Category: honesty

It’s the Photos…

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One of the most important things you can do to make your home stand out, whether it is on the MLS, Zillow, Trulia, Craigslist or some other site, is to have exceptional pictures.  Not just for bazillion dollar homes, either…

Vivienne galleria, in the 2nd arrondissement o...

Vivienne galleria, in the 2nd arrondissement of Paris. This panorama is made from 6 portrait pictures taken at 10mm (16mm in 35mm equiv.), f/8.0 and ISO 100. 3 exposures were blended to extend dynamic range and keep details in heterogeneously lit areas. All work was done with Hugin, Enblend, Enfuse and Gimp. (Photo credit: Wikipedia)

There are some challenges, like vacant houses or those that really could use some freshening, but still, pictures are the first step in selling your house.  Video is nice… and virtual tours can add to the pictures… but in the end, having 5-10 great pictures, along with 15-20 good or better pictures (our local MLSs only accept 25 pictures) can be what gets eyeballs INSIDE your house.

Where the problems start are that few real estate agents take the time to learn how to shoot good pictures, or worse yet, they think that grabbing a few pictures with their phone will be just fine.  I know, phones have come a long way… but that doesn’t mean that they take pro-quality pictures.

 

Even better would be to hire a photographer to shoot the home.  Again, most agents just don’t feel that “this listing warrants that type of expenditure”.  Oddly, I have had agents tell me that when we were talking about $1M+ homes…  If they aren’t willing to hire a pro for a “seven digit home”, when are they?

 

Image created using the redscale technique wit...

Image created using the redscale technique with Kodak MAX 400 film. (Photo credit: Wikipedia)

Luckily, I have a background in photography… and I still have hired in pros to shoot some of my listings.  It is simply too important.

 

But there is another problem that I run into… although not as frequently… that is manipulated images.  A little tweaking is fine, and some HDR shots might even be appropriate (HDR is High Dynamic Range, allowing both highlights and shadows to retain detail).  But, I see large areas of homes being digitally enhanced.  In fact, there is a service that digitally adds furniture to listing photos.

Of course, there actually IS a place for digital manipulation.  I have used a service that allows prospective buyers to “digitally remodel” a house.  They could go into key rooms and digitally alter details like wall and trim colors, floor surfaces and cabinetry and counters.  The big difference is that THEY started with a true representation of the room, and THEY made the changes.  They weren’t presented with an unrealistic portrayal of the area.

Some common things that get edited that might be ok would be trashcans by the street (seems easier to me to move them…) or a reflection of the photographer in a bathroom mirror.  But some things that cross the line… at least in my mind… are editing out power lines in the backyard, getting rid of stains on the carpet, cracks in the driveway and other defects which are factually accurate.

One direction that we have as REALTORS® is that we HAVE to honestly represent the property.  And as real estate licensees, we aren’t allowed to hide or lie about defects of which we have knowledge.  Advertising a proeprty should put it in its BEST light, but it should be honest, as well.

 

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It’s the Photos…

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One of the most important things you can do to make your home stand out, whether it is on the MLS, Zillow, Trulia, Craigslist or some other site, is to have exceptional pictures.  Not just for bazillion dollar homes, either…

Vivienne galleria, in the 2nd arrondissement o...

Vivienne galleria, in the 2nd arrondissement of Paris. This panorama is made from 6 portrait pictures taken at 10mm (16mm in 35mm equiv.), f/8.0 and ISO 100. 3 exposures were blended to extend dynamic range and keep details in heterogeneously lit areas. All work was done with Hugin, Enblend, Enfuse and Gimp. (Photo credit: Wikipedia)

There are some challenges, like vacant houses or those that really could use some freshening, but still, pictures are the first step in selling your house.  Video is nice… and virtual tours can add to the pictures… but in the end, having 5-10 great pictures, along with 15-20 good or better pictures (our local MLSs only accept 25 pictures) can be what gets eyeballs INSIDE your house.

Where the problems start are that few real estate agents take the time to learn how to shoot good pictures, or worse yet, they think that grabbing a few pictures with their phone will be just fine.  I know, phones have come a long way… but that doesn’t mean that they take pro-quality pictures.

 

Even better would be to hire a photographer to shoot the home.  Again, most agents just don’t feel that “this listing warrants that type of expenditure”.  Oddly, I have had agents tell me that when we were talking about $1M+ homes…  If they aren’t willing to hire a pro for a “seven digit home”, when are they?

 

Image created using the redscale technique wit...

Image created using the redscale technique with Kodak MAX 400 film. (Photo credit: Wikipedia)

Luckily, I have a background in photography… and I still have hired in pros to shoot some of my listings.  It is simply too important.

 

But there is another problem that I run into… although not as frequently… that is manipulated images.  A little tweaking is fine, and some HDR shots might even be appropriate (HDR is High Dynamic Range, allowing both highlights and shadows to retain detail).  But, I see large areas of homes being digitally enhanced.  In fact, there is a service that digitally adds furniture to listing photos.

Of course, there actually IS a place for digital manipulation.  I have used a service that allows prospective buyers to “digitally remodel” a house.  They could go into key rooms and digitally alter details like wall and trim colors, floor surfaces and cabinetry and counters.  The big difference is that THEY started with a true representation of the room, and THEY made the changes.  They weren’t presented with an unrealistic portrayal of the area.

Some common things that get edited that might be ok would be trashcans by the street (seems easier to me to move them…) or a reflection of the photographer in a bathroom mirror.  But some things that cross the line… at least in my mind… are editing out power lines in the backyard, getting rid of stains on the carpet, cracks in the driveway and other defects which are factually accurate.

One direction that we have as REALTORS® is that we HAVE to honestly represent the property.  And as real estate licensees, we aren’t allowed to hide or lie about defects of which we have knowledge.  Advertising a proeprty should put it in its BEST light, but it should be honest, as well.

 

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So, You Want To Be a Real Estate Investor…

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I had a call recently from a “would-be” real estate investor.  He wanted me to find a few properties for him to flip.  He’s been looking at the Atlanta market for a few years (his words) and decided that now was the time to jump in and flip some properties.

Atlanta

Atlanta (Photo credit: Lima Pix)

Specifically, he was looking for entry level homes that he could pick up needing a little work, maybe in the $50-75k range, needing $10-15k worth of renovation.  His goal was then to sell them for $100-$125k.  East peasy.

Except, it isn’t… 

In fact, right now that would be ANYTHING except easy peasy.  It would be quite difficult.  And here’s why…

  • A few Billion Dollars in “hedge fund money” floating around the Atlanta market
  • A market turn that while not “complete”, is far from unnoticed.
  • A limited inventory, especially on the entry level end.
  • Lack of easily available financing.
Billion Dollar Car

Billion Dollar Car (Photo credit: soul_motor)

This was a guy without a load of cash, unable to offer quicker closes than “the next guy”, and unable to out-spend the competition.  He was not only convinced that there was a glut of homes, but that he was completely in the driver’s seat on these types of deals.

That is NOT the case.  In fact, small investors are regularly SHOCKED at what the hedge funds are paying for houses right now.  They are bidding them up on the open market.  They are bidding them up on the Courthouse steps.  They are willing to pay top dollar whenever and where ever they find them.

They don’t care what they can sell them for right now.  They are looking at 5 year turns… with rental income in the mean time.  The “over-payment” will be erased by the rental income and the increase in values over the next few years.

If you want to compete right now, THAT is what you have to compete with.  A few years ago, you might have been able to pick up a cheap property and flip it… not so much any more.

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Garbage In… Garbage Out…

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Garbage Only

Garbage Only (Photo credit: Peter Kaminski)

It is an axiom among data types… Garbage in = garbage out.  you can’t derive good data from bad.  If you put garbage into the system, you are destined to get garbage back out.

MLS (Multiple Listing Service) data is the same way.  Real Estate Agents have to use strange and unique search patterns to overcome the bad data put in by other real estate agents… in some cases because the inputting agents are lazy, in others because they are incompetent… or a combination.  Mix in some “over-confidence” because they “have been doing this forever and don’t you dare think you can tell them what’s what” for good measure.

In this case, I’m talking about school district data.

 

Some of Butte's School Buildings (1915)

Some of Butte’s School Buildings (1915) (Photo credit: Butte-Silver Bow Public Library)

One of the main motivators people have in looking at a certain area will revolve around picking the best schools they can find.  In fact, the last areas to go down in value and the first to begin to rise are those with solid schools.  And the areas with solid schools had less of a slide to begin with.

Getting the schools right is a BASIC part of our jobs.

Unfortunately, we can’t rely on the seller (home owner) to know which schools serve their area.  Unless they currently have children in all of the schools, their data may be out of date.  Sometimes, even when they DO have kids in school.

In the case of one local area, there was a re-districting that went into effect in June, 2010.  A new High School, Middle School and Elementary School were added in the area.  But, we are almost 3 years into this change.

You’d think that agents would have a handle on it…

 

Wheelwright's tools

Wheelwright’s tools (Photo credit: Wikipedia)

Well, you’d be wrong.  In fact, you’d be wrong 30% of the time.  Yep, out of 210 listings in this High School cluster, 64 of them had bad school data.  Usually one wrong school out of three… sometimes two.  I didn’t look to see if they were in the wrong cluster totally…  The one area that really surprised me was that 2 of them were new construction.

One of the tools that EVERY agent needs to use is the online data from school systems.  Granted, some school systems are a decade behind the times on getting districting maps online, but that is NOT the case here in Gwinnett.

But often, agent think they know the schools (since they have been an agent in this area since it was farmland) or the look to see what other agents have put in for the neighborhood… or worse yet, they look at the schools listed by Trulia (which can even be in the wrong county).  So, they don’t spend 10 minutes checking online.

I expected that with the agents listing bank-owned properties over the last few years.  They were churning their listings, not caring about serving the needs of buyers.  But as we have moved back into an era of private sellers again, I’m a little surprised at how few agents have the right info…

And Where Does This Go?

 

WRONG WAY

WRONG WAY (Photo credit: CarbonNYC)

First… as a seller, how many buyer searches are you missing out on because your agent doesn’t have basic information like schools entered properly?  Buyer search by school…  And they BUY based on schools they search.

 

Second… if they aren’t paying attention to things like schools, what other details are they not noticing?  I run across poor descriptions, bad pictures and other faulty data all of the time.

Third…  how much actual money or time are YOU wasting, as a seller, while buyers skip past your home because the data isn’t correct?  The average days on market for homes listed in this cluster over the last year with the RIGHT info is 86.  The average for homes listed with the WRONG data is 108.  Do YOU want to spend an extra 22 days on the market… almost an extra full house payment?

Fourth… and this is the one I don’t have the ability to find data for… how many times were homes put under contract, only to fall out of contract when the buyers discovered that they weren’t in the school system they thought?  How much missed market time was there?

Want to know more? Give Lane a call…

 

 

 

 

 

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Atlanta Home Prices up 40% From Last Year?

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According to the AJC, Metro Atlanta home prices shot up an amazing 40% between March, 2012 and March, 2013.  This is looking at the median prices for “metro Atlanta”.  Unfortunately, they don’t give us a breakdown…

But, I am going to tell you that the news isn’t quite that rosy.  And here’s why:

Licensing

Licensing (Photo credit: Wikipedia)

This looks at the median value of properties that closed during each time period (March, 2012 and March, 2013).  It doesn’t look at neighborhoods, zip codes or cities.  This becomes a problem with what I call “market creep”.

Last year, we were seeing a LOT of investor sales.  Many of these were foreclosed properties, being unloaded by banks, at firesale prices.  Not only that, but they were VERY often at the extreme low end of the market.  These are houses that in a strong market might sell for under $60k or $70k.  Granted, their prices were SUPER cheap… sometimes as low as $25k or $30k.  But, they were insufficient numbers as to push down the overall market.

*** A quick note about “median” and “average”***  Many people use one or the other, sometimes as if they were interchangeable, but they are quite different.

Average is derived by adding everything up and dividing it by how many there were to add up.  So, if you had $1, $2, $10, $37 and $100, it would add up to $150.  Divide that by 5, and the average would by $30

Median is derived by looking at the middle value.  With our numbers above, half are above $10, half below.  The median would be $10.

This year, we are seeing more expensive homes going on the market.  Also, they are less frequently foreclosures or short sales.  So, the “normal” listing prices are higher.  In effect, houses could be selling for similar prices, but the mix could have changed.

Map of Georgia highlighting Gwinnett County

Map of Georgia highlighting Gwinnett County (Photo credit: Wikipedia)

Going back to our previous numbers…

This time we had sales of $25, $26, $30, $34 and $35.  Our average sale is still $30, but our median sale has now also jumped up to $30

The sales aren’t really comparable to the previous group, but, it appears that there has been a HUGE increase in the median value.  In real estate, these exact numbers aren’t realistic, but the concept is still true.

Here in Gwinnett, we have seen a solid 10% appreciation over the last year.  There are pockets where it could be argued higher, and others where it is lower, but 10% is a defensible increase.

In order to REALLY get to the bottom of it, we have to look at subdivisions, and maybe even sections of a subdivision (in the case of the larger ones).  Even then, we need to make adjustments for condition and even intangible changes (distressed v non-distressed sales).

The bottom line is that there are VERY few home owners that have seen their properties appreciate even close to 40% in the last year.  But there is a reasonable chance that they have seen 10% appreciation.

Going after statistics with a shotgun, like this article did, seeks to erase the differences with a large volume of properties.  The problem is that it is misleading to most consumers… buyers AND sellers.  About the only thing it does is make some sellers feel better about their homes… but it doesn’t really do that honestly.

If YOU want to find out about YOUR Gwinnett home’s value, give me a shout.

AJC link

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It’s Even In the BAD School Districts Now…

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And no, I am NOT going to volunteer which ones those are…

Gwinnett County, Georgia

Gwinnett County, Georgia (Photo credit: Dougtone)

Today during our weekly brokerage meeting, my broker was talking about builder activity.  South Forsyth County has been going nuts for a few months now.  And since inventory has been so low and demand so high, he mentioned that it’s even spilling over into bad school clusters…

Frankly, I got a kick out of that.

 

But, it is also VERY true.  We’ve been seeing inventories drop like a rock in a lot of pockets.  Interest rates are trolling along at unbelievably low levels and prices are still suppressed by short sale and foreclosure activity.  Gwinnett is moving in a strong direction…  Forsyth has been there for a while and we have watched as the builders moved further up-market… now it seems like there is a LOT of activity in the $500k range.  A year ago, it would have been suicidal for a builder to put up anything at that price… now they are pre-selling half of their lots before getting a model built.

In fact, one community opened in the last few days and had people CAMPING out over night to be first in line to reserve houses…  Real estate is such a deal right now that it is getting BLACK FRIDAY attention.

 

Rural public high school, Walkertown, Forsyth ...

Rural public high school, Walkertown, Forsyth County, NC (Photo credit: Government & Heritage Library, State Library of NC)

I need to be quick to point out that Gwinnett isn’t quite as far along as Forsyth in that regard… GREAT if you are a buyer, and not too bad if you are a seller.  Forsyth had a little advantage in that there weren’t as many foreclosures as in Gwinnett.  Gwinnett is also a much larger market, so it takes more to turn it.  But we are seeing dramatic decreases in “wholesale” activity (foreclosures) as well as distressed properties like short sales.  At the same time, “retail” sales are surging and inventories are dropping.

 

So, while prices are still struggling a little, they are much stronger than the last few years, and often, well prices homes are pulling in multiple offers… even over listed price.

 

If you want to have a conversation about YOUR Gwinnett County home, give me a call.

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