Ideas for real estate agents representing home buyers

living room
vacant house

I was going to call this “Throw Back Thursday for buyers’ agents”.   Negotiating has come back. It is still a seller’s market but it is getting a little harder to sell a house because of the high prices and high-interest rates. Sometimes homeowners need to make some concessions to speed up the sale.

The best way to get a seller concession is to ask for it. Here are some things that can be put into an offer on a house. The seller might say no but they might say yes:

  1. Ask for repairs – within reason. Make sure buyers understand the difference between a needed repair and an upgrade.
  2. If the buyer is a little short of cash for a downpayment go ahead and ask the seller for help with closing costs.
  3. Some houses are overpriced. Go ahead and offer less than the asking price.
  4. Yes, you can ask for new appliances.
  5. Ask to have the home professionally cleaned.
  6. Have the seller hire a pro to shampoo the carpet before the closing.
  7. It used to be common to ask to have the furnace or boiler certified.
  8. The sellers may agree to pay to have the chimney cleaned.

Buyers and their agents will need to use their imaginations.

Remember, it never hurts to ask and sometimes the answer is yes. There are many other things that can be negotiated into a purchase agreement. It is as if buyer’s agents have forgotten how to negotiate.

Home sales and prices for February 2023

There are more houses on the market right now than there were a year ago but it is fair to say that the seller’s market that we have been seeing for the past few years is as strong as ever.

Houses are staying on the market longer but they are still selling in less than 50 days in most cases. Prices are still going up but much more slowly and hesitantly than what we saw in 2020, 2021, and much of last year.

The closed sales prices reflect January activity more than February activity as there is usually a 30 lag between when an offer on a house is accepted and when the sale closes.

Interest rates and weather are both contributing to slower home sales.

The numbers used to create the table below are from the NorthstarMLS which is deemed reliable but isn’t guaranteed. The majority of the homes that were sold in St. Paul in February were listed on the NorthstarMLS (multiple listing service)

table that shows home prices by neighborhood
February home sales by St. Paul neighborhood

In the Twin Cities, the housing market usually starts to peak in mid-March as far as the number of sales and the prices.  It will be an interesting Spring with higher interest rates and high demand and low supply of houses on the market.

If the home is overpriced offer less

small houseWaiting for the price of a home to go down is a great way to miss out on a lower price. Home buyers save listings that they find on various websites and track them waiting for the price to go down.  While they are doing that a savvy home buyer finds the listing, falls in love, and offers less than the asking price.  Guess which home buyer gets the house?

The savvy buyer of course.

The smart home seller makes sure their home is correctly priced when it goes on the market. The not-so-savvy home seller “tries” the house at a higher price. Buyers see that the home is for sale but instead of making an offer, they wait for the price to go down.

A higher sale price on a house does not make the house worth more, nor does it attract buyers.

Proper pricing is very important. If the goal is to sell the house rather than have a bunch of interested buyers watch for a price cut it is important to start at the right price.

We are still experiencing a shortage of houses for sale in the metro area and prices are still slowly rising. My advice it to work with an experienced Realtor if you are buying or selling real estate this spring.

Why can’t AI price real estate correctly?


Why can’t AI (artificial intelligence)  price real estate correctly?

It is true we have all sorts of tools we can use for putting a value on real estate. I use them sometimes but always in conjunction with my own analysis. My analysis is always closer to the actual sale price than any of the auto valuation tools.

Autobaluation tools are great for doing a rough estimate or a starting point for finding the value.

I have a lot of experience, more than 21 years of experience pricing houses and figuring out how much they will sell for. Experience is a great teacher.

There aren’t any two houses that are exactly the same, Even if they are very similar they are not on the same piece of land.

In addition, to tools and data experience, there are things that I can see and know and understand about how people use houses and how a house may command more or less money depending upon intangibles like landscaping and traffic.

The basics for pricing residential real estate is to find three comparables that are close by and that have sold recently. Often the comparable houses are similar but now exactly the same. The three biggest factors that will determine value are location, size, and condition.

Pricing a house requires a kind of fuzzy logic that artificial intelligence doesn’t have.

Pay attention to the world around you

It is Friday and Fridays are for fun. I recently read an article where the CEO of a large corporation was interviewed. In the article, he advised salespeople to stay positive and to stop watching and reading the news because it is negative.

Of course, the people who have gotten wealthy from the labor of others want that labor to continue without distraction which is what got us into this mess in the first place.

Yes, there is a lot of bad news these days but it won’t go away because we ignore it. Unless you are very wealthy the bad news is impacting your life already.

This is the time to pay attention and do what we can to make the world a better place. It is time to take action. Positive thinking isn’t making a difference.

I recommend being a rebel and taking the day off from work to catch up on the news. Not cable news but actual news if you can find it. The old-school newspapers have news in them. Start there. Many are online. The big fat ones are published on Sundays and can be found in stores and in those little metal boxes around town.

The Penfield – throwback Thursday

The Penfield is located on 10th street and Minnesota street in downtown St. Paul. Luxury apartments using the facade from the old HQ of the Saint Paul Police department. The picture was taken in November 2013 while the building was still under construction.

Light rail was still under construction in the fall of 2013 as was the Lunds store next to the Penfield.

Penfield during construction in 2013