made it possible for prices to rise without shutting out those buyers. This will not, however, last forever. Even now we see occasional headlines that say things like "interest rates recently roared back up to 4%". (Who ever would have thought that 4% would seem high?) While they currently seem to be in a floating back and forth mode, some day the Fed will reverse course and they will begin to rise.
A rise in interest rates clearly and dramatically affects prices. Suppose you had a $400,000 30-year loan at 3.75%. Your monthly payments would be $1,852. If interest rates rose to 4.75%, to maintain the same payment the loan would have to be $355,000. The drop in borrowing power brought on by a rise in interest rates can be expected to be reflected in pricing. No one anticipates that incomes are likely to rise with, and at the same pace, as interest rates.
Another reason to think that now is a good time to sell is because inventory is still low, meaning there's less competition. To be sure, inventory is creeping up in many markets, but it is still historically low (60% of the peak in 2007). Why is inventory so low? There are disparate reasons, but certainly one of them is the belief that prices will continue to rise. Some people want to wait for that to happen. It is not just owners who think prices will rise. According to the same Redfin survey, 44% of agents thought that prices will rise "a lot" in the next twelve months. Only 11% thought that last year.
Whether it is a good time to sell is always, ultimately, an individual question. What would be the reason for selling? Would it entail another purchase? Whether one is planning on moving on to a larger house or to a smaller one, one factor in answering the question will depend on whether or not that can be accomplished. Naturally, everyone wants to sell high and buy low; and, frequently we can look back and see when and where that might have happened. Timing the market, though, is no easy task and is usually more the result of serendipity than acumen.
Setting aside the financial crystal ball aspect, the question to ask is whether, in today's market, it will be possible to accomplish the next move if and when one sells at today's prices -- and one needs to be realistic about what today's price might be. Today, the question for many would-be sellers is simply a question of whether or not the low-inventory market offers a selection of acceptable replacement properties.
Of course not every sale implies a next purchase. There might already be a second home that one plans to move to; or there may be no desire to own again. If that's the situation, whether or not it is a good time to sell is an easier question to answer. You can ask, "What would make another time better?" And then ask yourself if that seems to be likely in the future.
So, is it a good time to sell? Sure. If it fits your situation.
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Activity Equals Results
I watched a video yesterday from Floyd where he shared some of his timeless truths about succeeding in real estate. What’s amazing is that, even in our swiftly evolving industry -- the same message would have been on point twenty years ago and will no doubt be just as timely twenty years from now. That message? Activity equals results.
Want to achieve more? Make more? Rise to the top of your field? Your company? Your market? Increase your ACTIVITY. Or as Floyd likes to say, "It's What You Do When You Don’t Have to That Will Determine What You'll Be When You Can No Longer Help It."
Isn’t that the truth? Sometimes as salespeople - well and as people - we make things way more difficult than they need to be. A really simple formula for success in real estate is to map out your time and commit to the activity that generates appointments. SEND. CALL. SEE. Get a list together. Build your database of sphere of influence members. Family. Friends. Colleagues. Acquaintances. People you do business with. Neighbors. Start there and stay in touch. Send them something month after month after month. Next get a geographic list of everyone in the market area you want to brand yourself in and do the same thing for them.
And here’s where the magic happens - don’t just SEND stuff. Call them. Connect. Reach out. Ask the question, "Do you have any questions?" Be the resource they need and want in a time where consumers have LOTS of questions regarding the value of their property, their buying power, investment opportunities, and what’s happening in their market. You’re not bothering people - you’re providing a SERVICE. "KEEP THAT THOUGHT," Floyd would say.
What can you SEND?
- Handwritten notes
- Something fun
- An email
- A message on social media
- An offer for an item of value
- A card
What can you SAY when you CALL?
- Hi! Just checking in on you! We’ve got a lot of activity in our market, and I thought you might have some questions - do you?
- Is there anything I can do to help you?
- I’m expanding my business and I could use your help…
- Have you thought about selling your house now or in the near future?
- Have you been receiving my information? Any questions
What do you do when you SEE them?
- Create opportunities for appointments
- Take someone to lunch
- Attend a neighborhood block party
- Organize a charity drive in the community
- Sponsor a free workshop and invite everyone to attend
- Get out there and be visible in the community you’re servicing
- Walk your farm and start making friends
Where can you get a geographic list?
We’ve got you covered there! Call our office at 866.405.3638 and we can walk you through how to order one specific to your needs.
When should you start? Again, as Floyd would say, "Well, when do you want to start getting results? Does today work?"
Watch Floyd’s video that sparked the conversation and have a fantastic (and ACTIVITY-DRIVEN) day:
Need help automating that activity and firing up your production? ¬†Call our team at 866.405.3638 or visit us at¬†http://www.postcardsplus.com¬†today. ¬†Want to learn¬†more mad skills and training techniques from Floyd? Visit his site at:¬†https://floydwickman.com¬†and tell them Julie sent you! ¬†Have a great one!¬†
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Ask The HOA Expert
Answer: Not all rules are created equal. As a practical matter, rules issues rarely get into court because of cost, time and emotional effort involved. But when a matter gets into court, anything can happen. So it's always in the board's best interest to enforce all rules consistently so it won't give the judge an excuse to rule against the HOA.
Question: Our board rescinded Robert's Rules of Order as their parliamentary procedure and adopted an abbreviated version of parliamentary procedure. The board figured the "skinny" version was sufficient and could be amended as needed. In reality, this was a ploy to prevent homeowners from questioning the board's decision making process.
Answer: As long as the procedure adopted conforms to the governing documents and state statute, an abbreviated version of Robert's Rules is appropriate as long as it does not stifle debate. The full body of Robert's Rules was intended for trained parliamentarians and large groups like Congress. Insisting that all of Robert's Rules be followed is nitpicking and would surely be used to intimidate the Chair on some issue of little importance.
If the board fails to enforce a particular rule like parking in driveways for an extended period of time or is extremely inconsistent about it, a violator might rightly protest being held accountable to that rule but not another rule. One problem is that different boards sometimes enforce rules differently. If a particular board feels strongly that enforcing a particular rule that has long gone unenforced is a good thing, the matter should be discussed, ideally, in the annual homeowner meeting and at minimum in a newsletter that clearly informs all owners of the issue and the board's intention to enforce it. Catching folks by surprise is bad policy.
On the other hand, if a rule hasn't been enforced consistently, maybe it isn't needed at all. It's okay to take it formally off the books. Don't just have rules for rules sake. There are enough to follow already.
Question: Behind one of our buildings, several owners are allowing their dogs to do their business without ever cleaning up. It is unsanitary and downright nasty. Letters have been sent o these owners without any resolution. What steps can the HOA take?
Answer: They have been warned. Have the mess cleaned up and bill them for the expense.
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