Monday, November 20, 2006

Another Interesting Statistic…

Another Interesting Statistic…
Or More Listings Equals More Expireds!
By John Occhi

I was doing some work looking at some of the statistics for the Hemet Real Estate market and determined what ‘I knew to be true” is in reality a fact, that can be backed up with cold hard facts.

I have been looking at the Expired listings in Hemet, on the MLS. Expireds are properties that have been under contract and listed in the MLS with a REALTOR®. For a specific period of time – typically somewhere between 90 and 180 days, and the contract has expired without the property being sold.

Just to show you the significance of the numbers, for the sake of this article, I am comparing all 30 days of November 2005 to the first 20 days of November this year. I can guarantee that the numbers will shift more, highlighting the significance of the difference a year can make.

The first number I looked at was for all of Hemet. I looked at all 3 Hemet zip codes, 92543, 92544 & 02545. I also looked at all of the different classifications of property as a whole. These numbers not only include single family residences, but mobile homes, vacant land, commercial property and business opportunities are all included.

Last year, there were a total of 74 listings that expired during the month of November. In the first 20 days of November this year there have already been 123 properties that have expired from the MLS. – a 40% increase!

Next, I narrowed the search down to just the single family homes – in all 3 zip codes. Last November there were only 36 listings that expired compared to the 84 so far this year – that’s more than double!

So, now, let’s break it down by zip code:

Zip Code: 92543 Last Year: 8 This Year: 18
Zip Code: 92544 Last Year: 19 This Year: 34
Zip Code: 92545 Last Year: 9 This Year: 32

What this information means is that it is a Great Time to shop for a home!

Can You Really Tell when the Best Offer Price is Coming?

Can You Really Tell when the Best Offer Price is Coming?
by John Occhi

Here it is the week before Thanksgiving and the Hemet Real Estate market has not shown any signs of improving. Not only do we have all of the homes for sale that would normally be for sale, due to traditional reasons like job transfer, divorce, death, etc. but we also have every investor attempting to dump their real estate investments on the market so they can maximize their return.

Well, sellers are not happy, nor should they be if they stop and consider how much more they could have made, had they sold a year earlier. Not only is it a question if they could have gotten more, but how much easier it would have been in a much quicker sellers market.

NEWSFLASH: The coveted ‘sellers’ market is officially over and it is now a ‘buyers’ market. So deal with it.

So, let’s talk about offers and why the first one is generally the best.

It must happen everyday. A seller puts their home on the market, fairly priced. Anticipating they will generate a buyer frenzy and they should generate multiple offers, driving up the price of their Hemet Real Estate.

So the house gets listed for a fair price. The Hemet Realtor holds an ‘Open House’ or two and a full price offer comes in. The seller knows his home is worth more than that, after all, ‘it is the best one in the neighborhood’ and counters for a higher price which the buyer then rejects and buys another home.

In a panic, the seller raises the price to what he feels the palace is worth. The home now sits on the market for weeks with no activity at all. Tension starts to show between the Realtor and the Seller. Finally, the seller concedes and lowers the price once again to the original asking price.

By this time the home has been on the market for about 2 months and is considered ‘tired’. Everyone wants to know why the house had not sold yet, looking for a flaw that probably does not exist.

Once the Hemet home for sale has been lowered back to its original price, two more offers come in – almost simultaneously. Both for less than full asking price. The seller accepts the best of the two offers, with his tail stuck between his legs and the Realtor is feeling vindicated.

Granted, this probably would not have happened a year ago. The lower price would have certainly seen buyers competing for the Hemet home for sale. Had it gone on the market at an over priced point, it would not have been long for the market to catch up to the asking prices and generated interested buyers. But not today.

Today there is not the limited supply of homes there once was. Today, every seller has to carefully consider the merits of every offer, even if they think the actual price is lower than where it should be. Remember, price is NOT the only consideration in accepting an offer.

The big problem most sellers have is accepting a less than perfect offer shortly after the home comes on the market. They justify that if we can get this much now, then with a little more exposure, certainly there is a better offer right around the corner.

Of course, this is possible.

What most sellers don’t take into consideration is that the offer was generated by a serious home buyer who is very familiar with the local market and recognized Hemet home for what it is – a new listing on the market. They are probably very familiar with the local markets and have undoubtedly been in every other home for sale that meets their criteria, on paper. When the right property comes along, they are ready to move on it.

When evaluating any offer, make sure you understand the market, on the day your offer comes in. Ask your Hemet Realtor for some facts and figures to justify the price. Find out how many homes similar to your are for sale then. What is their price range? How many have sold in the last couple of weeks? How did the other homes form your neighborhood, that recently sold, compare to your? Do you know how competitive the buyers were?

When you are selling your home you have to be objective and not personal. Of course, there is a personal attachment to the home, especially if you have been there for many years – but start to think of it as a piece of dirt with sticks on it. It is nothing more than a house. The sooner you can separate yourself the sooner you will be able to objectively consider an offer when it comes in.

Do yourself a favor and have your Realtor take you on a tour of similar homes and other homes in the same price range. Then you can ask yourself if you had so many dollars to spend, what really is the best home on the market, today?