Today, as I chatted with an open house attendee, the sky opened up and a ray of sunlight burst through the heavy gray clouds and illuminated his main concern with pulling the purchase trigger--FEAR.
Breaking It Down: This prospective buyer did not know the market statistics for the area. He did know them for his home area (about 1 hour away and world apart from the coastal area of Palos Verdes), and his area is drowning in a sea of short sales and foreclosures. Real Estate is local---very local. Drive an hour and the market changes, often dramatically.
Buying It Up: The prospective buyer's neighborhood is crawling with investors offering 50 cents on the dollar. The buyers in my area are nearby residents who are thrilled to have the opportunity to purchase in a neighborhood that only a few years ago was out of their financial grasp. They are families looking for top notch schools. They are seeking a lifestyle.
Collecting Cash: Many residents in Palos Verdes have lived in their current home 20 to 30 years. Many (I recently read 35% of homes in my area are owned free and clear.) are retired or it is looming on their horizon. Many purchased their property for less than $100,000. They are still equity rich; and the bank is not breathing down their neck. They long to be closer to grandchildren, travel or downsize to a carefree condo. They are cashing out and taking advantage of spectacular deals in the local desert. Personal needs is driving their decision, not the economy.
I spent about 30 minutes with one prospective buyer. I showed him recent sales, pending sales and active listings in the neighborhood. We discussed the local economy, his personal economy and the needs of his family. At the end of our conversation he was no longer ready to throw up his hands in frustration. Instead, I hope he will raise his hands in victory and conquer his fear of the market.
He walked away informed. Will he buy a home in Palos Verdes? That is for him to decide, but he now has the tools to make a rational decision based on real local facts, not media hype.
Education and knowledge is a powerful antidote for quelling fear.
Norma Toering & Team RE/MAX Palos Verdes Realty
(310) 493-8333 / Office Phone: (310) 831-0800
South Bay Los Angeles cities I sell real estate, property, houses and homes in: Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes, San Pedro, Long Beach, Torrance, Lomita, Redondo Beach, Hermosa Beach and Manhattan Beach.
Find Norma on: Facebook - Twitter - LinkedIn - Email Norma
Palos Verdes Homes for Sale Blog - Palos Verdes Property Website
Palos Verdes Houses for Sale Search - More information on Palos Verdes
Subscribe via ActiveRain - Subscribe via Email - Start your own blog on activerain!
Rancho Palos Verdes Horse Property Blog - View Homes for Sale in Palos Verdes Estates Blog -
Palos Verdes Neighborhood Market Reports - Moving to Palos Verdes -
Needles RV Park, Motel and Land for Sale - Coachella Valley Equestrian Luxury Estate Lots for Sale
Sell Smart, Buy Wise and Live Well
Norma Toering & Team RE/MAX Palos Verdes Realty
(310) 493-8333
PalosVerdesLifestyle- Norma's award winning site as the best Palos Verdes homes and real estate blog since 2007. Selected by Relocation.com as one of the top ten Los Angeles area real estate blogs. Chosen by MovingCost.com as one of the best Los Angeles realty blogs. Awarded 5 out of 5 stars by Lender411 blog review. Ranked by Technorati in the top 1% of all blogs. As seen in the Daily Breeze newspaper.
South Bay Los Angeles cities I sell real estate, property, houses and homes in: Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes, San Pedro, Long Beach, Torrance, Lomita, Redondo Beach, Hermosa Beach and Manhattan Beach. Based on information from the Association of REALTORS®/Multiple Listing as of the initial date of this article/blog publication and /or other sources. Display of MLS data is deemed reliable but is not guaranteed accurate by the MLS. The Broker/Agent providing the information contained herein may or may not have been the Listing and/or Selling Agent.
Find Norma on: Facebook - Twitter - LinkedIn - Email Norma
Palos Verdes Homes Blog - Palos Verdes Houses
Palos Verdes Horse Property - Palos Verdes Realtor Agent
Palos Verdes Coastal Homes - Los Angeles Home Search
Photos of Palos Verdes - Palos Verdes Videos
Palos Verdes Luxury Homes - Beach Cities Homes
Real Estate is local. Know your market. Enough said.
Sabrina - Know it and share it!
Yeah, he'll buy sometihing, and he'll probably call the agent who was so familiar with the local market!
Buyers are very comforted by learning the type of information that you communicated. They just want to understand what's really going on. Knowing that, they're much more comfortable with proceding.
Great job Norma! It is our job to educate our buyers and sellers so that they can make the best decision for them and their families.
(Cueing up Johnny Nash) "I can see clearly now...the rain is gone". Being familiar with the local area too as criticial as just real estate especially to an out of towner new to the area.
Norma, I couldn't agree with you more! Great post.
I love the look in people's eyes when they learn the really bad housing situation is somewhere else. The national press has people believing it is everywhere.
YOU SAID IT! In my area you can drive 10 minutes the other way and the market is COMPLETELY DIFFERENT! You really need an agent who knows YOUR AREA!
Norma~Great job giving him the non media version of the market. We could use positive in dealing with the current housing market. Best to you~
Education and knowledge is a powerful antidote for quelling fear.
Hi Norma,
I really like how you handled that situation! Buyers with expert local market education, as you provided, will make better decisions.
Norma,
Great post..so true..know your market and share the knowledge..they will choose to work with you!
Know your market is the key to finding great clients. Be the local expert
So true! I just took a listing about 30 minutes from town. It's value is about 100K less than it would be here in Spokane. VERY LOCAL!!!
Hi Norma !
Great education you gave that buyer ! ... hope they come right back to ya to buy !
Cheers !
Sheldon :o)
Wow, I posted, went to dinner with a friend and came home to a "star" on this post! I'll answer comments tomorrow, right now I have to follow up on an request from an open house attendee....
Nice post Norma! You are totally right. I am going to start using stats more also.
Norma, we have the same situation in our resort area of Coastal Delaware. I just did an analysis of a small town, about 15 blocks long and East of Rt. 1, which is 1 block wide. From 2005-2008, the market along that strip as close to the Atlantic Ocean as one can get has decreased in value only 11.5%--quite different from parts of Florida and California that have decreased 50%, or from the western part of our own county that has declined about 17%. Real estate is local, indeed! Arming buyers and sellers so negotiations can be based on realistic figures from both sides of the bargaining table is crucial.
It's great Every tuesday at the meetings we discuss what is local it sure helps when the client is asking
Norma, I believe all buyers and sellers should be educated by REALTORs, the experts in this industry, rather than by the media.
Norma- great post... real estate is truly extremely local.
"Fear is the unknown - knowledge overcomes fear - knowledge brings confidence"
The buyers cannot make an educated decision without the education - and it is not all on the internet.
Norma, You are so right. Unfortunately often it seems even the most clear and decisive information doesn't dispell fear. Fear is a huge, ugly creature. Remember, "The only thing we have to fear is fear itself." If we can help to dispell fear, we can truly assist in bringing back a healthy economy. Let's Roll!
Hi Norma, You are right, an informed purchaser can make rational decisions and knowing your market area is key to informing perspective purchasers so they can make those rational decisions.
Norma - Good post. If you don't know the market you work and can't convey that information accurately, then you have a long road to travel!
Great posting, Norma! You're so right that real estate is local in nature, and customers are always better served by someone who knows the specific local market. It's that agent's job to educate buyers and sellers so that they can make the best decision.
I hope you gained a client from your well prepared information on the area. Good luck and yes, being the local expert makes you a standout!
Patricia - It is a nice listing and he may decide it is "the one."
Margaret - Clearing up the buyer's confusion and increasing his comfort level was my goal--the sale will happen when he is ready.
Zilkia - Sometimes I just morph back into my former teacher routine...and yes, the decision is easy once you have the knowledge and the facts.
Andrew - I was an out-of-towner buyer many times and I know how bewildering it can be to step off a plane and go buy a house---you really need an agent you can trust because you are in unknown territory.
Amber - Thank you, and I have found presenting the facts, or stats in our case, is a great way to build trust.
Ron - Light in the eyes is a good thing--it is especially rewarding when the buyer comes to the conclusion on his own after reviewing the local stats.
Norma, good post and so true.. educate the buyers to remove the fear. I'm sure you will, or have, a sale from this buyer.
Michael - There are 17 areas in Palos Verdes (per our MLS), and each neighborhood has its own real estate story to tell. It is local, very local!
Mary - Share the positive and the word will spread--real estate is not dead!
Bruce - When you are confused and unsure the easiest thing to do is to do nothing. Buyers are fearful of making a mistake.
Dorie - That's right, the buyers get to choose who they will work with once they decide to buy.
Russ - The best way to lose a client is to not know the area and product you are trying to sell.
BethAnn - It is so easy for someone who does not know the market to make a costly mistake and lose credibility and clients.
Sheldon - Now that would be sweet and good for the bank account!
Eileen - I"ve found stats to be the perfect tool to convert a stanger into a client!
Diane - Yes, a prospective buyer asked if he could pick up the property for 30 to 40% less than asking price. It was so helpful to show him recent comps and let him come to his own conclusion--not happening.
Michelle - In this market weekly, if not daily, checks on the market are necessary.
Olena - Absolutely true.
JB - Be familiar with the real estate market in general, but KNOW the local one.
Virginia - I once took a class in college for easy credit, or so I thought. Introduction to Straight Thinking was one of the toughest classes I ever signed up for, but also one I have used often in solving day to day problems. Your response is a classic example of Straight Thinking.
Norma - I could not agree more with your assessment. So many times, the market takes a downturn for no apparent reason other than simple fear. Nicely done.
Marian - We may have to do it one client at a time, but do it we must. I'm already rolling!
Eunice - Knowledge and the facts to back it up are powerful forces.
Bruce and Mary - It there is a shortcut to success in real estate it is being well prepared and knowing the local market.
Jason - Yes, the pushy approach does not work with today's savvy buyers. Knowledge rules.
I agree about the pushy approach not working. There is a fine line between "closing-sales approaches" and being way too pushy and aggressive. I have had a couple of partners in the past kills some deals over this. My approach is to inform, inform, inform and create a true sense of trust for the client. A sense that you are not going to just tell them what they want to hear. These are the clients you will establish for life! And they will keep sending more their closest family and friends to you in the future!
Great Post Norma!
Connie - Time will tell whether he becomes a client, but one thing I know for sure is--- he is a better informed consumer.
Rebecca - Thanks for the vote of confidence.
Jason C. - See comment above!!
I totally agree with you Norma! EVERY market is different and local conditions drive those factors such as unemployment rates, number of retirees, local economy, etc. Thanks for a great post on a Monday morning!!
Norma, I couldn't agree with you more. I specialize in an area of Miami called Pinecrest. And like your area it's the schools and lifestyle that makes it so desirable. I just finished writing the following:
In Pinecrest in 2007 there were 150 listed properties sold with an average sale price of $1,454,808. In 2008 there were 136 listed properties sold with an average sale price of $1,116,094. As we all know, real estate is very local. In Miami-Dade County during the same time period there was a decline in sales price of 41%, while here in Pinecrest our decline was approximately 23%. Pinecrest continues to be a very desirable area making it a very good investment.
Norma - great point you have made here about knowledge of your local market. It is so important to have an agent who is aware of all of these statistics.
Norma,
Great picture of you on your camel!
I think the key is not only knowing your market, but also being able to quickly communicate that information in a clear manner.
Keep it simple stupid. Where is the market now (supply and demand), where was it, it is getting better or worse, and how fast is it moving?
Norma,
Fear is what is driving this recession and keeping buyers out of the market. Congrats on the feature!
Norma.. love the simple concept..rule your decision by facts not fears. Sure there are places suffering, but too assume every place is- is wrong. I have to tell buyer's all the time that we are not suffering, so if you want to be here make a reasonable offer, not a ridiculous one. You will not get the perfect home at a song, but it is less than 3 years ago. That is the facts.
Knowledge is power...real estate could not be more local right now! Even some neighborhoods are hit harder than others within the same town. Having lived in your wonderful community years ago I can see why it hasn't been hit as hard as others.
Good stuff Norma. Thanks for posting this up. I hope to be in the position some of those homeowners are in. Having ones house free and clear. What a load off the shoulders
You are right in saying that areas vary greatly and here even in the same town from one neighborhood to another we have great differences in desireablity and therefore price.