It's the sort of statement you never forget! My real estate coach, Dave was on the phone and we were talking about the valuation of property and the implications for providing proper counsel to real estate clients. Dave said....and I quote "Lola, you don't often find a Buyer with a Bucket Full of Money in one hand and a Bucket Full of Stupid in the Other!"
Very true. But in the current market in Grand Rapids, Michigan sometimes it feels like Dave's statement is being challenged. That's because appraisals are coming in below what some buyers are willing to pay for homes! In a recent conversation with an area lender, this issue came up. In speaking with one of my agents about structuring the purchase transaction, he gave us a caution. Be careful that you don't offer more than necessary for the home.
One of the underlying challenges that lenders are having in our market is that appraisals are coming in for less than the agreed upon purchase price between buyers and sellers. So, are there steps that homeowners can take to maintain the Values in their neighborhood and decrease the impact that declining sales and increased foreclosures are having in their community? The answer is YES!
The lending industry is understandably cautious about declining values. It's an issue which has risen in prominence due to the increase in foreclosures in our market. Did you know that a property which is in foreclosure in your neighborhood on the average lops off about $7,000 worth of Value off the Top? However, this presents some unique opportunities. With interest rates at all time lows and talk of decreases in the Prime Lending Rate in the near future, being proactive about promoting your community is important.
Every element of the real estate market is in a period of adjustment right now. As a result, Buyers and Sellers have to make sure that the decisions they are making about their real estate concerns allow them to focus on getting a positive result and avoiding holding the proverbial bucket of stupid.
Here are some Tips which are helpful to consider when Marketing a Home During A foreclosure crisis.
1. Help Out Your Neighbors!
Yes, for by helping them, you are helping yourself. Become nosey. Find out what your neighbors are selling their homes for. Don't be afraid to ask about the details of their home. Visit their Open House and talk with the real estate agent. They'll probably even offer you coffee and a snack. Ask the agent HOW they arrived at the price for the home and if there have been any price reductions. Inquire about the real estate market in your area. Offer to take some extra flyers. And then distribute them! Let everyone you can know that there is a great home or homes for Sale in your neighborhood.
2. Focus on The Benefits!
Talk to people you know about the homes For Sale In Your Community. Focus on the fact that there is a GREAT SELECTION of homes in your neighborhood currently for Sale. Now, armed with the knowledge of these home...become a salesperson. Describe the homes in your neighborhood that are for sale and ENCOURAGE people to tell others whom they know. I know that if you've read this far...you're thinking Huh??? Well, let's put it this way...this is not really about your neighbors...its about YOU! Every Successful Home Sale ultimately benefits YOU!
Every-time a home Sells in Your community for a good price...YOU BENEFIT! Every-time, you have someone in a home rather than a home boarded up and vacant...YOU BENEFIT! Every-time, a good neighbor moves into your community whom you recommended...YOU BENEFIT! Every-time you avoid a Foreclosure near you...YOU BENEFIT.
3. Become a Home Selling Advocate!
So, I encourage you to become a HOME SELLING ADVOCATE! Advocate for Homes for Sale in Your community. Advocate for Values to remain stable by taking care of your home and helping your neighbors who may be struggling. Advocate to encourage departing home owners to maintain the exterior of their properties. If you have a home nearby where the lawn is not being mowed...consider mowing it. It's about your property values. Advocate for positive outcomes for others...for as you put this type of energy into motion...it has a way of swirling in bountiful returns back to you.
If you intend to Sell You Home within the Next Year in Grand Rapids, Michigan...you will need to think in a completely different way! No buyer wants to be told by the appraiser that they paid more for a home than it was worth. Do your part to promote and enhance the Value of homes in your neighborhood. This will take new and innovative thinking. If you'd like to talk about how we have successfully assisted homeowners through the changing norms of selling homes today, please feel free to call our office at 616-791-0511.
Copyright 2007 Audu Real Estate All Rights Reserved
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Lola Audu, is the Designated Broker & Owner of Audu Real Estate. Our company specializes in helping people buy and sell homes in the greater Grand Rapids, West Michigan area. You can contact us via e-mail @ info@auduhomes.com or by phone at 616-791-0511. Thanks for visiting our blog. Here are links to some of our most popular posts for you to enjoy!
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Lola. This is a good perspective.
I believe too that home buyers need to start focusing on where they are going to live and stop thinking about what they are going to buy.
There's too much emphasis on the investment today. If buyers are going to insist on not buying until we reach the bottom of this mess, they could be waiting a while.
I find that buyers in my area want prices so low that they have no risk that they will below market. Can't be done. They could have to wait several years. We don't know how long this is going to take.
Folks need to buy a place to live.
Lola,
What a fabulous idea for a post. You are absolutely correct of course. Foreclosures are not just bad for the owner, but every neighbor as well. Great post.
Lola- another excellent post! I love the idea of neighbors helping one another through this. A positive message that is needed during this foreclosure mess.
Peter, in our area, this has become a tricky situation. Appraisers are cautious due to the issues we have had with fraudulent loans. Keeping Values up is the collective job of all neighbors within a community.
Absolutely Robert! :)
Hi Kris...How about it takes a community...:) Thanks for stopping by.
Hi Margaret, Yes, Yes, Yes! We all know this instinctively, but sometimes the weariness which settles in during difficult times makes us forget these core values. Helping others is helping myself...ultimately.
Thanks for stopping by to read and comment Donna.
Thanks Marc, appreciate your comment.
Hi Diane, We're only victims if we choose to be. I've sold quite a few homes over the years because the people in the neighborhood told others about a home for Sale near them. This does work! Thanks for your comment.
Lenn, Very TRUE! Although a home is an investment....it is most importantly a place where one will LIVE. Great insight, thanks for adding it to this discussion.
Yes Monika. :)
Thanks Kelly, Our goal is to help home owners pass through this difficult phase as quickly and efficiently as possible.
Lola - what excellent advice. Today, just for kicks and grins, I pulled up my street on GRAR. I found two homes, both ranches with identical features, pictures are mirror images. One was $99,000 the other 129,900.
It boggled me how they were so different...is one motivated and one not? Is one in foreclosure and the other not? I don't know. I don't have access to those numbers but the listings certainly looked skewed. I only know as a buyer which house I would look at first! and what my mind set would be. (and being on the same street the value I would like to receive for my home in this cookie cutter neighborhood!)
Bless your heart for explaining what is at stake here and how to get the best value for a home...communication is key! Great post, as always!
You know I have noticed a house on my street where a little old lady lives. Her home needs painted but I always sensed that she was on a fixed income and couldn't afford to maintain the place properly and have many times said to myself that I should volunteer to paint it for her. After reading your post here, I'm going to contact her and see if she would like my help in the spring. I know it would help her and my property value as well!
Thanks Lola!