You Can Sell Something Without Selling Anything
January 31, 2007 | Leave a Comment
Sales is something that happens all the time, many times without us even noticing. Commercials on the radio and TV, ads in magazines and newspapers, billboards as we zoom about town, all of these are selling something. Most of the time, I think that people are so accustomed to being sold, that they don’t even think about it. Sometimes, however, “being sold” is topmost on people’s mind. I encountered just such a situation this past weekend.
I showed property to a lovely couple who came from Northern Virginia. As with many of my clients, the first time we met face-to-face was Sunday when I showed them property. Prior to that, we had never actually spoken to each other, our only conversations were via email. After a few hours and plenty of homes, we returned to the office to discuss how the day had gone, and their plans for the future. At this point, they made what I found to be an interesting comment. My client said, “you know, we really like working with you; we don’t feel like you are trying to sell us anything.”
I thought this comment was interesting only because I had never really thought about it before. As I told them, when I represent buyers, I see my function as mostly consultative and advisory. My standard comment to most buyers is, “it doesn’t matter to me which home you buy because I’m not the one who has to live in it.” Listing homes is different, a listing agent is contracted specifically for the purpose of selling the home. You can call it marketing if you want, but when you boil it down, selling homes is just that- selling homes.
It occurred to me that these people felt they did not want their buyer’s agent to sell anything. To them, selling was a negative quality for a buyer’s agent. In a way, this makes sense. Think about it like this: when you go onto a car lot, you know the person who comes out to help you is there for the benefit of the dealership. That person’s job, their raison d’etre, is to sell you a car. That is what makes people defensive when they go to car dealerships. It is the reason that people go to great lengths to avoid the car salesperson up until the point that their involvement becomes absolutely necessary. For whatever reason, it is human nature to resist being sold. I think that it has to do with the fact that to be sold requires that a person give up a degree of control over a situation. People like to be in control. But, that’s enough pop psychology, back to my clients. . .
My clients liked feeling that they were not being “sold.” They knew that they had control of their situation and their home-buying destiny. To use a nautical metaphor, my clients are captains of the ship, I am merely navigator and first officer. That is the way I like to work with all of my clients. It was good to hear first hand that they appreciate this approach.
They were, however, wrong about one thing: I didn’t sell them nothing. I sold them on my ability to faithfully represent their interests in the home-buying process. That is the biggest sale of all.
[tags] real estate, realtor, charlottesville, sales, marketing [/tags]
Finding Answers in Fluvanna
January 27, 2007 | 2 Comments
In response to the many calls, emails, and comments I have received from people regarding the assessments in Fluvanna County, I have tried to get answers. To that end, I have scheduled a meeting with Rivanna District Supervisor Charles Allbaugh. While he acknowledges that he is on the Board of Supervisors, and not from the Commissioner of Revenue’s office, and this is his first assessment as a Supervisor, he has agreed to try and answer any questions that I have the best that he can. I have no reason to think otherwise, and Charles has been one of the more forthcoming Supervisors on the issue that I have found.
Since I have this meeting scheduled for next Thursday, I thought that if any of you out there have any questions about the assessments that you would like answered, I am happy to ask them. Of course, I am not going to ask him any questions about specific properties, so keep things general. I will ask him as many questions as I can, or as many as he is willing to answer, whichever comes first.
So if you do have unanswered questions, now is your chance. Feel free to either leave them here as comments or send me an email.
[tags] real estate, realtor, fluvanna, assessment, taxes [/tags]
The Market Determines Price, Not the Government
January 25, 2007 | 1 Comment
I have observed a rather disturbing sentiment surfacing as a result of the Fluvanna County assessment controversy. I have heard a number of people say things like, “Well now I am going to sell, because my the county says my house is worth ‘X,’” or, sellers who say, “now I don’t have to negotiate the price, because the county says my house is worth more than the list price.” Both of these statements are dangerous, and exhibit a fundamental misunderstanding of how markets, and especially real estate markets, work.
I am going to say this once, very emphatically, so that hopefully I will only have to say it once: THE MARKET DETERMINES PRICE, NOT THE GOVERNMENT.
The reason that a home is worth some amount of money, any amount of money for that matter, is because that is the amount of money that someone else is willing to pay for it. This is the way free markets work. The value of a commodity, in this case a home, is determined by supply and demand and a buyer’s willingness to pay.
The purpose of any government assessment of property is to determine market value of the property so that the government can collect the maximum amount of tax revenue. The government IS NOT SETTING THE VALUE. In fact, the government is incapable of setting the value of any property, unless it is the government who is buying it. Even then, the person holding the property may not want to pay the government’s price. Of course, the one exception to this may be eminent domain, but that is a discussion for another day.
What people must remember is that just because the government says a home is worth “X” does not make it so. The only person that can make it so is a buyer for the property. Consider this– if you opened your assessment, and it said that your home is worth $1,000,000,000,000 (1 trillion dollars), would you believe it? Of course not. Conversely, if you opened the assessment, and it said that your home is worth $.01, would you believe it? Of course not. Just because the number that is on your assessment is palatable to you doesn’t make it accurate.
The only way to determine the value of a home is to put it on the open market. Only then will you know what buyers are willing to pay for it. Sure, a REALTOR can give you a CMA, or a licensed appraiser can give you an appraised value, but those are simply educated guesses based on the recent history of similar homes. While both should yield a number very close to market value, they may not. In selling your home, you may find out that it is worth more than you thought, or you may found out it is worth less. Either way, the government isn’t going to be able to tell you anything. The market will speak for itself.
[tags] real estate, realtor, virginia, fluvanna, assessment, taxes, free market [/tags]
Lots of Goings On In Fluvanna
January 24, 2007 | Leave a Comment
Alright, let me start by admitting that I am out of the office this week. Not to fear, however, since my phone is still ringing, and my inbox is still filling with emails from people about their assessments. I have also noticed that there have been a number of comments left on the blog, which I appreciate. There have been so many that I am going to try and address them with posts rather than simply responding to the comments.
First, let me begin by saying this. If you are concerned, or even mad, about your real estate assessment, you are not alone. In fact, there are literally thousands of people who feel the same way you do. If you are going to try and challenge the assessment, go ahead and call the county to do so. I know that some people have already received appointments with county officials to discuss the assessments. The first of my clients to do so is going to let me know how it goes on Wednesday. As soon as I know something more, I will let you know.
If you have more questions than you do answers, you also are not alone. The shock at the increase has left many people with questions, and not as many people with answers. That is why I am trying my best to get as many answers from as many people as I can, and post them here.
The more I learn, the more I will pass along to you. Since this is just the beginning of what I imagine with be a long and arduous process to sort out the county’s budget and tax rate, hang in there.
[tags]real estate, realtor, virginia, fluvanna, taxes [/tags]
The Tip of the Iceberg
January 19, 2007 | 2 Comments
The Fluvanna reassessments are out, and I can’t imagine that this is a fun week for the folks over at the Fluvanna County Commissioner of Revenue’s office. I talked about this twice before, and now that the time is here, our phones at the office has been ringing and I have been getting emails from clients past and present about the assessment. The most common question I am hearing from homeowners is, “can I really sell my house for that much?” The simple answer is, “probably not.” In just taking a quick glance at the December sales in Fluvanna and comparing them to the new assessments, it looks like about 95% of them sold for below their assessed value (in some cases, well below). More on that in upcoming posts. . .
I recognize that current residents and homeowners probably won’t experience a major increase, if any at all, in their tax bills. The county is going to have to hold a public hearing and publicize the “revenue-neutral” tax rate. That means that the rate will probably decrease enough to offset any increase in assessments. The problem is not necessarily for the current homeowners, but for the new buyers of a home. It could go something like this, “thanks for buying a home in beautiful Fluvanna County; if you don’t mind, you are going to pay taxes on an assessment that might be 20% above what you actually just paid for your home. Thanks again.” That is not cool at all.
So far, there are lots of questions, and not nearly enough answers. Many residents are shocked and upset, and I am sure that the first public meeting on the issue will be a lively one. Unanswered questions usually make people uneasy, so the faster county officials can address the issue, the better off everyone will be. I will do my best to find out what information I can and pass it along here.
Right now, we are just looking at the tip of the iceberg as far as the assessment issue is concerned. I think that most people, myself included, just want to make sure that the ship we are sailing doesn’t say “Titanic” on the stern.
[tags] real estate, realtor, virginia, fluvanna, taxes, assessement [/tags]
Let the Fun Begin. . .
January 18, 2007 | 2 Comments
Fluvanna County residents are receiving their reassessments in the mail this week. I have already heard from some residents who were shocked and now concerned. I have done a little looking at some of the numbers compared to recent sales. After just a look at the most recent county sales in December, some interesting trends are emerging. More on this tomorrow. . .
[tags] real estate, realtor, virginia, fluvanna, taxes, reassessment [/tags]
Virginia Is For Lovers– And People Who Like to Keep Their Hard-Earned Cash
January 16, 2007 | Leave a Comment
A client of mine pointed out this CNNMoney.com list of the most tax-friendly states. He currently resides in New York, but recently bought a home here in the Charlottesville area that he hopes to move to permanently very soon. New York was the second LEAST tax-friendly state when it comes to tax burden as a percentage of income. Conversely, Virginia is one of the top-ten most tax-friendly states.
One consideration that people make when they move is how that move will affect their wallet. Taxes are a major consideration. It is good to know that Virginia is a leader in keeping the tax burden on its citizens as low as possible. Citizens earn the money, and citizens should be able to keep as much of it as possible.
That includes you, Steve. Hopefully, you will be able to enjoy the fruits of you labor even more in the Old Dominion.
[tags] real estate, realtor, charlottesville, virginia, taxes [/tags]
2006 Charlottesville Area Year-End Statistics
January 12, 2007 | Leave a Comment
After some strange MLS problems, I was finally able to compile the year end statistics for the Charlottesville area. I compared them with the report that CAAR published, and noticed that despite all the requests to the contrary, there were still additional transactions recorded in the MLS after CAAR published their report. In light of this, I may wait a full 15 days to report stats in the future.
As always, the stats are compiled from the CAAR MLS and cover the Charlottesville Metropolitan Statistical Area (Albemarle, Charlottesville, Fluvanna, Greene, Nelson).
2005 Year-End Sales Data
2006 Year-End Sales Data
Breakdown
Overall, 2006 was not a bad year for real estate. It wasn’t 2005, but since 2005 was a record year, there is really no room for complaint. Charlottesville outpaced all the other areas, posting a 36% increase in sales. Since the majority, if not all, of this increase was the result of condo sales, it will be interesting to see how the city fares in the first few months of 2007. Every other area saw a decrease in sales– Albemarle -16%, Fluvanna -23%, Greene -18%, and Nelson -36%. Overall, the Charlottesville area experienced a 10% decrease in the number of sales.
The good news is that the median home price is continuing to rise for the area. Interestingly, the positive effect that condo sales had in Charlottesville may have negatively affected the median price, since it dropped 4% in the city for 2006. Every other area saw an increase– Albemarle +11%, Fluvanna +5%, Greene +13%, and Nelson +5%. Overall, the Charlottesville area experienced a 6% increase in the median home price for 2006.
Inventory History
Breakdown
While the months of inventory is relatively high as of the end of 2006 (10.37 months of inventory), the good thing is that the overall number of listings on the market has begun to trend downward. This could mean that while their will still be a healthy selection of homes on the market, it won’t feel so much like there is a glut of homes out there that simply won’t sell. It could also mean that people who were previously “testing” the market to see if they could get the price they wanted, have now come to grips with the reality of the market and are either taking their homes off the market or have actually adjusted and sold their homes.
One statistic that I found interesting was that the percentage of list price has gone down steadily over the last few months of 2006. This again leads me to believe that previously unreasonable sellers have been forced to adjust to this market. The only way to see if this remains true in 2007 will be to watch and see if that number begins to inch upward or at least remain the same in the beginning of 2007.
Final Analysis
All things considered, 2006 was a good year for real estate. Much like the hometown UVA football team, 2006 was a transition year for real estate. Granted, most people in real estate fared better in 2006 than the Cavaliers, but hopefully 2007 will meet everyone’s expectations for yet another solid performance by the Charlottesville area real estate market. As for the Cavaliers, I’m not so sure. . .
[tags] charlottesville, real estate, realtor, virginia, albemarle, charlottesville, fluvanna, greene, nelson, statistics, housing statistics [/tags]
Your Clients Are Part of Your Marketing, Too
January 11, 2007 | 2 Comments
Every business has, or should have, a marketing plan. A marketing plan is especially important to REALTORS. It is important not only for the listings that a REALTOR markets, but for the REALTOR as well. A marketing plan is usually concerned with how and by what means a REALTOR plans to market himself. One part of that plan that may be overlooked, but is very important, is the REALTOR’s clients. Their is an old saying that goes, “if you lie down with dogs, you wake up with fleas.” This can be all too true in real estate.
I will illustrate my point with an experience I had this past weekend while showing property. I met a couple at a home that they wanted to see. This was a resale home that was a few years old. One of the first questions that they asked was, “Do you know who built the home?” I didn’t, so I told them I would find out from the listing agent. I have heard that question enough times to know that it is usually motivated by a desire to avoid a particular builder. To find out more, I simply asked them if they were looking for any builder in particular. They said no, and left it at that. We went from that house to another house, which happened to be new construction. Walking up to open the front door, they again asked about the builder. Being new construction, I knew the builder, so I told them. The next words out of my client’s mouth were, “Oh S—-. Forget it!” He then proceeded to tell me about the lawsuit his family had been involved in with the builder over their current house, and went into great detail about the horror he had been through.
Fair enough. I can understand his sentiment. My family had actually had a very horrific experience with a builder, so I could relate. The thing that I found interesting, however, was the fact that his anger and disdain was not reserved only for the builder, but extended to the agent and the listing company as well. From what I can tell, it was not because of anything that the agent had done specifically, but more because he felt he couldn’t trust anyone associated with the builder. Sadly, this isn’t an isolated incident, and I have heard similar stories from others who have dealt with this particular builder as well. My question is, why would any listing agent or company continue to represent this builder?
As independent contractors, REALTORS are able to choose their client. No REALTOR is obligated to work with anyone. There are those people out there who will cost much more than the commission can ever pay for. I wonder if this agent is even aware of the situation. And if not, how would the agent react when told about the detrimental effect this is having on the agent’s reputation?
For me, personally, there is no client in the world worth the destruction of my reputation. Marketing is about message, and if your clients are putting out a negative message, maybe they shouldn’t be your clients. In a business like real estate, that relies so heavily on word-of-mouth personal recommendation and involves most people’s largest and most emotionally charged assets, once you’ve got fleas, they can be awfully hard to remove.
[tags] real estate, realtor, charlottesville, virginia, marketing, reputation [/tags]
The Turn of the Bulb
January 4, 2007 | 6 Comments
Seth Godin writes one of my favorite blogs, and he recently started a series of posts on compact florescent light bulbs. Greg did an excellent job tackling the subject, and I thought I might add a little something to the issue.
I don’t have any CF light bulbs in my house. Not one. The only time I ever used a CF bulb was during my time in college. When you are in college, anything, and I mean anything, that may save you even a few pennies is worth a try. I know that CF bulbs can save me money, and that they last longer, should be better for the environment, etc. The simple truth is that I don’t use CF bulbs because I hate the light they produce. To me, the savings isn’t worth the product being offered.
I hate florescent lighting. I don’t like quality of florescent light. Perhaps it has something to do with the fact that florescent lights are typically the lighting style of choice for all government buildings and office spaces. There is just something about florescent lighting in my house that gives me the heebie-jeebies. My life is more than a series of economic calculations. Just because something is going to save me money doesn’t necessarily make it worthwhile. While I like saving money, I also like quality. For me, the quality of CF bulbs isn’t high enough for me to switch, even if they do save me some money.
To Greg’s point, I love Capitalism. For all its imperfections, Capitalism has yielded more wealth and improved the lives of more humans on this earth than any other economic system yet devised, and all this is a relatively short time. While I agree with Greg that the CF bulb is yet another example of how Capitalism can benefit people, I think the story of the light bulb isn’t over. The CF bulb is a great step forward in efficiency when it comes to light bulbs, but a step backward when it comes to quality. The Capitalists of the world are capable of creating something even better than the CF bulb. Such an innovation will be made by people much smarter than I, and I can’t wait to get my hands on it.
[tags] real estate, realtor, light bulb, compact florescent, capitalism [/tags]
-
Connect With Me
Proud Sponsor of RE Barcamp '08
Listen to ZebraTalk
Read the Zebra on AgentGenius
Disclaimer
My name is Daniel Rothamel. I am a licensed real estate agent in the Commonwealth of Virginia and a member of the National Association of REALTORS. As such, I adhere to a strict code of ethics and all laws with regard to equal housing, which is reflected in the content of this blog. My broker is Strong Team REALTORS, 86 Joshua Lane, Palmyra, VA 22963; (434) 589-5800. My VA Real Estate License number is 0225 077325. All of the opinions in this blog are mine, unless otherwise noted.
