That is the question. We get around 4 to 8 calls a month from owners that are considering selling their lot. It is the same call every time, no they don’t HAVE to sell, they are fine to hold onto until prices have come back to a level that they are satisfied with etc…
Usually these owners purchased before the bust of 2008-09 and paid quite a premium on their lot. We then have to have a somewhat tough conversation. The good news is that we have now had 10 solid years of a decent to good real estate market. The bad news is that the lot you bought for $90K in 2006 is worth $50K in today’s market. Also, the average lot is sitting on the market for 18 to 24 months.
The vast majority of owners have decided to wait for the greener pastures where the buyers that are willing to pay what they paid. Eventually, we will get back there. Will it be next year? Next decade? In our lifetime? Who knows.
What we do know is that taxes, community dues, real estate sales commission (that can be between 6% and 10%), and potential community assessments are going to make that wait for Mr. and Mrs. Property Owner to get back what they paid, be a long ways down the road. Prices have comeback up since the bust. In 2010 a lot that sold for $90K was selling around $45K. In today’s market of 2020, that lot sells for around $50k. Ten years to get $5K, never mind the money lost in taxes, dues and assessments, is a long time to sit on the sidelines.
If you take the standard investment rule of 72, expecting a return of 8% would mean that your money would double in 9 years. So, were the people that sold their lots for half of what they paid for them back in 2010 better off than those that are still hold out for the market to heat up? The answer is most definitely yes. The owners that are holding and waiting are still paying tax and dues and are losing out on time which what you need when you are investing.
Do we think real estate is a good investment? We will cover that in a future post. Until then, think long and hard about what selling at a loss really means to your bottom line in the long run.
“Why hasn’t it sold?” This is like asking someone over the age of 30 why aren’t they married.
Seriously, how does one go about answering this question? Is it price? Is there something terribly wrong with the property? Why has no one bought it? Has it been on the market too long? It has not been on the market long enough? Is it you? Is it me?
Internally, the buyers must be thinking…It is what we are looking for, it is in our price range, it meets all of our criteria. Why hasn’t someone bought it before us? What is wrong with it? What is wrong with what we want? We want what everyone else wants, maybe we should wait and see what happens.
Inevitably the property sells and the buyers will forever compare what they are looking at today to what they could have had yesterday. The fear of making a mistake, that leads to decision paralysis becomes so overwhelming, that in the end, they fall under the category of eternal lookers.
I am wondering if we should only show prospects with this mentality what someone else has purchased and that they can’t have. Who knows, maybe it will result in more sales. If someone can help me come up with a better way to answer this horrible question, I will buy them Fonta Flora beverage of their choice!
Welcome home to Heron Point. This stunning, gated waterfront community is comprised of only 4 large 16-20 acre lots. Embrace nature and build your private dream lake and mountain estate in Heron Point.
No, not what car you drive, mansion you own, single, married or “it’s complicated” status. We are talking real estate! In real estate jargon we have Active, Under Contract, Pending and Closed for our various statuses in real estate. These are fine and do a good job letting the buyers and sellers of this great nation know what they do and do not have a opportunity to purchase. However, we are missing a major status that we feel would really help in the buying and selling process.
The negotiating status. Why is this not a thing? Think about all the buyers that look at a property, they love it, it meets everything they have told you they are looking for and low and behold, they do not make an offer. In fact they come at you with one of my all time favorite lines, “why hasn’t it sold?”
Grrrr. So they are saying they only want it if someone else wants it? Like watching our two dogs fight over the same bone even though we have provided each with enough cow femurs to make our living room floor look like the Chicago stockyards of the 1880s.
We at the Lake James Team would be thrilled to be able to have button to click that says “NEGOTIATING” or “OFFER In PROGRESS”. Think about all those buyers that may come out of the wood works and make offers thus possibly resulting in the seller making more money?!? If I got an offer in writing, the first thing I would do would be to change that listings status! It would feel so go to let the world know that we have two people interested in trying to make a deal.
We do recognize that this proposal is not without a potential downside. If you were representing just the buyer and this status change caused another buyer to make an offer it might not work out for you, but it would encourage your buyer to quit screwing around and make the best and strongest offer possible instead of a terrible low-ball that is never going to work out and wastes everyone’s time and energy.
We feel that the upside far outweighs the downside and would like to see the MLS of the world and/or the Zillow’s of the world make this “a thing” to use the parlance of the younger generation.
Like what we have to say? Like what we are selling? Come see us at http://www.nclakejames.com
Y’all ever go on Zillow? Don’t lie, we know you do. Everyone does, apparently.
Ever wonder how it works? Well, basically, we hand over our MLS data and money to them because we know you go to their website and our listing clients need your attention. It’s that simple.
Why does it suck? Well, as a Zillow Premier Agent, let me be frank on a few points:
- It pits agents against each other. To make Zillow’s list as a contact for a listing you visit in a particular zip code, you have to “out bid” other agents in that zip code.
- Their mapping stinks. Sometimes because agents mark it wrong, but mostly because it just stinks.
- Have a problem with something? Be prepared to take that to your grave. That is, unless you’re paying them. In that case you’ll hear from them in 4 to 7 business years.
- The “Zestimate.” Need I elaborate? Hope there aren’t any mobile homes near your waterfront mansion. On the flip side, your mobile home looks pretty good if you can get it underpinned near Doral.
- It only uses zip codes as dividing lines. I don’t know that much about Tar Pit Hollar south of Yonder Patch, but I’m learning.
- It is expensive. Just heard from a friend that some high-end areas are paying Zillow $20K per month. Geez.
- The public may not be getting the best agent for the job, just the agent that pays Zillow the most. Sad but true. And, if you’re able to figure out who the listing agent is, you should be working for the CIA.
Y’all ever try REALTOR.COM?