The internet is good at many things. Manipulation and misdirection are sometimes part of that skill set. Understanding the goal of online real estate sites may shed light on what information is useful and which is not.
I am often amazed at how influential real estate websites are and what power they hold over the general public. Rarely a day goes by that someone doesn’t ask me about something they saw on Zillow. I do my best to field the question and educate the questioner on the role many websites like Zillow play in the grand scheme of our industry.
Most sites like Trulia and Zillow are advertising sites for Realtors and Brokerages. I advertise there because home buyers and sellers go there; the same reason I advertise in local real estate publications and, of course, in the Reading Eagle. Let me repeat; these sites do not sell houses, they sell advertising.
Websites are not required to play by the same rules as licensed realtors. The low home inventory environment that presently exists is not beneficial to real estate websites. The more homes for sale the more consumers visit the site. In an effort to manufacture more listings, these sites may spread misinformation or bend the truth to gain more lookers. One way to beef up inventory is to display homes that are pending sale as still for sale. They will also display homes that are in pre-foreclosure status which are not for sale. I have seen the same house listed as for sale and not for sale on these sites at the same time. By delivering more leads by whatever means necessary the website can validate their existence as a lead provider to the paying agent. It is then up to the agent to convert the would-be misled customer and turn them to another available property.
If a particular home seller does not want to use the internet sites to sell their home, known as opting out, for privacy or personal reasons the online real estate websites list the home as off-market or not for sale. To me, this practice is overreaching and should be considered misleading by consumer advocacy groups.
I do not suggest depending on any single source of information for all your real estate wisdom. You would never have only one tool in your toolbox you would use for every task. Even sites like Zillow and the rest depend on the real estate industry to do the heavy lifting. Unfortunately, that heavy lifting may someday lead to agents becoming little more than real estate uber drivers, but that’s another story.
Again, real estate websites like Zillow do not sell real estate; they sell advertising to real estate agents. They often do not compile their data and information but acquire it from third-party resources. The accuracy of data is not a prerequisite.
It has taken me years to learn the dynamics of how to value real estate and just as long to understand the metrics of the Reading and Berks Housing market which I have served for over 25 years. How can Zillow do that with a mathematical algorithm called a Zestimate? As far as I know, Zillow has never been to Reading and Berks County.
Using real estate sites is the now and future of our business. I hope it becomes responsibly regulated to provide the same ethic, and honesty, we as realtors uphold. The lesson I teach is that no real estate website can outperform any real estate agent who understands their community and is educated at their craft, at least not yet!
Knowledge is Power!
Jeffrey C. Hogue
Price plays the starring role of most home sales while terms and conditions are often considered the supporting cast. In reality, the terms and conditions of a real estate transaction will determine whether your home sale is a hit or not.
Every home listed for sale has one major thing in common. It has an asking price. In many cases, the success or failure of the home sale is relegated to finding a buyer who will pay the asking, or listed, price, or more. It is obvious that price is important but what about the terms and conditions of the sale?
It is interesting to note that in Pennsylvania, the STANDARD AGREEMENT FOR THE SALE OF REAL ESTATE reserves one line of its 13 pages to price and the remainder to terms and conditions. Certainly, it is obvious why this is the case, but it does help make my point. Without terms and conditions that are clearly understood and responsibly met by all parties in a real estate transaction, there will be No sale price because there will be No sale. I would further state that reasonable ~ (and I use the word loosely) terms and conditions are the keys to a happy and smooth real estate transaction.
Top selling price is excellent, but it is the orchestration of a well-planned real estate deal that brings many positive accolades. No one likes a tough deal where the buyer and seller are scratching for every inch of turf. It creates ill will and can make real estate professionals look, well, not professional. Furthermore, what good does it do if the price you get or pay is eroded or impacted by costs that could have been alleviated using beneficial terms and conditions?
Specific terms and conditions like the settlement date are very standard, but there may be more to consider. If you are a buyer, you may want to consider moving things into the home before settlement. The pre-settlement possession addendum would work nicely here. The seller may desire to move out of their home sometime after settlement. The standard document used in this case is the post-settlement possession addendum.
Another often used condition of sale is the home inspection contingency. This contingency gives the buyer the right to have home inspectors investigate the property to make sure it is to the satisfaction of the buyer. If it is acceptable to the buyer, the transaction continues. If it is not acceptable, the buyer can terminate the agreement. There is a third option the buyer can consider which involves renegotiating or requesting that the seller repair, replace or credit the buyer an amount of money that will make the home acceptable to the buyer. While these choices are a fundamental part of our agreement, it is my opinion it opens the door to unwanted renegotiation. There are times this type of renegotiation is necessary, but occasionally these things can be handled differently. The terms of any reparations, if necessary, and the costs thereof can be discussed and agreed to up front.
The point is a simple one. There are as many considerations in a real estate transaction as there are stars in the sky. Our standard agreement is a good start. A well-versed real estate agent can supply both the buyer and seller with valuable options that stretch above and beyond the status quo.
There are no two properties alike and no two people that are the same. Every real estate transaction is unique unto itself. The success of your transaction could easily rest on the experience of your Realtor® and the planning of your terms and conditions.
Knowledge is Power!
Jeffrey C. Hogue
The term “Home is Where the Heart is” can be interpreted in two different ways. Firstly, it can mean that wherever our loved ones are, that is our home and Secondly, it says our family home is the focus of our love or heart. In either case, the proverb very much reflects our love and thankfulness for those in our lives and the familiar places we gather. And there is no place more familiar to most of us than home.
We Americans can trace the Thanksgiving celebration back to the first settlements in Plymouth and Jonestown in the early 1600’s. The new world settlers held a harvest feast after a successful growing season giving thanks for their new home and bountiful harvest that would sustain them throughout the severe winter.
The majority of us here in America no longer have to labor on the land as they did back then or wonder if the weather will produce life-saving crops. Our toil is much different today, but our goals are the same. We seek shelter from the elements, sustenance for our bodies as in food and water, safety, and security from the wild, and, of course, freedom. In many cases, our residence provides the shelter and safety.
The dream of many in America is to own a home. Their pursuit, while not as dramatic as the first settlers, is none the less just as important to them. These “New Settlers” work to obtain the funds necessary to acquire and sustain their dream. There are yet others who own a home and plan to sell it to pursue other endeavors or due to circumstance. In either case, they are headed to new surroundings thus leaving familiarity and memories created.
It is especially at this time of year when I reflect on all people I have assisted in selling or buying a house. I am proud to have been a part of your journey. I understand and respect the anticipation, emotion, and fear that goes into every real estate dealing. I will continue to be a student of my craft, so I am a competent resource for all your real estate needs.
So to all that have put their trust in me over the past twenty-five years by choosing to make me your guide into the “New World” I am forever thankful. I will be thinking of you this holiday season and wishing you abundant peace, joy, and love.
To all my future clients; I look forward to offering you the same high level of service and respect that has been a hallmark of my real estate career. It is a journey we experience together, and no two rides are ever the same.
Remember, a Realtor® can find you a house, but only you can make it a home! Choose your Realtor® wisely, home is that important! After all, it will be where your heart is:)
Knowledge is Power!
Jeffrey C. Hogue
Reading and Berks home sales were on fire throughout most of 2018. Will fall and winter bring a cool to the real estate market? Let’s see if the latest home sale statistics can help us better anticipate the near future.
It is the time of year when I am often asked if it is wise to sell a home with the holidays fast approaching. Most that pose the question have already surmised that trying to sell a home in winter is less lucrative and more difficult. While perception is often reality, I like to see what the numbers say. Let’s take a look.
Reading and Berks Housing Trend – The Numbers
Inventory of available properties in Berks County remains at historic lows. As of November 8, 2018, there are 1,233 available homes which is almost a 20% decrease from November 2017. The home Inventory numbers continue to reflect positive value trend.
Sold and settled homes in Berks County from January 1 through November 8, 2018, totaled 4,571 units, a 4% decrease from the same period in 2017, (4,759 units). It is interesting to note that home sales from January 1 through July 30, 2018, totaled 3,084 units which are all but identical to the number in 2017 during the same period (3,079 units). What is impressive about the 2018 figure is the sales number was achieved with the 20% decrease in overall inventory. Equally remarkable is that the median home sale price in July and August hit a high of $180,000 according to the Trend Market Trends report, a feat we have not seen in Reading and Berks real estate going back over ten years! A pure case of supply and demand working to push housing prices up.
Reading and Berks Housing Trend – Have We Peaked?
Home sales numbers from January through July 2018 outpaced overall 2017 sales in 6 out of the seven months. Since then sales have decreased compared to the 2017 totals. From August 1 through November 8, 2018, there have been 1,487 total sales compared to 1,680 in 2017, a decrease of 11.4%. Most notably was the month of September which saw 430 sold properties in 2018 compared to 552 in 2017, a decrease of over 22%. Fortunately, the median price held up in September at $172,000, an increase of 1.2% over the 2017 figures according to the Market Trends report.
Should I wait Until Spring To Sell My Home?
I recently spoke with a friend who relocated to Arizona from Berks several years ago. He told me how hot (literally) the real estate market was there. His impression was that they sell 3,000 homes a month in the Phoenix area and only a handful in Berks over the holidays and winter.
As I stated earlier, perception is everything, but numbers do count. December was the 6th busiest month for Berks property settlements in 2017 at 450 units sold. That number was higher than the March and April figures of the same year. The stronger than perceived “Off Season” data is in part due to a phenomenon I like to refer to as “The Holiday Effect.” You can read about it in an article I did in 2013 ~ Berks County Home Sales & the Holiday Effect. Also, check out the Holiday Home Selling Guide.
The internet has certainly changed how people shop for homes and has diluted the home sale seasonality argument to a degree. If you need or desire to sell your home now, then do so. I believe the real estate market here in Reading and Berks is still strong, but the winds may be changing. One thing for sure is that I will be watching the trend so to inform my clients better no matter what time of year it is.
Knowledge is Power!
Jeffrey C. Hogue
Do “Coming Soon” or “Pre-Marketed” home listings better serve the real estate industry or the real estate broker? The question depends on an understanding of the practice and how it affects the clients home selling and buying goals. Let’s get to it.
If you’ve been searching for a home, you may have run across properties with the headline Coming Soon. You call your agent to inquire about the property, and they tell you the seller is not accepting showings at this time. The logical next question is “when can I see it?” Good question! Scenarios like this play out more and more adding speculation about the real estate business, and it’s fairness to consumers.
While Coming Soon home advertising seems to be more prevalent on social media it is also promoted on mainstream home shopping websites like Zillow.com.
What is a “Coming Soon” home Listing and the Rationale Behind Them?
Simply put, A Coming Soon home listings refer to properties that are not available for showing or sale until a later date. The date the seller will accept showings is not publicized and becomes part of the mystery. Often Coming Soon home listings are not entered in the multi-list. The exception is a home listing using the Active No-Show status in the Trend/Bright MLS.
The rationale behind Coming Soon home listings is to give would-be home sellers time to make repairs, spruce up the property, and handle other personal business that may conflict with the seller’s ability to handle showings and field an agreement before it hits the full market. Pre-marketing a home may also be a way to gauge interest from prospective buyers at the proposed asking price before the house hits the full market.
Coming Soon Home Listings ~ The Dark Side
Low available home inventory can create some unusual real estate marketing practices. Real Estate brokers and agents realizing that there are fewer listings available may attempt to squeeze every bit of business they can get out of them. In some cases, the seller’s home is used as bait to attract and capture would-be home buyers for themselves or their brokerage. This practice often disenfranchises prospective buyers working with buyer agents and limits the power of the full real estate market for all. Pre-marketing homes is causing valid concern among real estate professionals prompting real estate commissions nationwide to issue guidance on the topic. Read the National Association of Realtors latest on the subject.
My Take on Coming Soon Home Listings and Pre-Marketing in general
Imagine trying to buy company stocks without a stock market. Now imagine trying to sell a home without a real estate market. The reason why markets work is due to an agreement of cooperation among the participants to treat each other fairly. Without cooperation, we would not be able to enjoy the benefits these markets provide. I believe the pre-marketing of homes by brokers and agents is an erosion of that cooperation.
There will always be rogue operators in any industry that look to bend the rules to give themselves an advantage even if it is not in their clients or industry’s best interest. I believe that the disagreement and confusion Coming Soon home listings cause to the overall real estate market far outweighs any perceived benefits. That said if a real estate agent somehow conveys that listing the sellers home as Coming Soon benefits them and they agree so be it. I often wonder how many of those agents thoroughly explain the negatives of pre-marketing a home to their clients before that agreement.
If you are planning to sell your home someday consider these points as they relate to pre-marketing; It will limit the exposure of your home to buyers; It is more likely you will receive multiple offers using the full market instead of a select small slice acquired using a pre-marketing strategy. After all, the whole reason you listed with your agent is to get maximum value, and you get that with maximum exposure provided by a healthy and cooperative real estate market. By using a Coming Soon strategy, It is more likely that any prospective buyers will come directly through your listing agent. Therefore, you may be represented by the same person who is now representing the buyer, a practice known as dual agency. If you read my articles you know I am not a fan of dual agency and do not practice it. I find it literally impossible to represent the buyer and seller in the same real estate deal.
Representing a client in a real estate transaction means putting the interest of your client before your own. I am not sure listing a client’s home as Coming Soon truly achieves that objective.
Knowledge is Power!
Jeffrey C. Hogue
There was a time when real estate agents advertised houses for sale to attract interested buyers. Now houses are advertised by internet companies to attract real estate agents. The focus of real estate marketing seems to have shifted from listings to leads.
That was Then ~ Boots on the Ground
When I started selling real estate some 25 years ago I had to be on my toes when it came to marketing homes. I had to consider which publications outside the normal local real estate magazines would expose the property to the most likely buyer. It made more sense to advertise a property that allows for horses in an equestrian magazine than a culinary publication. I also had to creatively craft property flyers and locate good places to put them. The only contact information in these property ads and flyers was that of me and my real estate company. The goal was to market the home and attract prospective buyers in the hope they would call me directly so I could sell them my client’s home.
This is Now ~ Fast forward to internet times
Today the home marketing process is more of a media and fact gathering practice. Take great home photos, compile a list of amenities and craft some appealing remarks describing the home. Once compiled the data is uploaded to the Multi-List which is then sent to sites like Zillow and Trulia. These sites take advantage of a thing called Broker Reciprocity. Basically, Broker Reciprocity is the practice of allowing brokerages to display all properties for sale on their own websites as long as they display the actual brokerage that is listing the home. With the click of a button, it takes literally minutes for a home to be found online whereas in the past it took ten times the effort to find your target market in weeks and months.
The Ambiguity Associated With Today’s Home Marketing
In a twist of marketing, the home for sale is now used by real estate websites to attract the paying agent. Of course, no agents would advertise on a real estate website that was not visited by prospective home buyers and the buyers would not go to the site if there were no home information that was provided by the listing agent. My issue is that there is little clarity on who the listing agent is on many of these websites. For Example, Zillow offers four agent selections on most home listings. The top listed agent is customarily the listing agent and the three below are Premier Agents, AKA, buyer or non-listing agents. If a customer requests information without selecting one of the four agents their request will be sent to the Premier Agent just below the listing agent. The position of the Premier agents changes every time the webpage is reloaded. I call this Realtor Roulette.
The strange part of all this is that buyer agency was born out of a desire by consumer groups to clear up the ambiguity on who represents who in a real estate transaction. It is my belief that there is just as much ambiguity relating to who represents what in real estate as there has ever been due to the interpretation of Broker Reciprocity practiced by these online behemoths.
The ambiguity on who is a buyer agent and who is the listing agent is not an accident. I was told by a Zillow representative that over 80 percent of all home shoppers who request information on a property do not choose who they want to give them that information. This often means the listing or non-paying agent never gets the lead and the Premier agent or paying agent does.
The goal of this article is to make the online home shopping public aware of who they may be contacting to offer them information on a home they desire. If you are looking for general information and are not working with an agent you may want to contact the listing agent. If you are considering seeing the home and are interested in being represented contact a buyer agent, Just because you call an agent for information does not mean you are automatically forced to work with them.
The choices you make in your pursuit of a great home are important and can be impacted by who you talk to first. Make sure it is a person you desire to speak with and ultimately what their motivation and role is.
Knowledge is Power!
Jeffrey C. Hogue