Loudoun County Real Estate – The Word On The Street

You read the data, you see the graphs and you hear and watch the media comment on the local real estate market in Loudoun County. But what are the active sellers, buyers and real estate professionals saying?

The comments being made by Buyers:

1. "There’s not much to choose from!"
2. "Why are the last three we saw so overpriced?"
3. "I want move-in-condition, but there aren’t many that are."
4. "This property sold in 4 days, but so many have been on the market for 4, 6 or even 12 months."
5. "We can totally beat up every seller out there because _____________ (add in a comment based on an incorrect comment by the media or someone not in real estate)."

Translation/explanation:

1. The inventory is at the lowest point since the peak in the summer of 2005 so there’s not much to choose from.
2. Over 75 percent of the properties currently on the market are overpriced.
3. Sellers may still think that just putting their home on the market will be enough, which is incorrect. Buyers are more knowledgeable and pickier than ever.
4. The properties that are of the best value are the first to sell. With so many homes overpriced and showing poorly, buyers are acting quickly when they come across a "diamond in the rough".
5. The media is typically 6 to 9 or months behind the curve.  What was true last summer or fall is no longer the case. Yes, you can still get great deals and negotiate, but the market is more balanced than it has been in two years.

The comments being made by Sellers:

1. "My home is worth more than my neighbor’s one because ____________ (add in an emotional based comment)."
2. "I can’t get a straight answer from my listing agent on what I should do to sell my house."
3. "The comps from summer and fall of 2006 and the tax assessment clearly show that my home is worth ________ (add in a price higher than today’s market value)."
4. "How come I’m not getting any buyers through?"
5. "How come I’m getting traffic, but no offers?"
6. "I’m glad that I priced the home where I did so that is sold in 30 days!"

Translation/explanation:

1. Sellers are trying to make logical and factual decisions based on emotion. Yes, it’s emotional to sell your "home". But in the end, it’s still a product.
2. Some listing agents are either uninformed, scared to say the truth for fear of insulting the sellers or losing the listing or like to keep the sign in the ground in order to generate more buyer leads. The listing agent’s relationship with their sellers should be based on honesty. It’s better for everyone if the agent were to tell their client what they need to hear, not what they want to hear.
3. Comps older than 3 months are worthless in a changing market. And 2006 tax assessments are not indicative of today’s market values because they are from the beginning of 2006 when property values were 10 to 15 percent higher than today.
4. The most common reason that there haven’t been any buyers through a home is that the property is overpriced. Being off even $15,000 in price may lead to not a have even one buyer through. Other reasons may be that the listing doesn’t have any pictures on the MLS or other sites and/or the information is incorrect and is therefore being overlooked by buyers.
5. Your asking price is close to the market value, but not quite where it should be. Good news is that you’re almost there, but you’d better act quickly before your neighbor comes on and undercuts you and your market value becomes even less.
6. The home was priced correctly and therefore sold! With the first 60 days on the market being the most critical, pricing your home correctly is key. Once 60 days go by, buyers will begin to view your home negatively ("Something must be wrong with the property otherwise it would have sold already").

The comments being made by Agents/Brokers:

1. "There are only 5 properties that fit my buyer’s needs that are of great value in all of Ashburn."
2. "An undervalued property that shows well that fits my buyer’s needs?! Quick, let me call my client immediately because it won’t last long!"
3. "I need to just tell the sellers that I can get the price they’re looking for because I need the listing and the sign in the ground for the advertising and seller and buyer leads."
4. "I can’t sell your home for that much because the market value is __________ (add is a lower amount). So you don’t want to use me as your listing agent because of that? Ok. Good luck!"
5. "I can’t get my clients to adjust the price to market value even after the same model in better condition down the street just sold for $20K less!"

Translation/explanation:

1. Great deals are few and far between. Finding the best valued properties is not an easy task these days.
2. With buyers all looking for the best deal, chances are that you’re not the only agent or buyer that ran across this great deal. Buyers and sellers are even seeing multiple offers (I personally know of 4 instances in the last 2 months that had between 2 and 8 competing offers). The early bird catches the worm!
3. I call this "Buying A Listing". The agent/broker is lying to the seller, putting their own interests before those of their client and is hurting all consumers as well as fellow agents/brokers. It does absolutely no one any good especially the seller. I personally think that this practice should be punishable by a heavy fine to the agent and their supervising broker, suspension of the agent’s license and possible license revokation.
4. This is what an agent/broker should say rather than "Buying A Listing". No matter how good of a salesperson you are, you can’t sell something worth $500K for $600K. Consumers are armed with more tools and information than ever before. It’s easy for consumers to see that a property is overpriced even from just searching Realtor.com, Homesdatabase.com or any MLS Listing Search/IDX feed.
5. If, from the start, you had devised and agreed on a clear game plan that also addresses the issue of your neighbor undercutting your price, you would have no problem taking the proper course of action. If you didn’t do this, get all your comps and data together and clearly explain the market conditions and how they will effect your clients – you owe it to them and yourself. If they still don’t get it, you may have not been clear and/or had enough data. If you did everything you could and they still don’t get it, you may want to cut your losses and move on. Yes, I mean fire your client. It may sound ludicrous especially with the market being extremely slow for most agents, but don’t ever forget the 80/20 rule.

To sum it up:

Buyers  -  Don’t get discouraged. Though they’re few and far between, there are great deals out there. Just make sure that you and/or your agent is finding these deals for you and act swiftly once you find them.

Sellers  -  Price your home correctly and choose an experienced and honest (if not painfully blunt) local agent/broker to sell your property. If you don’t, you will just sit on the market and watch your market value diminish while your competition sells. 

Agents/Brokers  -  Do your homework, know what the hyper-local market conditions are, be honest and upfront from the start regardless of your fear of rejection and refuse to take a listing that you know will not sell at the pie-in-the-sky price the seller wants.