Wednesday, March 28, 2018

Greenwich Real Estate Agents Cheer the Wall Street Journal Expose

Greenwich real estate agents who happened upon last week’s Wall Street Journal feature may have been jolted by the headline, “How to Sell Your Home Without a Real-Estate Agent.” Why would the Journal—one of the most sophisticated observers of today’s business realities—possibly want to lead readers down the FSBO (For Sale by Owner) path? Don’t actual market results point to the opposite approach?

As it turned out, the shock turned out to be only headline deep. What seemed to be a how-to for homeowners intent on doing without the services of a Realtor® quickly proved to be the opposite. Greenwich readers who read on discovered the article was more like a how-not-to advisory for Greenwich sellers. Among the key points:

Only 8% of all homes marketed last year were FSBOs.
Real estate agents know best how to make the most of their huge selling edge: the cooperative use of the Multiple Listing Service: “Without use of the MLS, solo sellers have a tough time marketing their homes.” 
If FSBO sellers shell out for a service that lets them list in the MLS, any advantage is halved because they have to agree to pay the selling agent’s commission, typically 2.5% in Greenwich.
Lacking the resources of professional offices, “another hurdle is ensuring that a buyer has sufficient cash” to pay for a house. 
Even if they build a website for their property, FSBOs face an uphill battle when it comes to effective use of search engine optimization and social media tools.
The coup de grace is the bottom line. In 2017, even after factoring the commission, agent-assisted sales netted a median $45,000 more! 

I have been brought in to deals to represent buyers (acting as the buyers agent) when there is an FSBO.  I can tell you first-hand, that from negotiation to inspection process, not having an agent on the other side of the transaction has been difficult on a number of levels, and probably not saved the sellers any dollars in the long run.  The bottom line is that negotiating is an art, and knowing how to get through hurdles and surprises that undoubtedly come up during the sales process is something that a skilled agent can get sellers through and preserve the deal.

Since most FSBOs hope to avoid paying “the typical 5% commission,” it’s not surprising that, as one self-help service admitted, 70% of sellers who started out as FSBOs “ultimately hired a full-service real-estate agent to sell the house.”

So why did the Journal choose that headline for an article that goes into such detail about the pitfalls of selling your home yourself? It’s anyone’s guess—but I’d go with shock value. For the 92% of sellers who decide to hire a professional, it certainly would get attention. Speaking as one of Greenwich’s experienced real estate agents, I’m pleased that they did: it showcased many excellent reasons to use professionals.   

Monday, March 12, 2018

3 Strategies for Setting Your Greenwich House’s Asking Price

Selling your Greenwich house for the best price involves a certain amount of effective strategy and luck-- and how much of each varies, not the least of which is how many buyers for a home like your clients happen to be in the market at the same time.   The "luck" portion  is more likely when you’ve set out the welcome mat for it. In addition to strategic home preparation and a solid marketing launch and ongoing program, selling your Greenwich house for the best price also has to do with where that price starts out: that is, the asking price. 

Once you have a clear idea of the professional opinion of its market value—that is, a price that aligns with the latest comparable sales data for similar Greenwich homes—you have three strategies:
1. Price To The Current Market-- You can set an asking price as close as possible to what the comps suggest. After all, it’s reasonable and defensible—and lenders are likely to agree if a home loan becomes a contingency in the final sale. A possible downside is that it will be more difficult to stand out from the crowd since many comparable properties may be priced at the same level. It can also prove necessary to compromise with buyers who assume any asking price is an opening bargain position.
2. Price Above The Market-  Some sellers look at the comparatives but feel that their property stands out in some way and deserves a premium.  Occasionally, this is true.  But most of the time, it is tough for a seller to be objective and see what today's buyer is seeing and valuing.  Setting a bit of an aspirational price has a downside though--  if a sale fails to materialize in a reasonable timeframe, lowering the asking price later can be costly: those reductions (especially multiple reductions) are like properties that linger on the market for a long time: they suggest that something is wrong (even if the only problem was the asking price).
3. Price Below Rival Properties- The strategy here is clear enough: the expectation that serious house hunters will become interested. Very interested. Fascinated, in fact—especially if in a price range where supply is tight. The most serious prospects—the ones who know the market—will be expected to hurry to beat the others to your door. In the best case, this can result in a bidding war, resulting in higher-than-asking offers.

In the past four months, I have implemented all of the above pricing strategies with the strongest results being pricing below rivals.  That approach netted owners 5 offers within 2 weeks and a sale 22% above the list price.  Now that's results!

Saturday, March 3, 2018

Will Changes in Interest Rates Affect Home Prices?

New Price: $6,950,000 In the Premier Location of Mid Country Greenwich
If we start seeing an influx of Greenwich homes for sale ahead of this spring’s peak selling season, it’s not hard to guess why. There may not have been any conspicuous heads-up for homeowners, but thoughtful deductions based on the news might prompt just such an effect.

At point is the possibility of a coming “double squeeze” for homeowners on the move. If it happens, there could be a decrease in the total number of Greenwich homes for sale because of what sellers face after they have given up their current residence. 
The steady flow of good news about the national economy has clearly been the main culprit. Last week’s release of the Federal Reserve’s minutes from last month’s meeting revealed the Governors’ recognition of stronger growth than had been forecast. Per CNBC, that news “confirmed that a gradual increase in the Fed Funds rate would be appropriate...” MarketWatch agreed that the Fed was “on track for 3 rate hikes” this year—but placed a strategic question market about the possibility of 4.

When the experts’ only uncertainty is whether there will be a fourth rate hike this year, the likelihood that Greenwich homeowners could face a double squeeze becomes hard to ignore. A double squeeze forms when sellers’ Greenwich homes for sale draw fewer eligible buyers qualified to pay the higher mortgage payments. They will sell eventually, but then face the second part of the squeeze, when they, too, face stiffer terms for any new home’s mortgage payments.

One possible scenario leads to fewer homes being put on the market in the first place, which could actually help bring into balance our inventory levels.

 If Greenwich homeowners haven’t heard much about this phenomenon, my guess is that it’s because we’ve been swaddled in such a comfy interest rate cocoon for so long, the whole issue has migrated to the back pages. By some calculations, today’s typical mortgage payments are more than 36% lower than the all-time high reached in 2006.

Yet if prognostications prove to be correct, the reality for Greenwich homeowners with a hankering to move on is that when it comes to the bottom line, now is absolutely the best time to act—with later being next best, and still later next best after that—and so on. In any case, it should certainly be worthwhile to discuss possible courses of action. 

Tuesday, February 20, 2018

When Loan Rates Rise, Do Greenwich Home Sales Slump?

34 Midwood Rd in Prestigious Deer Park, Greenwich  $7.495 Million 
Many Greenwich homeowners will be planning to list their properties this spring because it’s when future home sales would be expected to peak. Historically, spring is when the highest crush of prospects arrive on the scene. But this year, the upward drift in mortgage interest rates might have would-be sellers worried. After all, it’s common sense that any rise in home loan rates would put a damper on buyers’ enthusiasm.

Sometimes common sense and reality don’t go hand in hand. When we try to estimate the strength of Greenwich’s future home sales, it could be a case in point.  That’s one way to look at the conclusions drawn by a pair of studies released last week. Both were focused on examining how rising interest rates are likely to affect future home sales. 

 John Burns Real Estate Consulting examined the “common sense” idea about the dampening effect of rising mortgage interest rates—and found historical evidence that put the kibosh on it. They looked at ten separate periods since 1975 during which rates rose by 1% or more, and found little or no impact on sales if the underlying economy was strong. Apparently, the public optimism that accompanies a roaring economy offsets the effect of higher monthly mortgage payments.

 Another study by market research journalist Greg McCarriston summarized a late-2017 Redfin-commissioned survey. More than 4,000 people were polled in late 2017 about their own homebuying plans. Surprisingly, only 6% of those quizzed said they would cancel their own homebuying plans if mortgage rates passed 5%. A surprising 46% said that would either have no effect on their plans—or that it would actually increase their urgency to buy since rates might rise further.

Common sense or not, if both studies prove out, the strength of recent economic news could energize this spring’s Greenwich future home sales activity—despite a creeping rise in interest rates. That will be good news for homeowners who decide to sell, and for buyers.  The selection of properties in Greenwich is excellent and none more special than the one featured in today's blog and available for purchase.

Robin Kencel, Associate Broker
The Robin Kencel Group
Top 10 Greenwich Real Estate Agent, 2017
Top Agent, Douglas Elliman Greenwich 

Monday, February 12, 2018

Greenwich SDIRA Investment Avoids Wall Street Gyrations

For many typical Greenwich breadwinners, last week’s stock market gyrations undoubtedly revived feelings that had been largely absent for quite a while: retirement jitters. Nearly a quarter of working Americans own Individual Retirement Accounts—but since most IRAs’ values fluctuate considerably with the ups and downs of Wall Street, when major indexes officially enter correction territory (as the New York Times reported last Thursday), savers’ anxiety levels head toward redline territory. 

That’s too bad because one of the principal purposes of saving for retirement is to create a secure feeling about the future. Even if the financial pundits seem undismayed by all the correction territory chitchat, those feelings can begin to evaporate.

All of this may seem unavoidable, but there is an alternative strategy that Greenwich retirement savers might want to check into. It’s a sort of do-it-yourself option that’s called a Self-Directed IRA (SDIRA). It is structured to allow withdrawals at a specified age—but differs from other IRAs in that it allows investments in a wide variety of diversified investment choices, including Greenwich real estate as well as private market securities and more. The tax advantages are like those enjoyed by traditional and Roth IRA accounts.
Since I am not a financial planner, I’ll refrain from providing much more than a few brief observations about SDIRAs:

They aren’t for everyone. Since they’re subject to more stringent and complex IRS rules than regular IRAs—and since they are actively directed by the beneficiary—they require a good deal more initiative and due diligence.
Although the beneficiary makes the investment decisions, SDIRA accounts are opened, held, and administered by a recognized SDIRA specialist firm which acts as a trustee or “custodian.” 
Custodian firms may allow only some kinds of investment assets, so it’s important to be sure they match the investor’s preferred mix of assets. This is a list of custodian firms.
IRA rules do not allow SDIRA investments to be used for personal use until the targeted withdrawal date—so, for instance, any Greenwich rental property held in an SDIRA could not be used for the investor or family members until then.
f this little-publicized alternative sounds intriguing, you should do your own research—and probably an in-depth consultation with a trusted financial adviser. I will be standing by to introduce you to the wide assortment of Greenwich properties that might just become key elements in a more diversified—and more stable—retirement picture.

Thursday, February 1, 2018

Super Bowl and Real Estate Misconceptions

Readers who check in here regularly know that every once in a while I’m moved to relate Greenwich real estate matters to various hot issues that are claiming the popular imagination. Such topics used to be called “water cooler talk” (but that was before we all started carrying water bottles around all day). So despite the fact that we may not gather around water coolers anymore, this the odds are that the leading topic of conversation won’t be the State of the Union or the Binney Park dredging project (good news-- it's done and water is back in the pond).  

So, it’s all but inevitable—here are the Top 7 Things that Greenwich real estate and the Super Bowl have in common:
1. Both are Sunday-centric. Greenwich real estate and the Super Bowl make Sunday a major activity day (at least when the weather is nice).
2. Both do better when their ads are top-notch. The best Super Bowl ads will be replayed on Monday night news shows, but although our best Greenwich real estate ads won’t get that kind of attention, eye-catching ads sell.
3. Both rely on heads-up plays by top notch teams (had to say it!).
4. Both rely on marketing to draw a crowd.
5. Both have a definite banking connection (Sunday’s venue is U.S. Bank Stadium).
6. Both are (mostly) free to enjoy. Open houses and showings are free to the public—only in Minneapolis will admission be charged (and what a charge!).
7. Both are judged to be first rate when fumbles don’t happen.

Now you may be thinking that my Top 7 Things list is offered for no other reason than to try to get Super Bowl fans thinking about Greenwich real estate instead of the game itself. There may be an element of truth in that but I know, this Sunday, it's a useless try.  However, come Monday, it's Spring Season and time to think about the real estate market.

Monday, January 15, 2018

Ls Vegas Electronics Show Unveils Real Estate Gadgetry

In Greenwich real estate, it’s the steak—not the sizzle—that draws serious offers.

Even so, every year about this time it can be useful (and great fun) to watch what comes out of Las Vegas’ Consumer Electronics Show (CES) gathering. This year’s edition of the annual trade extravaganza that grabs headlines for its bounty of new electronic products, unveiled a number of smart home tech debuts. Some were, as commentators noted, “weird and wonderful”—while others were potentially important incremental steps toward what will eventually become everyday household necessities. Among those that caught my eye: 

Echo Plus-connected gadgetry: Amazon’s ubiquitous wifi-connected digital assistant (aka “Alexa”) is getting its/her artificially intelligent mitts into a vast number of home devices, from TVs to toasters. Disneyland-style homes of the future seem ever closer at hand as more and more household appliances and devices become controllable with just a word to your closest Alexa or Google Assistant outlet.
5G: Get familiar with this term, which denotes the technology which soon will enable home wireless speeds 100 times faster than the current technology Greenwich homes use today. In the unlikely event that your own home still lacks wireless connectivity—we should talk!
Smart Rooms: too many to detail, smart bathroom appliances include intelligent showers that save water even as they direct temperature-controlled streams your way; smart kitchens featuring ovens clever enough to shut themselves off when dinner’s ready; and smart driveways that clear themselves of debris. 
Furbo: a treat-tossing camera/speaker that lets owners remotely spoil pets from anywhere in the world.
Robots and More Robots: on hand were a laundry-folding robot; a pair of dancing robots; an owl-like children’s companion robot; and LG’s kitchen helper, a recipe-fetching robot (“Cloi”) that repeatedly stalled (possibly from over-excitement). 

The consumer show also demonstrated what looks like an iPad perched on a roller-mounted monopod: a real estate agent robot! Said to be capable of leading prospective renters or buyers on home tours, it answered prospects’ questions via long-distance connection with an actual agent who managed the tour via remote control. 
For the foreseeable future, I think I’ll be sticking with more personal, in-person showings