Someone once asked me what the worst offer I have ever received.  I asked them if they had all day because I have had several of them. 

I recently had a bank foreclosure home that had been listed for $1,399,000 when the owner had it.  The bank foreclosed on it and wanted to sell it quickly and priced it at $799,000 which I thought was a great value and most people agreed. 

I received an offer for $200,000; I thought the agent was joking when he called me.  Oddly enough, the agent said that he thought the bank wanted to sell it.

I told him that the bank did want to sell the house which is why they reduced the price from $1,399,000 to $799,000 but this agent was not embarrassed to present a $200,000 offer.

I would have personally been too embarrassed to present that offer because it would have made me look like I was crazy and my purchaser who thought he could have bought it for $200,000 would have been very unrealistic.  This was a brand new, never lived in 4,300 square foot house in one of the finest developments on Hilton Head Island.

I often have people say that if they really wanted to sell it, they will take an offer.  Yes, they will take an offer but there is a limit to what people will take. 

When I started asking other agents what the worst offer they ever received was I was amazed to hear that all of them had stories like I did.  One agent had a $1 million house listed and someone offered $100,000 was upset that they did not receive a counteroffer.  The market is slow, but is it that slow – I do not think so.

Last week we had 78 homes, 32 villas and 35 lots come on the market.

The Hilton Head MLS had 42 home sales last week; 18 on Hilton Head Island and 24 in the Bluffton area.  Following is the breakdown of home sales on Hilton Head:  4 in Sea Pines, 2 in Palmetto Dunes, 2 in Port Royal, 6 in Hilton Head Plantation, 2 in Indigo Run, one in Spanish Wells, one in Hilton Head Island off plantation areas.

We also had 14 villas and 3 lots sell. 

Even though activity is up from the last several months, we are still seeing too much new inventory on the market.  Real Estate supply versus demand is still putting a strain on prices.

Recently I was working with a client that we were listing her house. She had bought a house in the Cypress and kept saying that she wanted to go ahead and move to the Cypress, but she she needed to leave her furniture in the house because she knew a furnished house sells better than an unfurnished house.

You have to keep in mind that this was not decorator furniture. It was furniture that was over 20 years old. I tried to explain to the owner of the house that the house would sell better unfurnished than furnished. She said, “that can’t be right because I have always heard the opposite.” For years, people told her that, but the statistics don’t back that up.

The National Association of Realtors did a study that concluded that unfurnished properties sold better than furnished properties. That is what I always tell people.

There is one exception to that. That is what we call a professionally staged home. I recently had a house listed that I had had over 50 showings and didn’t get a single offer because there was too much white tile throughout the house. I had the house professionally staged and got an offer the first day the house was staged. People didn’t notice the white tile as much and the space was better defined, due to the furniture.

The mistake most people make is assuming that their furniture looks good. That is why a furnished house doesn’t sell as well. If it is professionally staged, it absolutely shines like a shiny penny.

If your house is unfurnished and hasn’t sold, you may want to consider having a staging company come in and stage the properties. There are a couple of companies that do a phenomenal job.

Now I would rank the homes easiest to sell as follows: 1)Professionally staged house 2)Empty house 3)Furnished house.

Over the last several years I have noticed that people are using their homes on Hilton Head like an ATM machine.  Every time they needed a little money they went to the bank and either took out a line of credit, 2nd mortgage, or refinanced. 

Recently I have had several people call me to appraise their home.  When I pulled it up on tax recrods I would notice that for 4 years in a row they had refinanced the house every year.  I asked myself, why would people refinance their house every year?  Then it hit me, it wasn’t that they were necessarily trying to get a better rate as much as they were trying to take money out and live off of their home. 

The problem with using your home as an ATM machine is that eventually the ATM machine runs dry.  You get to the point where you have a bad year and your house drops in value and the house is worth less than you owe on it so you cannot continue to draw out.  If you sell it you do not have the money to bring to the table to close.  Furthermore, if it is an investment property you will owe tax on it.

I recently met with some clients of mine that I had sold them a villa for $400,000 several years ago.  The villa is now worth around $800,000 and at one time was worth about $1.1 million; they owe $950,000 on it.  Since they paid $400,000 for the villa and it is worth $800,000 now they are going to have a $400,000 tax gain on it even though they are bringing money to the table to close the property – not  a good situation for them to be in.  The problem was, they kept drawing out to spend money on other investments like the stock market where they lost that money so they are between a rock and a hard place.

I think this all goes back to the right reasons to own real estate.  We own resort real estate because it is a great place to vacation and have fun.  Too many people used it as an investment vehicle.  It reminds me of the old country music song, “I love you for all the wrong reasons”.

Late last night I was at the office doing some statistics and out of curiosity I ran sales in 2008 versus 2009 for the first 20 days of April.  We sold 102 homes during the first 20 days of April in 2009 and last year we sold 98.  We sold 32 villas during the first 20 days of April in 2008 and this year we sold 45.  I was shocked when I saw this because the trend had been that production had been dropping each quarter.  We had five quarters in a row showing a decrease in sales which was having a detrimental effect on pricing.

For us to actually sell more in 2009 than we did in 2008 is the first step in realizing that the real estate market has bottomed out.

There is a real art in our business of seeing when the bottom of the market has arrived.  Most real estate firms use closing dates to figure that out.  If you wait on closing dates you have already missed it; we prefer to look at pending dates which is actually the date that the property goes under contract. 

20 days does not make a quarter but this is a step in the right direction.

I think what this also tells us is that sellers are now figuring out that the market is slow and are adjusting their prices and doing whatever they can to get the deal put together. 

We will keep you posted on other statistics and how they affect the market, but I do think the worst is over.  Please tell your friends that NOW is the time to buy on Hilton Head Island, South Carolina.

Please feel free to give me a call if you would like an updated list of bank foreclosure properties or any type property you are most interested in.  I will do the best I can to find a property that will fit your needs.

I had a great time at the Verizon Heritage golf tournament this past weekend.  I watched the leader through the first 15 holes and after he birdied 15 I hopped in my car and drove home to watch the last few holes on television.  I got home in time to see the leader play 17 and 18. 

The footage of 18 was the most spectacular footage I have ever seen.  They shot it from the air and once I saw that, I thought to myself that millions of people are going to see this and they are all going to want to come to Hilton Head.  I never realized how valuable a tool of the Heritage on Hilton Head Island is.

Over the years I have had many people tell me that they first heard about Hilton Head by watching the golf tournament on television; obviously that is a big boost for us.

Wow – what a Heritage!  Four days of absolutely perfect weather – what are the chances of that happening? 

I have often wondered what is the value of the Verizon Heritage is to Hilton Head Island. 

How many people buy property on Hilton Head simply because the first time they came to the island was for the Heritage golf tournament and they fell in love with the island. 

How many people saw the Verizon Heritage on television and thought this was the most beautiful place – we should go for a vacation there and ended up buying property on Hilton Head?

Nobody will ever know the actual value of the tournament to real estate values on Hilton Head; but I can assure you it is a lot more than any of us can probably figure.

One of the main reasons people buy real estate on Hilton Head is because it is a great place to vacation, the weather is good, the amenities are good and it is a fun place.  Anyone who was at the Heritage tournament this weekend they had lots of fun – excitement, good golf, great weather – what more could someone ask for on Hilton Head Island?

I had someone ask what would happen to Hilton Head if we did not have the Heritage.  Let’s hope that does not happen – I think our Heritage Classic committee is doing a good job to ensure that the tournament stays here, but I do know it affects real estate values and the local economy. 

I would love to see more of our locals in attendance at the tournament.  People spend thousands to come to Hilton Head to go to the golf tournament.  As locals, all we have to do is buy a $135 pass – we already have a place to stay and we are already here.  It makes sense.

Next year I want to encourage more of my clients to attend the Heritage; it is a great event and I’m glad we have it on Hilton Head Island.

Heritage week has always been the greatest week of the year to be on Hilton Head Island. 

I remember when I first moved here and my first Heritage which was March of 1982.  This was back in the old days when we were the week before the Masters. 

I had never been to a golf tournament before and I asked my sales manager, Rick Turner, what to do and he suggested that I just go down there and pick someone out and follow them.

I took my 2 year old daughter and we got to the golf tournament and picked out a young man to follow.

It happened to be Fred Couples playing in one of his first events and I have been a Fred Couple’s fan ever since.  He played great in the tournament and ended up in about 3rd place.

Let me encourage you to pick out a player and follow them for a week and you will have the time of your life.

Last week we had 36 homes go under contract; 18 on Hilton Head Island and 18 in the Bluffton area.  Of the sales on Hilton Head, five were priced below $300,000, four between $300,000 and $500,000, four between $500,000 and $700,000, four between $700,000 and $1,000,000 and one oceanfront home at $5,850,000. 

We had 21 villas go under contract last week on Hilton Head; two in Sea Pines, eight in Forest Beach, four in Palmetto Dunes, two in Folly Field, one in Hilton Head Plantation, two in off plantation areas and two in The Estate at Westbuty Park in Bluffton. 

We also had three lots sell on the island which is the most lot activity we have had in quite some time. 

Spring, and particularly Heritage week is one of our busiest times of year.  If you or anyone you know is looking for a great buy on Hilton Head please let me know – now is a great time to buy!  View all of my best buys here!