Tuesday, May 12, 2015

A Little Advice on Dealing With the Listing Agent(s)...

If you find yourself at an open house with a chance to chat with the agent, best to keep the questions to facts about the property. You will not get anywhere challenging the agent about price (even if it is seriously aspirational!) Two things to remember; the agent probably had a hand in determining the listing price. The agent will want to defend said listing price (at least for the first 30 days). Then at that point they may have to have that difficult conversation with the seller, the one about the price being too high.  Many listing agents will pitch to a seller a price that is a aggressive though in this market anything is possible. And it is only human nature to list with the agent telling you he will get you that price.

I always felt that the market is more persuasive than just about any golden tongued sales person. Price a bit soft and let the market do it's thing, less time on the web and probably will attract multiple bids after the first open house. Sort of like investing in index funds, 90%+ of the time they will beat the active manager.

Back on topic. You corner the listing agent at an open house or private showing and hit him with data about the sale 2 floors above, 6 months ago that was 15% below the current ask of his listing; I can assure you the conversation won't go well. If the property was just listed your comments may just be brushed aside like an annoying mosquito. However if the home has been listed for 15+ days the agent may get a tad bit annoyed or perhaps unload a bomb on you! This is not a good way to begin a negotiation.

I'll wrap it up here. In short there is no advantage to telling the agent his property is 15% over valued.We have ways of presenting offers that are significantly below ask, we call it a "soft offer". Certainly there are times we feel our clients are off the mark with a valuation. In those cases we talk it through to try and understand each others position.

Sometimes the best thing to do is just get the conversation started, at least then there is the potential for success. If there is no discussion there is little hope for success.

Tuesday, May 5, 2015

Which Renovations Add the Most Value?

There really is no general answer to this, though it is widely accepted that money spent on bathrooms and the kitchen is well spent and will serve to increase value. I received an email from a client that recently closed and wanted to know if closing off a dining area to convert it into a bedroom was a smart idea; would it add value? They also wondered if they should refinish the current parquet or install new wood floors.

First I think as a new homeowner you should make changes that will improve your own quality of life in your new home. If in their case converting the dining area to an enclosed space made sense for their use, then by all means do it. If not then deal with it when you plan to sell, assess the market at that time and decide with your agent if it makes sense. Most buyers are going to prefer plank wood flooring over parquet. However if the parquet is in good shape or can be nicely refinished it probably won't be a deal breaker when you sell. If it's in the budget I think you will see a return on new wood flooring and I'm sure you will also enjoy living with it.

There is no question that money spent on the kitchen and bathroom will add value as well as make your home more desirable to buyers in the future. If you are looking to maximize return later on then stick with timeless, classic materials and design. Either way what you install today will be either considered out of style in 5+ years or dated (the idea is to age gracefully). I prefer a classic subway tile back splash in kitchens to the small multicolored glass tiles we are seeing a lot of today. Explore the different counter top materials available, stay neutral and think about wear and tear. Granite was the "it" material 15 years ago, today not so much. Though I still like granite if the pattern is a bit subdued. I always am a sucker for a white kitchen with white carrera marble counters. I know, not the most durable but even well worm with a nice patina, I still love it.

Another thing to factor in is where you live, what is your building like and what are the apartment valuations. If you live in a fairly typical, yet nice post war on the 2nd avenue you may not want to install a $150,000 custom kitchen along with $60,000 dollar bathrooms (especially if you are in a one bedroom!) Stay within the theme of your building (unless you just want what you want and can afford it).

You should also think back to the various homes you viewed..... What did you think of that red custom Italian kitchen? Gold fixtures seem to be back in fashion (why??). Were you tired of all the stainless steel appliances, how important was the flooring type etc. That will be a good guide as you make decisions about renovations in your new home.

NY Time article on which renovations add value.