Was I nuts?
After all, most Agents would welcome the chance we had: To work with the husband and wife who called a few days ago about a home we have listed for sale in Alabaster.
We really need to find a place, the wife tells me.
Moving here from out of area and pre-approved by their local bank to spend up to $300,000, they tell of their frustrating efforts to find a home in Birmingham.
And yet, I would wind up sitting down with them face to face and telling them what some might consider unthinkable: “Sorry, we can’t help you.”
After determining that the house they called about is not a good match, I ask a little more about their situation, and if they’d like help with finding a suitable property.
I get an earful.
They have put full price Offers on two homes, only to have the houses “sell right out from under us,” the husband says.
They had tried to get help from two other Realtors in the area.
“They’ve put us on the back burner,” the husband tells me during a half hour phone call. “I’ll ask to see a particular home a week ahead of time, and nothing happens,” he says.
There is nothing Colleen and I hate worse than hearing about Agents who are non-responsive to their Clients. This kind of behavior makes all of us in the profession look bad.
In our roughly 15 years combined of helping people buy and sell homes in the Birmingham and Shelby Co. area, one critical step we always follow is to learn as much as we can about our Buyer’s particular situation.
It pays to listen.
The Offers that failed, it turns out, were both made on the condition that the Buyers could first sell their existing home.
From the description of their home—five bedrooms, over 4,000 square feet on a beautiful lake setting, five car garage, in-ground pool and boat dock—you’d sure think it would go easily…especially in today’s market.
I look their home up on MLS and the Internet. Sales price: Just under $600,000.
My conclusion about their place: Very nice.
Sales data I uncover for the property suggests that these folks paid less than half their current asking price when they bought it. Maybe they’ve put some money into the place over the years.
I can certainly understand that one Agent they’d contact would be a dud.
But two Agents? That’s possible.
In my mind, questions are starting to rise.
Then comes the bombshell.
They’ve been trying to sell their home for two years.
No home should be on the market that long.
During one of our phone calls, I ask the husband more questions.
How many Offers have you gotten? Answer: None
How many showings do you typically get each month? Answer: Maybe one.
What kind of Feedback do you get from those showings? Answer: Everyone says it’s a very nice home.
Has anyone ever told you that your home may be overpriced? Answer: Absolutely not.
So, why, then, do you think your home hasn’t sold? Answer: There just aren’t that many people who can afford homes in our price range. Besides, he adds, none of the homes for sale in their area have sold in a long time.
Remember those roughly 15 years selling homes I mentioned? They’ve taught us other things, too.
Experienced Agents know that when homes fail to sell, it’s almost always for at least one of three reasons:
With the setting on the lake and the home’s general appearance, I’m able to eliminate two of the three causes immediately.
Price, then, can be the only reason.
My exchanges with these people make it clear to me that there is a lot they may not understand, including the changes that are taking place in the Birmingham and Shelby Co. area housing market:
- Inventory has dropped;
- It’s not a Buyer’s market any longer;
- Sellers have more clout than they did a couple of years ago;
- Multiple Offers are occurring again;
- More homes are starting to sell in shorter amounts of time (sometimes, new Listings go Under Contract within one to two weeks of going on market);
- More Sellers who price appropriately and have their homes in top condition are getting full asking price or close to it
I realize, too, the probable effect of a recent local MLS rules change on our Buyers, which they may not be aware of.
The rules change requires homes that go Under Contingency Contract be removed from Active Listings and moved to a different category. This reduced exposure, while waiting on the Buyer’s home to sell, is not likely to be attractive to most Sellers.
As a result, many Sellers—at the advice of their Agents—are not accepting home sale Contingency Offers unless the Buyer’s home is already Under Contract to sell. This is understandable; Sellers want at least some assurance that they will be able to actually sell their home, as opposed to losing valuable time on market, only to have the Contingency Contract fall apart if the Buyer’s home fails to sell.
It’s time, I decide, to share some market and general buying knowledge with these people. I sit at the computer and start drafting an e-mail with information they should find useful.
In the meantime, I get a text message.
They’ve found a home for sale in the area they’d like to see today. It’s a Short Sale. They want to know if we can show it to them that afternoon.
I look the home up on MLS. It’s available, and it’s occupied.
There’s a hitch: Lenders in a Short Sale will not accept Contingent Offers based on the sale of the Buyer’s property.
I also look at personal considerations: We would be asking the occupant to let us show their home to people I now realize have very little chance of actually being able to carry through with a purchase at this point in time, even if they wanted to.
We’ve learned—and our Broker, Keller Williams Realty, preaches a lot—that successful sales need to be a win-win for everyone involved.
This means that we need to assess carefully the viability of our Clients to actually carry through and meet their goals.
While I might represent the Buyers and not the Sellers, is asking to show this home under these circumstances appropriate? Is this likely to be a win-win for everyone?
I respond that I can’t show them the home. Instead, I decide, it’s time to have a conversation.
I recommend that we meet in person at our office that afternoon. They agree.
“This is the situation I see you in,” I say, while seated at our conference table. I hold up a note pad.
“First, your main focus is trying to find a home here in the Birmingham/Shelby Co. area,” as I scribble point number one. “And you’re finding it difficult.”
Heads nod in agreement.
“Second,” as I write point number two, “You’re not getting help from the Realtors you’ve called, and you’re finding that extremely frustrating.”
“Absolutely,” I’m told. Heads are really nodding now, with facial expressions providing more confirmation.
“And third,” as I keep writing, “You’re still dealing with trying to get your own home sold, something you’ve been unable to do for two years.”
I almost hear an ‘amen, brother.’
There is total agreement; husband and wife relate 100% to everything I’ve said.
At this point, I describe what’s happening right now in the Birmingham area real estate market. I talk about how homes are selling. I explain why Sellers are unlikely to find their Offer—even at full price—attractive.
“One hundred percent of nothing is still nothing,” I tell them.
I share other valuations I’ve found for their property. And while I stress that none of those numbers should be considered reliable for pricing their home, there is such a wide disparity between them and the current asking price that I look straight at them and say, “I think this is a huge problem.”
I point out that inventory in the Shelby Co./Birmingham area can change substantially in less than a 60 day time frame. With no immediate prospect of selling their existing home, I tell them that, by the time they might actually be able to move ahead with a purchase, they would probably have to look at a different set of homes to choose from than is on market right now.
I then offer recommendations.
“First,” I say point blank to them, “Stop what you’re doing. It’s not working.”
I take my pen and abruptly strike through the bullet points I had just written down.
They seem a bit taken back.
No matter what home they find, and when they find it, I tell them that they can’t move ahead with buying until they sell their current home.
Getting your current place sold, I tell them, needs to be your absolute top priority over anything else.
I tell them that I feel very sure their home is overpriced, and that Buyers are, in fact, responding to this.
The silence Buyers have created for two years is deafening.
The husband reminds me that no other lake properties in the area have sold. I have a quick answer. That’s something we have seen before. “It may well be that they’re all overpriced,” I tell them.
“Every home will sell. There are Buyers out there.”
The husband mentions that they have to be able to walk away from the sale of their home with a certain amount of money.
“I completely understand,” I answer.
While I tell them I realize that how much money these folks clear from the sale of their home is very important to them, I point out that it’s of no concern at all to a Buyer.
The true value of your home, I tell them, is the figure at which a Buyer and a Seller agree to sit across from each other at a closing table.
I write down a new set of bullet points on my pad.
Number one, I recommend, is to get an appraisal. It’s the best independent assessment of their home’s actual probable value.
The husband mentions that they can use an appraisal from two years ago. Nope, I respond, that won’t work. It needs to be no more than about six months old. After looking at a current appraisal of their home’s probable selling price, I tell the couple that they’ll have a decision to make.
Number two, as I continue scribbling, is to adjust the sales price. And, I tell them, they have to keep adjusting it until they get sufficient interest—and an Offer that turns into a Contract—on their home.
Number three, as I talk and scribble, is to get their home Under Contract.
I conclude by scribbling item four: Start looking for your next home.
When they make it to point number three, I tell them, is when it’s time to pick up the phone and call us for help with finding a home in the Birmingham area.
And that’s more promising to be a win-win for everyone.
I tear the sheet off the notepad and hand it to the husband.
“Colleen and I would love to be your Agents,” I tell them, “but now you understand why we can’t help you with looking at homes right now.”
While our meeting concludes on a friendly tone, I sense that these folks are not walking out very happy.
Will we ever hear from them again?
Did we manage to lose a potential Buyer Client and sale?
I have no idea.
But my conscience is clear.
It’s about being honest and giving people information they need to know.
Even when they may not want to hear it.
From time to time, people ask us, “How’s business?”
If you look around and ask various Agents throughout the Birmingham area how their business is going, you’re likely to get varied answers. One Agent we spoke with recently has struggled much of the year. Other Agents we know have been doing much better. Colleen and I have had an extremely busy year, for which we’re grateful.
The fact is that—regardless of the economy in general and what’s reported in the news media—homes still sell. That’s because people’s lives change. New jobs, a change in family size or wanting to be closer to a particular area can be among the reasons.
I’ve heard people thinking of selling their home say, “I’ll wait until the economy improves.” To be sure, values are still down considerably, compared to previous years.
But that can also be like saying, “I’m going to buy a new car when the models get better.”
Here in the Birmingham and Shelby Co. area, the number of homes for sale in many communities is down considerably, compared to previous months. In Shelby County’s Alabaster and vicinity, the Birmingham MLS shows 220 homes for sale at present. This continues to be among the lowest numbers we’ve seen.
This drop in inventory is having an effect. Homes for sale that we consider excellent deals don’t stay on the market long. Buyers are out there, and pounce as soon as the excellent deals appear.
I’ve heard some home owners trying to sell without luck lamenting the lack of Buyers. It’s really not that Buyers are scarce. It’s just that they’re finding better deals elsewhere; the homes they wind up buying are in nicer condition, have more features, or are priced more attractively (or maybe all three).
A home needs to have pizazz to sell in the current market, and must be priced to grab a Buyer’s attention.
Homes lacking these attributes typically take much longer to sell (we’ve seen homes remain on market over a year before getting an Offer).
When it comes to getting your home sold, there are definitely success stories in the Birmingham area. Colleen and I recently listed a home in Alabaster that got two Offers and went Under Contract 13 days after going on the market. The Seller was motivated, priced his home so that Buyers had to notice, and has done a lot of fixing up to make his home look nice. The payoff to his work is that his home is set to sell, so he can move.
The drop in inventory being seen in some areas around Birmingham is starting to put a bit of a squeeze on Buyers. The Buyer who sees a really good deal on a home for sale in this area now realizes that there’s a chance to be taken by waiting: Someone else might swoop in and grab the home in the meantime.
If you’re looking to buy a home in the area, our advice is to think about what’s important in a home to you, as well as area, and to contact us (205-356-5412). If you’re planning to get a loan, another critical step to take early in the process is to get in touch with a Lender. Here is a link to some area Lenders we recommend contacting.
Remember that the world of home mortgages can be confusing, because there are so many different kinds of loans and differences in fees, down payments and other charges. A good Lender will be able to sort this out for you to help to simplify your decision.
Getting quotes from other Lenders to compare is a good idea, too; just be sure to understand that comparing different loans effectively means looking at all the overall costs, and not just a single fee that might be higher with one loan. You might also ask about “locking” in your interest rate (which involves being assured of getting the same rate if you wind up buying a little later).
By following these steps, you’ll be on the road to being part of the home sales success stories we’re seeing throughout much of the Shelby Co. and Birmingham area.
Thinking of selling your home?
You already know there’s plenty of competition here in the Birmingham and Shelby Co. area.
But now, there’s a new force to deal with. Check out our video just below. This all started when we decided to pay a visit to a recently listed Foreclosure in Alabaster’s Lake Forest; you may be interested to see what’s happening inside…
We’re ready to help you with getting your home sold, successfully, and sooner, rather than later.
Give us a call at 205.677.8696…
If you’ve been thinking about buying a home in the Birmingham or Shelby county area, be aware: the clock is ticking…
The government’s Tax Credit for first time (and many existing) Buyers ends April 30th.
Under current rules, that’s the last day you can have a Contract to buy a home in place and still be eligible for the credit.
Have you been ‘on the fence’ about buying?
Here are some of the reasons proving why buying now is such a good idea:
Whether you’re buying an existing home or want to buy a brand new home, we are seeing some excellent opportunities to own a home in just about all areas in Shelby County.
In a number of cases, we are seeing such attractive pricing that—provided you meet certain Lender qualifications—you could own your own home, instead of paying rent.
So, if you’re planning on staying awhile, it doesn’t make sense to rent when you could own your own home.
Since buying a home can easily take 30 to 45 days or longer, and since the Tax Credit is set to expire in about two months, it’s time to jump off the fence!
Colleen and I are always available to help with your search and with any questions you have…
After taking a look at new numbers from the Birmingham MLS, it’s clear that Buyers have the upper hand when it comes to purchasing a home in the area.
Almost all across the board in the areas we checked, sales in January were down, and in some cases, half of what they were four months ago:
The message for now is clear: Buyers call the shots.
If you’re looking to buy, all sorts of factors are on your side at the moment. First, there are lots of homes available (482 in Helena and Pelham, 350 in Alabaster and 684 across the North Shelby Co. area at the moment!). Second, smart Sellers know they have competition and will do whatever they can to ‘work a deal.’
Third, interest rates are, in two words, still great. One of the Lenders we work with reports 30-year fixed rates remain below five percent, while 15-year rates (which were around 4.375% last week) have dropped a bit more.
So, if you’re a Seller, the message here is that you absolutely must meet Buyer’s expectations in terms of how nicely your home shows, and price. Fail to meet either of those requirements, and your home won’t sell.
And if you’re a Buyer, with such a good market for buying a home, one question comes to mind:
What are you waiting for?
Here are a few news tidbits involving home sales:
…Sales in the Birmingham area shot up 46% in November, marking the second straight month of increases over the previous year, according to the Birmingham Association of Realtors. In November, 879 homes sold, compared to 603 in November, 2008;
…November sales of previously occupied homes surged to their highest point nationwide in nearly three years, according to the National Association of Realtors;
…Lawrence Yun, NAR’s Chief economist, sees continued progress in 2010, even as some of the government’s efforts to stimulate the housing market ease. “We expect a temporary sales drop [before] another surge in the spring when buyers take advantage of the expanded tax credit,” Yun said. That “hopefully will take us into a self-sustaining market in the second half of 2010.”
…Roughly 2 million homebuyers have taken advantage of the $8,000 First Time Buyer’s Tax Credit, according to NAR estimates;
…Sales of new homes, however, dropped 11% in November, their lowest level since April (new home sales represent a dwindling share of the market). Bottom line: If you’re looking for a new home, chances are you’ll find builders extremely anxious to work a deal;
Overall, analysts feel the housing market continues to recover from its recent downturn, with the government’s assistance programs getting much of the credit.
If you’re thinking of buying a home in the Birmingham and Shelby Co. area, the market remains very much in your favor, thanks to a large selection of homes to choose from, motivated Sellers, and a continuation of some of the lowest ever interest rates on loans.
Last, but certainly not least, keep in mind that the First Time Buyer’s Tax Credit, originally set to expire November 30, 2009, has been extended to April 30, 2010. The government has also expanded the program to provide incentives for current homeowners who relocate — click here for details.
Getting your home sold in Shelby County is taking longer in some communities and less time in others, while prices have dropped, according to October statistics from the Birmingham Multiple Listing System.
The average number of days on market increased in Alabaster and Chelsea, but fell in Helena, Pelham and Calera:
Prices continued a downward trend in October, and substantially so, compared to September:
How many homes are selling?
Except for Calera, the number of homes sold in October dropped from September. Chelsea saw the sharpest one month drop, while more homes sold in Calera during October than in September:
Why the uptick in Calera?
Perhaps it’s the large inventory of low cost housing (both new and resale), making for some very attractive deals for first time home buyers, along with the fact that Calera qualifies for USDA financing (which means loans with no down payment required).
I think these statistics are giving us some important messages.
If you’re planning on buying a home, the market is continuing to work very much in your favor in the Birmingham and Shelby County area. Prices have dropped, inventory is in plentiful supply, and loans continue to be very affordable.
If you’re trying to sell, the message these numbers present is that it’s going to take a lot more than just putting a For Sale sign in the yard.
Marketing plays a more critical role than ever, and must be done in innovative ways if your home is to stand out among all the other properties for sale.
Pricing is no less important and will be a huge deciding factor in how quickly you sell, or if you sell, at all (believe me, we have seen examples of both!).
You may also benefit from an informed assessment of your property’s appearance and condition. With so many homes for sale right now, if your property doesn’t sparkle, Buyers will simply move on to another.
These are some very good reasons for trusting the sale of your home to an Agent who’s knowledgeable about the market here in the Shelby Co./Birmingham area and who knows how to achieve success in spite of challenging economic conditions.
Hereâ€™s a look at current inventory for the Shelby County and Birmingham areas, as indicated by the Birmingham Multiple Listing Service. To help you with an idea of trends, the numbers in parentheses show the count as of March 9th, 2009 (one month ago today):
Single family, town homes and condominiums available:
Helena & Pelham area (Shelby Co.): 519 (521)
Helena & Pelham area (Jefferson Co.): 59 (58)
North Shelby/Hoover area (Shelby Co.): 739 (701)
Chelsea: 298 (324)
Altadena/Cahaba Heights area: 67 (62)
Liberty Park/Vestavia area: 492 (446)
Alabaster, Maylene & Saginaw area: 373 (372)
Calera, Montevallo & Wilton area: 360 (356)
Columbiana, Westover & Wilsonville area: 93 (89)
Number of homes for sale based on current selling price:
Alabaster, Maylene and Saginaw area:
$150,000-$200,000: 132 (131)
$200,000-$300,000: 90 (86)
Helena and Pelham areas (Shelby Co.):
$150,000-$200,000: 169 (166)
$200,000-$300,000: 127 (124)
Helena and Pelham areas (Jefferson Co.):
$150,000-$200,000: 2 (2)
$200,000-$300,000: 22 (21)
$150,000-$200,000: 82 (99)
$200,000-$300,000: 118 (120)
Here’s a quick look at some current numbers for the Birmingham and Shelby County housing market as we approach mid February, courtesy of the Birmingham Multiple Listing Service…
Number of homes available:
Helena & Pelham area (Shelby Co.): 497
Helena & Pelham area (Jefferson Co.): 60
North Shelby/Hoover area (Shelby Co.): 665
Altadena/Cahaba Heights area: 54
Liberty Park/Vestavia area: 438
Alabaster, Maylene & Saginaw area: 374
Calera, Montevallo & Wilton area: 360
Columbiana, Westover & Wilsonville area: 88
Number of homes for sale based on current selling price:
Alabaster, Maylene and Saginaw area:
Helena and Pelham areas (Shelby Co.):
Helena and Pelham areas (Jefferson Co.):
Bottom line: There are still lots of choices!
The latest numbers for home sales in the Shelby county and Birmingham area confirm that 2008 saw a significant downward slide in the market.Â A report by the Birmingham Association of Realtors shows home sales down by 29% for the year, compared to 2007.
Average prices slipped by 5%, and the average number of days homes stayed on the market stood at 100 for 2008, up from 96 in 2007.Â Home sales for December, 2008 totaled 798, which is down by 32% compared to December, 2007.
It’s interesting to compare these statistics with other markets.Â While home values in Birmingham lost 5%, prices dropped closer to 11% when averaged nationally, and 32% in California.Â So, as we have stated before, while our local market does wind up seeing most of the same trends that occur elsewhere in the country, the undulations in Birmingham and Shelby county home sales are typically nowhere near as extreme.Â And for that, we can be thankful.
While our local market numbers aren’t what homeowners or people in the industry want to see, there is reason to be optimistic that home sales will pick back up.Â As people knowledgeable about real estate market trends are well known for saying, it’s only a matter of time.
With our climate of 24-hour negative news these days, a number of homeowners who would like to think about selling are having to deal with fear.Â Â You may be uneasy, wondering how long it will take to sell your home.Â And then there’s the question of whether you might wind up with as much money in your pocket as you’ve been hoping.Â And if a foreclosure pops up in your neighborhood, what then?Â Would you wind up feeling even more uneasy about selling?Â So, what to do?
Look carefully at homes that are selling in the area, and those that are not selling.Â What’s the difference?Â Price is certainly a huge consideration, but so is appearance.Â A third factor—that is making more and more difference in whether a home sells these days—is how it’s marketed.Â Not all homes for sale get the same exposure.
The fact that homes continue to sell—even in the middle of the constant barrage of negative news—clearly demonstrates that the local market continues to beÂ healthier than many people realize.
Here’s another reason to feel that better times are ahead:Â Inventory—the number of homes for sale—fell by 19% during 2008.Â At the end of the year, there were 10,201 homes for sale, compared to 12,642 at the end of 2007.Â If that trend continues, then it’s safe to conclude that the ‘Buyer’s Market’ is beginning to shift more back into balance.
If you’ve been thinking of selling your home, but are perplexed or somewhat uneasy about the current market and your prospects to sell, there’s an easy solution:Â Â Give us a call.Â We will be glad to take a close look at the history and trends of home sales, targeted to your neighborhood.Â We’ll then be able to present you with a projection of how long your home might need to sell, and at what price a buyer would consider reasonable.Â This could be valuable information to help you with selling during this around-the-clock negative news era.
Colleen and David