Last month, I talked about appraisers and appraisals. In this blog, I will touch briefly on the “perception difference” between appraisers and property owners as well as some DO’S and DON’TS when preparing your house for its sale and appraisal.
According to the Pennsylvania Association of Realtors, the average appraisal last month was only 1.15% lower than the expectation of the homeowner – – or, in many cases, the sale price established in the pending sale contract. PAR indicates that this is the fourth consecutive month where the gap between the appraisal and the expectation has decreased.
I have recently read several industry related articles indicating that the next several months are the best time for a Buyer to purchase a new home. After giving it some thought, it makes perfect sense.
Most everyone assumes that the Spring-Summer period is the best time for residential real estate. More Sellers put their property on the market during that time, for sure. This increased inventory attracts more Buyers – – many of whom end up competing for the same property. This, in turn, actually drives prices up and forces Buyers to perhaps pay more for the property that they wish to purchase.
APPRAISER. This is probable the most misused, misunderstood and abused term in the real estate world. So, let’s set the record straight.
I have mentioned many times before that there are two types of Real Estate Licensees in the Commonwealth of Pennsylvania – – Licensed Salesperson and Licensed Broker. Licensed sales persons cannot perform appraisals and only a small handful of Brokers are permitted to do appraisals on a limited scope. Remember, too, that the term “Realtor” deals with the trade organization that advocates for Real Estate Licensees and has nothing whatsoever to do with one’s license status.
A number of years ago, I earned an industry designation called CRS (Certified Residential Specialist). At the time, only between 2-4% of all licensed real estate practitioners in the Country held the designation. I believe that that percentage is now in the 10-12% range, but this group still generally represents among the most successful residential Brokers and agents in the business.
One thing has become absolutely clear to me these past few years as we recover from the “post-bubble” downturn. Houses that are outdated or have not been kept updated are simply tough to sell.
Irrespective of curb appeal, location, neighborhood and even price – – homes that are perceived by the Buyers to need “too much work” simply experience more days on market than their competitors. Even with inventory levels declining and more buyers being available to purchase homes, these outdated properties tend to sit for long periods of time. As a reluctant homeowner myself, I have finally acknowledged this fact of life and agreed with my wife that it is it time to update our 1990 home.
If you have followed my blogs over the past several years, you know that I have frequently pointed out the lack of activity from entry level or first time buyers. In essence, I have attributed this to three factors.
First, many of these younger buyers are loaded with student debt. Second, many are under employed or not working in the field for which they trained or studied. Finally, many of them just fail to see the value in home ownership – – having paid attention to the economic downturn and housing crisis the 2008-2012 period.
The market is hot! I mean HOT! Honestly, it is the most active local real estate market that I have observed in more than ten years.
Still, there are Sellers who have difficulty finding a Buyer for their property. In a market like this, the only reasons for this are self- inflicted. The top reasons that Sellers are unable to sell their home are the following:
1. Over pricing the home.
2. Overlooking repairs.
3. Failing to declutter and depersonalize the home.
4. Expectations which are too high and a patience level which is too low.
For several years now, the WHOLE HOUSE INSPECTION (i.e. Home Inspection) has become pretty much a standard condition for all Agreements of Sale for residential real estate. In theory, this is a good thing.
The Home Inspection process was designed to inform the Buyer of any legitimate issues with the home that might require repairs, improvements, or even replacement. Although the Seller is obligated to make good faith acknowledgements in the Seller Property Disclosure Statement, there are often deficiencies within the home about which even the homeowner is unaware.
For many years now, The Greater Carlisle Area Chamber of Commerce has been sponsoring an Economic Forecast breakfast each January, which is generously sponsored by M&T Bank. Scott D. Ehrig, a Senior Investment Advisor for M&T Bank, offers a very well researched presentation regarding both national, regional and local economic matters. I attended the Annual breakfast meeting again a few weeks ago, and came away with several observations for the Harrisburg/Carlisle MSA.
On January 2nd, 1986 I opened a real estate office in Carlisle. I was twenty five years old, less than four years removed from Dickinson College, and had just obtained my Broker’s License a few weeks before.
I borrowed $7,500, rented a small portion of the office building that I now own and fully occupy, and hired my own mother for her “free secretarial services.” We had one salesperson – – just out of Millersville University and with no experience whatsoever.