Edwardsville and Glen Carbon Real Estate Chat: April 2009

Principles of negotiation.  Books have been written about it.  Speakers travel the world lecturing about it.  Millions have been spent trying to uncover the secret.  For some, it will remain an abstract principle they will sadly never master.

A few weeks ago I had the chance to speak with a fellow for whom negotiations had not been a kind mistress.  This fellow, we'll call him Stanley, set out to buy a home for his family and ended up outmaneuvered by a more skilled negotiator into a contract he now wishes he had never signed.

Stanley and his family had been renting a small house in Fairbanks for the past couple of years.  It was comfortable and the price was right but with the changes in the housing market, he hoped to make the transition from renter to owner. A yard for his children to play in... a place in which to make memories of opening presents on Christmas mornings and birthday BBQ's on the deck.  Reasons which we can no doubt all relate to.

When Stanley found 'the house' he sat down with his lender and later the seller to hammer out the details of a purchase agreement.  The seller was ready to sell... he and his wife had plans of moving to be closer to their grandchildren and were ready to take the house off the market. 

"Let's get this done and get you moved in." Motivated seller. That's good, right?

Having watched HGTV's endless parade of real estate programming and read every real estate article he saw on MSN, he had a plan.  Take the purchase price, slice 10% off the top and negotiate up from there, if necessary.  Armed with his offer strategy, Stanley and the sellers put pen to paper and in short order had a mutually agreeable contract.

"10% off the asking price and the seller agreed to pay $5,500 toward our closing costs if we would waive any contingencies and close in three weeks." The anguish was palpable as he told me the story.  He ddn't need to continue... I knew the house and where this conversaton was going.

"Earnest money was placed in escrow with the title company.  An appraisal was ordered and we were planning furniture placement."  Imagine Stanley's surprise when the lender calls to say the appraisal came in... well... a little low.  Seems as though there's a near $37,000 difference between appraised value and the contract price.

A call to the seller turns the butterflies in Stanley's stomach to catapulting, trapeze-flying monkey's trying to claw their way through his belly button.  No re-negotiations.  "You agreed to remove the contingencies for the 10% price reduction and the $5,500 in closing costs I'm paying" replied the seller.  Hmmm. Now what?  This is where Stanley begins his search for answers and where he lands on this blog and calls us for answers... guidance... absolution... something. 

Unfortunately the only truly helpful advice I could offer is a referral to a reputable real estate attorney.  Where and how did the train heading to paradise go so far off the tracks? 

Representation - Stanley had none.  No buyer-agent representation.  No legal representation.  Nothing.  Mano-a-mano as it were.  Given the complexities of contract law, finance, discovery, disclosures, etc. representation is key.  A buyers-agent is the buyers advocate in a transaction.  What a concept, huh?  Their primary responsibility is to protect and promote the buyers interests.  Most of the time said representation comes at little to no cost to the buyer.

Research - If you don't know the local real estate market, you need to hire someone who does.  A sellers asking price is simply a number.  Unrepresented sellers are notorious for having an inflated opinion of their homes worth.  What are comparable homes selling for?  How long is it taking to sell those homes... and how does that compare to the subject property?  You need detailed market information... and someone to interpret that data.

Last but not least, forget the hype.  Not even HGTV, your Uncle Bob in Poughkeepsie or Donald 'Combover' Trump will be much help in crafting a negotiation strategy in Fairbanks, Alaska... or in any market they're not well versed in.  When the time comes to buy a home for your family, and now is a pretty good time, rely on a local expert. As luck would have it, I happen to know a couple.

 

(gold man image courtesy of Guido Jansen)

Dear Buyer: 

I am so glad we've decided to work together to find your next new home. It will be a pleasure to be your buyer's agent.

But before we get started, I want to make one thing perfectly clear. I will never, ever sell you a house.

Now, before you decide I'm crazy, let me explain how this works. You and I will have a meeting to talk about your housing needs and wants. A "need" is something like the number of bedrooms in your home.  A "want" is something like a fireplace or a three-car garage. 

What kind of neighborhood do you see yourself living in? And how long a commute to your job would you like? Do you want a ranch or a two story or maybe a maintenance-free villa? Do you have kids that you want to enroll in a particular school district? The sharper we can focus your desires at this stage, the easier the entire process will be for you.

I'm a great listener, so tell me everything.

To determine the price range in which you'd be comfortable, we'll have you meet with the lender of your choice for a loan pre-approval. Once we've established what what type of home you're after and how much you can spend, I'll search through the available properties that fit your needs and we'll make appointments to see the best matches in your range.

Eventually we'll walk into a place where you'll feel right at home. It meets all your needs and it even includes some of your wants. You'll know this is the one for you. 

At that point, I'll put the contract together to get you the best possible deal on the house you've selected.  I'll handle the back-and-forth negotiations with the seller's agent at your direction and once we have an accepted contract, I'll guide you through the details during inspections, inspection responses and then finally, we'll have a deal.

On the day of closing, you'll sign a zillion papers and take possession of your new home.  You'll take the keys knowing I've been with you every step of the way, watching out for your best interests and making sure you're happy during a stressful -- yet ultimately rewarding -- time in your life.

But you know what?  Going back to my original point...I didn't sell you this house.  You decided what you needed and wanted in a home. I helped you focus and then acquire the selection at the best possible price and terms and with the least amount of disruption to your busy life.

Let's get started. Aren't we going to make a great team?

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About the Author:  Nancy Milton, GRI, is a Realtor with the Just Ducky Homes team at Coldwell Banker Brown Realtors in Edwardsville, Illinois. She and Kristina Pratt help their customers buy and sell homes and investment properties in St. Louis' Illinois suburbs of Madison and St. Clair counties with special emphasis on real estate in the communities of Edwardsville, Glen Carbon, Maryville, Collinsville and Troy. For more information, visit their web site at http://www.JustDuckyHomes.com or e-mail Nancy@JustDuckyHomes.com. Follow her on Twitter @JustDuckyHomes or "friend" us on Facebook.

Did you know that May is National Bike Month?

Every child should have the opportunity to hop on a bike, strap on a helmet and enjoy the feeling of freedom that comes from flying down the road under their own power. 

Sadly not all kids in our area have access to bikes they can call their own. That's why the Just Ducky Homes Team is participating in Coldwell Banker Brown Realtors' bike drive.

For the next several weeks, you contact me to make arrangements to donate your new or gently used bike. The bikes will be repaired as needed by our great friends and partners at The Cyclery in Edwardsville, Illinois. Once they're in tip-top shape, the bikes will be stored in a unit on loan from The Mobile Attic at our office on State Route 157 until donation day.

In May, the collected bicycles will be given to kids identified as being in need in the Edwardsville school district. Obviously the more donations we receive, the more kids can enjoy the summer on their own bikes. (You also can make monetary donations that will go toward the purchase of bicycles for the program. Checks can be made out to Coldwell Banker Brown Realtors.)

So call me at 618-791-8007 or send an e-mail to Nancy@JustDuckyHomes.com and we'll make arrangements to pick up your bikes.

Together we can make some great kids even happier this summer.

The massive ConocoPhillips EnCana Wood River refinery in Roxana, Illinois is expanding, bringing great new jobs to our area for skilled craftsmen and contractors. That's excellent news for Madison County, Illinois in the midst of the ongoing national recession.

According to the companies, the $2 billion project is expected to be completed for production to begin in the early months of 2011.  The expansion will upgrade capacity and will increase the production of clean fuels for the Midwest.

The refinery, located on approximately 2,200 acres at the intersection of IL Highway 111 and Madison, is operated by ConocoPhillips in cooperation with EnCana Corp., a Canadian oil producer.

If you're relocating to the area for jobs associated with the Wood River oil refinery expansion in the Roxana area, there are great home deals waiting for you across the communities of Madison County.

Contact the Just Ducky Homes team at Refinery@JustDuckyHomes.com or 618-791-8007 for more information on the top deals in Roxana and Wood River and throughout the River Bend area. Or click on our web site at http://www.JustDuckyHomes.com to look for properties that match your needs within just a 30 minute commute or closer to your new job. Communities such as Edwardsville, Bethalto, Glen Carbon, Maryville, Alton and many others provide a wide variety of housing options.

The Just Ducky Homes team specializes in helping people who are buying their first homes in our region. If you're unfamiliar with our area, we have information on schools, community life, recreation and much more to help you and your family find the right home during your relocation.

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About the Author: Nancy Milton, GRI, is a Realtor with the Just Ducky Homes team at Coldwell Banker Brown Realtors in Edwardsville, Illinois. She and Kristina Pratt help their customers buy and sell homes and investment properties in St. Louis' Illinois suburbs of Madison and St. Clair counties. For more information, visit their web site at http://www.JustDuckyHomes.com or e-mail Nancy@JustDuckyHomes.com.

As I write this blog post, there are 245 new and resale residential properties listed for sale in Edwardsville, Illinois, the county seat of Madison County, site of Southern Illinois University at Edwardsville and -- not coincidentally -- the location of Just Ducky Homes.

The homes for sale range from a low of $29,900 for a two-bedroom handyperson special to $3,000,000 for a luxurious four-bedroom beauty with more than 8,500 square feet of living space. Clearly it's a diverse market with something for everyone. Throwing out the low and the high, the average home in Edwardsville is listed for $271,478 and the median home price (half are priced higher, half are lower) is $220,950. Homes for sale have been on the market an average of 119 days.

Eighty properties are currently under contract with "pending" sales in Edwardsville. Those homes have an average list price of $203,406 and were on the market an average of 157 days.

Since January 1, 2009, 44 residential property sales have closed in Edwardsville.  The average listing price for homes that have closed in this time period was $175,357 and the average selling price was $166,808, a list-to-sell ratio of 95 percent. Average days on the market prior to closing -- 141.

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About the Author:  Nancy Milton, GRI, is a Realtor with the Just Ducky Homes team at Coldwell Banker Brown Realtors in Edwardsville, Illinois. She and Kristina Pratt help their customers buy and sell homes and investment properties in St. Louis' Illinois suburbs of Madison and St. Clair counties with special emphasis on the communities of Edwardsville, Glen Carbon, Maryville, Collinsville and Troy. For more information, visit their web site at http://www.JustDuckyHomes.com or e-mail Nancy@JustDuckyHomes.com.