Laurie Moore Moore from the Luxury Home Marketing Institute recently welcomed Lance Langenhoven from The Oscar Group as a new member of the institute.
Laurie founded the institute and she is a legend in the industry! She travels all over the world and knows the in's and out's of selling luxury real estate!
"We were very lucky to have her present her course here in Houston earlier this month and we jumped at the chance to get in to meet her and join the institute.
We have so many new ideas on how to market properties in the higher price ranges and what clients at the top end of the market expect. We continue to strive for higher quality in all our work and the list of items we have to work on has just grown but we love a challenge!
Our clients selling homes in The Woodlands especially will benefit from our new techniques and the new network that we belong to." - Lance.
Well, the December numbers for The Woodlands real estate market are in... in fact, we can now compare the whole year 2007 vs 2006.
Number of homes sold is the 2nd & 3rd columns after the month column... you'll notice that fewer homes sold in December 2007 vs 2006. However, look at the incredible increase in the price of home purchased!!!
But... I'm sure that closer analysis will show that it's probably just statistics playing a game with us here... what I believe happened is that the top end of the market was unaffected by the turmoil hitting the lower end of the market ($80k to $175k) and so it looks like the average purchase price has jumped by a large amount year-on-year compared with the other months.
Days on market increased by 3 days in December 2007 vs the same month in 2006 and actual selling price vs asking price remained stead at a 3% reduction.
So... a good steady market.
This beautiful photo of the Woodlands Waterway at sunset taken by Polar Bear in a Snowstorm.
Good question. Well, assuming your price is reasonable, in other words, within a few percent of true market value, then the following strategy should work in most cases.
Let's assume you're selling a home for $250 000.00. An offer comes in for $230 000.00. The buyer hopes you'll "split the difference" and come down to $240 000.00 and usually, that's what sellers do... they "split the difference" and move 50% of the gap towards the buyer. It's the "honorable" thing to do.. it's "playing fair" and all that but it's not required!!!
Rule 1. Don't "split the difference". Make sure each counter is less than 50% of the gap towards the buyer.
Okay, how about the buyer that's just increased their offer by $5000.00 but you're still $20 000 apart? Sticking to rule 1 would mean we don't move $10 000 toward the buyer as that is a 50% move. Well, how about a $7000 move? That's less than 50% of the $20k gap? Nope. Don't do that.
Rule 2. Make each seller concession less than the buyer's last move. So, in the example above, the buyer increased their offer by $5000, so, you should give a concession of less than $5000.
These two rules force the buyer, over a number of negotiating steps, to make bigger moves than the seller.
Obviously each transaction has it's own unique situations and nuances and different strategies fit different circumstances BUT, just being aware of the above two rules will, in general, stand you in good stead and should save you many thousands of dollars over your lifetime.
Don't force yourself to stick to them. Sometimes you can use it once in a transaction & save yourself a big move and then, from that move on you can make more "honorable" moves. Again, it's more "art" than "science".
Have you used any interesting negotiation techniques or strategies? Let's hear about them.
You've always wondered about it. How to become an investor?
So, how do you take advantage of this?
An interesting way to get into the property investment game is to buy yourself a new home. What? Buy myself a new home? Yup. And lease out your existing home or apartment or town-home.
What are the benefits to this approach?:
1. You get to go shopping for a new home!!! That's exciting... you can upgrade to a newer home or a smaller or bigger home, whatever suits your current needs!
2. You know the investment home you're going to lease out as you've lived in it for years yourself! This is crucial. Most new investors step into so many unknowns when they buy their first investment property as they're not normally of the same quality that they live in themselves. The costs tend to be unwelcome surprises that are discovered after you've already closed on the deal. Too late now!
3. The new home that you'll be buying for yourself will be newer and will have less issues and you'll be very careful with this purchase as you're going to live in it yourself so you automatically reduce the risks you'll be prepared to take on.
4. You should be able to obtain a better quality tenant... or, at least, one from a similar social status as yourself as they'll be leasing the home you're vacating!! This also reduces risk as you're dealing with a social sphere that you understand much better.
Lease out the apartment!
What are the benefits of being a landlord? The three main ones are:
1. You gain from the asset appreciation of the home/s you're leasing out.
2. You gain from an appreciating income stream from your tenants. Small annual rent increases is the best way.
3. You gain from the equity building up in the home as your tenant pays down the note.
ps - If you'd like to discuss investing or if you want an investment analysis done on a potential purchase, we can help.
Interesting article on MSNBC today... the word of the year for 2007 is "subprime"!!!
Let's just ask if we can get rid of our debt. Yeah... wish it was that easy!
"CHICAGO - Even the American Dialect Society knows how risky home mortgages are these days. The group of wordsmiths chose "subprime" as 2007's Word of the Year at its annual convention Friday.
"'Subprime' has been around with bankers for awhile, but now everyone is talking about 'subprime,'" said Wayne Glowka, a spokesman for the group and a dean at Reinhardt College in Waleska, Ga. "It's affecting all kinds of people in all kinds of places."
About 80 members of the organization spent two days debating the merits of runners-up "Facebook," "green," "Googleganger" and "waterboarding" before voting for an adjective that means "a risky or less than ideal loan, mortgage or investment."
The choice signifies the public's concern for a "deepening mortgage crisis," the society said in a statement."
So, who says real estate isn't exciting! I wonder what this year's word is going to be? I hope it's "recovery"!
You're selling your first home in The Woodlands and you're moving to a bigger family home in Sterling Ridge. The new one has all the bells & whistles already installed. So, you don't really need the washer & dryer in the home you're selling. Or the refrigerator (an item usually not left behind).
So, you're thinking... okay, I'll just leave it for the buyer to make the deal more attractive to them.
Okay, here's where you can get a little more creative than that. Don't just throw away these excellent bargaining chips. You can still give them to the buyer, just not so easy! "Okay mister, so, how do we do it?" you ask.
Negotiations can be tricky!
You have a young couple interested in buying your home as their first home. Here's what you do:
Step 1. Setting up the deal.
Leave the washer & dryer & refrigerator (& any other valuable item you wish to leave the buyer) in place in the home but add them to an "Exclusion List" (check with your realtor).
Step 2. Buyer's First Offer.
You're selling the home for $150 000.00 (say). The first offer comes in at $135 000.00. You counter with $147 000.00.
Step 3. Second Offer.
The buyer improves the first offer by going to $140 000.00.
Step 4. The counter with sweetener.
You counter with $147 000.00 again and say that you'll include the washer, dryer & refrigerator in the deal. The young couple are ecstatic! Not only did they get a discount off the asking price but they also managed to get a washer, dryer & refrigerator out of you! They win. You win.
So, the items you were going to leave anyway, saved you a round of negotiating on price. Or, you could have included a small token price reduction on the second round accompanied by the items you were leaving.
The point is, without the additional items left to the buyer, you would feel compelled to make bigger reductions during the negotiations.
Do you have any interesting negotiation techniques or strategies? Let's hear about them.
Phew, you've signed the contract to buy your first home in The Woodlands, the inspections have passed without a hitch and the "pending" period has passed so you're finally on track to closing on your new home in about two weeks time. Time to celebrate and head out to buy some furniture? "Hey, we can't sit around on the floor!" you say. Not so fast my friend... don't do it. 
If you do you might completely blow your transaction to pieces and you could be faced with extending your lease on that tiny little 700 square foot condo apartment that you've been living in for the last five years while you were saving for the down-payment on this home.
This is the deal... most lik
ely you will not be paying cash for that new furniture and the new flat-screen television.
You'll have to buy it on credit. This means credit checks. That means credit score gets affected. That means that if you are a border-line financing case you cannot afford to be messing around with your credit in the last few weeks before you're about to close on one of the biggest deals of your life. Even though you were originally "pre-approved", the underwriters can kick your deal out of their office if they discover that your debt load has climbed dramatically since they first looked at you.
So... wait. Close on your deal and then, that same night, go and buy that new furniture - if you can afford it!
Do you have any last-minute closing horror stories? Let's hear about them.
I love Los Cucos! When we first arrived in The Woodlands on the 5th October 1991 from England we stayed in corporate (i.e. furnished) accommodation at Holly Creek as all our furniture was still in transit. The Holly Creek condos are right across from the Panther Creek Shopping Center. Our very first buying stop was at 0.300 am that morning (still on English body clock) at the Randall store. Randalls is right next to Los Cucos so we spotte
d it right away.
That night we visited Los Cucus and we've never looked back. It's not the cleanest of establishments but the food is great, the waiters very friendly and accommodating, the prices reasonable and the servings HUUUGE!! On almost every night of the week Los Cucos will be busy - people just keep coming back.
My favorite dish is the "Gallitos Snapper"... I have it every time. That fish is just out of this world.
Including tip & sodas, a meal for two adults and one child usually comes in around $35.00 for a dinner. Lunches are cheaper!
This gets a three spoons award - i.e. go, you'll enjoy decent food at a reasonable price.
I still get people asking me "so how much do I pay you?" as a buyer's representative. Well, in almost 99% of cases, there is no payment from the buyer to the realtor. The realtor's commission is paid by the seller.
In the 1% of cases where the buyer might end up contributing to the realtor's commission is in the case of a seller possibly not paying the agreed upon commission. So, say the agreed commission was 3% to the buyer's agent. The seller insists on paying no more than 2.5%. So, in theory, the buyer would be liable to make up the 0.5% to the realtor representing them.
Usually though, most realtors just let it slide and essentially end up working for less than what they agreed upon.
So, the buyer almost never pays anything towards their realtor's commission.
That's great news! You get personal representation, loads of service, get driven around in someone else's car using someone else's gas (pretty cool with today's high gas prices!) and you don't pay anything for it! You can't get much better than that!
Do you have any "buyer rep" stories? Let's have them!
I visited Cafe Express for the first time today. This restaurant is located in the Market Street location right next to Grotto's. I was a little apprehensive about going as I wanted "hot food" & "some meat" and was worried it would be one of those cold sandwich, salad or soup places.
My wife convinced me otherwise and so off we went to try out their menu for lunch. I was pleasantly surprised. It's extremely spacious, no problem getting a table. You order food off a large menu above a serving counter. The waitress was friendly and helpful. They had sandwiches, soups, pasta, chicken & a few other meals. I tried a grilled chicken with linguini.
You can help yourself to a condiment island and something from the soda fountain while your food is being prepared. When it's ready the little gizmo they give you lights up and you fetch it from the serving counter.
My food was hot and tasty. There was far more chicken than pasta... usually it's the other way round!
Prices were reasonable... for two adult meals, one kid meal & sodas the total bill came to about $29.00.
This gets our three spoons award - i.e. go, you'll enjoy decent food at a reasonable price.
Have you had a meal at Cafe Express? What did you think?
Have you heard the term "chasing the market"? No? Ok... here's what happens.
Often a seller has an optimistic view of the value of their home "We used those long nails and we put two coats of paint on that new siding". So, their asking price is above true market value.
In a rising market, eventually the rising tide will catch up to their incorrect valuation. What happens in a market trending flat or slightly down? Well, not much really... the asking price is "out of the market" and "the market" never reaches it. Worse, the market could move further away from the asking price over time. The seller eventually decides to lower the asking price but now the market has moved away from him and his new position is where he originally was... i.e. "out of the market". This is called "chasing the market".
The best thing to do in such a situation is to get a really good market estimate based on recently sold homes in the area and price your home at our slightly below that. This way your home's selling price should be "in the market" and you have a much better chance to sell.
Have you been in a situation like this? Share your experience & how you managed to sell.
OK... here's the deal. Our market right now is not what you'd call "on fire". Woodlands Texas real estate is not as bad as some parts of the country but we have some inventory sitting out there and Woodlands home builders are giving out major discounts and incentives to shift product.
But, you still want to sell your home in a reasonable time frame because you've been transferred to Houston and your new job starts there in about a month's time and there's no time to waste. So... what to do?
Consider staging. The Woodlands real estate market has not caught onto this strategy probably as much as it should. It works. It is especially good value for money if you're still living in the home you're trying to sell... you don't have to rent furniture &/or accessories from the stager! I know a really good stager that will charge around $350.00 for a day's worth of staging using the items already in your home. When you consider that staged homes sell within about 80% less time on the market (see www.stagedhomes.com) this alone can recoup the cost of staging many times over. Larger homes (above 2500 square foot) will usually take two whole days to stage.
I recently listed a home in The Woodlands in Beckonvale (beautiful area right next to Carlton Woods). Prior to listing it we took a few extra days to stage the home and to take the best photos we could. Autumn Dunn (www.autumndunn.com) did the staging and it was phenomenal! We pre-marketed the home to just over 500 realtors. The day after we listed it we had an open house for realtors, however, we had two offers on day one and we closed the deal on the second day of listing at the full asking price. I'm not sure what clinched the deal but I know that we were extremely happy with the look of the home after it was staged. It was like night & day. The master bedroom below was just exquisite! The whole house looked like a dream.
Have you had experience selling a staged home? I'd be interested to know how it worked out & who you used.