Wednesday, May 20, 2009

How's the Real Estate Market?

As a Realtor I get asked this question at least 50 times each day so I decided to post my official comments on the state of the market here on my blog for all to see. You might sense a bit of frustration in my "blog tone" but I assure you I am not frustrated, but simply trying to warn you, the layman, about where this simple, yet loaded question might lead you. Also, I want to summarize my responses to the many people who are truly concerned about the state of my business, the market as it pertains to you, and to those who just want small talk.
Many people are curious to know my response because they are considering buying or selling a home and need to know what to do. However, many times this question comes up and it is simply asked to fill in the silence during a social gathering and my response ultimately wont matter. Many times when I start to answer this question the person whom I am talking to will start to look away due to the sheer lack of interest or because he already knows the answer. The truth is that it is a tough question to answer and can get pretty boring especially if you get me into supply and demand theory. The problem is that there are two facets to this question. The first is that there are many Realtors who's lively hood depends on this answer and if they respond based on how there business is doing then you might get a skewed answer based on how little money they are making and not pertaining to how it might affect you and your home sell or purchase. The other facet is that many people need to know if the market is worth entering and are truly seeking your professional opinion. You might not be interested nor care about your Realtor friend's business "numbers", but chances are this is what you will get. My advice to you, the leman, is to be more specific with how you phrase this question.
For example, if you are truly wondering how the current downturn in the market is treating your friend's (the Realtor) real estate business then word your questions appropriately and please pay attention because this is a personal question that many Realtors struggle with. If you ask me this question my response will sound a bit like this, "Hey thanks for asking, but considering that I am here sharing a drink with you at this lame social/business networking group then it must be pretty bad and that I'm hard up for clients, huh?" Actually, I am being somewhat sarcastic but all the same there is truth in that response and of course the answer is pretty obvious by this remark (for most agents), times aren't good. The truth is that Realtors are hurting all over and many are being driven out of the business due to a lack of clients (buyers especially) and listings that wont sell or at least not for the amount the sellers want. It is tough time now and many consider the downturn a necessary evil that must follow a "housing bubble". This downturn forces many agents to reconsider their goals and business models and only the best and most resourceful will figure out a way to succeed. So, the honest answer I might give will sound something like this, "Hey, I appreciate you asking. The market is definitely slower than what I would like, but I am still in business and have figured out some creative ways to help people get in and out of this tricky market successfully". I know it sounds canned, but hey I'm in sales and canned is what I do best. But actually its very true and I want to give people an honest answer that sets a positive tone about my company. Be very leery of any Realtor that paints an overly emotional (positive or gloomy) picture.....probably best to walk away immediately.
Now, if you, the layman, want to know if this is a good time for YOU to enter the market then phrase the question similar to this, "Hey [Agent Name], I'm thinking about selling my vacation villa and figured this is an awful time to do so, what do you think?" Now, I know that you are seeking my advice and I will respond with this, " Yes, [Rich Friend's Name], I'm glad you thought to direct this important question to me, but it appears you answered your own question. Unfortunately, I am unable to give you the answer you deserve because the slow market has forced me to charge for all advice given. Here is a client contract, fee schedule and business card. Feel free to call me at home after 9am to set up an appointment as I recently closed my office and laid-off my office manager." Again, this response is laced with sarcasm, but as you can see it answers the question perfectly. Many agents will tie their personal business or beliefs into your situation so be prepared to read between the lines and be ready to ask specific questions on how your neighborhood is doing or how certain homes in a certain price range are doing. In other words, the agent's personal business might be down, but water front property in Wilmington could be doing well. In this case you'd never get that answer you were seeking. Again, you probably already know the answer and are only looking for the agent to respond in kind. Keep in mind, this question is essentially asking for you Realtor friend to provide a professional opinion/advice, and as anal as it might sound I charge my clients money for this answer. In other words, its a bit like asking your attorney friend about a potential legal situation you might be facing. Again its not that I don't want to help or be friendly, but my response would be somewhat vague yet positive and would sound like this, "Wow, I didn't know you had such an incredible vacation home?!? Now is a great time to sell! I would love to be your Realtor and I would have invited you to my New Year's Bash if I had known that! " Just kidding, but this a typical response from a hungry Realtor.....beware! I would respond like this, "Hey, thanks for seeking my opinion on this question. Actually, thats a pretty tough question for anybody to answer because real estate is so dependent on the type of home, condition and location. Even though popular media (CNN) says the market is down, it is very possible that it could be an incredible time for you to sell, but I would need to do some research to be able to give you my best opinion. If your serious about selling lets set up an appointment and we can discuss it." Note: I would quickly address and neutralize any preconceived negative biases and will always let people know that real estate is so specific to each individual transaction and that it is not so bad for some folks. It just depends on so many factors. If you truly want your Realtor friend's professional advice be prepared for him to ask some personal questions and/or to invite you over to his office to discuss your situation.
Many people ask the aforementioned question already with an understanding that the market is bad and they figure that you will answer in a negative way providing some frightening examples of how mortgages have dried up or how foreclosures are pilling higher. Some savvy 'question askers' might even be waiting for you to give the canned "sunny side up" response which goes a bit like this, (Realtor) "Oh, I'm so glad you asked because this is actually a great time to be in real estate! I have more listings than ever and I also have buyers calling me left and right looking to buy and take advantage of this opportunity!!! So, what do I have to do to put you in a new house today?". With a response like that the savvy 'question asker' will tear into a unsuspecting Realtor and question their business and their education due to such a chipper and fabricated response. Once again, be leery of emotional Realtors, but also understand that they are doing their best to portray a positive image about their business.
Now, for the folks who simply want to "small talk": Most people are aware of the tough times and are also aware that many Realtors are not doing well overall. So, on occasion, I will feed people a dose of sarcasm when presented with the topic question knowing that many people just want to talk "shop" and are simply looking for a general market view. In this and in most cases when I get the, "So, Hows the Real Estate Market these Days?", I usually ask if they want my Bernakesque view (this will require a few hours of your time and will ultimately fill you full of bullsh*t), the CNN gloom and doom speech, or if they are really considering buying or selling? In the latter case I will give you my card and tell you to call me tomorrow after the Poison Reunion Concert.

No comments: