We have to come to grips with the current state of affairs, making allowances for the pent up demand for new product and our hungry sellers. You keep hearing that we are at historical lows for long term mortgage rates. Yet that does not seem to be enough to motivate lethargic buyers, fearful of overpaying. This is where a really good Realtor can help; more on that later. It feels like we have been over every angle of how to get things going again. You may wonder if I am saying anything new each month or if it’s the same message in different disguise. The source is unknown, but a relevant phrase goes like this: “I am accountable for the results of my decisions and actions.” Well, go ahead and sacrifice the messenger now, because I say it will be quite some time before things get better. You just cannot make a living telling lies to yourself and your associates. That is not to say you should mope and sulk, feeling sorry for yourself and your clients. The message continues to be: Get to Work! There are more opportunities right now than anytime anyone alive can recall, unless you count the cornering of the silver market in decades past. Bad times are ripe for advancement and success.
Spending any time at all talking with real estate sellers and buyers could give you a reason to get out of real estate and into the restaurant business. And that’s high risk! When I was a Banker, making loans locally, it was my experience and opinion that money lent to open a new restaurant was the highest risk loan a lender could make. Some of them beat the odds and became wonderfully successful – think Santacafe; while others lasted maybe a year – think Lone Wolf Café. But just talk to a seller for a few minutes. You may get the “what did I ever do to deserve this” tone. It’s hard to be optimistic all the time. Many are racked with uncertainty about their future. They didn’t prepare for retirement, counting on their home equity putting money into their bank account to retire on. But, oh no, they took out that money well before retirement, believing the home would just keep going up in value. You know how that turned out. Then you might visit with a buyer prospect. You will hear a prognosticator’s mantra, word for word, about why it’s not prudent to make a move right now. They are all about not making mistakes – and possibly paying too much. But what really is too much unless you hope to flip for a quick profit? If you plan to live there, today’s price might be as good as you will ever find. Remember when home buyers were buying a place to live and raise a family and feel safe and enjoy coming home to (their own paradise). It was a monument to sweat equity, hard work and self reliance. Now some buyers are stuck in the mind set that they have to protect themselves from a decline in value, but why would that matter unless they just want an instant profit? If they can’t see proof that they are taking the undershirt off the seller, they are not sure it’s a good enough deal to proceed. They have to be able to brag.
So let us come to grips with buyers that cannot pull the trigger and sellers that refuse to accept the facts of the marketplace. Where exactly do the two lines intersect? First, the price has to be the best price out there. All buyers are studying the prices carefully and comparing. Second, the home has to be immaculate and everything has to work the way it should, or please be prepared to renegotiate the price lower before closing. Third, the buyer has to be serious and feel an attraction to the property, ideally establishing an emotional tie to the home. This is where the professional Realtor comes in – finding the exact home the buyer is looking for (not a simple task with so much inventory and many with special terms & conditions) and accurately communicating why the time to buy is now. One more thing, get every tiny detail reviewed early. Property details, loan details, etc. It’s a crying shame to later learn of an easement that’s only about 50 feet from the front portal of a home you have under contract. Because then you have to punish the innocent person that confirmed the presence of the easement, and the seller claimed to know nothing about said easement. Yes, it happened. So ask lots of questions. Don’t allow there to be anything about a property that will come as a surprise to a buyer and their Realtor. Make the buying decision as simple and as easy as possible. Remove clutter. Don’t ask them to adjust for your herd of chickens or your RV parking.
Now it is done; we have solved the riddle and found the map to the buried treasure. Now it’s a simple walk from here to there – but don’t stumble; look both ways before crossing, say your prayers – and we all will happily toast those that arrive at the end of this short jaunt. Then why is it so damned difficult, so fraught with delays and detours and dead ends? And why do so few actually arrive happy and in one piece? Just this morning I got a highly unprofessional phone call from a seller acting as if the world was coming to an end and saying it was my fault. Forgot his medicine?
Speaking of forgetting, this newsletter is about the Santa Fe area real estate market, primarily residential, but the writer will consider any related subject you suggest. There is a spreadsheet attached showing lots of numbers, but really just one simple statistic that shines a light on where we are and just how far along we are in the “recovery”. That is the Absorption Rate. And as is my habit, I will do the statistics and let you do the interpretation.
If you wish to share this letter, feel free to quote from it, forward it, in part or in its entirety or just borrow a few phrases and use them into your own letter. If you are forwarding this to your friends and associates every month because they are too shy to allow their name and email into my distribution database, maybe you could let me know how many people you are forwarding to? From indications, circulation is much greater than the 500 souls on the list.