Ok, I lied. It is more than 5.
But I needed you to read this – I have been licensed since the early 1990’s and having been around builders, developers, other agents, sales trainers, professors, gurus, analysts, buyers and sellers for that long has given me a wealth of experience in many different arenas and with it, some genuine pearls of wisdom.
The following is a list of some of my favorite little tidbits that come out from time to time. While some of these statements / sayings are totally original and some are complete rip-offs of something I heard elsewhere, most are a little of both. You will also notice that most of these relate somehow to VALUE. As you can tell, I believe that it is a Realtor’s job to help clients make the best decision. In my mind, that means helping the client find the best value in the marketplace given the constraints / wishes / needs that they have. I have found most of these statements to be very universal and their application has been validated by remaining true (or even truer) during the market adjustment that began in 2008.
Here goes …
“Make the expensive stuff neutral and the cheap stuff specific.”
If you like pink, paint something pink and stop at that.
NEVER-EVER-NEVER install a pink piece of granite or put in a pink tub (or other brazen color). You would be amazed at how many people that destroy value with unnecessary choices that are expensive to remedy. If it costs 4 or more digits, make it universally appealing (unless money doesn’t matter.)
And in 25+ years, I have only met one person who seemed to generally not care about money at all. And they were quite easy work with …
“The market is never kind but it is always correct and it will tell you everything you want to know if you are listening.”
I think that is a knock off of a Mike Ferry statement.
I tell sellers this all of the time … they all nod, and then proceed to get angry when they get negative feedback. Getting angry means you AREN’T hearing the message being delivered. The key to this statement (if your agent asks the correct questions) is that you can figure out if you should drop the price vs. offer a concession vs. fix a problem if you just strive to understand the nature of the message.
This is one of the most important concepts for any buyer OR seller to understand. Figuring it out means maximizing value.
I’m just saying buyers HATE to take down wallpaper. Use it judiciously.
“The most important role for your REALTOR is to help you understand value.”
The best transactions I have are the ones where the buyers want to learn. When there is a commitment by both sides (REALTOR and client) to gain an understanding of the decision, then the process becomes easy and fun and the decision becomes obvious. If I do my job correctly, then there is no tension or fear about buying. The buying decision is based on understanding. It is what I enjoy.
Buyers never refer to a house by the address, they call it by the house’s defining feature. The “House with No Yard” or the “House with the green carpet” or the “House with the _____” (and if you want to ask me about the parrot story, feel free, it is a funny story). Do not buy houses that have things that cannot be remedied or you will become “The House With the <insert the really negative feature>” and that is not a good thing. The object is to be the “House with the AWESOME _______.”
“Respect the Process”
There are steps you MUST go through to be a good buyer and it takes a little time. Until you have seen not just a certain number of houses, but the RIGHT MIX of houses, you are not qualified to buy a home. There is a component of age, size, price, features, and geography that you must see to understand how the market is operating. Shortcutting the process will result in a flawed decision.
“Know who has the deal equity”
This one is a head scratcher when I say it.
What I am saying is this – when you look at at the deal (price, terms, concessions, timing, etc.) who stands to lose the most if the deal blows up? I see so many people mistake their relative positions in deals because Yahoo or CNN give some global piece of real estate news that may or may not apply to this situation (usually ‘may not,’ but I digress)
Buyers tend to think that they overpaid and are going to try to extract every penny through inspections, etc. If you are a a buyer and you want to start at square one all over again over a $200 item, go ahead – you will kick yourself for it. Likewise, sellers, I have very rarely seen re-trading work out in your favor. Just understand that the contract price is only a beginning.
Know where you REALLY stand and act accordingly.
“The market makes your home go up or down in value. It is your job to buy one that goes up faster or down slower when the market shifts.”
I have been saying that for years when asked, “Will this house appreciate?” (and it has been a while since I have had that question asked, btw) but I feel that this tidbit has held up quite well post 2008. The key to this is making the effort to understand what makes a home go up or down in value faster or slower than the other when the market shifts.
“Take advantage of the opportunity and not the individual”
I have heard stories of so many people trying to “win” just because they think that can/should/are obligated to in ways that make me shake my head. If you want to drive a hard bargain, that is fine, just do so in good faith. In every deal, there is a small favor required at the end to help push a deal over the goal line and it almost always requires a seller’s cooperation. Don’t cause yourself to need a night or seven in a hotel room because the seller hates you and refuses to help navigate an issue relating to title or something stupid your mortgage company wants.
The decade has been hard enough on everyone. Often, an investment in fairness will pay you back many times over when it is needed.
“I have never seen a bidding war erupt over a house that backs to the interstate.”
In effect, this is a more flippant way of saying, ‘Location. Location. Location.’
“If the kitchen and bath doesn’t cut it, the rest doesn’t matter”
99.999999% (or 85% if you believe this article) of the buying public acts this way (even if they don’t admit it.) Inside the house, if the kitchen OR the master bath is significantly subpar (think – ‘sucks’), then you are facing an uphill battle regardless of what else the home brings to the table. A ‘drop-dead gorgeous’ kitchen makes up for a lot of other flaws.
“Look at the floor plan and not the stuff”
Buyers, I get it, the owner has weird taste. Don’t let it affect your opinion of the layout.
Sellers, I know you took a ceramics class – but that is really ugly. Do not make it a centerpiece in the main hallway. They are not buying your art, they are buying your house. Help them to see the home, not your stuff.
“Understand the difference between COST and VALUE”
I will say it now like I have said it a million times before – THE MARKET DOES NOT CARE WHAT YOU PAID FOR IT. IT IS WORTH WHAT IT IS WORTH. Paying $13,000 for something does not make it worth $13,000. As a matter of a fact, if you do it right, you can make it worth more! And, man, do builders always struggle with this one.
“Understand the difference between expense and investment”
Just because a home costs more does not make it more expensive. If a home has a higher price tag but fits you better, then consider it. Transacting a house will cost you close to 10% of the value of the home when all said and done. Moving twice when you didn’t have to may not be the best idea.
“Can you rent your way out of this?”
I am especially proud of this one right now. I have lender buddy who has heard me say this for years (and gives me credit for it so you can ask him). When buying a home, you have to ask yourself, ‘if the world turns upside down (like it did in 2008), can I get enough rent for this to allow me to carry it for a looooong time.’ If the answer is no, then be careful.
“The counties are driven by schools”
If you want to see stable home values, look in the best school districts (this is an interesting article if you like really scientific studies.) This is obvious to the Richmond folks, but buyers that are coming in from other markets may not always grasp this. Test scores and home values in suburban RVA are strongly correlated.
“This market harshly punishes mistakes.”
The buying public today will turn up its nose at anything that has a flaw. Do not buy houses that have flaws, or at least not unfixable flaws. Buying a 3-bedroom house in a 4-bedroom neighborhood is a bad idea. Yards that are too small or lots that are too sloped or back up to a power line or retail strip center – all of these are flaws that cannot really be addressed. Stay away despite the discount or you will get killed when you sell.
“Make sure you buy an ‘-est.’”
This one always gets a weird look but is an extension of the one above. What I am saying is try to make sure your home has at least one superlative quality. It can be the biggEST or the nicEST or the coolEST or have the bEST view or the mostEST bedrooms (that was a stretch, sorry, but trying to make a point.) The takeaway is that you should have a home that appeals to someone on some level more than any other. If you have no ‘-est’, then you are a commodity and you can only compete on price.
I have a couple of hundred more, but these are my favorites.