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The Customer ISN’T Always Right!

September 16, 2019 By Tayson Rockefeller Leave a Comment

The customer ISN’T always right!

I was watching a YouTube video about landscaping (DIY purposes) and ran across an interesting video I could relate with titled “When the Customer is Wrong”. It showed me some similarities and perspective with my career and areas of expertise. The example that resonated with me was protecting the client from themselves.

People tend to become emotionally tied to what they are buying or selling. In the case of the landscaper, the homeowner wanted the contractor to remove a pool and install a patio which was cost-prohibitive because of the soil composition. The contractor made the homeowner aware of the potential costs associated, but his emotions pushed him to go forward with the project. The contractor, adamant and concerned with not only the cost but the long-term viability of the project pushed back and ultimately was able to talk to homeowner into filling the area in and creating some natural grass and landscape at a much lower cost ensuring the homeowner that he could later install the patio after they were able to monitor ground movement.

Real estate agents are faced with similar situations. This contractor talked his customer out of investing thousands of dollars into the project of which he was already mobilized and prepared to do. As professionals, we also have to show our customers the long-term ramifications of trying to purchase something that doesn’t fit their needs or that may be a bigger project than their emotions are allowing them to see.

Similarly, and in many cases even more challenging is the razor thin line we balance between with respect to sellers and what they should do. Sellers oftentimes ask for opinions and advice, but don’t always heed that advice. Buyers can be emotionally attached to something they want which is an easy concept to grasp. We all like things that are new and shiny. Sellers, on the other hand, are emotionally attached to something that they have lived in, and shared life experiences in. This is why in so many cases, providing opinions of value can be so sensitive to many homeowners.

A classic approach includes sellers who only recognize, and only explain the great aspects of the home they live in. This is a classic trap for many rookie real estate agents. They are being sold by the homeowner. This can lead to overvaluation and extended days on market which usually equates to buyers expecting to be able to negotiate further. We also have to be careful about how we approach sellers when they receive good offers. What a broker might see and know is a good offer, a seller might view as a terrible offer. Trying to tell someone that a good offer is good can oftentimes lead them to believe that you weren’t working in their best interest, it can be messy.

Personally, I try to find ways to show my customers that I genuinely care about their investment or potential investment. I try not to think about my bottom line as a rule of thumb. The more I want something, the more my emotions can play tricks on my own mind. Working in your client’s best interest, genuinely, usually works itself out. However, it doesn’t mean these awkward situations don’t come up, and it’s a part of a broker’s job to know how to handle and articulate these situations.

Is it a good time to buy?

May 15, 2019 By Tayson Rockefeller Leave a Comment

Any good economist, salesperson, or real estate agent will always tell you up front; “I don’t have a crystal ball.” I don’t view this as a disclosure to cover one’s rear, but more a statement to get you thinking about both sides of an equation. With that, I don’t have a crystal ball, but I am going to do my best to make a recommendation.

Home prices continue to rise, the real estate market is booming, but these cycles don’t last forever. Even in times of recession, history shows us that markets recover, and thrive. I have to remind people that those who purchased a home in 2007 would very likely be in good shape today. We witnessed one of the deepest recessions in American history, yet here we are, 10 years later. If you would have purchased a home in 2007, your interest rate likely would have been somewhere between 6 and 7%. This seems high, but based on the past 50 years, it’s not bad. Sure, there are other equations. Those with an 18% interest rate in the early 80s could have refinanced over time. They also may have experienced a higher rate of appreciation.

Regardless, for the first time in history, rates have been below 5% for nearly 10 years, and this probably won’t last forever. The rate of inflation will likely increase as the strong economy continues, which will result in increasing interest rates to create balance for that rising inflation.

With that, I’m going to run a quick hypothetical. Let’s say you are buying a home and obtaining a loan for $400,000. The interest rates for a 30 year loan today are favorable, in the low 4% range. I’ll use 4.25%. The total cost of the loan, if you didn’t make any additional payments, would be about $708,000 over 30 years. Now, let’s say home values come down. You are able to buy the same home for $350,000 in a few years’ time, but interest rates are 6%. The total cost of the loan is $755,000 in this scenario.

To be fair, the above scenario isn’t totally realistic. Most people don’t own a home for the entire duration of their mortgage. I believe the median tenure living in a home is somewhere around 10 years. If we run the same scenario, and add up the payments over those 10 years, your balance owed at the end of 2030 with the first scenario would be around $300,000 and $280,000 in the second scenario. If you were to take into account the payments you would have made (as opposed to renting) between buying a house now, and if, and when the prices reduce in the future, you would likely be in the same boat. Things would also begin to swing in your favor the longer you own the home.

We don’t know if prices will decrease. We also don’t know if interest rates will rise. For all we know, home prices could come down along with interest rates, or home prices could increase along with interest rates. If trends continue, the latter is more likely to happen. If I run the same scenario with an increased purchase price and a higher interest rate, things get ugly.

We all have our own budget, limits on what we should spend, or even circumstances where it is not the right financial move to invest in a home. Do your best to weigh the pros AND cons. Educate yourself with respect to current interest rates, home prices and values. If it all adds up, then yes, it is my opinion that it is the right time to buy.

Map Your Listings!

April 19, 2019 By Tayson Rockefeller Leave a Comment

For this week’s article I wanted to talk a little bit about marketing. Specifically, listing mapping, how it works, and how it can drastically affect your listing.

I am constantly in some sort of web development phase. I monitor our own website and it’s performance, look at competitor sites, as well as listing sites like Zillow. As a refresher, your listing, and how it appears on these sites is directly linked to how your Realtor enters the data into their local MLS.

Accurately entering this data is important not only for mapping purposes, but property features. For example, if your property has a Teton view, you need to make sure that your agent checks the box under the view category that the property has a Teton view. If the data isn’t entered correctly your listing isn’t going to show up for those using specific search filters. It’s amazing how many agents don’t enter this data correctly, especially once you get into the Idaho Falls market… Sorry guys, it’s true.

Back to mapping and its importance. Just like customers using filters to look for properties, many customers (if not most) used some sort of map feature to search for real estate. Like inconsistencies with property features, it’s amazing how many real estate agents don’t properly map their (your) listings. Almost every MLS tries to map listings automatically, and there is a second step available to verify the location of each listing entry. Because we are in a rural area, many listings are either not mapped by this system at all, or mapped improperly. All of the websites that display your listing receive their data from each MLS in simple data feeds. These feeds include property features, acreage, square feet and so forth. The mapping data, however, is provided in latitude and longitude coordinates. If a listing is properly mapped, these coordinates are sent to the secondary website like Zillow. If they aren’t, a variety of things can happen, none of which are good for your listing.

The primary result for most advertising websites if coordinates are not available is to not display them on maps at all. This is the case with Zillow. The listing is still available in the “list” view, which is why you’ll see your listing come up, and many agents don’t realize the mistake they have made. The other result, which is the case on websites like mine, is that these listings are still displayed on the map, but in the wrong location. This can be a minor issue since my website tries to generate it’s own coordinates based on the address, but it can also be a major issue for listings that don’t have an address or haven’t been mapped by Google, many land listings fall under this category. These listings can show up and very odd places, Africa for example. Arguably this is better than not having it display at all, but still a pretty big issue. As we approach the sale season, it might be good to review your listing with your agent, and verify that it is being mapped properly, and that is translating properly to sites like Zillow.

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