Last week I wrote about that crazy Zestimate. The zestimate, is a calculation that can be found on the Zillow website that is an estimate as to how much a home is worth. There is a margin of error for every city and in some cases that margin is a big one. According to Zillow 37.5% of the Zestimates of properties in Minneapolis and Saint Paul are within 5% of the actual sale price.
Sellers may actually be better off if the “zestimate” is less than the listing price as opposed to more than the listing price. When buyers see the price of the home and it is more than they want to pay and the zestimate is even higher they probably won’t make an offer. If the zestimate is lower than the asking price the buyers may see that as the value of the house and make an offer based on the zestimate.
When buyers offer less we can usually negotiate the offer up. In fact I just love to negotiate so bring it on. If buyers don’t make any offer at all there is nothing to negotiate. If your home is on the market and you are serious about selling you want an offer. Don’t be afraid of a low Zillow Zestimate. It should help you sell your home for more.
There are a lot of people who believe in the Zestimate. It is a good idea to know what the Zestimate for your home is. There isn’t any point in trying to suppress the information if it isn’t what you were hoping for because buyers and even your neighbors will look it up. My own home is missing about 400 square feet on Zillow of above ground finished living space which means the zestimate is lower than the actual value. If I were to put it on the market today I would list it for about 60K more than the “Zestimated” value.
If you would like to know how much a Realtor® thinks your home is worth. Call or write and I’ll send you out information about what the public records show and I’ll do my own analysis. Free of charge of course unless you want to pay me.
House – not new construction. They don’t build them like this any more.
There isn’t much new construction in St. Paul. There are a dozen or so new homes on the market right now. Over all in the metro area there are fewer than 600 new construction homes listed for sale. Most are in the burbs. The average size of these homes is over 2500 square feet for an average price of around 450K. Homes that were built a decade ago in 2005 are about 100 square feet smaller and cost about 80K less than homes built in 2015.
Buyers pay more for new construction but it isn’t like buying a car. The value does not go down, although it may go down a little the first year or two depending upon how big the development is that the new construction is in and what else is for sale in the area.
When buying new construction it is a great idea to bring your real estate agent with. I’ll never forget the call I got from a neighbor several years ago. She bought new construction and ran into a snag and did not know what to do. It was hard to help her because she had signed contracts. She did not know that she could have had me help with the purchase and that I could have saved her some money while making the process more transparent and less stressful.
The friendly people at the model home are representing the seller not the buyer. They can help the buyer and facilitate the sale but that isn’t the same as representing the buyer. The agent at the model will make more money by working with buyer and seller but the buyer won’t save a dime.
The sales people who represent the seller know the development and project better than I do but they are willing to work with a buyers agent. A buyers agent with new construction experience is best because we know what to ask and what to expect and might be able to stop a buyer from signing something he or she might later regret.
Usually the agents at the model home or construction trailer will ask buyers if they have an agent. There is a reason for this. Claiming an agent later on usually causes problems. In most cases people can just walk into new construction without their agent. They will be asked if they have one and they will be asked for the name of the agent. Once given the information the agents will work with your agent.
One of the many things I love about St. Paul is that there are wild areas right in the city or close to it. Yesterday I went to Battle Creek Regional park where I knew I could find some of my favorite spring wildflowers blooming in the woods.
I could hear the pileated woodpeckers but none of them would pose for me. The sights and sounds and smells are so therapeutic to an urban dweller.
The bloodroot is in full bloom right now. You can find them in clumps growing in the wooded areas of the park.
It is friday and fridays are for fun. I understand the need for road construction but sometimes it seems like projects are coordinated in such a way that alternate routes all have some construction on them so that it takes a long time to go just a few blocks. This construction season is a big one especially downtown which is how it was last year and for all the many years they worked on building a light rail and other large projects. I wonder what it would be like to have every road and sidewalk in downtown St. Paul opened at the same time? Wouldn’t it be crazy if they opened all of the roads AND removed all the hoods from the parking meters?
For Home Sellers
I am convinced that most home sellers and their real estate agents don’t really understand the concept of using photography to market a home rather than to document the existence of various rooms. Amazing photographs do attract buyers who are searching the internet looking for that perfect home. Some studies have shown that homes that are marketed with professional photography actually sell for more money than those that are photographed by a real estate agent using an iPhone or point and shoot camera.
There are rooms in almost every house that are hard to photograph or that just don’t look that appealing. I generally don’t photograph those areas because they are not going to help me sell the home.
Who ever took the photographs in the screenshot simply did not use the right kind of equipment. It doesn’t look like he or she used a wide angle lens. The camera was not held level in either photograph.
Most of the rest of the photos for this home have a strange yellow hue to them because the photographer used an automatic white balance setting.
I have written many articles on this subject. Marketing real estate mostly happens on the internet. The internet is a visual place. Homeowners can hire a professional photographer themselves if their agent won’t. I am not exactly sure why anyone would work with an agent who does not provide professional photography but then there are many things that I don’t understand.
When I shop online and look for shoes I rarely find a bad picture of a shoe. They almost always look better in the photographs than they do on my feet.
Kitchen – taken with a wide angle lens and a DSLR camera. The home is located near Rice Street in St. Paul.
First Time Home Buyers
It is spring and the competition among buyers is heating up. Buyers find that perfect home only to learn that three other buyers have offers on it.
Serious buyers will need to put their best foot forward and make their first offer their best offer in a multiple offer situation because they may not get the chance to negotiate. Often buyers imagine scenarios where they offer X amount and sellers counter at X amount and they end up getting the house for the amount they had in mind. In todays market the seller is calling the shots.
The best offer isn’t always the offer of the most money. Financing is important too. Buyers who are putting more than 5% down may have an advantage. More cash in the mix means that there is a greater chance that the loan will close.
Closing dates matter. Buyer who are inflexible will have less negotiating power. The best strategy is to ask your agent to find out what the sellers have in mind for a closing date. Sellers who need to move into a home that they have an offer on may have to pass on an offer that is 110% of the asking price with a closing in 90 days or maybe the offer is perfect for them.
Flexibility on possession date and time can be important. I have seen situations where sellers need to move out of one home and into another on the same day that they are closing on both the sale of their home and the purchase of another. Not an ideal situation but it happens. Buyers who can allow the seller a little more time to move out can have an advantage in a multiple offer situation that doesn’t cost them a dime.
The amount of the offer is important. I have never seen a lowball offer win in a multiple offer situation. If the home just came on the market today the seller may not be ready to consider a less than full price offer.
When the perfect home comes on the market it may be sold by the weekend, be ready to make an offer now. Have a pre-approval letter ready. See the home as soon as you can and make an offer or let your agent know you want to make an offer as soon as possible. Sometimes sellers will wait a few hours or even a day for an offer even though they have others if they know the offer is coming and the reason for the delay.
Assuming that the sellers have a lot of money that they can contribute to closing costs is a mistake. Sellers who owe a lot of money on a home may not have the resources to pay the buyers closing costs. An offer that does not require a seller contribution may be more attractive to a seller even though it is for less money.
As a bonus tip I can tell you that when there is a “coming soon” sign in front of the house the listing agent is likely collecting offers from his or her own clients or from the clients of agents in his office. Contact the agent or your own agent and chances are they will let you see the home before it comes on the market.
Work with an agent who is prepared and who can quickly write an offer and one with a lot of experience in multiple offer situations.