There is more behind the door of that "Open House"

On a recent post, one of my esteemed friends from Florida discussed his views on open houses. He offered some statistical data and suggested that any agent that included them in a marketing plan during a listing presentation should be thrown out the door.

I won't disagree with the statistical analysis that was presented. I am wondering why it is even an issue. He and many others feel that open houses are a waste of time. I accept that. He and others are quick to point out that one of the side benefits of holding an open house is that the agent may come in contact with buyers or others that are considering selling their home. Somehow, this is presented as a bad thing for the owner of the home.

He is quick to point out all of the possible dangers. He mentions theft, injury to visitors, injury to the agent as things that may occur. He fails to acknowledge that theft can occur when visitors view the home with their agent, injury may occur when visitors visit the home with their agent, injury may occur to the agent when they are showing the home. Somehow, he and others perceive that bad things only happen during the open house. There is always risk. A meteor may strike the house during an open house as well. The same meteor would strike the house if no one was there when it arrived. Just because one event occurs during another does not create a causational relationship of one with the other.

A broker's open is a good opportunity to showcase the home for other agents. This showcase often increases the awareness of the home with other agents in the market. Increased awareness may land the home on a short list in the future.

People do visit open houses. In some cases, people buy the house. In other cases, neighbors recommend the home to a friend that is seeking to move into the neighborhood. There are times that viewing a home will enable the buyer to focus on exactly what they are seeking. In these cases, one open house helps sell another. I personally believe that open houses are a long continuem of product on the market. Making the product available for viewing does help increase the overall sales figure for the market.

It is one thing, to adamantly believe there is no value to your personally holding an open house. If you feel that way, I would suggest your chance for success in holding open houses will be limited by your attitude regarding them. I do not feel that they should be the "deal breaker" regarding hiring an agent. Throwing an agent out because an open house may or may not be part of their marketing plan is short sighted at best.

The beauty of our profession is found in the wide array of opportunities available to us to use in our day to day operations. Postcards work for some, farming works for others. Phone calls work for some and personal "pop-bys" work for others. Shown by appointment only works for some and open houses work for others.

If we are to stop marketing in every fashion that is not singular in purpose, our costs would increase significantly. If we are to be honest about all the reasons we market, our listing appointments would go on for hours. Should we toss every agent that suggests the use of craig's list because in addition to marketing the home, it may bring potential buyers and sellers? Should we toss every agent that suggests placement of the home on their personal website because in addition to marketing the home, it may bring potential buyers and sellers? I, for one, think not.

I think that our job is to expose the home to as many potential buyers as possible. The greater the pool of potential buyers, the more likely we may receive an offer on the property. The ad for the open house brings exposure. The neighborhood notification about the open house brings exposure. The signage on the street regarding the open house brings exposure. The open house brings exposure. Exposure brings the potential for opportunity.

I will accept that he sees no value in them. I accept that others may see no value in them. Neither of those facts is sufficient to denigrate those that hold them nor is it evidence that they have no worth.

If you would like to discuss the sale of your home or if you have any other questions about the process, feel free to contact me.

Move over Willie Sutton...you've got company

Many years ago, there was a chap that robbed banks. He would commit the crime, get caught, and do the time. Upon release, he would wait a bit and then plan and rob another bank. He would be caught again and the cycle would continue. The gentleman was Willie Sutton. He was interviewed at one point and the reporter asked, "Why do you keep robbing banks?"

His answer was short and sweet and quite revealing. "That's where the money was."

Philosophically, Willie Sutton has lots of company today.

If you live anywhere in or close to Montgomery County, you must have noticed that there are homes for sale. There are homes for sale on the main roads, side roads, back roads and dirt roads. There are homes for sale in condo buildings (pick a floor and you will find a unit for sale in one of the buildings). There are homes for sale by every type of agent ( big names, little names and boutique companies). There are homes for sale by owner and homes for sale by banks.

You get the picture...........there are homes for sale.

There are more homes for sale now, than at anytime most people can remember. Did I mention there is pre-construction, new construction and re-sale homes in this mix. The amount of new homes for sale dwarfs the number of potential buyers that are looking for a new home.

Just like every industry that discovers a long running slowdown is occuring, the real estate industry has started using a new term - "the absorbtion rate". It sure sounds pretty impressive but it really only means - how long will it take to sell all these houses? Any agent worth his or her salt has been aware of this figure for a long time. We used to just say "how many months inventory is on the market". I guess that was too simple and as others have done, agents have determined that if we change the spin, maybe no one will notice how bad it has become.

"If you buy a house today, you will lose money!" was Jim Cramers most recent pontification. It was heard on the Today Show and has been heatedly debated in many quarters. (For the record, he was right and he was wrong. It depends on the total picture. For investment purposes, he is dead on...for awhile. For those that need a home ... he has missed the boat.)

Everyone has an opinion on what in the world happened. Fingers are being pointed at lenders and real estate agents. People are convinced that there is a relationship with illegal immigrants. Others think it must be "those" people that used sub-prime loans.

There were some bad lenders that failed to make sure that their customers understood the loan they were accepting. There were some really bad apples that did not care how accurate the application was as long as they could get the loan made. There were cases of loan fraud.

There were some real estate agents that were not concerned with their clients ability to pay for the home that they were seeking. There were agents that affiliated with lenders that would "get the loan done" and home inspectors "that would not pooch the deal." There were cases of failed fiduciary.

The immigration status of anyone that bought a home has no relationship to any default. You do not have to be a legal resident of the United States to purchase property in the United States.

Sub-prime loans were available and remain available for some borrowers. The product is not at fault. The problems created by sub-prime loans did not occur with the majority of people that borrowed money using that product.

All these fingers being pointed, and there is a "gorilla in our midst" that few will acknowledge, that is probably statistically the biggest offender. There is a group being overlooked in the equation and few fingers are pointed their way.

Homebuyers and home owners, this finger is for you. You were the consumer and most of you had every opportunity to make a better decision. You signed disclosure after disclosure. You knew what you could consistently afford to pay. You allowed the possibility of financial gain or the desire for things you really could not afford to cloud your vision. Yes, in most cases, you created the quagmire that you are attempting to escape.

The consumers, that purchased homes that they could not afford, will ultimately have to accept responsibility for their actions. The consumer that used one or more cash out refi's to increase their buying power will ultimately have to accept responsibility for their actions.

Not only accept responsibility but they will have to live with the consequences of their actions.

Before you get angry and stop reading.... play along with me here. Let's do a short version
of.......IF THE SHOE FITS......

• Did you ask your lender for a loan that would give you the smallest monthly payment?
• Did you ignore the fact that the payment might increase because you were sure that prices were going up and you could refinance before the rate went up?
• Did you succumb to the desire to own a home you could not afford because creative financing allowed you to get in the door?
• Did you tell your real estate agent the total amount of money you wanted to spend on a home?
• Did you think, in the back of your mind, well if I can't afford it, I can sell it for more than I am paying today?
• Did you think that the multiple disclosures that you signed, agreeing that you understood every aspect of the purchase, were just meaningless window dressing?
  
  
  For a short period, people were buying and selling homes like cheap jewelry on E-Bay. The market was very hot. People got caught up in the rush. There was money to be made in the kitchen, the extra bathroom, the finished basement, etc.
  
  People began viewing their home as a liquid asset. They dipped into their equity and bought cars, vacations, paid off credit cards and many things like that. They did not change their lifestyle. Now the car is old, they need a vacation and the credit cards are maxed out again.
  
  The milk cow has run dry.
  
  People can not afford to stay and they can not afford to go. Homes are on the market and no one is willing to pay the asking price. Buyers are not willing to subsidize the largess of the homeowners. The once perceived value does not exist anymore. Sellers will either reduce their price to an acceptable level or they will have to remain in the home. If they cannot afford to repay the money they have knowingly borrowed, they will have to accept foreclosure. In this area, short sales remain terribly overpriced. The stalemate has continued.
  
  Sellers have been asked, "why would you mortgage yourself to the hilt?"
  
  They all have the same type of reply...."That's where the money was."