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Randy H
2006 Apr 18, 3:57pm
And for you German grammar masochists:
Ah, German conjugation. Wars have been started over less.
Has anyone looked into remote influencing? Supposingly the subconscious of everyone is linked and there ought to be a way to influence the decision of others using just your mind.
I think that's highly plausible.
Or just employ Karl Rove and a team of talented speech-writers, and become good friends with network TV owners...
Since I've started watching the RE market carefully, I've begun to fixate on inventory levels and new home prices as the two most important leading indicators. Here are snippets from the AP today:
Selling One's Home Is Difficult Business
By ALEKSANDRS ROZENS , 04.18.2006, 06:17 PM
Pete Montero first listed his Ann Arbor, Mich., nearly a year ago at $379,000. The 2,600-square-foot home didn't attr'act buyers so Montero dropped the price in $10,000 increments - he's now asking $329,900 - and he's even considered remodeling the kitchen.
"We really didn't think any individual thing about the house would make it difficult to sell," said Montero, whose four-bedroom home has a finished basement and sits on a cul de sac to ensure privacy.
Spring is typically the busiest time of the year for home sales. But with mortgage rates rising and sales slowing, sellers find they have to work harder to get a sale.
In February, there were 3.03 million previously owned homes for sale, a level not seen since 1991, when 1.91 million homes were up for sale, according to the National Association of Realtors.
"Business is tough. The inventory of available properties has increased," said Martin Bouma, an Ann Arbor real estate agent. "You are looking at (the number of) buyers going down, and inventory is going up."
Some incentives offered by sellers include a year's worth of free landscaping or lawn care, free snow removal for a year or a year's worth of alarm service. And, that's just from the owners of existing homes - builders sitting on a mound of inventory have also had to come up with new ways of wooing buyers.
The tempered pace of home sales in recent months follows record years of activity - 7.982 million homes sold in 2004, followed by a record 8.35 million in 2005 - that saw bidding wars and a steady escalation of prices.
The first signs of an ebbing in demand appeared last summer and have continued into this year. Applications for home loans, a gauge of future home sales, are down 20 percent from last year, according to the Mortgage Bankers Association.
"I have seen it transition from a seller's market to a buyer's market," said Bob Moulton, a mortgage broker based in Manhassett, N.Y. "Buyers are putting in bids but they are not counter offering."
The process of selling a home, meanwhile, is taking longer, a trend reflected in heightened demand for lengthier rate locks, a guarantee offered by lenders to keep the rate on a mortgage at a set level for a certain period. In recent years, rates for mortgages were guaranteed for 30 to 45 days because homes could be sold quickly. Now, borrowers ask for 120-day rate locks.
While some homes can be taken off the market place by their owners, home builders cannot afford to hold on to empty homes. So, some have offered their own incentives, such as helping to pay mortgage closing costs or upgrading kitchen appliances.
"This year we're being a little more aggressive from the advertising and incentive standpoint," said Paris Reese, chief financial officer of MDC Corp., a Denver-based builder. "Incentives are an important part of our business," but Reese is quick to note, "we're not doing any fire sales."
Dallas-based Centex Corp., meanwhile, has kicked off a series of 12-hour sales in Seattle, Las Vegas, Houston and Denver, among other markets. In Sacramento, Calif., Centex lopped off $100,000 from some multimillion dollar homes.
Centex likens its sales to a retailer clearing unsold inventory off shelves. A spokesman for the firm, Neil Devory, said the 12-hour sales have "tremendously increased traffic," but he would not disclose exactly how many sales actually resulted from the promotions.
Randy H
2006 Apr 19, 2:16am
This is a very helpful thread. We should continue the discussion here.
Has anyone looked into remote influencing? Supposedly the subconscious of everyone is linked and there ought to be a way to influence the decision of others using just your mind.
I don't buy the supernatural-ish "collective conscious" thing, but there is a lot of evidence that tiny, imperceptible cues can deeply affect your "target". In fact, this "charisma" or "manipulative" quality is exactly why good negotiators want to have a face-to-face exchange and others want the exchange mediated.
I took a course in Berlin during which we saw influence experiments that showed how incredibly predictive various cues, some very small, could be. Sadly, one of the best predictors is physical attraction; specifically attraction that is "normative", meaning believable and not overdone. The "girl next door" if you will. This is why realtors(tm) paste their pictures everywhere, they just missed the "overdone" part.
skibum,
I work with a lot of folks in Boston. Many of the money management firms are right there on State Street. Many of the younger wholesalers decided to hold off on buying over the last several years and man are they glad they did! One did buy in Charlestown and emailed me the pictures. It's a nice enough place but it's small, the taxes are through the roof and they're on a One Way street with virtually no parking (and no garage). While not a candidate for the "Overvalued Blogspot" they certainly overpaid! Agreed, we'll look back and see MA in general and Boston in particular as the canary in the coal mine. What's more alarming is that many of these younger folks at the financial firms come from families that worked at financial firms and their parents offered to help them get into a place before they "get priced out" and these guys thoughtfully declined. Back east EVERYBODY has money! What will it be like out west?
Randy H,
I've seen some of those studies over the years and they reveal things about humans that suggest we haven't evolved all that much! I'm actually a lot better negotiating over the phone. It's not only that I'm more comfortable that way it's that you can apply pressure, back down and then re-apply as you sense the prospects level of interest. Sometimes it's a good idea to call someone where you might have an interest in buying and gauge their negotiating skills from a distance (almost like a third party) and just take notes on well they present their offer. Once in awhile I learn something but more often than not you find people use "crutches" like a realtor falling back on some hackneyed phrase like "location, location, location". I don't mind people prospecting me from a sales script if they deliver the content with passion, take notes on your objections and address those genuine objections intelligently.
Skibum said,
We ended up pricing our place $30-50K less than comps (still did okay), and we were one of only 3-4 units out of 50+ in our neighborhood/price range that have sold....
Exactly. And back on the current topic, the same approach is required if and when we buy back in. If we try to time the absolute bottom or top of anything, or if you try to hold out for every possible penny in a negotiation, you'll be too paralyzed to move. Ever.
Think of the monkey who has his hand thrust deep inside a bottle. He can't pull it out because he refuses to release his grip on the peanut he has clenched in his fist.
And, if you love something let it go. If it doesn't come back hunt it down ... etc.
Garth,
I say those very things often, and I mean them! The truth is that when we drive a hard bargain we learn things that the casual "shopper" will never learn. My old neighbor built his dream house a few doors down from a dream house that is presently in foreclosure! Everytime I would run into the guy I would ask him how things were going in his area. He would say "Oh, just great" and I left it at that. I suspect had I made the effort and drilled down a little deeper I would have learned this in time to perhaps engineer a short sale. Now it's too late and everybody and their long lost brother knows!
newsfreak,
I'd have to say that as automated and "streamlined" the closing and financing process has become 8 months is an eternity. Clearly not priced correctly. Even before the internet 8 months was long time assuming it wasn't some kind of a mansion or unique property.
Skibum,
Thanks. Now how do I get this damn bottle off of my hand?
I won't need to negotiate, they will be begging me to take it at a price I feel it is worth. I will probably be buying my house from a bank, because soon there will be so many houses on their books that they will need to liquidate them or go under...or maybe I will buy it from an RTC auction for pennies on the dollar as many have done the last RE bust when all the S&L's went under. Either way, by the time this crash really reaches full swing, the homedebtors won't have any negotiating power! The homedebtors will soon have a six figure net worth,... too bad it will be a negative number! :evil:
athena,
So good to have you back! They say the proof is in the pudding and DAMN that's a lot of pudding! 940 listings added in a little over two weeks? Must be the "spring rush".
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Much has been written regarding the origins of the bubble. One of the major contributing factors keeps getting overlooked. The simple ability to negotiate. After a lifetime of standing in line and paying whay we are told to pay we have lost the will to negotiate, the ability to negotiate or both. This is perhaps as primal as fight or flight and equally important to self preservation. Yet we've managed to shuffle this important skill off to the back burner to die on the vine as we "hone" our SHOPPING skills. As evidenced by the bubble we are all now confronting "shopping" is not getting it done. You've found a place that's perfect for you (but we all know it should be priced lower in the future) so how do we bring the future closer? How do we bring sellers closer to our reality? What skills need to be dusted off and brought back to the forefront as bidding wars subside and the new reality finally gains traction?