End of Year Market Update

I recently was the speaker at a local Rotary club where I gave a year-end update of the real estate market in Abilene.  Since I had the presentation in hand, I thought I would share it with you.

The first thing you need to know is that Abilene, Texas is a great place to live.  I could expound on the many advantages of living in our small cosmopolitan community such our nationally renowned Philharmonic Orchestra, or our First class tourist attraction, “Frontier Texas,” but what I’m really excited about is our most recent claim to fame.  Abilene, Texas was just awarded “Best Commute” for major cities by bizjournals.com.  Did you hear that?  We are a MAJOR CITY!  In addition, we have the shortest average commute in the country, but WE ARE A MAJOR CITY!  http://www.bizjournals.com/memphis/news/2012/01/05/memphis-commute-times-better-than-most.html

So, how is home price appreciation in this Major City of Abilene?  The average home sales price in Abilene in 2011 was $130,460 which was basically flat from the previous year at $132,215, but over the last 10 years home prices in Abilene have continued to rise.  Only twice in the last 20 years have our home prices gone down at all.  If you purchased a home in 1993 the average sales price was $62,426 so in 20 years home values have more than doubled.

10 year Average Sales Price Abilene Texas

We average around 7% appreciation each year.  Abilene doesn’t experience the kinds of booms and busts seen in other markets.  In fact, Texas as a whole has fared better than the rest of the country.

National Average Home Prices

So, when the National news tells you not to buy real estate because it’s in the tank, just remember that all real estate is local.  One of the reasons Texas is in much better shape is because of our strong constitutional protections for homesteads.  In Texas, you cannot obtain a home equity loan for more than a combined 80% of the value of the home.

What about interest rates?  Interest rates are at a 50 year low.  In my lifetime interest rates have never been this low. You can lock in a 30 year rate for around 4% and a 15 year rate for in the 3′s.  THE THREES!

Historic Mortgage Rates

So, is it a good time to buy?  Yes, buy now!  Do not wait, do not pass go, please for the love of Pete, buy now!

I certainly understand trying to save as much money as you can for a down payment on a house, but the longer you wait while paying rent, the greater the chance of you losing out.  I’ll talk more about that next time.

First-Time Buyers and Skydivers Need More Than A Radio

I’ve never gone sky diving before.   I don’t think my life insurance covers it, and I’m pretty sure I would scream like a little girl, but if I DID want to go sky diving I would go to someone and actually get a hands-on lesson from an expert. 

I recently had a call from a potential first-time buyer.  He had two goals in mind in buying his first home.  First, he wanted to get a “steal of a deal”.  Second, he wanted to buy with at least 20% down in order to save the mortgage insurance, and so his loan balance would be as small as possible.  The problem is that he doesn’t have any money.   

Let’s talk a little about negotiation.  In order to get a “steal of a deal” a buyer has to have the upper hand.  The strongest position for a buyer is when he can buy with cash, no contingencies, as-is, right now.  That is the way that investors often buy.  If you don’t have cash, or have to get a loan, or need inspections and repairs, or you can’t close immediately, then that puts the seller in a better negotiating position. 

I offered to have the buyer come in and go through a little crash course on the home buying process and we could talk about different types of financing, negotiation, and contracts.  He told me that he is a fan of a radio show that offers financial advice and implied that he understood everything there is to know about financing and negotiating.  Wow.  I wish that I would have met him 25 years ago.  I too listen to radio programs and read books, but if I were doing something this important, like sky diving, I think I would talk to the person who is going to be in the back of the plane with me.

 

A Seussational Sales Story

 The sun did not shine, it was too wet to play, but in my office I worked, on that cold, cold, wet day.  I was working and thinking of something to do, when the phone started ringing, and the call was put through.

Ring, Ring, Ring went the phone so I picked it up. I said, “It’s the Realtor,” as I put down my cup.  The caller said, “Quickly, come quickly, come quick!  I must sell my house, it’s made all of brick.  It’s a nice house you see, it’s a nice house for me, but you must come right down, I’m moving from town!”

So I grabbed my camera and laptop computer.  I rushed out the door and jumped on my scooter.  I drove to the house as fast as I could, to a neighborhood cute, it couldn’t be cuter!  The seller greeted me with a shake and a smile.  “Come in, come in, come sit for a while.”

He told me his needs, his wants, his desires.  He told me he wanted top dollar from multiple buyers.  He wanted a quick sale that was free from all pains.  He wanted a sale without capital gains.  He wanted the price of Bill Gates Taj Mahal, he wanted to sell and do nothing at all.  He said, “Tell me now, quick, quick, quick, can you do it?” I said, “I’m not sure, but I’ll help walk you through it.”

So the first thing we did was to talk about pricing.  “We must have a price that will make it enticing.”  So he told me how much he had paid, and how much that is, after inflationary adjustments are made.  “No, no!” I said, “You can’t price it like that!  We must sit and talk, we must have a chat!”

He told me the cost of repairs and improvements, with great animation, and waving hand movements.  He told me of carpet and paper and paint; of blood he had shed that caused him to faint. “No, no!” I said, “You can’t price it like that! We must sit and talk, we must have a chat!”

He told me how much he would need from the sale, to buy somewhere else on a much greater scale.  “Prices are higher there, I need it you see. I must get enough to go on a spree!”  “No, no!” I said, “You can’t price it like that! We must sit and talk, we must have a chat!”

I said, “You should price it in a way that is real.  It must be perceived as a fair kind of deal.”  It doesn’t matter the price that you paid, the blood that was shed, or repairs’ cost that were made. 

You can’t price a home by what you need, or what you have in it.”  With that, he said, “Now wait just a minute!  If that’s not the way, then what is, pray tell?  What can I do to make this house sell?”

“We must find the price paid of houses with doors, and windows and walls that are kind of like yours.”  “Oh,” he said, “I see what you mean, we’ll find comparable sales then, that would be keen!”  So together we developed a price that was fair.  We did this without any pulling of hair, but pricing was only the first part of the plan.  I said, “Let’s get busy and clean this place, man!”  I said, “I’ll do my part, and I hope you’re approving, but it will take teamwork to get this place moving.”

To give a long story a short little end, we sold the house, and I made a new friend.  Selling a home is not always easy. The process can make you just a bit queasy.  So always call Stovall, REALTORS©  we can help you with that.  We’ll be much better than a Cat in a Hat!

All About Steve

Who is that masked man, you ask yourself?  Well, I’m not wearing a mask, it’s just my face, but enough about my appearance.  The real questions are who am I, and what can you expect from this blog?  My name is Steve Stovall and I am the Broker and Owner of Stovall Realtors in Abilene, Texas.  I’m a fourth generation Abilenian and I’ve been in the real estate business since 1989.  I train and manage real estate agents for a living.  So, in some ways, I’m like a kindergarten teacher.  Not that real estate agents are like kindergarteners.  I would never say that (out loud), but rather meaning that I care about all of my students.  Yeah, that’s it.

What is this blog all about?  As the title implies, or just outright tells you, it’s a “cheeky” look at Abilene real estate.  Cheeky is word that we don’t use much in Texas.  I thought about saying “quirky”, but that didn’t sound right.  “Weird” wasn’t quite right either, although I have been called that on occasion.  So, it’s cheeky, defined by Webster as “saucy, impudent and brazen.”  Yes.  Cheeky is the right word.

At Stovall Realtors, our mission is to set the standard of honesty and professionalism in Abilene real estate.  So, why would I write a blog in a saucy, impudent, brazen way?  There are a couple of reasons.  First, I think that you can be professional, and still have a sense of humor.  You see, the point is to try to pull you in with a funny story, and then slip a little education in your drink while you’re not looking.  Many of these ideas were originally published in the Abilene Reporter-News while I was President of the Abilene Association of Realtors.  I had lots of positive comments, and a few that were… questionable.  Our ad rep from the Reporter-News told me that someone asked her if I was “alright.”  I wasn’t quite sure how to take that.  Did they mean mentally?  Some people just wont get it, but some will.  I loved receiving a letter from a lady in Tye, TX. who wrote that she appreciates the way I “take something that is totally unrelated, and relate it to some aspect of the real estate business.”  Now, there’s a person who “gets it!”

So, tell me what you think.  If you have a question about real estate, or about Abilene in general, ask me.  Odds are, I’ll have encountered your problem before and I have a funny story about it!

Hidden Secrets of Home Selling

You have heard me say that there are only five things that affect the sale of a home.  They are (feel free to repeat them with me if you have them memorized) price, terms, condition, location, and marketing.  Remember these 5 things.  There is a sixth one that we don’t talk much about.  It is an invisible, mysterious element that cannot be determined.  You can’t see it, taste it, smell it or step in it.  Because it cannot be analyzed, seller’s often try to manipulate it.

Let’s make some assumptions here.  Let’s assume that the agent has done a thorough analysis of the sales and active listings in your neighborhood and you have priced your home to sell based on factual data.  Let’s also assume that the terms are reasonable, it shows well, and that the location is desirable.  Let’s further assume that you have listed your home with Stovall Realtors and it is being marketed using our exclusive home marketing plan that ensures that all of the other agents know about it, and buyers who are in the market are seeing it in the best possible light.  These are the primary 5 things.

Now, as a home seller, you want to know what you can do to speed up the process.  Fortune is smiling on you my friend because I know the secret.  You have come to seek the council of the great Yoda.  So sit down with your feet crossed over your knees and learn, Grasshopper.  Pay no attention to the man behind the curtain.

A little known secret is that there are certain exercises that you can do that will cause your physical body to create an aura around your home that will attract buyers.  The first exercise must be done each morning, just before dawn.   Go out of the home into the front yard.  While facing north, raise both of your arms and your right leg as high as they will go.  Do this exactly 18 times and then whisper the word “Sellem” (pronounced Sell-Em) before going back into the house.  If you do this for three to four weeks, it will help your house to sell, assuming all of the other 5 things are in place.

If after 3 or 4 weeks you have not obtained an offer, you and your Stovall Realtors associate should determine what adjustment needs to be made to the price, terms, or condition.  Do not continue until you have made an adjustment.  Once that has been done, there is another exercise that you can do that will create a mental “call” from your home to buyers.  As they enter your neighborhood, they will mentally hear the house call out to them.  Follow these instructions.  Each night, just after dusk, go out into the yard and look at the moon.  Take a piece of foil and fold it into the shape of an arrow and point it toward the moon.  Then bite the foil and say “bring them out” three times.

After doing this for 3 to 4 weeks, visit with the agent and talk about the number of showings and the feedback from buyers.  If your house is not being shown enough, lower the price.  If you are getting good showings, but no offers, then change the condition of the home, and repeat the above exercises for another 3 to 4 week period.

Well, as you might have guessed, there really is no magic to selling a home.  There are five things that affect the sale of a home: price, terms, condition, location and marketing.  That invisible sixth element is time.  We don’t have a crystal ball that will tell us how long it will take for the right buyer to see the home.  All we can do is to make sure that we are in their line of sight.

It’s like fishing.  Generally, we can’t see the fish.  We use data to determine where the fish are, and what kind of bait they like, and what it will take to reel them in, but we can’t make them take the hook.  You can’t rush fishing, and you can’t rush selling a house at market value.  There are some crazy things that some people have suggested might help, but generally those things are just ways to keep you occupied until the house sells.  So, if you want to sell, listen to your Stovall Realtors associate and have a little patience.  We won’t steer you wrong.  If timing is of utmost importance to you, then you might need to sell for less than true market value, or you might need to put some money into changing the condition.  But if the buyers have objections, and you don’t want to change anything, then there is an old saying that always applies: “price overcomes all objections.” However, if you want to sell for true market value, and  you have done all that you can do to make the house marketable, forget about it for a while and enjoy your life.  Now, Grasshopper, go forth and conquer!

Steve Stovall -Broker/Owner of Stovall Realtors