Monday, June 26, 2017

The Matrix Describing Utah County Real Estate Negotiations Image via https://www.biggerpockets.com

When the goals motivating the parties in a negotiation—including Utah County real estate negotiations—are understood by all concerned, the odds for success are greatly improved. In most cases where the negotiation is between a buyer and seller of Utah County real estate, the goals are straightforward enough that it doesn’t seem to require much attention. Yet with a negotiation as weighty as the buying and selling of a home, stripping down the motivations common to the various parties can be a clarifying exercise. Here is what you might call a negotiation matrix:
When a buyer puts together an offer, more often than not their mental decision-making process goes something like this:
  • — — — — — — — — BUYER — — — — — — — —
  I do not want to lose this house ->|<- I want to pay as little as possible
  • — — — — — — — — —— — — — — — — — — — —
The reason for the colliding arrows is that the two goals run the risk of conflicting with one another. If the buyer’s offer is too low, another buyer could come in to swoop up the property, and: game over. If the offer is higher than would turn out to be acceptable to the seller, the second goal will have been needlessly sacrificed.  
At the same time and on the other side, the seller is usually thinking:
  • — — — — — — — — —— — — — — — — — — — —
I want to complete the sale ->|<- I want to bank the full asking price (or            higher!)
  • — — — — — — — — — SELLER— — — — — — — — — — —
It’s quite similar to the buyer’s mental process. Both are calculations of the risk vs. reward that making an offer and responding to an offer entails.
When a buyer makes a lowball offer, it signals to the seller that the “don’t want to lose this house” side is probably losing out to the “pay the least” side of the buyer’s calculation. If the seller is leaning toward the “complete the sale” side of his or her own calculation, the offer will either be accepted or countered with a significant discount. If the current inclination is more toward the “full price” side, the counter may contain just a minor discount.
This negotiation matrix is the barest of bare-bones reductions. In practice, it’s often a little more complicated. Offers often contain details about desired maintenance corrections or may be dependent upon outside factors (like selling their current home); counter-offers, likewise.
Where a possible negotiation can needlessly go off the rails is if either party becomes emotionally threatened by an offer or counter. And believe me, it can happen! What’s vitally important is that each side understands that the other’s goals are legitimate, even though at odds with their own. A lowball offer may be misguided, but it’s not evil. A refusal to counter at all is, likewise, a statement of a legitimate bargaining position. Either may be disappointing, but neither is necessarily evidence of bad faith.
It’s my job to help my buying and selling clients chart a course through the negotiation rapids while avoiding such emotional cross-currents. At best, they are a needless distraction; at worst, obstacles that can prevent a meeting of minds. Appreciating the legitimacy of everybody’s motivations before the actual numbers start to fly is a good way to prepare. And, as usual, calling me is another prudent idea!
Alicia Terry & ATeam Realty

Friday, June 23, 2017

Automated Utah County Home Appraisals: for Amusement Only Image via http://www.homeappraisalsinc.com

In the Terminator movies, a robot from the future (Arnold Schwarzenegger) hunts down the human heroine in order to change the future by altering the past. Although that’s actually the present. It’s complicated.

Although generally considered science fiction, the same thing is happening right now in the realm of Utah County home appraisals! Now, before any Utah County readers panic, there’s no immediate danger to the community. The authorities have the situation well in hand; in fact, the robot in question has already been hauled into court. There’s certainly nothing that could affect any individual Utah County homeowner…that is, unless your own house is about to be entered into the Utah County listings.

First, about the robot: this is not the Terminator (Arnold) himself. In real life, if you saw him in the supermarket or walking down the street, there would be nothing to fear at all. In real life, he is an actor/Governor who is actually an American/Austrian who is a conservative/liberal and in no way the fictional robot character who was the antagonist/protagonist featured in the Terminator movies.

Neither is the robot that lurks in some online listings: the home appraisal robot. It, too, is nothing to fear, even though it has probably already visited your house without your knowledge. This robot comes from the Zillow website, and its name is “Zestimate.” It means no harm and is doing the best an automated home estimate robot could be expected to do. Any unintended consequences of what happens when it visits your house are, as the phrase indicates, unintentional.

About that court case: the online information company Zillow publishes a dollar figure that its robot calculates for most U.S. home addresses. It is featured as its “Zestimate” of a property’s market value. An Illinois realty lawyer has sued them because she claims that in her case that number is so low and off-kilter that it has materially hampered the sale of her condominium. State law has it that nobody can publish an appraisal without permission of the property’s owner. Zillow says that the $ number it calls its “Zestimate” is not an appraisal at all: instead, it’s an “estimated market value.” Who wins the court case is yet to be determined.

How this might affect your own Utah County home is because prospective buyers might visit Zillow to see what the robot thinks your own property is worth, and be slightly misled. Zillow admits that, compared with actual sale prices, their Zestimate number has a median error rate of 5% (not bad)—but that it’s only within twenty percent 89.7% of the time. A 20% error would be terribly misleading; especially when it happens more than one out of ten times.

The fact is, this robot doesn’t come from the future like the Terminator. Its numbers are based solely on publicly recorded information, which may be outdated, incorrect, or, most likely, unable to factor in anything other than basic square footage and general comps. What the Zestimate cannot account for are things like how upgraded, or outdated, or depressingly dark, or delightfully light, or traffic-noise heavy, or majestically awe-inspiring the subject property actually is in comparison to the comps used to calculate the Zestimate. When human beings aren’t involved at all, the subject property itself is not actually compared. I think there is room for this kind of automated approach. It can be fun and interesting to look around a neighborhood to see how various individual properties fare, even if the numbers aren’t to be taken too seriously.  As the name implies, it's really just an estimate. 

But when the time comes to actually sell your own Utah County home or to start looking in earnest for a house you will be calling home for many years, that’s no time to rely on anything less than comparables and guidance researched by a living, breathing real estate professional. In other words, when the information needs to be right—call me!

Alicia Terry & ATeam Realty

Wednesday, June 21, 2017

Utah County Rental Home for Sale and the Get Rich Slow Scheme! Image Source: http://www.mlive.com/

The term “get rich quick scheme” has been held in low regard since before Charlie Ponzi’s pyramid came crashing to earth in the 1920s. Probably that word “scheme” is a problem…sounds too shifty. And the whole idea of sudden riches sounds as reassuring as “something for nothing” or “free lunch.” 

Prudent Utah County residents tend to go a good deal more cautiously when they plan their investments. They usually aren’t even aiming to “get rich.” More like “get comfortable.” Instead of hoping to reap sudden wealth (living off all those tolls after buying the Brooklyn Bridge), they think in conservative terms like “passive income streams” and “lowered risk strategies.” Instead of responding to radio ads for the week’s fastest-growing franchise opportunity, they’re more likely to be scouring the listings for Utah County rental homes for sale.

A week or so ago, The Wall Street Journal published a real estate piece that focused on the building momentum behind this kind of investment strategy. The headline promised to point out ways “to get the best return on a rental property.” It included bullet-pointed tips like “Maintenance costs money” and “Invest for the long term.” The article described the growing number of investors concerned about stock market volatility: they are “choosing a different place to park their money.” The parking place in question? “Buying homes in moderately-priced markets…then renting them out.”

Instead of going high-ticket, one Ohio investor purchased a four-bedroom home for $175,000 in a town with “a strong job market.” After expenses, she nets $350 in positive monthly cash flow. Doing the math, that may be a modest amount, but it’s the cash net after paying for the home loan: she’s simultaneously acquiring the property. It’s a slow but steady strategy. Anyone who finds themselves regularly checking the listings for Utah County rental homes for sale are probably like-minded with investors the Journal describes: “investors who take comfort in the steady income stream.”

With “get rich quick” schemes held in such disrepute, you might conclude that a “get rich slow scheme” would be well-received. Perhaps—but it might be better if we switch out that “scheme” word for one that’s more substantial—like “plan” or “program.” In the meantime, if you are among those looking for this brand of steady-as-she-goes investment opportunity, you don’t need a formal designation to put it into action. For details on the current batch of Utah County rental homes for sale, just phone me at the office!
Alicia Terry & ATeam Realty

Monday, June 19, 2017

Utah County Mortgage Rates Point to Encouraging Future Image Source: http://money.cnn.com

Last week, following the Fed’s hike in the rates they charge banks, you might expect a matching rise in mortgage rates for Utah County home buyers and refi applicants. If the experts are right, that’s far from a done deal.

The Washington Post headline said it all:
Mortgage rates move slightly higher but could be headed back down again.”
Mortgage News Daily reported the same: a slight nudge upward, then back down:
By holding flat, rates remain very close to the best levels seen in more than 8 months.”
The consensus was all but unanimous, with even Freddie Mac predicting that “mortgage rates are likely to follow” Treasury yields—that is, downward.

When the Fed raises the rates banks must pay, it’s only logical to expect the move to echo through the money markets, finally reaching home loan lenders. After all, they must raise rates to maintain the same profit level. But following the Fed announcement, investors drove Treasury rates sharply lower. The reason for the market’s seemingly reverse reaction wasn’t due to the Fed’s move: rather, it was because of “a surprisingly weak” Consumer Price Index report (which the Fed had chosen to ignore). In other words, investors believed the CPI instead of the Fed.

The likely effect on Utah County home buyers and sellers remains very good news. With Utah County mortgage rates holding at the “best levels seen in more than 8 months,” more families’ budgets allow moves to bigger and better homes. And for those who read the Fed rate news and feared it might be too late to take advantage of historically low interest rates, the Mortgage News Daily offered a further prediction about mortgage rates that even “stand a shot at going lower this summer.”

Utah County mortgage rates do rise and fall daily—and knowing for certain where they are headed is famously impossible. As Bloomberg.com noted by the end of the week, “it’s been an especially rough six months” for those charged with predicting trends. What needs no crystal ball to establish is that it now seems likely that this year’s spring-summer busy season will continue to produce real estate bargains that would have seemed almost inconceivable in earlier inflation-ridden decades.

With both sellers and buyers seeing Utah County mortgage rates that translate into more house for lower monthly payments, it remains prime time to check out the market—and to give me a call!

Alicia Terry & ATeam Realty

Friday, June 16, 2017

Making the Most of Today’s Crop of Utah County Homes for Sale Image Source: http://cittamoffittrealtors.com/

Not everyone who is looking at the homes for sale in Utah County needs to come up with a winner right away. If their own house has just been listed, they may reasonably estimate that it will be some months before the moving vans need to be summoned. Or they may be contemplating a move only if they happen across just the right place at just the right price.

If you find yourself in a similar kind of low-pressure house hunting mode, some basic truths about homebuying still do apply. Remember that when you finally do find just the right home at just the right price, all of a sudden you could find yourself in competition with others who see the same thing: the house they’ve been looking for!

The takeaway is that, even if your interest in today’s Utah County homes for sale is strictly low-key, it’s prudent to prepare yourself as if yours is more of a front-burner quest. Although it could seem to be more trouble than it’s likely to be worth, most people in a similar “just looking” frame of mind won’t have gone to the trouble. In other words, when the Utah County house of your dreams suddenly does come on the market, guess who’s going to be the one to land it?

Here are three checklist items that will position you to make the most of any Utah County house hunt:
  • Budget seriously. Without doubt, the place to start is by doing some financial homework. If you don’t know what you can comfortably afford, you can’t know which of the homes for sale in Utah County should be competing for your attention.
  • Get real. Unless you plan to be a cash buyer, having a mortgage lender on your team is well worth the effort. Keep in mind that being “pre-qualified” isn’t the same thing as being “pre-approved”—the more rigorous (and real) process. It spells out the precise size of the home loan you can expect to receive. It’s no surprise that sellers tilt toward prospective buyers who have bothered to get real!
  • Widen the field. Once you have narrowed the field in terms of the price range you will be considering, you can improve the chances of finding a singularly appealing property by widening your search parameters. This can mean considering homes for sale in areas you hadn’t really paid attention to—or opening your imagination to include properties with features or architectural styles you hadn’t previously thought about. Especially in an active market with tight inventories, the open-minded approach is often the one that yields pay dirt.
Today’s low home loan rates are allowing surprisingly affordable monthly payments—numbers which can transform even the least motivated prospects into active house hunters. To see what that means in terms of the actual current crop of Utah County homes for sale, give me a call!

Alicia Terry & ATeam Realty

real estate, utah real estate, utah homes, utah homes for sale, utah home buyers, father's day in utah county Image Source: http://www.timesfreepress.com

As has become traditional on the third Sunday in June, Utah County fathers can look forward to being honored and fussed over. For most families, Father’s Day in Utah County is considered to be every bit as important a celebration as Mother’s Day. At least that’s what most families pretend. But there are two basic reasons why it’s usually an uphill battle.
First, there’s the checkered history. Then, there’s the reality.
HISTORY: Mother’s Day got the jump on Father’s Day because, starting in 1905, its zealous originator (Anna Jarvis) wouldn’t give up on the idea. Because the holiday was dreamed up right at the start of the 20th century, men were exclusively in charge of the calendar and holidays. Since they were men and because telephones were only starting to be installed, most of them had neglected to call their mothers often enough. So when Jarvis pointed out that they had better recognize “the person who has done more for you than anyone in the world,” the men mumbled that they agreed—and Mother’s Day became a national holiday. Then Hallmark got wind of the idea. The rest is history.
Father’s Day, on the other hand, got its start five years later (in 1910). But it was promoted by Sonora Dodd, who was less zealous than Jarvis. In fact, when Dodd went off to college, she forgot about the idea for a while. It was only in the 30s that she resumed her promotion of a Father’s Day holiday. Then Hallmark got wind of the idea. The rest is history.
REALITY: Regardless of whether or not it’s fair, Mother’s Day has always been taken a notch or two more seriously than Father’s Day—possibly because it’s impossible to resist the idea that mothers deserve to get a day off. (Try arguing against that and you’ll be sent to your room). Everybody knows that from the start, mothers have a harder time than fathers. If you don’t agree, please recall what took place on the day you were born. Fathers’ level of participation during that occasion was optional; not so mothers.
Additionally, the traditional stereotype for fathers is that they are less sentimental—so the Hallmark cards have fewer flowers on them. If so, when you forget to shop for a Father’s Day gift until the last minute, fathers are not supposed to care much. This is a purely sexist argument, but many fathers have learned to pretend it’s true. Even Wikipedia says that all you have to get for Father’s Day is a necktie or “something mechanical.”
Here in Utah County, Father’s Day celebrations may involve letting Dad watch sports on TV, go golfing, or generally just goof off. The best part will be if the family can gather ‘round to let the Old Man be proud of them. But if he can’t be there, it’s a day to doubly recall why Father’s Day really is a day that deserves to be celebrated!
Alicia Terry & ATeam Realty

Wednesday, June 14, 2017

Selling a Home in Utah County: It's Really a Light Show! Image Source: https://walkerteamrealtors.com

You could say that selling a home—in Utah County or anywhere else in the nation—is in large part “a light show.” When you dissect marketing statistics that trace the path of the vast majority of buyers, it’s clear that the first sense that comes into play in the selling of a home is sight: either a first view of the online listing, a glimpse of a property with a “for sale” sign out front, or an image in an ad or printed handout. As the saying goes, “the eyes have it.”

Selling Utah County homes really begins with the photography. Professional photographers know that whenever they aim their cameras at something they intend to capture, as important as the actual object itself is the quality of the light that illuminates it. They talk about the “shape” of the light and whether it’s “hard” (meaning shadows are prominent) or “soft” (shadows innocuous). It’s why the pros will time a listing’s emblematic “curb appeal” shot for the sun to be in the most flattering position.  Inside, they may use as many as three or four hidden slave strobe lights to brighten larger rooms where the natural light is photographically uneven.

With few exceptions, light and bright is the rule of thumb for what succeeds best in selling a home. That guideline explains why most agree that the preferred wall colors are variations of “pale” this or “light” that. The perennial favorites are light beige, pale taupe, and pale gray-blue. The common denominator for room color recommendations is high to moderate reflectivity—in other words: light and bright! A recent published analysis of over 32,000 photos of sold homes seems to have been a largely unnecessary exercise: the leaders were (you guessed it) pale gray blue and light beige.

The same thinking leads to the good practice of preceding every showing and open house with a quick trip through the home, opening blinds and curtains and turning on lamps and overheads.

But there are exceptions, of course. Utah County homes with media rooms can often benefit from dimmed lighting that accentuates media screens. Likewise, a rich, darkly paneled study can do the same. Both make an interesting contrast with the rest of the home (and a dramatic break in the whole presentation). When showing a client’s property, some agents lead the guests on a predetermined route through the property. The idea is to manage the progression of impressions to achieve maximum impact.

When you begin to contemplate selling your own Utah County home, even if it’s not being planned for a while, I hope you will give me a call. I’ll come out so we can chat about some low-intensity preparations that will pave the way for a quick and easy eventual sale. There’s never any obligation—and there are often some early steps you can take that result in meaningful results!

Alicia Terry & ATeam Realty