by MICHAEL BODEEN | May 30, 2016 | Bodeen Team Blog, Real Estate News, Realtors
Is this Good or Bad for the Consumer?
When I arrived on the real estate scene in 1976 in Truckee, California, I was a mere 22 years old. I knew nothing about real estate. While it was technically accurate to call myself a real estate practitioner, I shudder to think of all the folks I “practiced” on in those days.
So when I read these newer studies that show how Realtors are increasing in number and decreasing in age, my gut reaction is to be frightened for an unsuspecting populace. Of course back when I started, it was much harder to find quality training, education and mentorship that encouraged best practices than it is today.
According to the National Association of Realtors (NAR), the median age of a Realtor, as of 2015, is now 53. This is reduced from 57 in 2014 and is the lowest since 1952. This means a lot of younger people are joining the real estate industry.
Our local market is no exception to these statistics. We have been observing large increases in the number of ARMLS members over the past two months. This is the listing service that almost all local agents register with that enables them to hunt for homes and list them publicly as well. Today we topped 36,000 entries in this database. As recently as March 24, we saw fewer than 35,000, which is an increase of 500 agents a month! All of the largest 20 real estate brokerages except (except for one) saw increases in the number of agents as well.
So is this a good thing for Joe Q. Public? Is my gut twisting in knots needlessly? From a base economic standpoint, more laborers within a single industry creates more competition, more choice and, theoretically, lower average costs for the public to employ those agents. So from that perspective alone that can be seen as a gain to the public.
On the other hand, new agents mean inexperience, and in our industry, the knowledge we gain from experience is half our worth. A successful listing agent must also understand marketing, negotiating, and how to price a home correctly to get their clients the highest value for their property. If an agent is representing a buyer they need to know how to read a local market, and to understand the basics of lending so they can guide their client to an honest and fair lender. The 90 hours of classes you must take to become a licensed Realtor in Arizona will not give a person these skills.
My son actually began his career working for a very successful agent in Idaho as a licensed assistant in 2009. He was involved with 50 transactions from start to finish before he ever represented his first client, and I wish more agents would begin their careers this way.
It’s not that you should never work with a newer agent, because many of them are motivated, high energy, and desperate for a payday, which means they will break their back for you. The questions you need to ask are; 1. Does this agent know where to find the right answers when they are unsure of something? 2. Does the agent have a mentor/business partner they can lean on for experience? 3. Is this agent taking steps to educate themselves regularly? 4. Is this agent full time?
Fortunately, with larger companies such as our firm, HomeSmart, excellent training is made available to all agents and that’s a plus. We also have tremendous Broker Support, all of which I wished I had when I started in the biz back in 1976.
My greatest plea to a consumer searching for an agent, is not to just go with the first one you meet, which is what most do. Instead attempt to evaluate their level of experience, industry knowledge, and integrity.
by MICHAEL BODEEN | Mar 30, 2015 | Bodeen Team Blog, Buying a Home, Real Estate News, Realtors
You’ve done your home selling research. You’ve got a fairly good idea about what your home is worth. You’ve even found a neighborhood you’d love to live in, and the numbers work. But, how do you get from here to there? Your Realtor has told you that not all sellers are willing to take a sales contingency – and by the way, your Realtor is right! So where does that leave you? Homeless? Quickly buying a home that you might not be happy with? Renting between your sale and purchase and having to move twice? Or finding the perfect home and closing within your allotted escrow period, needing only one move.
Here are some tips to help put this puzzle together, as you begin down the Sell/Buy road. Our assumption is that you can’t buy the next home until you sell the current one. And remember the goal should be finding the home you want.
Tip #1: Determine your worst case sell/buy scenario and decide if you can live with that. That worst case scenario may be that you close escrow on your home but you haven’t found the right home to buy so you will need to live in rental/apartment/family for a few months, or longer. That’s a double move, but believe it or not it has strong advantages. If you can swallow the worst case, then list your home and get ready for the ride.
Tip #2: When you’re negotiating your current home sale, try for a longer close. If the buyer wants 30-45 days to close, ask for 60. This can provide you a solid month or thereabouts to find the right home. And get yourself pre-approved with a good lender. This will go a long way in your new home negotiations.
Real World: The chances are way stacked against you that you will find a willing seller who will allow a contingency sale without you having your home in escrow. Even then, they will want to know how well seasoned the escrow is, like have the buyer and seller already negotiated inspection repair requests? Has the home been appraised? Other contingencies? (By the way, the caveat to the willing home seller is family, friends, or some new home builders)
Tip #3: Once your current home is in escrow, and you’re through the inspection process, now you can make an offer contingent on the close of escrow of your home. Most sellers will consider this type of contingency. Your Realtor and lender must be ready to make a strong documented case of your ability to close the next home. In other words, they need to “sell” the seller and seller’s agent.
Tip #4: Be willing to rent or move in with family. Renting, although a pain to have to move twice can put you in a strong negotiation position of not having a contingency. If you can find a month to month or short term lease, or a family member to temporarily live with after you close your current home, this will greatly enhance your chances of getting the right house at the right price. If possible avoid a long term lease.
Real World Example: We just closed on this very situation. A family of four had outgrown their home and were looking for a new one in 85254. When we sat down to go over their options, they mentioned that they were prepared to live with relatives nearby if need be. Well we quickly got their home under contract and through the inspection period. Then, an unbelievable home came on the market for a smoking price and they jumped for it. Because they were ready and gave a strong offer to the seller, the deal went together. They did need to move twice, but because the new home needed carpet and paint they had the luxury of being able to wait a few weeks to move in while it is being done. They couldn’t be happier.
And at the end of the day, getting the right home is the final piece of the puzzle.
by MICHAEL BODEEN | Oct 6, 2014 | Bodeen Team Blog, Real Estate News, Realtors
What we saw in toward the end of the third quarter, as I mentioned before, is a drop in supply that helped us get back to a balanced market, not favoring sellers or buyers. It seems however that we should not get too excited as there are many factors that are still counting against sellers right now.
It appears that even though there have not been a whole lot of new listings, in fact very few, demand has also begun to weaken a little from the low it was already at. The amount of listings that are pending right now has dropped nearly 6% from last month, indicating a drop in demand. The total inventory or supply of listings is up 2%, conversely indicating an ever so slight increase in supply.
Market experts are predicting an increase in listings until Thanksgiving, at which point it is expected to drop down again. What does this all mean for sellers? Well it’s a tough road right now, which means we have to be competitive in price, the best presentation possible, and a little bit of patience… ok, maybe a lot of patience.
As professional Realtors, we often tread the fine line of staying optimistic, but also reporting negative facts taking place on the ground. Thankfully, we can remain optimistic because we enjoy where we live and life is good, except when it’s not – and that’s life. If I am a person who really enjoys my home and the memories it affords me, then I’m not that concerned about what the local real estate market is doing. Least of all week to week or month to month.
I do however confess to having a penchant for being a market observer, and the main reason for that is that 90% of the time when I see a client, even casually apart from biz, they inevitably ask, “Mike, how’s the market?” I’d like to be able to intelligently answer them something other than, “I dunno.”
So when we find ourselves in the languid real estate market that we are, we need to come up with the right spin, and in this case, currently, there is an honest spin that works. Here it goes: Fence sitters, your time has come, get your financial house in order, and get ready to buy a house shortly, because there’s going to be some great buys between now and the end of the year. “I dunno Mike, sounds like Realtor hype to me.”
The truth is that we’re seeing (literally) hundreds upon hundreds of price reductions weekly. If you combine that with very low mortgage rates, and a jobs economy that’s turning around, it may very well result in a booming market. When that happens, just as in our not too distant past, prices escalate rapidly and then, in the words of Carole King, “it’s too late baby, now it’s too late…”
– Mike Bodeen
