In my mind, a successful negotiation is not where one side has pulverized the other. You don’t “win” a negotiation; you get the best possible outcome for your clients while doing the least harm. No one should leave a negotiation angry. After all, you never know when you might have to negotiate with the same people again. When it comes to negotiating on behalf of my clients, I keep the following in mind:

Set the stage: I like a location that’s quiet, neutral, pleasant, and away from distractions and confusion. It’s best if everyone turns off their devices, and refrains from calls or texts during negotiations.  This is assuming we are doing face-to-face negotiatons… however, most negotiations today in real estate are telephonic.

Be prepared: I never enter without my homework. I verify any outstanding facts before the negotiation begins. (Later fact-finding can cause a negotiation to bog down!)

Present a united front: I represent clients and have been hired to act on their wishes. At times I may not agree with their position, but I never share that with the other side. If I feel a client’s position is less than optimal, I only discuss it with them in private

Leave attitudes at the door: It’s very simple… treat everyone in the negotiation with respect, regardless of personal opinions. If anyone disagrees, disagree with the idea, not the person.

Watch non-verbal cues and body language: (Sorry, but I can’t reveal all of my secrets here… suffice it to say I take it all in!)

Hold something in reserve: I discuss concessions with my clients before hand and only offer these concessions when we absolutely need to concede something.

I don’t harp about points that don’t matter to my clients: Negotiations should never choke over a minor point. I like to get agreement on major points such as price and terms and put lesser items aside to return to later.

Never volunteer too much information: Knowledge is power in a negotiation. Telling the other side any information, however insignificant seeming, could weaken my clients’ position. On the other hand, I learn as much about the other side as I can.

If you ever need someone on your side in a real estate negotiation, feel free to contact me directly: call or text me at (540) 538-7222, email me, or use our contact form.

The most asked question of a real estate professional is How’s The Market?  The answer to the question truly depends upon whether you are asking from a buying, selling, investing or leasing standpoint.  But… since that is a question that is so often on the minds of consumers, each month we provide some insight into the general answer.

Click the image below to see this month’s “How’s The Market” report.

If you have any questions about the statistics or observations, or wonder how they affect your home’s value, or purchasing power, feel free to call, email or text us.

Have you ever watched the television show Pawn Stars?  If you have, one thing will be become glaringly clear as you watch the negotiations.  The crew at the Pawn Store quickly decides how much they think they can sell the item for, and base their purchase price on that number.

For instance, if an item comes into the store that is worth $800 retail, the odds of the pawn shop paying the current seller more than $400 is pretty remote.  If it is an item that is highly unusual or highly collectible, and that they know they can resell very quickly, they MAY pay a bit more.  But that is an unusual occurrence.

This all makes sense.  Their business model is based upon buying low and reselling high.  Period.  That is what they do.  Still it often seems to baffle many people trying to sell items to them, that the pawn shop will not pay them retail value.
So, why am I talking about this on a real estate blog?  It’s because of all the businesses out there that buy real estate in a pawn shop like business model.  You’ve seen them right?  We buy houses, we buy houses fast, we buy ugly houses, express home buyers, and on and on.  The curiosity to me is why would someone sell real estate this way?

One answer I always get is that they don’t want to pay commission.  Really?  OK, let me share a true story with you.  I once had a client who hired us to sell their home.  When I met with the client they shared that they had spoken to two of these “We Buy” companies.  Both offered them approximately $180,000 for their home.  We listed and sold their home for $245,000.  After paying commission to my team and to the buyer’s agent, they netted $230,300.  AFTER paying commission they netted $50,000 more by selling the home traditionally.  So, the commission argument doesn’t fly.

I’ve examined this issue inside and out, and honestly can’t come up with many scenarios at all in which using one of these companies makes sense.  Even looking at the next most common argument…. we didn’t want to fix it up to sell it.  No problem, there are multiple ways in which I can get that property sold, without you fixing it up and still net you more money.  We can sell the home as-is in the traditional market, or we can take the property to auction with our friends at Nicholls Auction Marketing Group.  Either way we will net you more money in almost every situation.

To sell your home for All It’s Worth, you have to take the sale to the end user.  Period.

The final, most common argument is well, I need to sell it fast.  No problem.  Again, we have multiple ways of doing that too.  In the scenario I provided above, if I were to discount that price right out of the gate by 10%, we would have had multiple offers in the first week.  That would put my client netting around $207,000…. $27,000 more than they were offered by the “We Buy” companies.  Or, again, we can bring in the folks at Nicholls Auction Marketing Group, schedule a sale date around 30 days away, and get it sold.

Don’t misunderstand, I don’t have a personal problem with the “We Buy” companies in general… although a few of them are scams.  But my role in my business, is to educate my clients on how to net the most money when they sell.  That is regardless of whether they want to make repairs or not, or if they need to sell quickly or not.  Give it due consideration.

This morning as I purchased a cup of coffee, a young man began asking me questions about real estate.  During our conversation, he made the following statement, “Someone told me I should NOT invest in real estate.”

So, being naturally curious about his line of reasoning, I asked him why he felt that he should not invest in real estate.  He indicated that this “advisor” made the point to him that so many people had lost money, and have ended up losing their homes recently, that it just wasn’t a good investment.

I gave him the following scenario to think about.  I said, let’s assume that I have decided to invest $20,000 in the stock market.  Then, having decided to do that, I just randomly started buying stocks with no real plan in place.  I asked, “How well do you think my investment would do?”  He said, probably not very well, unless you were just lucky.

The same theory applies to investing in real estate.  If you have no plan, no model for your investing business, then you are just hoping to be lucky.  Yes, a lot of people have lost money investing in real estate in recent years, but let me share a true story with you.

I have a friend who owns more than 15 investment properties.  For years, he has had a standing order with me, to keep an eye out for a certain type of home, in a certain geographic location, and the list price can NEVER be above $150,000.  Period.  He won’t even consider a home over $150,000.

During the early 2000s he purchased several homes, but come mid 2005, there weren’t any homes to be found under $150,000.  I watched several investors move their price ranges up as the prices in the market increased.  But, not my friend.  He said, “No, the prices will come back down.  Until then, I won’t buy anything.”

True enough.  He waited through a two to three year cycle, and when the prices fell back to where they are now, he started buying homes again.

My friend generates a very healthy monthly income from his rental properties, hasn’t lost a dime in equity on his properties, and hasn’t overpaid for a single purchase.  He had a plan, one that made sense, and stuck to it.  And, best of all, he generates income and has options should he need them.  He could sell his homes today and pocket 4-5 million dollars if he needed to do so.

As I relayed the story to this young man, I could see the light bulbs going off in his head.  I think he got it.  His advisor was speaking in terms of a very short sighted look at the market, and at people who hadn’t approached investing as a business, with a business plan that made sense.

Just a few days ago, Redfin unveiled it’s newest, latest, greatest thing in real estate – The Scouting Report.  The Scouting Report ignited a firestorm in the real estate community almost immediately.  What seemed to be designed to help consumers evaluate turned out to have alot of bugs and inaccuracies.  Redfin admitted, a day after launching The Scouting Report, that there were at least 12 bugs with the program.  The quirks in the system weren’t the only problems with the program.  It appears that Redfin was also indexing agents’ names. This means that if a consumer searched for an agent through Google, then Redfin would pop up in their search as one of the top options.  If the agent is not a Redfin agent this can cause some problems.  The brokerage disclosures for each agent were not readily apparent to the sites’ readers.  This directed internet traffic away from the agent’s brokerage and to Redfin.  This practice is frowned upon in the real estate industry because of the way information was presented to the public.  Many agents expressed that they do not mind their sales statistics being available to consumers; they just want that data to be accurate. 

How Would You Rate Your Last Agent?

What I think it boils down to is that statistics don’t tell the whole story.  The Scouting Report reported information on average days on market for an agent’s listings, average number of listings that had price drops, average sales price and sales price range, etc.  While Redfin now acknowledges that there were “bugs” in the days on market data; seeing an accurate number of days doesn’t tell you if an agent is good or not.  There are a variety of reasons why a home sells quickly or languishes on the market.  Many consumers would think that less days on market would be a good thing.  However, less days on market may be due to under pricing, or having a specific buyer in mind when a property is listed.  A lengthy time on market may mean that the seller has set a list price that is higher than what the market will bare.  Or, the property is very unique and requires a unique buyer.  The numbers mean nothing without context.  This is just ine example of why a rating system, such as this one, is not what it may seem on the surface. 

After many complaints and several Multiple Listing Services pulling their agent information from Redfin all together, The Scouting Report 1.0 has been taken offthe Redfin site.  The Northern Virginia MLS  (MRIS) was one of the mls’s that took this action.  It seems that The Scouting Report is a good idea in theory, but there are just too many variables in real estate transactions to make it work effectively and accurately.  MLS data relies on mls members (agents) to inport accurate data.  Let’s face it, mistakes are made.  If any rating system pulls human-imported data, then there is a great chance that errors will be reported as accuracies.  Redfin’s reference to their report being a 1.0 tells me that they may try to relaunch at a later date.  It will be interesting to see if that system will also be an “opt-out” instead of a “opt-in.” 

So, what’s the best way to evaulate a agent before you hire them?  It’s simple.  Ask questions.  If sales stats are important to you, have the agents you interview bring their sales stats with them.  Every agent knows how many deals they have successfully completed.  It shouldn’t be hard for them to answer questions about them.  You can also check the Department of Professional and Occupational Regulation for any state regulation violations.  You will need the agent’s full name to look up this data.  See if the agent has a Facebook profile, Facebook business page, and/ or Twitter account.  You can learn alot about a person by how they interact online.  The important thing to remember is that any agent rating system will be flawed.  Be prepared to seek out those flaws and do your own research.

I know you’ve heard about the great bed bug infestation that has hit the United States.  Well, it looks like it has finally made its way to Fredericksburg.  There has been an uptick in bed bug reports to landlords and doctors across the area.  The important thing to remember is that bed bugs are not a social class epidemic.  The can be found in any house, clean or not.  Keep in mind that many bed bug infestations happen in hotels and college campuses, not low-income houses.  Bed bugs feed off of human blood, not dirt.  So, as long as you have blood in your body, there is a chance you can have a bed bug infestation.  No one is immune from these little critters.  Makes you feel all warm and cozy, huh?

So who is responsible for the costs of exterminating bed bugs in a rental property in Virginia?  The quick answer is:  The Tenant.  That’s right.  Unless the tenant can prove that the landlord knew, or should have known there was an infestation before the tenant occupied the property, then the tenant is responsible for treatment and remediation.  The Virginia Residential Landlord Tenant Act also requires the tenant keep the premises free and clear from any bug infestation.  Section 55-248.16 states:

The tenant shall … keep that part of the dwelling unit and the part of the premises that he occupies free from insects and pests.

So, landlords will argue that it is the tenant’s responsibility to treat and remediate bed bugs at the tenant’s expense.

If you think your bed bug infestation is the fault of your landlord, you need to document everything and contact a local attorney.  There is no guarantee that the cost of bed bugs will end up getting paid for by the landlord.  Moving out in the middle of the night is also not an option.  The landlord has a right to sue a tenant who has abandoned the property for lost rents, cleaning fees, and pest remediation.  You may not live there any more, but you’ll still get a bill for the bed bugs.  So far, Virginia has not had a bed bug case go to court.  It is hard for lawmakers to address an issue if they haven’t acknowledged there’s a problem.  It’s kind of like a out of sight, out of mind mentality. 

What does bed bug treatment look like and how much does it cost?  Simply washing linens, clothing, and carpets isn’t going to rid you of bed bugs.  These little guys are super great at hiding.  The extermination of bed bugs includes using monitoring devices, removing clutter where bed bugs can hide, applying heat treatment, vacuuming, sealing cracks and crevices to remove hiding places, and using non-chemical and chemical pesticides.  Because the treatment process is so intense, the cost is much higher than the treatment of other insects and pests.  Getting multiple quotes from reputable pest control companies is highly recommended.

I am relatively sure that I have covered this topic before.  But, my approach to blogging for real estate is to relate day to day occurences, as well as trends in the market.  Well, it just so happens that today, I found a couple of, apparently, unmotivated sellers.

Here is the story.  I have a highly qualified and motivated buyer who is interested in one community only.  She picked five listings… five properties in which she is interested, and requested to see them on a specific day.

I telephoned all five contacts, and two of the five refused our showing request.  REALLY?  I don’t really mind that they refused us, it’s their loss.  I do feel badly for the listing agents who are trying to sell these properties, and have uncooperative sellers.

When I meet with potential homesellers, one of the most important things that I stress is that showing availability is critical.  If we refuse a showing, it could have been the perfect buyer, and they may never call back.

I know it can be inconvenient to keep the home in show shape, and to have to reorganize your schedule on short notice.  But come on, you are trying to sell a $200k or $300k house.  This isn’t a yard sale.

So, if you decide to put your home on the market for sale, discuss with your agent how to maximize the home’s showing availability.  Then, you won’t have to second guess if you could have netted more money with a buyer that you turned away.

Our monthly newsletter for September 2011, with market statistics is now available.  Click the graphic below to view the newsletter.

I’m giving August a thumbs-up, but barely… just barely.  Inventory is pretty low, which is actually a good thing as we head into the fall selling season.  However, rumor has it that banks are releasing a new wave of REO properties in the next month or two.  This should create longer days on market and more months’ inventory.  Unfortunately, sales price ratios will most likely also see a decline.  Those pesky banks!   

Fredericksburg City:

• 84 days on market – this is 67 days less than in August 2010
• Sellers received, on average, 98.5% of their list price when the home sold
• There is 5.8 months of inventory on the market
• 20 homes sold in August 2011 – this is 4 more than August 2010.
• The most popular price range was $200,000-$299,999.
• The median sold price was $220,000, compared to $283,500 in August 2010.
• Financing Terms:  Conventional – 8, FHA – 5, VA – 3, Cash – 2

Orange County

• 116 days on market – this is 31 days less than in August 2010
• Sellers received, on average, 89.5% of their list price when the home sold
• There is 7.95 months of inventory on the market
• 41 homes sold in August 2011 – this is 10 more than in August 2010
• The most popular price ranges were $100,000-$149,999.
• The median sold price was $150,000, compared to $160,000 in August 2010 
• Financing Terms:  Conventional – 16, FHA – 6, VA –1, Cash –14, Other – 4

Spotsylvania County

• 75 days on market – this is 20 more than August 2010
• Sellers received, on average, 93.8% of their list price when the home sold
• There is 4.19 months inventory on the market
• 157 homes sold in August 2011 – this is 20 more than in August 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $187,000, compared to $200,000 in August 2010 
• Financing Terms:  Conventional – 38, FHA – 41, VA – 40, Cash – 32, Other – 6

Stafford County

• 66 days on market – this is 5 more than August 2010
• Sellers received, on average, 95.3% of their list price when the home sold
• There is 4.7 months inventory on the market
• 120 homes sold in August 2011 - this is 43 less than in August 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $225,000, compared to $249,625 in August 2010 
• Financing Terms:  Conventional – 31, FHA – 30, VA – 41, Cash – 17, Other – 1

Prince William County

• 53 days on market – this is 10 more than August 2010 
• Sellers received, on average, 96.8% of their list price when the home sold
• There is 3.10 months inventory on the market
• 498 homes sold in August 2011 - this is 89 less than in August 2010
• The most popular price range was $200,000-$299,999
• The median sold price was $277,500, compared to $265,000 in August 2010
• Financing Terms:  Conventional – 156, FHA – 143, VA – 116, Cash – 74, Other – 9

Caroline County

• 95 days on market – this is 2 more than August 2010 
• Sellers received, on average, 88.7% of their list price when the home sold
• There is 5.78 months inventory on the market
• 33 homes sold in August 2011 - this is 10 more than in August 2010
• The most popular price range was under $100,000-$149,999
• The median sold price was $110,000, compared to $150,000 in August 2010
• Financing Terms:  Conventional – 7, FHA –11, VA – 3, Cash – 7

All data provided by MRIS.