Blog : Buyers

Lake Geneva Market Conditions

Lake Geneva Market Conditions

I had a dream last night. In the dream I was just myself, no one else. I wasn’t able to fly, or able to breath under water; nothing terrific like that. I was just a Realtor in this dream, going about my Realtor business. I was in a living room, someone else’s living room, not a room I had been in before. It wasn’t a very nice living room, but it was okay, I guess. In dreams, decor rarely matters.

The seller was someone I knew. A kid I knew a few years ago, he couldn’t be more than 22 now, as he was in the dream. He was sitting in his house, except in real life it is his parent’s house, but not in dreams. It was his house and he wanted to know how much it was worth.  He kept repeating three million dollars. He was intent. Three million dollars. Maybe three million five hundred thousand dollars. He wasn’t sure.

I was uncomfortable in the dream. I wanted to hear him out, to listen to the myriad reasons his house was worth this much money, and so I sat on the couch as he pointed to comps. The comparables were indeed nice homes, lakefront homes, big ones and fancy ones and I had sold many of them. I nodded along with his charismatic plea. Three million dollars.

When it was my turn I explained that those homes were large lakefront homes, and that his home was a small A-frame located two blocks from the lake. He sat back in his chair, feigning disgust at my lack of enthusiasm. I used the example of the Knollwood house that sold two years ago for $2.2MM, and said that the only reason that home sold for such an incredible number was because the home was so amazing. It was perfect, I said. Luxe Magazine, I said. Three million dollars, he said.

When I sensed I was making some progress with him, I asked what he had into the house. He said $300k. I said, “you mean your parents had $300k into it”. He smiled and acknowledged that yes, it was his parents’ money and their investment, not his. I told him he’d be lucky to get $400k for the house, but that he shouldn’t be so upset because that’s a lot of money for a kid his age. The dream ended without any further commentary. I’m uncertain if I got the listing, but it didn’t matter because I didn’t want it anyway.

This was a dream, but this is my life today. The market at Lake Geneva is filling with competition, I should say, with other agents whom, no matter their lack of knowledge or prior success, are intent on telling the world of their proficiency. The competition isn’t that, but it looks like it when you drive around and see names on signs that you’ve never seen before. It’s a market chock full of agents, of open houses, or letters and websites and Instagram hashtags. Experts are everywhere. Things are changing, and it’s the competition in the business of real estate that’s often bad for the consumer.

And that comes back to my dream. Sellers know the market is hot. They know it because all 500 some agents in Walworth County are telling them. Hot. Hot. Hot. And so agents are bidding up the listing prices of houses, especially lakefront houses on Geneva Lake, and sellers are feeling flattered by all the attention. The dream I had was just that, a dream, but it’s based on the reality of this season. Sellers, a note of caution. A hot market means there are market buyers for your house. Someone might even pay 5-10% more than the market value if they love it enough. But if we take the bait and price homes too high just because there’s a slight chance we’ll get away with it, we’re going to damage the market by filling it with overpriced homes that will, ultimately, drag on the market and put downward pressure on the unrealistic listing prices.

Buyers, work with an agent who knows the market because they’ve proven that they sell the market. Sellers, work with an agent who knows the market because they’ve proven that they sell the market. This isn’t really that hard.

Ready For Sale

Ready For Sale

I’d like to think, after twenty years in this chair, that I’ve seen it all. I’ve seen sellers and buyers of all makes and models, the good, the bad, and the ugly. I’ve seen outliers and trends, typical things and odd things. I’ve seen mostly all of it and at this time I think it’s easy to group sellers into two different categories. Those who view the transaction as a game, and those who view the transaction as a personal matter.  Neither of these viewpoints is correct, neither is wrong, both considerations are present during any transaction.

That didn’t clear anything up, I’m aware.  The thing is, once the game is over and the transaction is readied for closing, there is something that I wish all sellers would do. There is one way for a seller to make every transaction close without ill will, because there is almost always some level of ill will involved in a transaction.  Sellers are under contractual obligation to deliver their property to the buyer in “broom swept” condition.  This statement is intentionally vague, because a broom in my hand will yield a slightly more thorough outcome than a broom in the hand of my 10 year old daughter. Broom Swept. Sounds nice, sounds sort of clean. But that’s really all it is.

I have sold several of my own, personal homes. Each time I sell a home, I move my family out of the house a week or more before closing. I do this because I know I need time. I need time to fix everything that I know ails the house. At the last house, I had a burned spot not the size of a nickel on my basement carpet. A burn that was the result of an overambitious fireplace ember. The buyer had certainly noticed that burn when he was touring the house. If he hadn’t, would he care? Probably not. But I found a carpet repair man in Clinton who came out to patch that small blemish. After he patched the blemish, I had the carpets cleaned, but only after I touched up every paint nick and every bent or dinged piece of that house. Did I have to do these things? Did these things fall under my “broom swept” requirement? No, but I wanted the buyer to be happy with his purchase.

This isn’t to say I’m the worlds greatest homeseller, because once a buyer of one of my homes told me after the fact that he had to clean up some broken glass that he found under the oven. Obviously, in my focus on the obvious I neglected to properly clean under the oven.  My selling behavior isn’t unique to me, but sadly it is unique in the world of real estate. Sellers tend to feel rushed at the end of a contracted closing, and when they feel rushed they tend to feel frustrated and when they feel frustrated they tend to feel that the buyer is getting a terrific deal on their home.  They tend to feel that they’re “giving their house away”, and if you feel that way then you tend to leave the burned mark in the carpet and the broken glass under the range. You tend to walk from your house and leave the problems to the buyer.

This, as you’ve now suspected, is terrible behavior. Yet it’s common. Sellers leave a house at the minimum, and buyers walk in to a house that’s less than clean.  This, dear sellers, is a mistake. A buyer who hates you because you left a trillion nail holes in the drywall is a buyer who’s more likely to get seriously mad when a pipe breaks one month after closing. A buyer who feels slighted is a buyer who’s more likely to walk through the house they just bought and pick apart all of the deficiencies of that house. A buyer who doesn’t feel valued is a buyer who is more likely to cause the seller trouble post closing. And for what? Because the seller was too lazy to properly clean the house and do a few hundred dollars worth of unexpected, but appreciated, repairs?

Today isn’t about Lake Geneva, necessarily. Today is about being a seller of any house or condo anywhere.  Be a good seller. Value your buyer. Take some pride in what you’re selling. Make the buyer feel good about their decision to pay you the money that they’ve worked hard to earn.  Odds are, if that buyer finds something later that they don’t like, they’ll cut you some slack because you had the carpets cleaned and left that bottle of champagne in the fridge.

Regrets

Regrets

I like to brag about certain things. For instance, I have a black SuperJet and there’s very little chance that you do as well. I have one, you don’t. It’s not that I’m better than you, but my SuperJet is better than yours, because you don’t even have one, which is embarrassing. For you, not for me, because my SuperJet is black and it’s custom, because it has an Uff Da sticker on it, which is something that only makes sense if your grandmother spoke some gibberish that she insisted was Norwegian. See, I’m bragging now, and there’s very little you can do about it.  Ah, but you say that it’s October and what good does a SuperJet do a Wisconsin boy in October?  Even that statement proves your SuperJet inferiority, because October is to SuperJetting what April is to showers. See? Bragging.

But I don’t intend to brag when I speak of my past personal real estate dealings. I don’t brag about profit or of market beating performance, though it has dawned on me that some of my anecdotal housing stories might be construed as less than humble tales. If you went to a foot doctor because you had something wrong with your foot, would you prefer the doctor tell you about what he learned in books, or would you prefer he tell you that last week he handled this same condition and fixed it? In fact, he saw the same condition three months ago and three years ago and he fixed those, too. Personal experience should lend some credibility to the expected outcome.

Back to those personal dealings of mine, they all have one common theme. No matter the house, no matter the price, no matter my personal confidence of lack thereof in the housing market, I have always left the closing table feeling as though I sold for too little. Buyers regret is a common affliction, in fact I also suffer from that each time I buy something, but that’s not specific to housing- I feel regret when I buy anything, including when I order a chicken wrap and everyone knows I should have ordered the brisket. But seller regret is just as real, and I’ve felt it each and every time I’ve been the one signing the deed. I left money on the table, I sold too cheap, I blew it. That’s how I feel  after every personal sale. Deflated, poor, taken.

The thing is, each personal deal I’ve closed is just a distant memory. They mean nothing to my life today. I look back at the progression of housing, to the first purchase and to the last one, and I think of how I caved in one way or another. I caved on the buy, and then I caved on the sale, I’m a professional caver, the farthest thing from shrewd, a sucker, really. But that’s how people who like to over think real estate might feel, that’s not how I feel. Because today I’m not holding any house that I no longer wish to own. I’m not stuck with a property that doesn’t serve a purpose in my life. I’m not beholden to something that erodes my personal finances just because I was unwilling to give in to a buyer’s last minute demands of a $1000 credit. I’m not stuck at my station because I couldn’t get that last 3% that I desperately wanted out of the buyer. I’m here now because I let the 3% go, because I know that moving forward is far more valuable than getting stuck.

Stop getting stuck. If you’re a seller, and a buyer won’t pay your “bottom” number, don’t be so stubborn. Meet the bid and move on. Often times a seller here is selling because she’s buying more house, or he’s buying less house, but he’s not removing himself from the market entirely. It’s just movement, up or down, but still here. And so owners buyer something new, hanging on to what they already own, because they don’t need to sell it. I can hold this forever, they say.  Never mind the financial bleed of an unnecessary, uninterested carry,  consider instead the emotional drain that accompanies this sort of prolonged ownership. When you wake up, do you think only about your new house and your job and your spouse and your children and that achy left hip, or do you think also of that house that you used to live in that you still own? It’s there, decaying, eating away at your finances and your mental-health. It’s there with you at all times,  serving no purpose, stuck in your thoughts.

This is why there is regret in real estate. Regret on the buy side, regret on the sale side. Did you sell your last home for too little? Did you end up taking the first offer and later beat yourself up for selling too quickly, for too little? Good, because I probably did the same, but here we both are, worrying about today and thinking about tomorrow, forgetting about yesterday and the houses we used to own.