It’s a common question and an even more common problem in today’s real estate market.  Competing with the builder to sell your home.  Knowing the builder’s position and promotions will give you a lot of information on how you should approach the sell of your home.

First things first, let’s do the short answer:

Do Builder Incentives Affect Value? SHORT ANSWER:

They do not affect Value directly, instead they tend to drive the price negotiated down on resales only in the neighborhood and do not typically affect surrounding neighborhoods.

Having a professional Realtor is the key to success and there is one thing to remember.  Above all else, price is king.

Some keys to success when competing with a builder are:

• Know the Market - Like any professional Realtor should know, you need to know what you are competing with.  Will the "Biltmore" take 8 months to build, and you have one that is move in ready?  Does your lot allow for the only 3 car garage?
• Know the promotions - You can do two things, you can attempt to match the promotion or show value elsewhere.
• Accentuate the Differences - Make sure that buyers know why they’d want your home over the builder’s.  Maybe you’ve finished some additional bedrooms, added a pool, or perhaps you "worked out the kinks."
• Work the Community - Most sales from new neighborhoods in more rural areas are referrals from the neighborhood.  Take advantage of it.
• Remind the Buyers - THEY CAN MOVE IN TO YOURS QUICKER.  They can get an inspection and have a real person to deal with.  Most builders have rigid contracts and are not really interested in lots of negotiations.  They’re simply less agile than a home owner is.

Be sure to hire a professional Realtor to help you with this trying process.  It doesn’t have to be an agent that lives in or near the neighborhood, in fact, hiring an outsider could be a good play, since their "sphere" might be people who would want to relocate to your neigborhood.

It happens more often than I care to repeat, but there are people out there that I really don’t want to work with.  I’m sure those of you who are reading this article are not part of this bunch, but if you are no worries.  My Christian natures pretty much require that I love you as a brother or sister, but I don’t have to work with you, nor you me, for that matter.

I’m all for being blunt and honest and frankly I’ve lost a few clients that way.  I’m not eloquent.   However, what I am talking about today is a guy named Steve.  He could be named Joe, Bob, or even Samuel, but we’ll call him Steve.

Steve Doesn’t Get It.

Here’s the scenario: Steve calls last minute and would like me to show him some homes.  He’s going to buy a home for his daughter, he may want one for himself, and he even has other "family" thinking of moving.  He’s sounds like a nice guy and I’m sure he is.  He certainly doesn’t want to put me out, but he’ll really only be available tomorrow.  He’d like to see something tomorrow and come back and BUY something a little later.

Bare with me it gets better.

I inform Steve that I COULD cancel or move appointments for him , but if I am going to do that, that I would require a Buyer Brokerage, or a Fiduciary Agreement with him so that I could be his Realtor of choice .

NOPE! Out of the question.  Steve says he knows Real Estate and whoever shows him the home wins and if he finds it on his own, the listing agent wins.. big time. I ask him more about his situation, but people like this are all the same.  It’s not that they are just plain stupid, I just think they don’t use their brains.

Let me get this straight…

You are turning down:

1. A Free Service
2. A Service that will save you more then you could possibly save by yourself
3. A Service that will save you time and hassle and protect your earnest money (deposit)
4. A Service that may very well save you from litigation

Basically, he doesn’t see the value in the service that is provided, he just wants someone to let him in the homes.

That’s a smart plan, Steve.  Good luck with that one.  I prefer to work with and for clients who want to work with me and understand that my job was never to find or show them a home.  ANYONE CAN SHOW A HOME.  I get paid to negotiate.

If I (or should I say my Seller) get really lucky, Steve will buy one of my listings in Alpharetta or Gwinnett County and I will be able to demonstrate this skill to Steve up close and personal.

For Sellers out there in Alpharetta. If you want someone who can take advantage of people like Steve, please give me a call, he should be buying in 3 to 6 months.

I get this question more than you might think.  There simply isn’t a ton of State specific information on avoiding Foreclosure in Georgia other than, "pay your bill."  If you are facing foreclosure you might have other options.

• Loan Modification - There’s a lot of scams out there, but there are people who can help you modify your loan assuming your situation is "right" for it.
• Short Sale - if that doesn’t work, then you can do a short sale most likely.  If Foreclosure is imminent, then Short sale may be the way to go.
• Bankruptcy - Please consult your attorney on this one, but a Bankruptcy can usually halt the foreclosure proceedings.

Please contact me at 770-374-4667, should you be facing foreclosure and want to find out if there are other options.

I recently had a question from a seller in a neighborhood with a lot of foreclosures on how to help improve the situation. I thought would share the response with you:

Communities that have high involvement of neighbors tend to have a slightly lower rate of foreclosure.  Get organized and get involved with the HOA.  You can get the word out that there are other options.

CNN recently stated that every foreclosures is 1% hit on your property’s value.  So you have incentive to help out.

You can direct them to good connected Realtors who might refer them to loan modification programs, or short sales (which hurt everyone but not as bad as a vacant foreclosures).

Some things are inevitable, but keeping up your home and helping others is a great way to build your community.

You can search for all the foreclosures in Georgia at my website.

As you start looking for a new home, you probably aren’t even considering your NEXT move . You probably just want to get this one taken care of! But it is always prudent to shop for a new home with an eye on potential resale value down the road. No one can predict what the future will bring , but here are some simple things you can look for:

• Lot Size and Shape: Larger Lots are beginning to add a premium to the price. This is especially true of new construction. And as a buyer, do not pay a premium for someone else’s landscaping efforts. Landscaping can typically decrease the time on the market but not increase the overall price by much.
• Neighborhoods: Pay special attention to the yard upkeep, neighborly involvement and the amenities. The best strategy is always to buy the smallest or lowest priced home in the best neighborhood. You can get community reports from me here or search all the communities in Georgia on my website .
• Kitchens and Baths: A spacious, updated kitchen is among the most important features in a home. Updated baths are also important.
• Basements: Although most in Georgia remain unfinished they can increase the resale value and decrease the time on the market. A finished basement can add an additional $50k to $100K depending on the neighborhood and the level of finishing work (i.e. Theatre Room with equipment staying, full kitchen, extra bathrooms). In a down market, Basements may only be worth $10K, but they can definitely speed up the sale!
• Backyard Features: Decks and patios generally yield almost a dollar-for-dollar return. But swimming pools are not generally great investments, however, they will decrease the selling time significantly. Typically buyers put a $10K - $20K premium on in ground pools, far less than what it cost to put in. Above ground pools actually decrease the home’s value in some areas as well.

As you can tell most items may not add directly to the value, but all these items will help the home sell much, much quicker. You’ve got to be the best of the best in a down market.

I’d be happy to answer any questions you have and show you properties that meet your needs. Please call (770-374-4667) or email me when you are ready to look for a new home.

Real Estate across the country is different.  In some state, it may take 90 days to close while in others, like Georgia, 30 days is the norm.  Additionally, in some states you can close at a title company’s office, in other states you may get an attorney to help coordinate the closing while still in other states (Georgia) your Realtor is the one who coordinates for you. In Georgia, a Realtor has a fiduciary responsibility to look out for your best interest.

So what does fiduciary mean? Wikipedia defines it as,

A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person they owe the duty (the "principal"): they must not put their personal interests before the duty, and must not profit from their position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.

This agreement is set by a contract known as the, "Buyer’s Brokerage Agreement."  If an agent does not go over this relationship with you AND asks you to sign it before helping you, they are not looking out for your best interest. It only with honesty, loyalty and integrity that someone can represent you in the biggest transaction of your lifetime.

It’s more than just searching for homes, it’s knowing the market and identifying good investments, negotiating the best price, protecting your investment of earnest money, looking out for your family in their move and it’s about telling you that you might consider waiting to purchase or not purchase at all in certain situations.

With the current market conditions it’s likely that if your home has been on the market, you might have had a price reduction.  What’s interesting is where you end up.  Look at the prices, are you Wal-mart priced?

What’s Wal-Mart pricing?  We all know that the tried and true method to get us to buy something is to price it at what the seller wants, say $5 then knock a penny off, to $4.99.  Our mind says, “Aha, $4!” when we just paid $5 for the item.

Well some agents and home owners have the funny misconception that Wal-mart pricing is the way to go with homes.  The fact is that Walmart pricing absolutely works for home buyers too.  It works, against you because of one key difference…

AT WALMART, YOU DON’T NEGOTIATE.

So buyers see your price at $399,900 and they think, “Great it’s $399K.”  At a bare minimum, you’ll be getting an offer less $900.00.

It actually goes much further then that.  This is not simply some idea that I’ve come up with (although I would not fault you if you thought that).  No, this concept has actually been backed up by Cornell University.

Using data from 27,000 real estate transactions in two U.S. markets, they found that buyers paid higher prices when asking prices were more exact [like rounded numbers].

People learn to associate precision with smaller magnitudes, wrote the resarch team led by Manoj Thomas. 

Furthermore, with this new generation of home buyers using the internet, it makes absolutely no sense to ever list your home at a price that does not take advantage of this. 

A home priced at $324,900 will only appear for hom buyers searching $325K and down.  However, if the home were correctly priced at $325K, home buyers from $350K (in a search from $350 to $325K) and under would see this home.  The reason for this is that most internet search engines use 10’s and 25’s, not 99’s. 

So next time you get ready to put your home on the Atlanta Real Estate market, be sure not to price it like good ole’ Sam Walton would.