Seller

Should You Re-List In The Spring?

Question: Are there certain considerations to be aware of when re-listing your home in the spring/summer market if you listed and then pulled it during the fall/winter market? Are there things that you would need to fix up in a slow winter market that you could let slide in a hotter market?

Answer: You’ve been on the market for months, had a few interested buyers, but nothing has stuck. Now you’re in the midst of the holidays during the coldest and darkest days of the year so you’re asking yourself what every seller is asking… should you pull your listing and wait for the market to heat back up in the spring?

There are three scenarios that I’ll consider advising sellers to take their home off the market during the winter:

  1. You are living in the home, are under no pressure to sell, have been on the market for more than 60 days without an acceptable offer and have exhausted conversations with any buyers who have shown interest.
  2. You have received feedback from agents and potential buyers that the home needs work and you will take time over the winter to make the necessary improvements, providing that the cost of those improvements will net you better terms than an immediate price reduction and avoiding additional carry cost.
  3. A key selling point of your home is landscaping and/or a view that is difficult to recognize during the winter.

Pros & Cons Of Re-Listing

  • Pro: More Buyers… The number of homes that go under contract drops substantially from November-January and picks up quickly in February. On average, the number of new purchase contracts more than doubles by March compared to December and January.
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  • Pro: Faster Sales… The increase is buyer activity (demand) results in homes selling a lot faster in the spring/summer
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  • Con: Not Necessarily Higher Prices… The increased buyer activity impacts days on market a lot more than it does pricing. The amount somebody is willing to pay or qualified to pay for a home often does not change based on the season, rather larger economic factors.

 

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  • Con: If you decide to re-list in the spring, you are probably planning to do so at a higher price. Be careful with this decision because agents and buyers have easy access to previous asking prices and if you have not made any substantial capital investments to your home to justify the increase, most buyers will base their negotiations on your previous asking price, not the new/higher one.
  • Pro: If you’re off-market for three months or more, your days on market count officially resets to zero when you re-list. This is a system rule for MRIS/BRIGHT (the database of record for agents), although most buyers use sites that show the full listing history and can easily see that something was withdrawn and re-listed.

The Spring Isn’t Easier

Don’t ease up on the marketing of your home in the spring just because there are more active buyers than the winter. You will be competing against 2-3 times more homes for sale so you could make a case that you need to do even more to stand out in the spring, not less. However, if you’re on a budget, you may want to allocate your repair, improvement and staging funds differently based on the season such as the warmth of the family room in the winter vs outdoor dining in the spring.

Happy holidays everybody!

What Are The Biggest Mistakes Sellers Make?

Question: I came across an article you wrote about how buyers and sellers can avoid the most common problems encountered in a real estate transaction and it made me wonder what some of the most common mistakes are that home owners make when selling that have the biggest impact on their bottom line.

Answer: The biggest mistake a home owner can make when selling their home is not calling me first… kidding (but not really). Below are a handful of the biggest mistakes I see home owners make when selling their home, that have the most impact on their net bottom line. This is not exclusive to homes sold without an agent either. Unfortunately, I see many of the same mistakes on For Sale By Owner (FSBO) homes as I do on listings owners are paying an agent to manage.

Over-Investing In Updates

Choosing the right combination of updates to invest in (or not) to prepare your home for sale has the biggest impact on your net bottom line of any decision you’ll make. I cannot stress the importance of getting this decision right early in the process.

You should only invest in updates that will result in an ROI of greater than 100% or it’s a waste of money and time. Of course you will be able to sell your home for more money if you redo the kitchen and master bathroom, but in most cases, you’ll only get a fraction of your money back, generating a huge net loss for you.

Similarly, don’t spend $10,000 replacing floors, but ignore painting and leave your old brass doorknobs. Selecting the right “package” of updates that will generate the highest ROI is specific to your sub-market, budget, priorities and time of year.

Working with an agent on these decisions who works with both sellers and buyers is critical because they have a strong understanding of how buyers interact with homes during showings and the impact certain updates have on their buying decisions.

Stop Using Amateur Photography

My photographers are some of the most valuable assets I have because the quality of photos can make the difference between drawing heavy traffic and being passed over… Traffic = offers and heavy traffic = multiple offers. Buyers and agents are combing through a lot of homes to decide what is worth seeing in person and the quality of your photos influences that decision more than anything else. Do not take pictures with your cell phone. Do not use an amateur photographer. Do not use a photographer without real estate experience.

Listing On The Wrong Day

It’s Sunday evening… you’ve taken pictures, selected your asking price and spent all weekend cleaning so you’re finally ready to put your beautiful home on the market, make yourself a drink and watch the offers roll in. STOP. There is one day of the week that you should put your home on the market to maximize exposure while minimizing days on market (and two acceptable alternatives), but Sunday evening is not one of them. Feel free to email me to find out which day you should list your property and why.

Stage It… Vacant Or Not

I discussed this in detail earlier this year. It hasn’t changed. Yes, you should hire a staging professional.

Don’t Be Offended By The Home Inspection

You raised three amazing children in your home and kept up with regular maintenance for 25 years, so who is this buyer and their inspector to tell you there are 35 items that need to be repaired? It’s hard not to take the results of a home inspection and the resulting buyer requests (read: demands) personally, but you’ll be much better off keeping your emotions out of this final negotiation. Reference my advice to sellers for home inspections here.

Remember that this is likely just as emotional of a transaction for the buyers and the goal is to reach a equitable agreement, not start a fight to defend the pride you have in your home.

There are a host of other mistakes I see including over-pricing, limited showing times and not including a floor plan but the above highlight the most common errors that have the biggest impact on a home owner’s net bottom line.

If you’re considering selling your home, even if you’re 12+ months out, don’t hesitate to reach out to me to discuss strategies that will maximize your sale. You can reach me any time by email at Eli@EliResidential.com or phone at (703) 539-2529.

Yes, You Should Stage Your Home

Question: We are planning to sell our home and wondering if the cost of professional staging is worth it. What’s your opinion on staging and are there certain circumstances where you do or do not recommend it?

Answer: I recommend staging for almost every home I sell because it will increase your sale price by more than you spend and help your home sell faster. In fact, it makes such a difference that clients often joke after seeing their decluttered and staged home that they’re considering moving back in!

What Is Staging?

Professional staging is a service used to improve the marketability of a home by arranging rented furniture in certain rooms of a home to maximize the space and visual appeal. Most staging professionals have an interior design background and a large supply of furniture to work with.

Staging is mostly done when a home is vacant, but for sellers occupying the home they’re living in, stagers will also provide consultations on how to best utilize your existing furniture and make suggestions on small add-on items to enhance a space (area rugs, towels, flowers, wall art, etc).

How Much $$$?

Condos can usually be staged for $1,500-$2,500 and townhomes and single family homes generally cost $2,500-$4,000 depending on the number of rooms you stage and quality of furnishings. For high-end real estate, expect to spend $5,000-$10,000. You should plan on spending 0.5-1 percent of your asking price on staging a vacant home.

What Are The Advantages?

  • Better pictures = more interest online = more showing traffic
  • Significantly better showing experience for buyers
  • Empty space looks smaller, staging helps visually increase the size of a room
  • Buyers struggle to visualize how beds, couches, tables, etc will fit
  • Awkward spaces benefit from the design of a professional
  • Clean, organized look increases the sense of a well-maintained home
  • Play to the strengths of a room and distract from its flaws

When Should You Stage?

  • Move-in-ready condition (limited updates/investment required)
  • Vacant
  • Home has been thoroughly cleaned and freshened up as necessary (paint, replace damaged/ancient items, etc)
  • Using professional photography

Where’s The Proof?

You may see staging companies or agents make claims that staged properties return an “X” percent higher sale price or sell “X” days faster than unstaged properties, but the reality is these numbers are just convenient marketing figures with no real substance.

One of the challenges with statements like these in real estate is that you don’t have the ability to isolate something like staging and compare the success or failure of the same home sale with and without it. You have to rely on the experience of your agent to help with decisions like these.

My experience with staging comes from seeing the impact it has on homes I sell, but even more so, how buyers I work with react. There is a noticeable difference in how buyers react to staged homes versus empty or cluttered homes (lived in without regard for design) and this shows up in their preferences when they’re viewing properties online to decide what they want to see and then again when they’re actually in the property.

I generally take an opportunity to point this out to my clients so they understand how much of an impact staging has on their perception of a home, so they keep it in mind when it comes time for them to sell.

I’m Here To Help

If you’re considering selling and trying to decide which investments like staging, painting, and updated appliances will return more than they cost, feel free to reach out to set-up time for me to see your home and make some suggestions.

Relationship Between Homes Price & Days On Market

Question: How does the price range of the home for sale affect the speed of the sale?

Answer: Last week I published statistics showing how quickly homes in Arlington sell(20 percent in the first five days, 50 percent in the first 30 days) and received a follow-up question in the comments asking how price impacts days on market. Here’s your response!

Data Description

The following data represents more than 15,000 sales in Arlington since January 1, 2012, broken out by sold price within the three primary housing types in Arlington – apartments/condos, townhomes and single-family/detached homes.

Key Findings

  • The middle price ranges sell fastest, with the cheapest and most expensive inventory in each housing type taking the longest to sell
  • Townhomes are in the most demand and sell two and a half weeks faster than other housing types
  • If you’re selling an apartment or single family over $1 million, be patient with your pricing and don’t worry if you don’t get your asking price immediately. It usually takes some time for those buyers to materialize.
  • Yes, there were actually nine single-family homes that sold for under $300,000 in Arlington (eight in 22204 and one in 22206)

 

I always appreciate hearing from readers in the comments section and via email. If you have any questions about the Arlington real estate market, please do not hesitate to post them in the comments or send me an email to Eli@RealtyDCMetro.com.

Landscaping For Resale and Current Trends

Question: I’m planning to sell my single family home in North Arlington this year and it seems that in my neighborhood, homes with great landscaping sell for top dollar. Our sale price justifies an investment in our lot, so I’m curious what the Arlington home-buyer demand from landscaping and if there are certain types of landscaping that offer the best Return on Investment.

Answer: Every spring I get a lot of landscaping questions and like to bring in my friend Jeff Minnich of Jeff Minnich Garden Designs to update Arlingtonians on what homeowners are doing in their yards and provide cost-effective tips for investing in your exterior for resale. If you’d like to continue the conversation with Jeff, you can reach him at jeff@minnichgardendesign.com or 703-525-4540.

Enjoy Jeff’s expert response to this week’s question:

In Arlington, homeowners take great pride in their gardens. Our temperate climate is such that we can enjoy our gardens for the majority of the year. Over the last 15 years, there has been a trend toward extending the interior living space seamlessly into the outdoor living space–outdoor rooms, kitchens, fire pits, play areas, fencing, to name a few.  The desirability of a well-designed garden space is a solid investment, and attractive to potential Arlington homebuyers.

Most people involved in the landscape industry have seen a surge in business the last few years, as the economy recovers. This year is particularly busy.

There are really two kinds of investment in a home and garden: doing what will bring pleasure, enjoyment, and ease to day-to-day life in the home; and doing what might add value to the property, if resale is in the cards.

When preparing to sell a home in Arlington, it is important to remember that many buyers have the means and desire to put their own personal stamps on their new homes and gardens. Therefore, I always recommend concentrating on safety items, tidiness, and color.

Fix that uneven sidewalk or replace rotten wood on the deck. Fix gates. Replace the burnt out bulbs in your outdoor lighting system (lots of potential buyers drive by and have a look at night, too). Have the windows cleaned and check the exterior paint job, particularly the front door (yes, these items are part of the outdoor landscape, too). Power wash the house, sidewalks, patio, deck, driveway…make sure your hardscapes sparkle.

Weed, re-edge and mulch the planting beds. Remove old/dead shrubs and trim existing ones. Look up into your trees–does a tree or branch look dead or precarious? Have a tree professional look at it. Potential homebuyers do notice these things. Cut the grass and make sure your lawn is not full of blooming dandelions! This one item can be a big turn-off.

Finally, finish the job by adding some flowers to windowboxes, pots, and beds. Remember, you cannot take back that first impression–the outside of your home is the first thing potential buyers see before walking through the front door, and it can often make or break a sale.

 

Once new homeowners get settled on the inside, they start to ponder what to do in their new gardens.

The most common request from new homeowners is a master landscape plan, which is a great starting place so they can prioritize, then phase, the work they’d like to do, all within a broader vision.

Safety issues should be addressed quickly–items like unstable walks or decks, handrails; and the often boring, but absolutely necessary, issues like grading, drainage, and where to put trash cans.

Fencing is a relatively quick and easy project to prioritize early on, and fences can give instant privacy, keep children and pets in the yard, and define a space. Nice fencing is particularly attractive to potential buyers with these concerns.

Outdoor living spaces are the next most-desired items, and these often involve building. It’s always a good idea to start with hardscapes–patios, sidewalks, decks, porches, walls, outdoor kitchens, etc.–and end with softscapes–plants, lawns, lighting, irrigation–as construction is messy and, try as they might, workers can still damage plants and surrounding areas.

Privacy from fencing and thoughtful plantings can screen unsightly views and enclose outdoor spaces.

Those interested in safety might find low-voltage outdoor lighting desirable. Outdoor lighting opens up the garden for nighttime use, too, and can be used to highlight architecture, specimen plantings, or specific pieces within the landscape.

For those who often travel and have very busy schedules, an irrigation system is a must. It really takes the edge off watering duties, yet should never 100 percent replace a discriminating eye and hand-watering intervention when gardens get really hot and dry.

I often say my outdoor lighting gives me the nighttime and my irrigation system gives me freedom, so they are very valuable to me.

Beautiful plantings are the icing on the cake and tie everything together. Much of North Arlington is blessed with large shade trees — a big reason potential buyers consider North Arlington — and lush evergreen and deciduous underplantings help potential buyers imagine living in these outdoor spaces.

Without a doubt, garden projects that define and enclose personal outdoor spaces–things like fencing and nice gates, patios and seating areas, and beautiful plantings–are items that not only increase the day-to-day enjoyment of the homeowner, they greatly increase the value of the property, as well.

Resale Value of New Construction

Question: I’m considering purchasing a new construction home in Arlington or a nearby neighborhood and have been meeting with a number of local builders to research my options. I’ve heard from quite a few that purchasing a new home often results in instant equity because they often get appraised for at least $100,000 more than the purchase price. Do you think that the higher appraisal value is an accurate reflection on the resale value of these homes?

Answer: Over the past decade, variations of large Craftsman and Arts & Crafts style homes have been replacing older homes across Arlington and Northern Virginia. Local builders have figured out a standard exterior aesthetic and interior design that buyers are willing to pay a premium for, so most new homes over the last ten years have a similar look and layout. Savvy buyers have started to question how these homes will do when they come back onto the market for resale.

Due to the fact that most buyers of $1M+ new homes plan to raise families in them for a long time, we won’t see a lot of these homes resold for a while. My guess is that we’re about 5-10 years away from really being able to answer this question, but by opening up the dataset to Arlington, McLean and Vienna, I was able to come up with enough data points to begin looking at the resale value of new homes in Northern Virginia.

The 106 data points I pulled together are for new homes built from 2007 on and resold once after the original purchase in Arlington, McLean and Vienna. I removed any foreclosures or short sales. For purposes of this analysis, I think it’s better to look at resale in all three markets combined rather than split them up and draw assumptions from minimal data.

  • On average, new homes resold for $45,585 more than what they were purchased for with an original average purchase price of $1.46M (~3 percent gain)
  • Of the 106 total data points 42 were sold within 3 years, 50 sold within 4-6 years, and 14 sold within 7-9 years
  • Homes that sold within 7-9 years of original purchase fared the worse with 57 percent (8 of 14) selling at a loss
  • Homes sold within 4-6 years have done the best, with 80 percent (40 of 50) selling for more than the purchase price
  • Two thirds of homes sold within 1-3 years sold for a gain
  • Of the 30 homes sold for a loss, the average loss was nearly $120,000
  • Of the 74 homes that sold for a gain, the average gain was nearly $114,000
  • Two homes resold for the same price they were purchased
  • 21 homes sold after three years of ownership and 18 sold after five years of ownership, these were the two most common times between sales
  • The biggest loss was nearly $665,000 and the biggest gain was nearly $400,000

It’s tough to draw any specific conclusions from this data because we’re still so early in the resale cycle for this type of new homes, but I thought it’d be fun to take a peak behind the current a bit early because it’s such a common question.

The important takeaway is that a good investment in a new home in Northern Virginia is more about making the right decision for you and your family than it is obsessing over the numbers. If you take your time, learn the market and understand the difference between builders you will put yourself in a much better position to end up on the “gains” side of the data when it’s time to resell.

Should You Remodel Before Selling?

Question: I’m preparing to sell my home this year and wondering if remodeling the 1990s kitchen and bathrooms will improve the resale value and help me sell faster or if I should leave it as-is. Is there a good way to decide which option is best?

Answer: Yes, remodeling your 1990s kitchen and bathroom will improve the resale value and probably help the home sell faster, but that’s not the right question to ask. The question you need answered is what updates will create a positive Return on Investment (ROI), meaning that every dollar you spend on updates results in an increase in expected sale price of at least one dollar. For many sellers, this is the most valuable advice your real estate agent can provide.

Avoid Most Remodeling Projects

Simply put, most remodeling projects do not return a positive ROI for homeowners. A number of large companies including Zillow and Remodeling Magazine have conducted extensive studies and determined that most large-scale remodeling projects like bathrooms, kitchens, roofs, additions, etc only return about 50-80 percent of their cost on the resale market. Remodeling Magazine updates their Cost vs. Value statistics every year using regional data and has a great report specific to the DC Metro area.

No Simple Answer…

  • There’s no easy answer to this question without being in the house, meeting with the owners, and knowing the local market. Here are some questions that need to be considered:
  • Who is the most likely buyer? Are they likely to have cash on-hand to make updates themselves?
  • Can the home be considered move-in ready in its current state?
  • Is the home suffering from functional obsolescence or just requires a quick facelift?
  • In as-is condition, does the home and pricing appeal to an investor?
  • How has the market reacted to homes in similar as-is condition, in similar condition with minor updates, and in similar condition with major updates/remodeling?
  • How much similar inventory is there (current and projected) at each level of updates (as-is, minor, major)?
  • What are your (homeowner) sales priorities, timeline, and pre-sale cash on-hand?
  • Is it easy for a buyer to envision an updated version of your home?

…But I’ll Try

Here are some tips and principles I find myself using most-often when advising homeowners on pre-sale updates:

  • Flooring (replace/refinish), paint (walls, trim, doors), de-cluttering, and staging are affordable for most homeowners and almost always result in a positive ROI and in some cases new, matching kitchen appliances are positive ROI investments
  • There are a lot of little things you can do to improve curb appeal (e.g. power washing and mulching) and interior appeal (e.g. new outlet plates and door knobs) that make a big difference
  • Updates should be done in groups/tiers, not one-offs, so that your investment is coordinated and within budget. In other words, if you commit to doing one update, you need to commit to other similar updates in order to get a positive ROI. For example, it doesn’t make sense to replace flooring if you’re not committed to de-cluttering or to remodel a master bathroom and leave your 30 year old kitchen untouched.
  • If you’re planning to live in your home for a few years after remodeling so that you benefit from the updates, then a 60-80% ROI may be an acceptable return. In this case, visit a few local new homes or builder design centers to see what today’s buyers like and try to replicate it to maximize the ROI when you do sell.

Strategically investing in pre-listing updates should be a well thought out process with different options priced out next to projected impact to sale price and speed of sale. For many homeowners, this process can take upwards of 3-6 months from planning through project completion before being ready to sell, so start early and invest wisely! Feel free to reach out to me at Eli@RealtyDCMetro.com or (703) 539-2529 if you’re thinking about selling your home and want an opinion on the most effective way of investing in pre-listing updates!

Resale Value Of Solar Panels

Question: Do solar panels improve or hurt the resale value of a home?

Answer: Green living. Green roofs. Green technology. With so much time spent discussing Green initiatives, you would think that investing in solar panels and other eco-friendly home products would put you in a competitive advantage when you sell your home. In my experience, that’s not the case.

Arlington residents overwhelmingly vote and promote Green policies locally and nationally, but I’ve found that when it comes down to the pocketbooks of individual buyers, most are not willing to pay a premium for a home that’s been upgraded with eco-friendly products and landscaping. Businesses, not residents, are usually the ones who take up Green initiatives because there’s a positive return for their brand and larger tax incentives.

Cost Savings vs. Aesthetics

Solar panels are a slightly different story because they can provide real savings with lower utility bills and tax incentives. However, there are two factors that offset those savings in buyers’ minds — aesthetics and maintenance concerns. The current technology is predominately the large panels you’re used to seeing, which isn’t the most aesthetically pleasing, especially when so many buyers are spending $1M+. Buyers are also skeptical of future maintenance costs if panels stop working or are damaged in a storm. Also, keep in mind that the pay-off period for the energy savings can take 10+ years.

For proof of the difficulty solar panels have had in the residential market, you don’t have to look much further than Elon Musk’s Solar City, which due to recent financial struggles, was recently acquired by Tesla.

Solar Will Improve Resale…Eventually

The solar industry has started introducing solar roofs, instead of solar panels, which incorporate solar technology into individual shingles so that it looks like a normal roof (it’s supposed to be more durable too). Right now it’s expensive, but as the prices comes down, I expect it will catch on quickly and become a great selling point.

What do you think about the resale value of homes with solar panels? It usually costs $10-15k to add solar panels to a home. If you were buying a home for $1M, would you be willing to pay a premium of $5-10k? Would you make a better offer on a home with solar panels than the same home without panels?

Trump’s Impact On Local Real Estate

Question: How do you think Trump’s presidency will impact real estate in Arlington/Northern Virginia?

Answer: I’ve never gotten so many questions about the same topic before (shocker…)! Like most of you, I entered election night completely unprepared for the result, so I’ve spent a lot of time getting read up on the impact Trump will have on our real estate market. The following is a summary of my findings sans my personal politics. Chicken Littles beware, I’m an optimist!

The Outlook Is Positive

Most of what I’ve read suggests that the Northern VA real estate market stands to benefit in the short and mid term from Trump, but the long term impact is where the concern lies. Key factors include:

  • Increased Defense Spending: More jobs, more office space and more money for the major Defense employers in the area like DoD, Boeing, Lockheed Martin and Raytheon should increase demand for housing, particularly in the mid and upper markets.
  • Tax Cuts: The assumed tax cuts should give a number of fringe buyers enough cash to cover a down payment sooner than they expected. I wonder if this will encourage developers to convert large multi-family buildings from rental apartments to condos.
  • Deregulation: Expect major deregulation on banks (Dodd-Frank) and home building to make it easier and cheaper to build new homes, thereby increasing the housing supply, which, in Arlington, is less than half of what economists say it should be in a neutral market. I do expect we’ll see increased demand well before an increase in supply.
  • Markets: After the election-night 5% tumble in futures, domestic markets have responded positively, signaling faith in the economic impact of Trump’s presidency. Strong markets tend to signal strong real estate growth.

Still Too Much Uncertainty

Ken Harney, Real Estate writer for the Washington Post, recently admitted, “It’s still too early to assess [the new reality of the real estate market].” Despite early optimism from many industries, a lot of it comes down to Trump’s design and implementation before we can determine the impact. Here are a few major questions:

  • Foreign Policy: Trump’s foreign policy changes project to be the biggest destabilizing factor of his presidential agenda and poorly executed foreign policy could easily trump (pun intended) any domestic growth. It’s way too early to start guessing how his foreign policy will impact local real estate, but it’s not too early to start hoping he gets it right!
  • Fannie/Freddie: One of the biggest questions facing the residential housing market is how Trump will handle Fannie Mae and Freddie Mac, makers of the mortgage industry. Trump has spoken about dissolving these institutions, but hasn’t said much about what would replace them. If he leads a major attack on Fannie and Freddie, look out for drastic changes in access to credit and mortgage rates, for better or worse.
  • Interest Rates: It’s time for us to stop telling consumers where we think mortgage rates are going, especially now that there are so many questions about the economy and turnover on Fed’s Board of Governors. Lynn Fisher, VP of Research and Economics for the Mortgage Bankers Association said interest rates might rise from the current 3.6 percent to 5.4 percent by 2019, but she added, “We’ve been wrong continuously for the last couple of years.”

Remember Where You Live

Arlington (and DC Metro) real estate remains one of the most stable real estate investments during difficult economic climates. We fared well during the Great Recession and Business Week ranks us among the top places to live during a recession. Strong fundamentals including Federal Government/Contractor jobs and valuable infrastructure like the Metro and an industry-leading fiber optic network support the local housing market.

The best advice I can give (mostly stolen from Warren Buffet) is don’t try to time the market, bet on America in the long-term, and make real estate decisions based on the needs of you and your family, not the talking heads on CNBC. Oh, and if you decide to bury gold in your backyard, do it quietly, after midnight and during a New Moon.

Here are some good articles I’ve found that hit on a range of topics that impact the local and national real estate market:

How Trump’s Presidency Could Impact Real Estate

Impact on 15 industries including Real Estate, Defense, and Banking

N.Va. economy, housing market in flux as Trump readies for presidency

Positive Outlook On D.C. Office Market

How President Trump Will Change the U.S. Housing Market

 

Understand Days On Market, Make Better Offers

Question: Why do I see different counts for the number of days a property has been listed for sale depending on the website I visit? What are the rules around agents resetting days on market?

Answer: Days on market is one of the most important data points when determining an appropriate offer:

  • The longer a property has been on the market, the more likely a seller is to accept a reduced sale price
  • Higher days on market = more leverage for buyers
  • Sellers are most likely to fight for full asking price during the first couple of weeks
  • You’re most likely to encounter multiple offers in the first week

The chart below shows the average sale price to original list price ratio based on the number of days a property has been on the market (100.00 = sold for full ask). On average, a property that sells in the first 10 days goes for above the asking price and after 30 days, the average seller takes a 4% reduction from the original asking price.

Ask Eli Nov 1 2016 Table

Days On Market – Property (DOMP)

DOMP is the number you want to focus on because it’s the number of days a property(based on the address) has been actively marketed for sale and it’s difficult to reset this number (see Resetting DOMP section).

Days On Market – MLS (DOMM)

DOMM is the number of days a listing has been actively marketed for sale. A listing is the individual record created by an agent to market a property for sale. It’s easy (and legal) for agents to reset this number as many times as they’d like by re-listing a property for sale. MRIS (see last week’s article for definition) makes it pretty easy for agents to do this and it’s common to see this action taken after a large price reduction because it gives the new listing more visibility to the public by, for example, popping back up in buyer’s automated searches as a new listing.

Resetting DOMP

The only way to reset DOMP is to withdraw a property from the market for 90+ days. This is an MRIS rule and may be different in other markets outside of the MRIS coverage area (VA, DC, MD, and parts of WV, PA, and DE). It’s somewhat common for a seller who’s not in a rush to remove an unsold listing from the market before the winter and allow the DOMP count to reset prior to re-listing in the spring.

How Do You Know?

Be careful, most public-facing websites use DOMM because they track the number of days the listing, not the property, has been on the market. Most good real estate search websites offer a “property history” section where you can view previous sales, when it’s been listed, taken off market or had a price reduction. MRIS has data fields specifically for DOMM and DOMP so your agent can easily provide this information and if you receive listing information from your agent directly from MRIS, those data fields are easily viewable.

Understanding the impact days on market has on final sale price is critical for buyers and sellers to maximize their value. The impact varies by locality and by the type of housing, so it’s important to also understand your market.