nesemeier.com

I was witness to an unsavory settlement recently while assisting another Realtor on a transaction.  Here’s the story.

Seller and buyer were under contract, due to settle on a Thursday afternoon.  On the Wednesday evening prior to settlement I was informed by the buyer’s agent that the purchaser’s settlement company had a problem with their business license, and could not settle.  Arrangements were made to switch title companies.  No settlement Thursday.  We targeted the following Monday for settlement because the lender needed a couple of days to get the loan arrangements redefined.  As it turned out, the original title company, apparently with a closed Virginia escrow account, the reasons for them losing that account made entirely unclear, was unable to disburse funds, so the title company next door took over the case.  How long the original title company was unable to use their Virginia escrow account was unclear, as was the buyer’s agent knowledge of this fact.  There was initially plenty of finger pointing to go around, but the objective was to get the property sold; at least from the seller’s side.  I’m not so sure about the buyer’s side.  Even though a third party delayed the settlement the buyer’s agent appeared either reckless or inept at assessing the gravity of the situation.  As I had discussions with both title companies, old and new, I found that these two companies “cover” for each other all the time.  If one company has an escrow account issue they “trade” to the company who is currently in good standing.  WHAT?  The buyer has the right to choose settlement companies in Virginia.  As much the listing agent wanted his client to move to a title company that understands good business practices, the client went along with the buyer’s title company change for the sake of speed.  He needed to sell the property.

Monday arrives.  No loan documents, no information provided by either settlement company, and a last minute call by the buyer’s agent.  Tuesday, no loan documents because the big lender’s computers are down.  I called Mr. Big Lender directly.  There phones were up, computers up, and stock share price seemed to be trading with no news of computer failures coming across the wire. 

Wednesday arrives, 1 week after the original title company problem.  The lender’s papers arrive at the settlement company and settlement is scheduled.  The mortgage broker sold the loan package to Mr. Big Lender.  The mortgage broker’s fees totaled $6000 over Mr. Big Lender’s fees!  The buyer’s closing costs amounted to almost 6% of the sales price of the house!  YEOW!  To further complicate matters, the seller authorized a subsidy to the buyer to help with closing costs.  Some of the overcharged amount to the buyer was paid by the seller.  The buyer, excited about this first home purchase, had not a clue as to what was going on.  Unsavory, but the property settled.  The seller is happy to move on, and the buyer is elated to move in, but both sides paid more than they should have.

This buyer would have saved $6000 by simply applying to Mr. Big Lender directly.  Her buyer’s agent should have, could have, pointed that out.  At settlement, in order to help her client save money, the buyer’s agent, instead of trying to negotiate ridiculous mortgage broker fees, made a last minute change to the HUD to remove the buyer’s title insurance!  Double YEOW!  The listing agent and I sat in silence and wonderment, watching this happy, unaware buyer just go along with the “expert” advice she was getting.

Watch out people! 

When getting pre-approved for a loan, SHOP IT!  If you choose a mortgage broker, ask for fees up front, ask for a good faith estimate up front before committing to the broker, and when it’s time to settle, hold that broker accountable for the fees which were stated to you from the beginning.  Your agent should give you two or three lenders from which to choose, and, through experience with those lenders, knows that their fees are reasonable.   ANY PURCHASER CLOSING COSTS THAT EXCEED 2 TO 3 PERCENT OF THE SALES PRICE, OR ANY BROKER ORIGINATION FEE THAT EXCEEDS 1 PERCENT OF THE SALES PRICE IS PROBABLY TOO MUCH! In the example above the mortgage broker’s origination fee was 2.5%.  That is pure profit for someone at the buyer’s expense (and the seller’s too if a seller subsidy is involved). 

When receiving recommendations for a title company, as a buyer, especially a first time home buyer, you should ask your agent for more details about the company.  Does the company have easy access to information via web page?  Are draft HUD statements provided on demand any time you ask for them?  What title insurance company do they use?  What are there fees?  Are their escrow accounts current and in good standing with the state?  Has the agent used the company before?

As a seller on a real estate transaction, limit your subsidy to 2 to 3 percent of the sales price (there are exceptions, such as the Nehemiah program.  Ask your agent for details).  If you receive in any offer an accompanying pre-approval letter from a mortgage broker that your agent has never heard of, consider a counter offer to limit your subsidy exposure to exhorbitant fees.  Your agreed upon subsidy could be squandered, and you want your net proceeds in your pocket, not the pockets of the mortgage broker. Counter-offer with a requirement that you want a pre-approval letter and a commitment letter from a well known mortgage company, counter with a reduction to the requested seller subsidy, or counter with a larger earnest money deposit (around 3 percent) with some language that will put the buyer into default if the mortgage broker fails to get to settlement on time for any reason and you will collect the buyer’s earnest money as liquidated damages.  There are numerous ways for you as a seller to limit your exposure.  Your agent will help you with that.

Consumer beware!  Buyers, shop for your peripheral real estate services.  Sellers, limit your seller subsidy exposure beginning with the counter offer process.  If the offer looks weak on the lender side, make it stronger with your counter.  If the buyer is marginally qualified and falls out because of your counter they weren’t well qualified to begin with. You will have saved yourself a lot of anguish.  The market is tough enough; you don’t need your back put against the wall because of poor buyer choices or choices made for them by their agent.

I’ve got to tell ya, I had a branch dangling from one of the big trees over my deck.  It was a big branch, and it was threatening the health of my Weber grill.  Since it’s grilling season, and I didn’t want to die by a knock on the head when cooking my next steak, I called Mr. Moon from Green Luna for an estimate on removing the whole dang tree.  He offered instead to take out the branch, risking life and limb for a very reasonable price the day after I called him.  Mr. Moon can not only perform life saving limb removal on trees in your yard, he also is an accomplished landscaper and stone work guy.  His work is good! Call Mr. Moon at Green Luna Landscaping 202 207 5045, fax 703 913 5468.  If you want to e-mail him, call me and I’ll set you up!  Click here to see an example of his stone work and patio work!

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
www.nesemeieronline.com

If you list, you last in real estate industry; so goes the cliche.  Listing agents bring houses to market and rely on all of the other agents out there to sell them.  If advertising is good, the house is priced right and the house shows well listings can also be a great springboard for future business.  Every agent likes to list homes for sale and I’m no exception!  Occasionally it doesn’t make sense to take a listing for various reasons, but there will always be an agent out there who will take a listing under any circumstances because the longer term goal is to generate future business from it.  I’ll take the short term loss in business rather than take on an unreasonable seller.

I’ve been on a few listing appointments over the last few months and “lost” them because the sellers and I weren’t able to come to terms over the price….but, who really lost?

September, 2007 — I was invited to visit a couple who was unhappy with their current real estate agent and wanted to try a different approach.  The townhouse was originally listed at $415,000 and had been reduced to $399,000 by the time I was invited in to give my presentation.  The sellers were really stuck on the price, and had a goal to make a certain amount of profit from their house because they needed it to move into their new place.  The townhouse showed well and had a nice kitchen, but was smaller.  I presented both a market analysis and a price trend analysis, which at the time showed the absorption rate (the time, expressed in months, that an average listing takes to sell) at 18 months.  Their current price was out of range and they needed both to lower it and expect to wait a while for an offer.  We talked about listing the house but I declined to recommend a price until they withdrew their current listing agreement.  They reduced their price shortly after my appointment but eventually withdrew the listing and listed with another agent at an even higher price than their previous low. 

A buyer customer contacted me and wanted to look at townhouses in the seller’s neighborhood, and of course, I showed them the seller’s house.  It showed well but my customers wanted something larger.  The seller called me a couple of days after the showing and I explained the showing results, and again pointed that they were probably overpriced.  Their listing agent never followed up with me.  The second listing agreement eventually expired, and I wrote a note to the sellers to ask if they were ready to list with me.  I received no response and their third listing agreement was with their original agent, and the price was lower, but still above comparable solds in the neighborhood.  The result:  Under contract at $330,000, $85,000 lower than and 218 days after their initial listing.  My loss was the opportunity to list and sell their house and about 20 hours spent on market research and showing the property to a customer.  Their loss:  at least $85,000.

September, 2007 – Another townhouse listing appointment, and I was competing with a top producing agent to get the listing.  The top producer had already made her presentation and I was the second interviewee.  As always, I had had a market analysis and a price trend analysis at the ready, and took the sellers to three other townhouses in the neighborhood so that they could look at the competition first hand.  One of the three was very close in property condition to the seller’s property, one was in inferior condition and priced appropriately, and one was grossly overpriced.  When they asked me for a price recommendation I thought it best to compete head to head with the townhouse that had similar upgrades and showing value, with a list price of $410,000.  I was certain that in a head to head competition at $410,000 the seller’s property would get an offer first.  The sellers told me they wanted to price at $430,000, a difference of $20,000, citing the overpriced property and its condition, but I held firm with my suggested price and strategy.  I “lost” the listing and they went with the top producing agent at $430K.  A week later the $410K property went under contract, just as I thought it would, and their price “support” had been lost.

In the meantime, house prices continued to decline, and my price trend analysis clearly showed the marked decline over the summer of 2007 and that it would likely continue.  Well, that top producing agent has some strong mojo!  The seller and agent stayed in their listing agreement for six months and never reduced the price.  Either the seller or the agent withdrew from the agreement, the seller is with agent number two, and the price has been reduced to $389K.  It’s a significant reduction, but the market shows listings for as low as $269K in their neighborhood now!  A $20K disagreement last August has resulted in what could be as much as $161,000 loss to the seller.  My loss was about 15 hours of preparation for the listing appointment and the listing appointment itself.  Who lost more?

September, 2007 — I received a call from a customer I met at an open house last spring who wanted to list his condo for sale, a well prepared 1 bedroom unit. I made my usual preparations and took pictures of the competition to show the clients at the listing appointment. I recommended a price of $250K, the clients wanted $255K, and we listed it at $255K. We got an offer and a ratified contract after only 2 days and closed at the end of September. The client was happy, I was happy, and we’re starting the home buying process very soon.

March, 2008 — I showed a property to a client, a nice 3 bedroom rambler that needed a little work but was otherwise in good condition.  The seller called me, unhappy with her listing agent, and asked me for a CMA and I obliged.  When I arrived for the appointment they told me their listing agreement had expired but they were continuing to stay on the MRIS.  Odd, but I went along.  My CMA showed they were about $25K overpriced and I recommended they lower it.  They did, but with their “expired” agent.  Result, contract in less than a week after the price reduction.

Is there anything wrong with being straightfoward at listing appointments?  Given my appointment record of “losses” maybe so.  I could have easily gone along with the townhouse folks and promised them the moon and the stars, but what benefit would have been gained?  And in the case of the “expired” agent situation, I could have declined to recommend a price, but these people really wanted to sell, so my goodwill kicked in.

You know, it happened to me again last month….productive listing appointment, months of preparation and follow up to get the house ready for sale, and the sellers at the last minute decided to chase dollars and went with an agent who apparently did promise them the stars and the moon, priced $70K above my recommended listing price.  Time will tell who was right on this one, but my disappointment is genuine and not my own.  I’m disappointed in sellers who just don’t get it.

Gerald Connolly, in his Fairfax County State of the County Address on Friday, March 28, 2008, proposed a new program in which the County would buy foreclosed properties and sell them at below market value to qualified families.

I believe Mr. Connolly and his idealogue cronies should stay out of the real estate market.  While the short term effect could be reduced foreclosure inventory, the longer term effect of reselling these foreclosures at below market value could be reduced property value for surrounding homes that aren’t in distress and would like to sell.

We don’t need Fairfax County’s help with the current state of the local housing market, and we certainly don’t need a set of qualifications put forth for buyers to purchase homes under market value.   Taxpayers should never be involved with the expense to purchase, rehabilitate and undersell the real estate market to clear foreclosured property inventories.  Market forces are already eroding equity throughout the county, and this foolish idea, if converted into a program by the county, could unfairly and disproportionately pass unecessary housing expenses in the way of higher taxes to those who have been responsibly paying mortgages on time.

The only help we need from the County is to foreclose on properties when taxes aren’t paid and put these homes up for auction to the highest bidder.   Real investors with real cash are always looking for opportunity and only they can help turn the market around.

This county intitiative, while only in the early discussion stage, is simply ridiculous.   The last thing Fairfax County homeowners need is government intervention in an open market. 

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
web: www.weichert.com
web: www.nesemeieronline.com

Hi!  I’m bringing a buyer client of mine over to see your house today, but I’d like to ask you a few things.  How’s your kitchen?  Bathrooms upgraded?  Windows?  Roof?  Furnace hot?  Air conditioner cold?  Has your hardwood floor been refinished?  Have you had any offers?

I have a couple more questions.  These are a little harder.  Why are you priced $50,000 higher than the same model house down the street?  Did you know that last closed sale in your neighborhood was $30,000 less than your asking price, and those sellers paid all the buyer’s closing costs?  What business case can you make to justify your price?  Reaching your own personal profit goal is not a factual answer.  What’s the market based answer?

Here’s some reality.  There are a lot of buyers out there who are fixated on price.  When they choose a neighborhood they start looking at the lowest priced houses first.  If they like the neighborhood they might look at another house or two around you.  If your price is at the top of the heap chances are excellent that they aren’t even going to drive by.  Is that fair?  For buyers, yes! 

Here’s more reality.  When I take a buyer through a property I’m looking for reasons to get them a lower price.  If you don’t have the upgrades a buyer is looking for I’m going to recommend they lower their offer.  A lot.  I’m not talking about relatively recent upgrades, say, within 5 to 10 years on a bathroom or kitchen that are a matter of taste; people are mostly reasonable and will just pass on the house if they don’t like the upgrade.  I’m talking about kitchens that are 30 years old,  bathrooms that are certainly clean but have the same 30 year old tile on the walls, single pane wood or aluminum windows that sway in the wind with an R factor of 0; you know, that kind of thing.   You will end up sharing the cost of the upgrade if you haven’t done it.

Buyers are finicky.  Sellers are too.  Buyers aren’t blinking first, and what will give is the price.  Get ahead of the market.  Buyers understand the current trend.  Why don’t you?

If you are preparing to list with me or with any other agent, please remember that we are squarely in a buyer’s market in most of the Northern Virginia area.  Your house is not immune.  Demand frank discussion about the current market and price where the market says you should be; otherwise you will be flailing in a sea of inventory wondering why your house won’t sell.

I know.  You may be thinking, not my house.  I’m not giving it away!  Keep in mind that you have had quiet enjoyment of the home for years, and if you bought your home several years ago you have made a tidy little profit.  Keep your eye on the market, and adjust accordingly.

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
web: www.weichert.com
web: www.nesemeieronline.com

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This may be old news for some, new for others, but nevertheless it’s time to renew interest in the actions of the Northern Virginia Transportation Authority’s (NVTA) reckless 500% increase on the tax on the sale of your home.  Virginia residents currently pay a grantor’s tax, currently assessed at $1 per $1000 value, paid by the seller.  The NVTA will increase this tax to $5 per $1000 on or about January 1, 2008.  The grantor’s tax will increase from $500 on the sale of a $500,000 home to $2500 to fund transportation initiatives in our area - initiatives you didn’t prioritize or ask for.

Admittedly, traffic gridlock in Northern Virginia is the norm at rush hour, but our politicians locally and in Richmond aren’t interested in increasing public transportation funding for recapitalization or acquisitions. Transportation issues are always someone else’s problem when Richmond politicians debate the issue.  Heaven forbid our elected officials take a stand and risk re-election to do the right thing to fund our ailing infrastructure.

So, HB 3202, amended by Governor Kaine and now written into law, allows the NVTA to impose a broad range of taxes to meet the area’s stifling transportation demands.  Going further than the grantor’s tax, the NVTA has also approved other taxes without public debate.  These taxes are:

• Motor Vehicle Rental Tax - 2% of the total
• Transient Occupancy Tax - 2% of the total
• Safety Inspection Fee - $10 per year
• Sales Tax on Auto Repairs - 5% of the total
• Regional Registration Fee - $10 per year
• Initial Vehicle Registration Fee - 1% of value (first time registration for a new vehicle or for vehicles that will be garaged in the area)

A quick review of referendums put to voters on November 5, 2002 reveals that Virginia residents overwhelmingly opposed tax increases for transportation  initiatives.  The Northern Virginia referendum to increase the sales tax by 1/2 cent to fund transportation initiatives failed 55% to 45%.  The Norfolk/Hampton Roads referendum for transportation initiatives, which would have increased the sales tax by 1 cent, was resoundingly voted down by nearly a 2 to 1 margin.  Prince William County’s $86.7 bond measure to pay for county road work failed 67% to 32%. The people of Virginia spoke loud and clear five years ago. What has changed since then?

The will of state and local politicians has quietly throttled funding of transportation related issues since 2002.  Transportation is a hot potato that could cost someone an election.  It’s a lot more convenient to appoint an unelected authority, lacking the same long term plan as each of the referendums that were defeated in 2002, to dig into Virginia taxpayer’s pockets with little more than a band-aid approach at tackling our local transportation woes.

Let’s take a look at a few of the short term projects that $102 million of your tax money will fund.  The NVTA has identified three funding categories: transit projects, multi-modal projects, and highway projects, funded at $39,208,820, $6,246,000 and $56,545,180 respectively:

• Escalator Canopy at Huntington Metro Station - $2,000,000
• Upgrade of Station Signage at at 20 Virginia Metrorail Stations - $6,100,000
• Fairfax County Parkway/Fair Lakes Parkway and Monument Drive Interchange - $28,850,000
• Prince William Parkway widening from Hoadly Road to Old Bridge Rd to Old Bridge Rd., $14,900,000

The NVTA’s priorities clearly lie on increasing traffic capacity over public transportation. 20% of the transit budget will create no rider increases in public transportation.  This $8,100,000 should be offered to taxpayers as a cost share subsidy to use public transportation, increasing WMATA’s federally assisted revenues.  Should WMATA maintain metro stations?  I think so.  Funding streams be damned.  Mixing budget pots between entities is attainable and more cost effective to taxpayers.

A whopping 77% of NVTA’s highway budget is attributed to decreasing traffic congestion where there is no reliable public transportation.  How far will this money go to begin the process of relieving congestion through the use of light rail or increased bus service in these areas?  The NVTA’s focus is wrong here.

Taxpayers have had no voice in any of these projects, and will have no voice unless you can change the NVTA’s direction.  Even the NVTA, unelected and not held responsible for their actions by Virginia citizens, doesn’t have the vision to permanently relieve traffic congestion through the aggressive expansion of public transportation.  Their short term goals will increase the very thing we would expect an authority to relieve; more traffic.

I’d like to encourage you to:

1.  Read this list of NVTA representatives, who are elected officials in other capacities, and if they are up for re-election this year, vote them out:

• Hon. Christopher Zimmerman, NVTA Chairman; Arlington County
• Hon. Martin Nohe, NVTA Vice Chairman; Prince William County
• Hon. William D. Euille, City of Alexandria
• Hon. Robert F. Lederer, City of Fairfax
• Hon. Gerald E. Connolly, Fairfax County
• Hon. David F. Snyder, City of Falls Church
• Hon. Scott K. York, Loudon County
• Hon. Harry J. “Hal” Parrish, II, City of Manassas
• Hon. Bryan Polk, City of Manassas Park
• Hon. Jeannemarrie Devolites Davis, Virginia Senate
• Hon. Vincent F. Callahan, Jr., Virginia House of Delegates
• Hon. Jeff Frederick, Virginia House of Delegates

2.  Demand that the NVTA hold public hearings prior to each of their meetings  and allow all meetings to be held open to the public as we would expect from any board meeting that decides how taxpayer money is allocated.

3.  Demand time to speak publicly to the NVTA to debate budgeting prioritization

4.  Demand your elected Richmond representatives repeal HB 3202 and roll back unrepresented, unwarranted taxes to their original levels.

The NVTA’s agenda is clear.  Build more roads, pay lip service to public transportation, and take the responsibility of making hard decisions about transportation issues from elected officials who we expect to represent us in matters about how our taxes are spent.  The NVTA is spending your tax money without your voice.  You ought to be angry about it.

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
web: www.weichert.com
web: www.nesemeieronline.com

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Okay, okay!  I give up! Virtually everyone I talk to is looking for the deal of a lifetime when it comes to buying real estate.  There’s no reason for me not to help you find a consolidated list of homes that are priced well below comparables in their neighborhoods.  I have stumbled across a website that brings distressed properties, foreclosed properties, and properties that have been drastically reduced into one web page!

There’s so much gloom and doom in our current real estate market.  Pundits are predicting the end of the world as we know it.  Heaven help us all!  What goes unmentioned is that the gloom and doom for some can be an excellent way to find great value if you are looking to buy this fall and winter.  There is so much housing inventory available that you can stumble across a house for sale, well priced and move in ready, virtually anywhere in Northern Virginia!

Will the market drop even more?  Waiting for the bottom?  What do you know about the market that I don’t?  Strike your deals now!

The link to the list of properties where you may find value in Northern Virginia appears below.  If you have any questions about any of these properties contact me so that we can go after it!

Disclaimer:  I don’t necessarily agree with predictions or commentary from the authors at the website provided in the link below.  The link is provided solely to help you find a quick list of inexpensive properties for sale without having to pay a subscription for the same information.  I have not verified the accuracy of the information, but I can help verify actual sales prices and terms and conditions of the sale of any of these properties.  Good luck with your home search!

Click Here for the List!

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
web: www.nesemeieronline.com
web: www.weichert.com

I really love my job!  I deal with people every day, and when my efforts are successful my clients are happy.  I deal with agents every day too (yes, they are people too), and there aren’t so many who are happy these days.  Some people who are trying to sell their homes in today’s market aren’t happy either.  Everyone wants top dollar for their home and, in their perception, they aren’t getting it.  Frustration ensues, and a feeding frenzy of negativity between agents and sellers surrounds them like a huge, dark cloud.  It just doesn’t have to be that way.

There are several things that sellers can control when placing their home on the market.

• Timing - Most of the time sellers can control  the time of year their property is to be introduced to the market.  Some times are better than others.
• Price - Completely controlled by sellers.  Realtors may recommend a range in which to price but the listing price is solely controlled by the owner of the property.
• Condition - I always recommend areas of improvement when preparing a property to list.  Sometimes a home needs paint, sometimes cleaning, sometimes a whole lot more than that, but sellers control the maintenance and condition of the home.  If you have a property for sale and it is messy or cluttered, only you can correct that.
• Terms - When an offer comes in, your tolerance level dictates whether it is acceptable.  Most of the time a counter-offer reflects what you really want, but sometimes sellers aren’t ready for what they see.  An offer can start a chain of events that takes time, but the events are sometimes consolidated into 24 or 48 hours.  Not good!  Read on.

There are also a couple of things that are controlled by the market.  They are simply beyond a seller’s and agent’s span of control:

• Competition - Houses are placed on the market every day, and pricing these days is sometimes not reflective of actual market conditions.  Nevertheless, it’s out of our control.  We don’t decide the prices of other homes.  We instead want to use them to your advantage.
• The Economy - We cannot control interest rates, the media, or general buyer sentiment that results from economic issues.

What do agents control?

• Promotion - We control how to market your property for sale, where and how to advertise, and use our networks to help get your house sold.  My marketing plan is similar in some respects to that of other Realtors, but I am a lot more personal about it.  List with me to find out just how aggressive I really am…but I digress…this isn’t about me!  I want to write about seller’s loss!

So, out of all of these elements and so many variables between them all, who controls how quickly a house sells?  Is it the agent?  Sometimes, but he controls only 1 element of the sale.  Is it the seller?  Sometimes, but she controls only 4 of the elements of the sale.  Is it the market?  Sometimes, but interest rates and the economy wiggle every day.  Is that crystal clear to you?

Let’s look at the primary element of any given home sale; the price.  If your home is priced right, given all of the other variables in the home sales equation, it will sell.  I promise!

Let’s say seller x lists his property at $700,000 when everything comparable to him in his neighborhood is selling for $600,000. The property has all of the upgrades and sparkles during any showing, but no one wants to step up and buy it. Or, seller y, in the same neighborhood, has received good advice from a Realtor, has been shown the trend in prices in the neighborhood, and prices just under the critical mass of homes for sale or sold in the neighborhood.  It has the same upgrades and shows just as well as seller x’s home.  Both seller x and y have built up equity in their home over the years and have room for negotiation in any offer.  Over a period of several weeks or months, seller x’s agent asks for a price reduction, and is met with resistance, while seller y’s home sells.  Why the resistance by seller x?

Loss.  Loss not unlike losing a family member.  Seller x sees money that he wants to spend on his next home, maybe his retirement home, diminish.  That makes him mad!
Lets review the stages of loss as they apply to real estate.

• Denial - Despite the market conditions around him seller x continues to think that his home will fetch a higher price than everyone else’s.  He’s been shown the data over and over again, but just won’t accept it.  The market is telling him something, and his agent is the messenger.  Seller x continues to hold out, knowing sub-consciously that reducing the price is the right thing to do.
• Anger - Continually, gently reminded by his agent that the market is telling him that a price reduction is in order, seller x gets mad.  Anger is a secondary emotion, a projection of the underlying issue, so say psychologists and one college professor of mine.  Seller x doesn’t want to reduce the price and takes it out on, you guessed it, the agent.
• Frustration - Seller x’s agent may be right.  A price reduction might get more showings and get an offer on the table, but seller x will be “losing” a lot of money as a result.  What’s the best approach to take? Will seller x try again next year?  How can, or will, seller x handle the loss? Still angry with his agent, he considers firing him to try again with a different agent, but the market isn’t changing the message, and the agent and the market message has been consistent.
• Disappointment - Now we’re in transition.  Seller x is beginning to realize that he’ll have to deal with what could be a big monetary loss.  He’s held his property for years and bought it a fraction of the sales price, and will likely walk away with a big profit even after a price reduction, but he still doesn’t like it.  Seller x really wanted more of a profit.
• Acceptance - Seller x has accepted market conditions and his agent’s advice.  He reduces the price so an acceptable level and sells the house.

Now, there’s yet another variable.  Suppose your house is overpriced and an offer comes in at the market price?  Talk about knee jerk!  In the scenario I’ve described in detail the seller had time to reflect and analyze the information.  He didn’t like it, but he had time to deal with loss.  He worked through the stages of loss, came to terms with it, and moved on.  Now, Mr. Seller, you’ve been on the market for two months, and an offer is on the table in front of you, significantly less than you hoped for but in line with the current state of the market in your neighborhood, and you are mad!  The clock is ticking and the buyer wants an answer.  Heaven help the seller’s agent, who now has to help work you through the stages of loss in one night!  How many of you sellers out there are still ticked at your agent because of this scenario?  I already know the answer, by the way!

I recently drove through a neighborhood in Northern Virginia to preview four properties for clients before showing them.  They were in the $420K range.  As I drove around I noticed two For Sale By Owner properties across the street from each other.  The curb appeal of one was fabulous, so I stopped to pick up a flyer.  The owner of the FSBO property across the street was outside and came over to chat, and she told me that she owned both properties.  I asked her the prices of each…one $100K over the comparables I just previewed, the other $150K over.  WOW!  When I told her about the comparables she grinned at me…you know, the kind of grin that conveyed that I didn’t know what I was talking about.  I’m just a dumb Realtor who doesn’t really know the market.  Never mind that I’m in a house somewhere every day, and looking at market trends every day.  I then showed her the listings to  the four comparable listings I had just previewed, which were on the passenger’s seat of my car, and her grin went away.  I gave her my card and let her know that when she was really ready to sell I would be happy to help, but I knew I would never get that listing.  Over time I noticed an agent’s sign on one of those FSBO properties and looked it up.  It’s still $100K over the market comparables.  Denial truly runs deep sometimes, but the owner at least took a step in the right direction and hired a professional that might know the state of the market in that neighborhood.  If that agent is good enough she’ll work them through the stages of loss and get the house sold over time, while those seller paid mortgage payments keep adding up.  I, on the other hand, will forever be the bad guy to that particular owner, the object of anger, frustration and disappointment until the house is sold.  I’m okay with that; I’ve given their agent a more educated client. That’s business!

You don’t have to like your agent, but please respect what he or she says.  Sometimes agents say what you don’t want to hear. If you choose me as your agent, expect me to be realistic, optomistic, and aggressive.  I know this business and the state of today’s market, and want you to have the same insights into selling homes that I have gleaned through my day to day experiences.  It can be a tough market, but hang in there.  Your house will sell!

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
web: www.nesemeieronline.com
web: www.weichert.com

My previous post about Fairfax County’s blight abatement program has generated a new discussion about the maximum number of people who can live in a home.  Here are some answers, provided by an online pamphlet posted on www.fairfaxcounty.gov :

In Fairfax County, as well as other communities across the nation, laws are passed to protect the health, safety and welfare of residents.  Housing, building and zoning codes limit the number of people who may live in a home, apartment, townhouse or condominium.  The purpose of this brochure is to help you better understand some of the basic occupancy requirements as set forth in the Virginia Uniform Statwide Building code (VUSBC) and the Fairfax County Zoning Ordinance.  For detailed information about the laws governing the occupancy of a residence, call the Fairfax County Health Department at (703) 246-2300 or the Department of Planning and Zoning at (703) 324-1314.

Health and Building Code Standards

In an effort to ensure a safe and healthy living environment and to help minimize the spread of disease, national housing standards or codes have been developed.  One of the code provisions, designed to protect public health and safety, places limits on the number of people who may live in a home/dwelling.  Properties in the state of Virginia are governed by the Virginia Uniform Statewide Building Code.  The VUSBC space requirements shown below limit the number of people who an occupy a dwelling.

Standards:

• A bedroom or sleeping area regularly occupied by one person must have at least 70 square feet of space.
• When two or more people regularly occupy a bedroom or sleeping area, 50 square feet of space must be provided for each person.  Space Requirements per bedroom or sleeping area:
  70 square feet of space for 1 person
  100 square feet of space for 2 people
  150 square feet of space for 3 people.

In addition to the space requirement, the room(s) used for sleeping must provide privacy, adequate light and ventilation, and two means of exit, one of which must lead directly to the outside.

County Zoning Ordinance Provisions

In Fairfax County, occupancy limits for a dwelling can be found in the Zoning Ordinance.  Shown below are some of the most common Fairfax County Zoning Ordinance provisions relating to the occupancy of a residence. The Zoning Ordinance, Section 2-502, permits, among other things, a dwelling to be occupied by:

• One family, which may consist of one person or two or more persons related by blood or marriage with any number of natural children, foster children, step children or adopted children.  In addition, there may be up to two roomers or boarders.
• Two single parents or guardians with not more than a total of six of their dependent children, including natural children, foster children, step children or adopted children, functioning as a single housekeeping unit.
• A group of not more than four persons not necessarily related by blood or marriage living as a single housekeeping unit.

Daniel S. Nesemeier
Realtor
Weichert, Realtors
6715 Little River Turnpike
Annandale, VA 22003
web: www.nesemeieronline.com
web: www.weichert.com

There are countless numbers of wonderful neighborhoods in Northern Virginia without a homeowner’s association.  Most single family neighborhoods inside the beltway, especially, don’t have an HOA to help enforce outside maintenance issues; you know, keeping lawns cut or maintaining home exteriors to meet a minimum standard that helps a neighborhood look nice.  Occasionally a homeowner, even in neighborhoods that have HOA rules, is unable or unwilling to bring the outside appearance of a home to a minimum standard.  Maybe the house is abandoned, or the owners or tenants can’t afford upkeep, but nevertheless you and your neighbors drive by it every day and wonder, mostly without discussing it between yourselves, why that house is in such bad condition. You are not powerless to resolve the problem!

There are neighborly ways to help improve the appearance of a blighted home.  You should start by getting a couple of the neighbors together and discussing a plan of action.  Your plan should include volunteers from your neighborhood who are willing and able to do a little outside work on the blighted property.  Make a list of problems with the home; lawn maintenance, fence repair, paint, yard debris removal, that sort of thing. Put your plan in writing and keep it handy.

You aren’t, of course, being a good neighbor by charging in and taking on maintenance issues for someone else.  You’ll need the owner’s or tenant’s permission.  There are a lot of reasons why someone may not be keeping up with maintenance.  In most cases the owners are elderly and simply unable to do it themselves, or finances in the household are a problem and the owners or tenants need a little help.  Or it could be that your neighbor just doesn’t care.  Regardless of the reason you can’t possibly know it until you chat with whoever is living there, and that’s what you should do.

Take a bold step by knocking on your offending neighbor’s door. Bring your written plan with you, and have a friendly discussion with the owner or tenant to determine why the home is in such bad condition.  You’ve got to be sensitive to how you present yoursef during this first intervention.  Embarassment by the owner or tenant will be the first response.  If you are genuinely concerned that is exactly what you should be projecting. Try to root out the cause.  It’s likely that your neighbor just needs one of your kids to mow the grass every couple of weeks.

If your neighbor is showing concern and you have determined that your help will be welcomed, discuss your plan, get permission, put your task force together and knock everything out in a weekend.

What do you do if your attempt to reach out is met with resistance? Seek county involvement.  In Fairfax County, call (703) 246-5179 and ask to speak to a representative working in the Blight Abatement Program.  Fairfax county offers programs to assist owners of blighted properties to bring their homes up to a minimal standard.  You can find more information about the program at www.fairfaxcounty.gov/rha/blight.htm .  In Arlington County, call (703) 228-3000.

You can solve blighted property issues with neighborhood involvement and perseverance.  If you’d like for me to help you put together a plan of action please contact me and I’ll get you started.