First quarter home sales on Hilton Head Island were at their lowest point in 2009 with 107 sales compared to 162 sales for the first quarter of 2008 which had been our previous lowest point.  The high was 410 sales during the first quarter of 2005. 

What does this mean?  If you are a buyer there are some great opportunities out there because when sales are slow, inventories are high and prices are reduced. 

Most people wait until it is too late to buy and wait until prices start increasing.  I tell my buyers to buy while prices are low and inventories are high.  It seems like we always buy stocks and real estate at the wrong time.

In all my years of selling real estate on Hilton Head Island, I have often had one of my property owners say that they wish I could help sell their property in their hometown.  I always tell them that I have more than I can handle on Hilton Head and I would laugh.

Recently, I had a client of mine call me and say that they really needed my help.  They had a property in Raleigh, North Carolina that they really needed to sell and they wanted my advice.

As it turns out, I happen to know the #1 Real Estate in North Carolina; we share the same coach.  I called her, she listed and sold the property and the people were very pleased with her service. (more…)

Almost every day people ask me about how many agents have actually left the real estate business during the recent slow down in the market.

I heard from another Realtor (even though I do not have proof of it) that we had about 300 Realtors who had licenses last year who did not renew their Board of Realtors membership this year.  I really do not think that is a true indication – probably the best indication is the number of people who still have an active MLS license who are working different jobs to try and make ends meet.  This has been a very tough time for all Realtors – even the ones on the top who are selling significantly less than they did several years ago.

The good news is that it makes us go back to the basics.  Charlie Reed has a saying on our wall in our office that says, “good habits are formed in bad real estate markets and bad habits are formed in good real estate markets”.

Yes, there will be agents leaving, but there will be agents replacing them.  Even in a slow market you have people who start in the market. 

I got in the real estate market in November of 1981 which was a terrible real estate market.  It was a great time to learn because you really had to scrap to make ends meet. 

I often say that in a slow market the buying public needs the service of a Realtor much more than they do in a fast market.

I was talking to one of the other Agents on Hilton Head who had just made a sale on a 4th row house in Sea Pines Plantation.  I asked him how he put the transaction together and he said “my buyer was looking for a screaming deal and he would only buy if he found one”.  I asked how he would describe a “screaming deal” and he answered that he did not know, but it was just the term his buyer used.

It seems like in a slow real estate market the only buyers are people looking for a deal.  If you are a seller you have to make your property a “deal” or nobody is going to buy it. 

I think the buyer’s logic is that there are a lot more sellers than there are buyers so therefore he would only buy if he felt like he was getting a property that was significantly below market value or what it sold for one or two years ago.

The problem that arises with this is when you have several “screaming deals” sell it sets the tone of the market.  The appraisers use those as comparable sales and when new buyers come along they say that they are not going to pay any more than the last buyer.  It sets prices in a downward spiral.

You also run into a problem where you are competing with foreclosures.  Most banks will want to get a property sold within 60 days and will adjust the price accordingly.  The the “regular sellers” have to compete with the bank. 

If you are a buyer, this is good because there are several “screaming deals” out there in today’s real estate market.

Many times when I list a piece of property the buyer will say, “we only need one buyer” and they are working on the assumption that there is going to be a buyer out there that loves their property so much that they will take it at any price compared to the other properties that are presently listed for sale.  I often feel that this is really not a true statement. 

On Hilton Head Island, I feel that buyers are looking for certain amenities and there are usually more than one home that has the amenity package they are looking for.  They are also comparing the prices of other homes on Hilton Head with the particular house they might be interested in. 

They are also comparing condition with other homes.

When a seller says, “don’t worry about it, I only need one buyer”, he has to realize that all the other people out there only need one buyer as well and when you have excess inventory the buyer has tons of choices.  As inventory increases, the chances of “one buyer” buying your home decreases because they have more to choose from.

As I often tell a seller, “it doesn’t work that way”.

How do I find out what my house is worth? 

It amazes me how people determine what their property is worth.  I recently had someone call and tell me that they wanted to list their house and they gave me a price.  I told them that I did not think it was worth that much and they told me how they got to that price.

They drove around Hilton Head Island and looked at other properties that were similar to theirs that were currently on the market.  They did not go inside them, but by looking at them they were able to get a good idea of what they felt like their house was worth. 

Tha t might be a way to do it, but basically you are comparing your house to other homes that have not sold. 

The most effective way to get a true idea of the value of your property is to compare your home to properties similar to yours that have sold and closed in the last six months. 

This is a much more effective way because these properties have actually passed the test. 

It amazes me that people will take an overpriced listing that has 0% chance of selling and think that their property is worth more than that.  It may be, but their base number is incorrect because you are using a price of a property that will not sell.

In a slow market, you have to be extremely accurate in trying to determine the value of your property because purchasers are so picky and they are looking at all the different options.  Because of Internet access, everybody knows their options.

Back when I was a college student a long time ago, I never will forget my marketing professor saying that the three most important items in the sale of real estate were location, location and location.  He was a professor and I assumed he knew what he was talking about and I have always believed that.  In my first 25 years of selling real estate I would always tell people “location, location, location”.

The market has changed over the last several years and that is not necessarily true any more.  There are a lot of properties in great locations that simply are not selling.  When we go to list these properties sellers always say, “they always say the three most important things in selling property are location, location, location.  I’ve got a great location so my property should be easy to sell”. 

I recently heard a top real estate agent say that the three most important items in selling real estate today are price, price and condition.  When I questioned why location was not one of the most important criteria he said that there were a lot of good properties available with good locations.  The scarcity of the location is not an advantage if there are a bunch of them out there.

The more I thought about what he said the more I realized that at least on Hilton Head Island, SC  that he was correct.

We are very fortunate to live in a community that is so interested in the arts. 

For the last several years, I have been a sponsor of the National Juried Show; this year the show is May 2 – May 24 at the Arts Center of Coastal Carolina. 

Please drop by and take a look at some of the artwork on display.  I enjoy going every year and I have so happy to live in a place where the community is as involved in the arts as we are on Hilton Head. 

As a real estate agent, I am always talked to property owners and it seems like when I ask people what they like most about Hilton Head Island they always talk about how involved the community is.  People are always saying that they moved to Hilton Head for golf or the beach and they stay here because of the great involvement in the community.  This is just another example of what makes Hilton Head great.

When people purchase real estate on Hilton Head Island they will justify it logically, but purchase it emotionally.

What do I mean when I say they will purchase emotionally? 

They want a good buy, but they buy something that excites them that is in good condition which is why one of the three most important things in selling property today is condition.

For example, many times when we go out to list an older home the carpet will be filthy shag carpet and the seller will say, “I know I need to replace the carpet, but I will just give a carpet allowance.  Plus, if I pick carpet out, I will probably pick the wrong color”. 

It does not work that way – people buy on emotions.  If it does not look good or if the condition is not good they simply will not buy it at any cost because there are so many properties available.

I once had a Plantation Club Villas listed for sale.  The walls in the original 2-bedroom Plantation Club were dark colored wood.  I kept telling the seller that we needed to paint that a lighter color and they kept saying that they would give someone a credit.  I told him that they did not understand – you are not going to get an offer because this place does not look good.  After much encouragement, they finally spent $800 to paint the wall a lighter color and the property sold a week later because it was so much more pleasant.  This is the point I was trying to make – people buy what they like.  If they like it they buy it, and if they do not like it then it does not matter what kind of credit you give them, they simply don’t pull the trigger.

Keep that in mind when you are trying to sell real estate on Hilton Head Island.  Look at the property through the eyes of a buyer.  Is the house cluttered?  Does it need to be staged?  Do you need new carpet?  Would a paint job help?