Denver Real Estate Blog

From the category archives:

Selling a Home Tips

The Real Estate Market

by Larry D. McGee, Denver Realtor on November 15, 2008

We stopped taking the newspaper a few months ago. What I miss most about the daily rag is the comics, which I guess goes to show you just how valuable the daily was in my life. Oddly enough, about the same time, I stopped watching the 10 o’clock news, which is now the “all the time” news, so I am no longer in touch with the talking heads of broadcast media. So, it was a bit unusual that as I was waiting for my plane home after an out of town conference a few days ago, I was idly watching a talking head on a television in the terminal. The talking head was speaking in sad tones about the state of the economy and mentioned in passing the national real estate market having lost XXX trillions of value in the last few years. It suddenly occurred to me that the talking head did not understand the concept of a market, as he was just reading the script. So goes my inspiration for this article.

According to Webster, a market (from the Latin -mercatus), is “a meeting together of people for the purpose of trade by private purchase“. Further, a market is a geographic area of demand for commodities or services. Real Estate is defined as property in buildings or land. So, a “real estate market” is “a meeting together of people in a geographic area for the purposes of purchasing buildings or land“. What the media is constantly referring to as “the real estate market” is really a reference to housing data compiled from thousands of markets to present simple and reportable national averages that can be addressed in 30 or 60 second sound bites.

In the Denver area real estate market, as with most markets nationwide, there are really many “markets”. Certainly there are many geographic markets, with values in neighborhoods such as Washington Park remaining steady, and values in Green Valley Ranch plummeting due to excessive foreclosures.There are new development projects such as The Landmark in Greenwood Village that are selling as fast as the builder can finish them, and other new home projects that are not selling at all. There are also markets stratified by price. Today, in Metro Denver, the price bracket of $100,000 to $200,000 is actually a sellers market, with multiple offers presented on some properties, and sales well over asking price on many bank owned homes. However, there is a glut of million dollar plus homes, with sales slowed to the level of watching grass grow.

And the “real estate market” is very dependent on another market, the “monetary” or “credit” market. With the worldwide money market in complete disarray, the housing market, as well as every other market, is captive to the lack of available credit.

The “real estate market” is much too individually specific, much to complicated, and much to local to accept what the talking heads are spewing on the nightly news. If you have need to buy or sell real property, you must take time to understand the market as it applies to your specific needs. You might want to spend time with a knowledgeable Realtor® and have an extended conversation about how your specific needs relate to the “market”.

Reblog this post [with Zemanta]
Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

{ 1 comment }

Love the Appraiser

by Larry D. McGee, Denver Realtor on September 2, 2008

We invited a fee appraiser to our sales meeting today. Over the past 15 years or so, appraisers have become as difficult to find as a moose in the wild, but lo and behold, there was a real live appraiser talking to the assembled sales force. He was kind enough to toss out a few facts and tips, so sharing seems appropriate. It is safe to say that everything mentioned below is applicable across the country:

1. Comparable sales over 6 months old are not acceptable. That is not the fault of the appraisal industry, it is a real time reaction from a jittery capital market. Suggestion-keep your comps up to date on your listings. If you are not updating your comps every 30 days, you may have a problem at appraisal time.

2. Meet the appraiser at the property with the your latest comps and other evidence of value. We used to do that all the time before money became easy, so it only makes sense to return to best practices of 20 years ago. DO NOT beg or bribe the appraiser. Very bad form. Smile, shake hands, and make it clear that you will be available to assist and answer questions. Exchange contact information. Be professional. Leave. Most appraisers will appreciate the courtesy. Will it help? Maybe. Remember, it is your job to perform your service to the seller at the highest level you can. So go the extra mile for your seller.

3. Understand that all appraisals must measure up to underwriting review. That process is a whole lot tougher than than it was 3 years ago, and many appraisals are “kicked back” for additional justification, or just plain rejected. Appraisers do not like their work questioned any more than you do, so they try real hard to get it right the first time.

4. The consumer and Realtor alike should endeavor to work with a local lender with local appraising and local underwriting. Buyers that insist on using a mortgage broker 5 states away, selecting the appraiser from the directory, and mailing the loan package to an underwriter located 3 states the other direction is a prescription for disaster.

5. There is a “fudge” factor. Appraising is not a precise science. It is a very sophisticated, educated guess, rendered by an expert with years of supervised training and experience. But there is almost always a little room to move the value up. Today, not much, but a little. There is no rule for a “fudge” factor, and there are many influences on that factor. If the buyer and seller agree on a price, and the appraised value is within a few dollars of that price, then the agreed value may be justifiable. But neither the seller nor their Realtor should expect miracles. Appraisers are licensed, and their livelihood depends on doing a good job in expressing an independent value of a property.

I hope these thoughts help. For sellers and Realtors alike, the market is challenging, and everyone involved must cooperate to celebrate a successful closing.

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

{ 0 comments }

Pricing Your Home to Sell, Part 2

by Larry D. McGee, Denver Realtor on September 21, 2007

Most sellers are like pedestrians in parking lots. If you are a pedestrian in a parking lot, you probably drove your car there, which is always fun to watch because most of the pedestrians walk like they have never seen a car, let alone just parked one. Sellers act they have never bought a house before, which is always strange, since they want to sell the one they obviously bought. Heads up sellers, know that buyers have most of the same information you have regarding price and the immediate market for homes and mortgage loans. The only thing the buyer does not have is an understanding of your level of motivation. [click to continue...]

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

{ 1 comment }

Pricing Your Home to Sell. Part 1.

by Larry D. McGee, Denver Realtor on September 17, 2007

After 30 years of working as a REALTOR, I am still amazed at the average homeowner’sPricing your home to sell inability to understand the market value of their home. People think it has something to with assessed value, or that appraisal they paid for two years ago when they took out a second mortgage. Some people give serious consideration to insurance value, the neighbors house down the street, or worse, the opinion of the close relative that lives three states away. None of those sources mean very much.

[click to continue...]

Written by Larry D. McGee, Denver Realtor - Visit Website Sphere: Related Content

{ 0 comments }