Signs and Selling

We have a few sellers who don't want signs on their properties. Sometimes, they also want us not to mail to the neighbors announcing the listing. Usually, they say that this is because they don't want their neighbors to know that they are selling! Since signs are the number one tool that agents have for selling property, and since many properties are sold to someone who already lives nearby, this is an odd reaction. Would you look for a job, but refuse to give out your resume? Would you try to get a part in a play, but not allow your agent to send information about you? Exposure is the key to successful selling in most cases. Especially since, when you think about it, once you sell these people won't be your neighbors anymore anyway!

The other misconception I find less surprising is that sellers think that they can sell their homes without benefit of a real estate agent and get more money. While it can be true that a seller could get lucky and know of a prospective buyer, he or she is not going to get more money if they do what is often the case. They advertise the property as "x dollars without an agent". In that case, don't you think that a buyer will expect that the money otherwise dedicated to the commission will go to him? Obviously, real estate professionals aren't helped by people selling their own properties, so I'm doubtless biased, but I find the approach unlikely to get more money for the seller. Plus, empirical evidence collected around the country suggests that most independent sellers get too little for their properties.

Now that I've vented, I should end by saying how busy the real estate market is this week. Let's hope it continues unabated!

Appraisals

Now that consumer confidence has risen back to the point it was when Lehman Brothers failed, and the spring market has begun, we're starting to see some action. The new problem is that the houses under contract are not always "appraising out". That means that, when a buyer goes to get a mortgage, how much the bank will lend depends not only upon his or her credit score and income, but on an appraisal ordered by the bank before granting the loan. Most banks have an approved list of independent appraisers, who are sent out to examine properties with mortgage applications, and value them by comparing them to other similar properties that have recently sold. Therein lies the rub. What's a comparable property? What if nothing nearby has recently sold? What if the appraiser is from out of the area, and doesn't know which streets or neighborhoods are considered prime? All of those factors come into play, and sometimes the appraiser goes back to the bank with a value far below the sales price, even when there have been multiple offers of around the same amount on the property (which almost guarantees that the sales price is at least very close to the true value, since no buyer knows what another is offering).

When that happens, one of three things usually occurs: the bank orders another appraisal, which differs, and its internal processes allow the loan to go forward at the requested amount; the buyer backs out, due to inability to get a mortgage, and the property goes back on the market; or the parties renegotiate the sales price downward. In the current market, any of the three can happen. On a hot property, the first alternative is most likely. If the buyer does back out, it often sells again just as quickly. As Realtors, we hate to see the sale fall through, in part because someone looking won't necessarily know why it's back on the market, and it may decrease the desirability of the property (of course, to be honest, it also means that we are selling it twice for the same fee). This is particularly infuriating when we believe that the appraiser made a mistake. Some banks are more interested than others in taking a second look, and often local banks are more confident of values within their smaller footprint.

Whatever happens, it's just another bump along the road of selling property in today's market.