Tooele Real Estate Blog

I am often asked how the real estate business is going. The presumption is that, with this economy, they don’t expect that the business is doing very well.

Well I’ve seen better, but the fact is that places are selling. In fact, we have agents in our office who have sold far more this year than last (and you need to be selling regularly to survive in a RE/MAX office).

Obviously, money is tight. But if you are employed, and you need to move, you can do it now. House prices have dropped over the last two years, and interest rates have stayed low. In addition there have been cash bonuses available to first time home buyers, and if you are buying a brand new home, there’s a bonus for that too. These discounts come and go, but if you are planning to buy, you should take advantage of them when you can.

If you are a seller, pricing is very important. There is a larger than normal inventory right now, so price it with the current market in mind. Clean-up, and repair any obvious damage (or price accordingly). If you are priced right, you should be able to sell within about 60-days.

If you’re ready, let’s get it done before the snow flies!

Tooele City added approximately 83 new listings in August, at a median price of $159,900. There were approximately 23 sales at a median price of $137,950. There are currently 323 active listings at a median price of $173,745.

Stansbury Park added 36 new listings at a median price of about $236,950. There were 10 sales at a median price of $198,600. There are currently 112 active listings at a median price of $235,000.

Grantsville added 23 listings at a median price of about $234,900. There were 9 sales at a median price of $227,000. There are currently 100 listings at a median price of $234,900.

The numbers are a little different from last month, but I’m not declaring any trend yet. Things still sell and sellers are still listing.

Twice last month I wrote up offers on properties for my buyers only to find myself in multiple offer situations on homes that have been sitting for awhile. It seems to me anecdotally that more buyers are shopping. If this is true, the final numbers for September should show it.

But it is that time of year. Winter lies before us and for those who need to move, it is nice to be finished before the snow flies, and the days grow too short, and the holidays make their entrance. This could just be a seasonal bump rather than a trend.

But I’ll take it.

It’s a tough market for sellers right now. There are three elements to successfully selling in this (or any other market that you’re likely to see in the next several years). They are Price, Condition, and Marketing. This is part three.

Rule #3–Successful Marketing

Effective marketing of your house will deliver qualified buyers to your front door, but only if the price and/or conditions are right. No intelligent buyer will spend more for a property if there are other substantially equivalent properties for less money (unless Elvis lived there once!). And if you’re counting on the less-intelligent buyers, there are lender’s appraisers who protect them by killing any deal that doesn’t hold up to a current market value appraisal.

The goal of marketing is to expose your house to the largest number of possible and probable buyers as efficiently and enticingly as possible. A skilled Realtor® will employ some or all of the following:

• Multiple Listing Services (MLS)
• Other Internet Websites
• Newspapers
• Flyers
• Lawn signs
• Property Tours
• Open Houses (if appropriate)
• Professional networking
• Skywriting, Hot Air Balloons, Commercial Television, etc., etc.

It is possible to do-it-yourself and market your own home, but few non-professionals can reach the numbers of potential buyers that a skilled Realtor® can reach. In a buyer’s market, sellers need every marketing advantage to get their house in the face of as many buyer’s as possible. Additionally, a Realtor® can screen buyers before they wander through your house. This can translate into increased security for you, and it doesn’t waste your time or effort on looky-loos who aren’t qualified to buy a home in your price range.

How to Judge Marketing Effectiveness-a Rule of Thumb

If few or no buyers visit your house during the marketing period, it is most likely over-priced. If many buyers tour your house but make no offers, it is most likely the condition of the house. Fix the condition or lower the price to neutralize the deterrent value of the negative condition.

In Conclusion . . .

Focus your attention on setting a fair market price, and upgrading the condition of your house. Work with your Realtor® in creating an effective marketing campaign. Make adjustments if necessary. Visit other homes in your price range to better understand your competition-and make yours a better deal. Don’t give up, and your house will sell!

It’s a tough market for sellers right now. There are three elements to successfully selling in this (or any other market that you’re likely to see in the next several years). They are Price, Condition, and Marketing. This is part two.

Rule #2–Improving the Condition

There is nothing like a good first impression to drive a sale. There is nothing more lasting than a bad first impression. Remember, “You never get a second chance to make a first impression.”

Outside

Begin the process of readying your house for sale by stepping outside and evaluating the property from curbside. Trying to be objective, ask yourself what a newcomer will notice as they drive up to the property. What is the general first impression?

• Has the exterior of the house been well taken care of?
• How does it compare with the other homes in the neighborhood (if applicable)?
• Has the landscaping surrounding the house been maintained?
• Do toys, tools, or trash litter the landscape and detract from the appeal of the house?

Complete your inspection by walking around the house and into the back yard. Remain critical! Keep in mind that you are pretending to wear the shoes of a potential buyer. You are also following a path that will be walked by a home inspector or other individuals hired by the buyer to give professional opinions about the property’s façade and exterior characteristics. Prepare a list of action items that will need attention immediately and that can be completed without undue cost.

Inside

Conduct the internal inspection starting at the front door and walking through the house as a buyer might. At each threshold stop and review individual rooms to gain a general first impression. Make a list of action items pertaining to the inside of the house. Things to watch out for include:

• Clutter – Piles of newspapers, magazines, toys and other objects, and even mail distract from the fine points of a room and contribute to making the room seem smaller.
• Poor lighting – Inspect those things that contribute to the brightness of the room. Open curtains and shades, make sure windows sparkle from inside and out, replace burned out light bulbs, and wipe down walls that contain smudges or marks. Good lighting can contribute to a feeling of spaciousness.
• Dirt – It appears in obvious places like heavily trafficked kitchens and baths, and some inconspicuous places that a serious buyer could investigate such as under furniture and appliances, in closets, on windowsills, and inside of cupboards. If your property is in a competitive market, it is strongly recommended that you hire a professional cleaning service to completely clean your house. A clean house gives the impression of being well cared for and offers a subtle assurance to most buyers.
• Too much furniture – This is often a problem when you have occupied a property for a number of years. In some cases, moving furniture from one room to another or removing certain pieces altogether can greatly improve the look and feel of a room.
• Poor decor – Keep an eye out for shabby fabric, colors that clash, or decorations that are so personal that they make the buyer focus on you rather than on your property. Also keep an eye out for empty spaces that could be filled by inexpensive silk flowers or plants, or other decorations that would spruce up the room.

Improving the Condition Summary

Make a list of positive and negative features of each room and prepare to maximize the positives. Write down the finer points of the home and provide this information to your realtor to be used in creating promotional materials.

If you feel that there are major upgrades or changes that must be completed in order for the house to sell, seek the advice of a real estate professional to get a second opinion before you invest your money on renovations. Unfortunately, in markets where there are more listings than buyers it is sometimes necessary to complete major repairs even though the cost will not be recouped through the sale of the house.

If your goal is to sell, you will have to do whatever it takes to make sure the house sells. Stay focused on the goal. The process of preparing your house for sale requires a critical eye, an impersonal attitude, and in some cases, nominal money. Do it right, and you will be rewarded by a timely sale!

It’s a tough market for sellers right now. There are three elements to successfully selling in this (or any other market that you’re likely to see in the next several years). They are Price, Condition, and Marketing. I will deal with each element individually.

Rule #1–Setting Your Price

Just a few words about setting a price. Imagine that your 2000 square feet of house, is actually 2000 shares of IBM stock. When you bought the shares, they were $85 each ($170,000). During the time that you owned them, they went up to $90 each ($180,000), dropped to $79 each ($158,000) and they are currently valued at $83 each ($166,000).

Guess what the current market value is?

$166,000 or $83 each!

(As I have previously written, the average Tooele County market value has dropped about 12% to 13% over the last 2-years!)

In today’s market, it doesn’t matter what the value was at any other point in history-only what today’s market value is (if you need to sell today!). Now there are some weaknesses to this comparison. The value of unfinished square feet in a basement would be considerably less than the value of finished square feet in the living areas of the house. If you converted unfinished square feet to finished square feet during your ownership, you would have increased the value of the house-by adding shares of full value stock to your portfolio–and your listing price would be higher than if you had made no material improvements. However, the value is determined by the market. Your house will sell for a price that is directly related to the recent selling price of other properties in your marketplace. If you don’t price it right, it will not sell!

Talk to your Realtor® about a Current Market Analysis (a CMA, also known as a competitive or comparable market analysis), and use this price range to set your listing price.

The average sales price for a home in Tooele over the last 12 months is right around $165k. That’s down from approximately $185k in 2007, or close to 12% lower. I have heard of other Utah areas that have declined as much as 18%, so I think that might indicate that the Tooele prices were a little more solid to begin with.

At the beginning of 2006, the average price in Tooele was closer to $128k and hadn’t moved up very much in the previous six years. During that period, there were lots of foreclosures and short sales (before they became popular!) that seemed to keep homes from appreciating very much. If you bought during those years, your property in Tooele–(indeed in the Tooele Valley, including Grantsville & Stansbury Park)—is probably still holding onto some significant equity. If you bought more recently, and/or if you took out your equity, your property value might be upside-down. (Worth less than you owe.)

That’s not necessarily a cause for panic, unless you need to sell right now. (And if you took equity out of your home to buy a ski boat or an RV, you might want to sell those and put the money back into the house to erase your deficit).

So what do you do if you need to move and your payoff is higher than the market value? Here are the options:

1. Sell the boat and RV and use the money to make up the shortage. Sell the house and pay off the mortgage in full.

2. Rent-out the house at a payment that will allow you to keep the mortgage payments current. When property values rise, sell the house.

3. Contact your mortgage lender and look into a short-sale.

A short-sale is a soul-slashing process that will leave you feeling as if life itself is not worth the struggle. (If you’re prone to depression, alcoholism, or rage, you would be advised to enter a short-sale situation only with the utmost caution and you should be under a doctor’s care.)

This advice goes for potential short-sale buyers as well.

Some banks are harder to work with than others. And some people have better experiences than others—but be prepared for the worst. (If you have a Countrywide mortgage—now Bank of America—prepare yourself for working with some of the most stupid, morally reprehensible sub-humans in the business!) Not that I have an opinion on the matter–that’s just what I heard.

More comments to come on short sales.

It’s the first week of August and the news seems to be filled with the sounds of trembling voices of optimism, anxiously proclaiming the first glimmering rays of our economic recovery.

Fatigued home sellers are grasping hopefully at the news that could signal an end to the extended slow-down in home sales that have pushed many to the edges of the abyss of foreclosures and/or short sales. Needy buyers are also hopeful that home values have reached the bottom of their decline, and that they can now buy with the assurance that those values will only go up.

Of course it is too soon to declare the end of our economic downturn. When businesses begin to rehire and expand to meet increased demand for goods and services, then we can declare the economic recovery. There are too many fundamentals of our previous economy that are broken—bubbles that are popped—things that will need to be replaced or restructured before the U.S. and indeed the Global economy will be able to rise from the ashes.

But before I cast too gloomy of a shadow over this week’s optimistic news, I want to recognize that optimism is good. It’s has miraculous powers to bring about the changes that we want to see. If an optimistic seller and an optimistic buyer can agree on the terms of a home sale, they can do their bit to stimulate the economy. And as the market sees movement, confidence grows.

So get out there and buy a home–(Tooele County specializes in homes that are made in America!)–and let’s get our American economy flowing again!

Tooele City added approximately 84 new listings in July, at a median price of $179,900. There were approximately 35 sales at a median price of $143,199. There are currently 296 active listings at a median price of $179,000.

Stansbury Park added 11 new listings at a median price of $238,450. There were 14 sales at a median price of $225,000. There are currently 96 active listings at a median price of $234,900.

Grantsville added 27 listings at a median price of $214,900. There were 11 sales at a median price of $223,000. There are currently 97 listings at a median price of $229,500.

Of course one month doesn’t establish a trend for better or for worse, but looking at this snapshot tells us that we have a 7-9 month surplus of housing inventory. That is typical of a buyer’s market. We would like to see a 4-5 month supply as an indicator of a balanced market.

But the numbers also tell us that homes are selling. In spite of our current economic woes, people are still buying and selling homes. There are bargains out there for the investment minded, but there is also movement for the normal homeowner who might need to buy or sell for all the normal reasons: job relocation, family space needs, etc.

Median selling prices have dropped from 18-months ago, and some of that may reflect price reductions. But it can also be attributable to the houses that are selling now. Not as many custom-built homes are being sold in the higher price ranges. And there are a number of foreclosed and short-sale properties being sold at reduced prices.

What does the future hold? More to come.