Psychology of the real estate transaction

As a real estate professional, I am forced to acknowledge the factors leading to the purchase of property on a daily basis. Most buyers and sellers have points of view driven by their own interest in a specific property.

Sellers typically believe that their property is worth more than other properties in the market place due to location, emotional attachment, personal improvements, or because their friends and family advised them. Selling a property below their own perceived value would be admitting that they may have made a mistake in the purchase, timing the sale, or over-improving the property.

Buyers, on the other hand, search for real estate to solve a problem currently existing in their lives. The most common utility achieved by the purchase of real estate is shelter. Affordability followed by lifestyle and ultimately leveraging funds in the form of a real estate investment lead the charge in the decision to buy property.

In today's market a buyer is quick to point out the negative attributes of a property in an attempt to justify and negotiate a lower offer. Often times the seller is offended by perceived low offers and a deal is ultimately not consummated due to emotional factors and/or financial loss.

As a listing agent my job is to keep as much money in my client's pocket as possible. I must provide care, obedience, accountability, loyalty and disclosure at all times. I am a successful real estate broker because of my integrity, work ethic and straight forward approach. My exceptional referral base is a direct result of proactive service and client appreciation.

Below, I have outlined my teams approach to selling properties at top market value and a brief analysis of your asset.

The First Step in Selling Property: Determine an accurate price range.

Trying to sell an over-priced property to an INFORMED buyer is virtually impossible in today's market. Buyers are knowledgeable and more educated today because of new technology and the internet. With a click of the button potential buyers are able to view all of the transactions in an area and quickly form an opinion about a property. Real estate agents are no longer in control of disseminating information. Their true value lies in market knowledge, interpretation and strategy.

Avoid Low-ball Offers: Third party appraisal will negate the buyer's ability to substantiate a low-ball offer.

Almost all of the offers I have received in the past few years contain specific language intended to protect both the buyers and the lending institutions. Specifically, "This offer is contingent upon the property appraising at or above the purchase price". By getting an opinion of value from a local, third party appraiser prior to marketing your property you will accomplish several things. First, your property will be priced realistically and will attract qualified buyers. Secondly, the appraisal will negate the buyer's ability to substantiate a low-ball offer. Third, an appraisal is an important component to help expedite the selling process. The goal in today's market place is to get recognized, get offers and sell. A long selling process, with multiple price reductions, hinders the ability to achieve a top market selling price.

Get Recognized and Not Passed Over: Being a real estate marketing professional means "professionally" marketing property so it looks great, creates interest and gets unparalleled market exposure. No excuses!

Hands down, my team markets property better than anyone in this region. We are the best because that is our standard. Marketing starts with having a thorough understanding of the market and being educated about the real estate industry. After compiling extensive market research, we incorporate professional photography, architectural drafted floor plans and aerial photos, along with other pertinent information to create graphically compelling marketing material.

Let's face it...if the property is overpriced then no one will ever see the marketing.
Tim Bray
B.S. Real Estate & Urban Economics - (UConn)

My team and I religiously track the real estate market in search of information that will give us a competitive advantage and help our clients. On a biweekly basis we take each of our listings and monitor the # of properties in direct competition; how many new properties have been added to the market; how many price reductions; # of properties under contract; # of properties closed; etc. Over time trends emerge...but I have never seen a trend like the one I discovered yesterday.
Keep in mind that over the past 5 years it has been our primary goal to market properties better than the competition and simply get them under contract. 95% of the time these properties would go through the motions and successfully close. Times have changed.
As an example I would like to show you the Groton residential single family market in the price range of $250,000 -$300,000. Over the past 4 months there have been a total of 52 properties that have gone under contract. Of those 52 properties 14 have closed. This is a 27% close ratio in comparison to a former ratio of 95%!! 4 properties in that range are still under contract at this time. Many of these properties have been withdrawn or are in pre foreclosure-foreclosure status. The Montville market is at a whopping 18% close ratio.

It is becoming more and more difficult to find qualified buyers that are capable of meeting the new lending standards and are willing to see a transaction through without being scared off by the National Media at some point throughout the transaction.

Thankfully unique properties such as waterfront, equestrian, or special use properties are being targeted by the wealthy, overseas investors, or bottom feeders with their eyes on an opportunity. This will keep diversified agents fed through the tough times.

More to come…

Popularity Contest vs. Value added

Having two young children forces a view of the world once forgotten. As we get older..we overthink things...analyze..make things more complicated than they need to be. Our minds race...are we forgetting something that could increase our chances of success?
Let's dumb it down.
As a child, being lined up the very first time in gym class. Two kids choosing who will be on their team. It is a critical moment that we will never forget for the remainder of our lives. It seems as though attractive and popular kids are chosen first while the shy and unique kids are at the end. Teams are chosen, the games begin. The playing field is leveled as the unattractive and last to be chosen are given a chance at bat to prove that they are worthy of a first pick next time around. As the game progresses, the value of players shifts in the minds of coaches and players. Little do they know that the foundation for the rest of their lives is being formed.
We as professionals have an opportunity to define ourselves by adding value to each and every one of our clients. Being the most popular may jump start your career and get you picked first as you embark on a new career path. But ultimately it is how you play the game and add value to the team that will get you picked first the next time around.
I am off to the beach to play with the kids.