How to Real Estate Today
Raw, unfiltered real estate conversations about how to win in real estate today. We're here for real estate agents, investors, flippers, buyers and sellers.
How to Real Estate Today
2: Buyer Trepidation + Seller Response
In this episode, the hosts discuss the current real estate market in the Portland, Oregon area. They cover topics such as buyer trepidation, realistic pricing for sellers, the importance of presentation and staging, the best time to sell, and the challenges and opportunities for real estate agents. They also touch on the mortgage industry and the importance of educating buyers about interest rates. The main takeaways include the need for sellers to be realistic about pricing and presentation, the importance of timing and affordability for buyers, and the value of having a knowledgeable and supportive real estate agent.
Takeaways
- Sellers need to be realistic about pricing and understand buyer trepidation in the current market.
- Presentation and staging are crucial for attracting buyers and making a good impression.
- The best time to sell depends on individual circumstances, but the winter market can be advantageous due to less competition.
- Buyers should consider affordability and be open to exploring different neighborhoods or locations.
- Real estate agents need to focus on profitability, educate themselves and their clients, and evaluate their business plans and brokerages.
- Buyers should work with agents who can connect them with different mortgage programs and negotiate interest rates.
- Having a strong team, including a home inspector and mortgage professional, is important for a successful real estate transaction.
Rebecca Green (00:00.078)
Hi, I'm Kim Borcharding here. Welcome to our podcast, How to Real Estate Today. I'm joined here by my co -host, Rebecca Green, and where we talk about all things real estate. And today we are gonna be talking about what we're seeing in the current market. Real estate changes every day, and we are located in the Portland, Oregon area. So also real estate is very nuanced. So what's going on in this market here may not be going on in the market.
So we're talking about our local market here today. And yeah, what we're seeing buyers, sellers, and for real estate agents, what is going on the market based on today? Rebecca, you work with a lot of sellers. You're really listing heavy as an experienced agent with, I think about 30 years of experience. Tell me from a seller's perspective, what are you seeing right now? What are the conversations that you're having? What do sellers need to know about selling right now in the market? Yeah.
You know, buyers are feeling trepidation, in my opinion. You know, interest rates, I think there was a false sense of security or a false sense of the low interest rates being the norm moving forward. You know, I've always been a believer that what goes up must come down and vice versa, right? So, you know, there's trepidation from buyers and sellers need to be sensitive to that. They need to understand that negotiating power might be a little bit less today than what it was when the market was super hot. Lots of sellers haven't quite caught up to that. So that's one thing. Pricing is always something that a seller should be realistic about. But buyer trepidation, you know, I have one house, great listing. We've had six offers and been pending twice. Now we're pending on the third, a third time. I haven't seen that in, I don't know, 20 years. I can't even remember the last time I saw that.
But it's been because buyers are sensitive to every little thing. So that's one thing I'm seeing. The other thing I'm seeing is a lot of sellers who are saying, you know, we need to sell because life has changed, but we don't want to get rid of that low interest rate. So they're trying to figure out how to maybe stay in their homes, renovate. So that's causing a slump in inventory, as everyone knows. But for sellers, I think you are
Rebecca Green (02:17.421)
Always need to be realistic on price, condition. When buyers are feeling sensitive and they're feeling sensitive about the financials, having pre -list home inspections is super smart. Get some of the bigger ticket items out of the way so that the home is in the best possible condition based on your financial situation and whatever the offer price is. And then of course, presentation is always huge. We are in such a visual world, and that is becoming more and more obvious in everything we do, but staging is super important, presentation is super important. Yeah, I was going to say elaborate. So what do you mean again for us when we talk this lingo, we get it, but what does that mean, presentation? So specifically for sellers. Yes. I just had an agent the other day say, if I can smell it, I can't sell it. I thought that was so great. It's so true. As soon as you walk into a house and it smells bad, no one wants to be there. I mean, I can't smell it.
Guys, I have pets too, but I tell people all the time, I'm like, because you have that dog or cat, that house might sell for $50 ,000 less. I mean, it's just such a - Literally, no one wants to know about your pets, even if they're dog lovers. Yes. No one wants to, so if I'm forever gonna use that. If I can smell it, I can't sell it. So presentation, you know, clean the gutters, make the front of the house sparkle, make it inviting when people open the door, they wanna come in and feel embraced by the home. Staging is so important.
And staging not out of the box like it looks like it was picked up and dropped in the house but more so the inviting environment, right? And especially that's always been important I don't want anyone to think that I I'm saying that it's just important now because the market is a little bit softer But when the market is soft you need to work extra hard to make sure the buyer sees that the home has been well taken care of right you need to make sure that
Because buyers are being a little bit pickier today, rightfully so, because of interest rates and affordability and sellers just need to understand that. Yep, I always tell a seller as well as like, imagine your house is gonna, you need to be the best-looking house like on Instagram or on Pinterest. Totally. And we need to make it look like it's on Pinterest. And so somebody, I mean, as silly as this sounds, I was like, so somebody's harding that image. I mean, literally, honestly, I tell people that front picture, the first...
Rebecca Green (04:40.397)
four swipes of that house are so important. Like I am so detailed when listing how it's like the order of the photos. Because I'm like, if I don't have their attention in four swipes, I lost that buyer. So like, again, it makes me crazy when listing agents put bad photos or this. Like I don't need to see 10 photos of the front of the house and the hallway and the front. Like show me, show me the kitchen, show me the living space, show me the primary. Yes, very fast.
That's a big thing with sellers. Also, this is a question, like a very common question too for sellers. When people say like, when is the best time to sell? What advice do you tell sellers when is the best time to sell? Yeah, we're historically, you know, it's March 18th, you know, 2024. We're getting ready to move into what is historically the, you know, heavy selling season, the spring market. Anytime is a good time to sell.
What people have to recognize right now is inventory, although our inventory levels are higher today than they've been for many, many years. In the Portland metro area, we have about three months of available inventory, which is higher. We were running at 0 .5, you know, for a long time. But, you know, life still happens, so people still have to move. You know, anytime is a good time to sell. In the winter market, I really love the winter market for sellers because there's not a lot of competition.
So, you know, moving into the spring and the summer markets, of course, we have more people, we have an influx of buyers in the area, but we also have an influx of listings. So I'm not one of those brokers that picks a season. I think that, you know, certain homes look better in the spring than they do in the winter, right? But I sell in mountain areas too, and they look gorgeous in the winter. So I think it's specific to the seller's need, the market and how the home presents itself more so than just picking a time of year. What do you think? I will say, I'm going to add to that a little bit. I do tell people...
Rebecca Green (06:40.557)
When's the best time to say it? I go, when it makes sense for you. That's exactly right. In a nutshell, everything I was trying to say, that was it. Is when it makes sense for you because selling your house is like a part -time job. So my first thing is like, well, when do you need to move? Okay, sometimes it's job relocation or grandma's moving in. We've got like, that's a big thing right now. We're expanding like intergenerational living, a multi -generational living, a school. Sometimes people need to move between school seasons. So that's when you need to move.
But also, it is a part -time job, so you need to have the bandwidth to get your house ready, do all the things, because again, to present your house well, it's going to take a lot of work, and you need to have the availability to do that. With that, I will say, if I could have my choice, there are some times I prefer to avoid selling, don't list on a holiday weekend. Yeah, that's great advice. Memorial Day weekend, Fourth of July, Labor Day, for me, I personally, I'd be like, I'd stay with maybe away from around elections because when there's uncertainty in the market, some buyers, you know, are... So when buyers... And then also here, at least locally, in my opinion, from my experience, things do kind of slow down from a buyer's looking about mid -June. So a lot of like in Oregon, we are dying for the summer. So we are... When it's summertime, everyone has their weddings, their vacations, their rafting trips, their camping trips. So some buyers are distracted with the gorgeous weather, and they're not looking at houses so much. So...
But again, there's also sometimes less listings, and that can be advantageous as well. So mostly, want to make sense for you and avoid some key holiday times. But also I say from a buyer's perspective, that's a great time to buy. That listing that showed up on Memorial Day weekend because everyone else is busy on vacation or at the coast, that's when you buy because there might be less offers and less people looking. Yeah. And speaking of buyers, what are you saying with buyers in the market? Yeah, gosh. So let's talk. So last year there was a big pullback. So as interest rates went up very fast and that kind of started about September 2022. Actually, I remember August being really good and then all of a sudden crickets. September, literally I had a listing in Selwood, Moreland, sold in August multiple offers, similar price point about a month later and it was quiet. And then we had price reduction, price reduction to sell it.
Rebecca Green (08:54.317)
And then, so last year was a tough year for real estate agents, for buyers, for sellers. I mean, so, and I know a lot of people went around the, you know, date the rate, buy the house thing, and were anticipating rates to get lower because they went up to seven, you know, I think they maybe hit eight percent. Almost eight, yeah, maybe right at eight, yeah. And so now we're back, you know, in the six, seven range. And I think people are really coming around now. This is what the market is. And I know
People were saying we're coming down to five, I don't see that. Again, I don't have a crystal ball. If I did, I wouldn't be selling real, I'd be doing other things much more. And unfortunately, my crystal ball is still broken and I can't find anybody to fix it, is my favorite thing to say. So I think this is the market. And so the rates are going to, in my opinion, and what I'm reading, the rates are gonna stay, I think, around this for a while. And I think buyers now are starting to come around to that. Okay, and so buyers are entering, but they are...
Cautious, they're really making sure it's the right house. They're taking their time. They're not they're not rushing out again or affordability Has gone unfortunate through the roof because our values have increased. Interest rates have increased, inflation. So cost of living has gone up, and salaries are not. I mean kept up so people are feeling pinched now in my opinion.
I am a big advocate of investing in real estate. I invest for my personal home. I invest with investment properties. I think it's a great way to build long -term wealth for me. I'm an investor. So I'm always like the best time to buy was, you know, five years ago as or yesterday, but the next best time is like now. So I'm an advocate of buying as soon as you can afford it. Also based on when you could afford with the interest right now. Now also this is an opportunity to potentially negotiate for sellers to pay down your interest rate. So there might be some opportunities again, because there's some more flexibility with sellers than we've had in the last, you know, 10 plus year in this, in this market. But also, make sure you can afford the interest rate. Make sure you're really clear where you're buying. There is always opportunity, but make sure you have a good agent and who's advising you. I mean, is this the area you want to be? What's this appreciate? Is this right? I mean, this is something people don't think about. I go,
Rebecca Green (11:08.781)
assume you're gonna be in this house at least five years, is this where you wanna send your kids to school? Because plenty of times people are looking at houses in areas like, okay, I know you're not thinking about your child is one, sending them to school, but think about five years from now. And they're, so making like good decisions on where you might be in the next phase of life, because you might be in this house longer than you think as well. And then again, affordably and unfortunately is...terrible right now. And for me, I'm an advocate of helping buyers figure out how to get in the house. But sometimes I'm like, you can't get your first choice neighborhood. And maybe your second choice. Or maybe you need to look in a new town. Or maybe you need to drive 30 minutes away. And gosh, you might also need to move states. I tell people. Yeah, it's crazy. I mean, it's so true. Because the reality is, is if you don't buy something today, you are going to lose out over time.
And this whole concept that we'll wait for the rates to come down and we'll wait for things to be more affordable, I just don't see it happening. I just don't see that being a norm anytime soon. A great stat that I just read is based on national appreciation, they're expecting appreciation on an average sale home in the United States over the next five years to be $83 ,000. So for the buyer who doesn't buy today, that's $83 ,000 in equity that they've lost out on. And also for somebody who doesn't buy today, that's $83 ,000 that the home's gonna be, you know, everything's gonna be $83 ,000 more expensive in five years. And to your point, salaries aren't going up at that same level. So how does the buyer get in five years from now? I wish that was, I mean, if I could just hammer buyers on one point, that would be it. It might not be your first choice, but getting in where you can afford today for your long -term financial health makes so much sense. You agree?
Totally, absolutely. Figure it out. Figure out wherever you need to buy. I actually met with someone recently who wants to buy in Mollola. She works here in the Portland area. So for everyone who's not from around here, that's probably what, a 40 -minute drive into Portland? Yeah. But she did it because it made sense. That's where she could afford to get a nice house. That's what made sense for our family. OK.
Rebecca Green (13:26.157)
So let's kind of switch it on that. Let's talk about what are you seeing right now in the market today for real estate agents and real estate brokers? Yeah. I mean, the market's slower, 50 some percent down from year over year. So there's been a lot of conversation with real estate agents about what to do next. I'm always a believer in educate yourself, educate your clients, hone your skills, make sure your systems are in place with changes in the industry geared around commission.
We have to be of the mindset that we really need to be prepared, super prepared, maybe over prepared to have conversations with buyers and sellers during the interview process. We really need to be able to articulate our value. I'm also seeing a lot of real estate agents leaving the market. And personally, I think that's a good thing.
What are you saying? You work with a lot of agents in a collaborative environment. Yeah. So what are some of the conversations you're having with them? I think mostly agents are now, they thought the market was going to quickly turn around this year. Again, it's off to a better start than it was for the last year for most agents. So that's good. So people are feeling more positive about that. But also they're coming to a realization that there will likely be less transactions and you really need to focus on profitability and getting clear on that. Also, I'm seeing agents make moves, you know, really evaluating the brokerages they were at. Guys, I think there is disruption going on in the brokerage space, and really evaluating the brokers you're at, and does that support where you're at now and where you want to go? So a lot of agents are kind of moving and shifting around. And again, in my opinion, there's pros and cons of different brokerages depending on what's important to you, what makes sense for that season of your business.
I think one thing I'm seeing too is taking business plans more seriously. You know, when the market was crazy, to be honest with you, a lot of us were just keeping up. I mean, it was a lot just to keep up. We had so much activity on our listings. We had to be Johnny on the spot to get our buyers into houses, you know, before there were 28 offers.
Rebecca Green (15:35.021)
So it left less time to work on our business because we were just working our business. And so I am seeing a lot of agents that are really, like you said, re -evaluating their profitability, re -evaluating their brokerage. And along those lines, they're re -evaluating their business plan. What does that look like? Who do they need for support in their business? Are they getting it out of their brokerage? Is there a more lucrative, more collaborative minded brokerage that makes sense for them?
So yeah, a lot of shift and a lot of change, which again, I also think is good. You know, the old guard and traditional brokerages are maybe not the right fit for some agents. And now people have the time to actually think that through. Whereas when things were crazy and busy, like I said, Johnny on the spot, you had to get into the house as quickly as possible. So your husband's in the mortgage industry. So let's talk a little bit about what you're hearing and seeing, and I know you work with him in the mortgage arena, what is he seeing a lot of? What's going on there? He's seeing an increase or a decrease or a random fluctuation of people making application. What's that look like? Yeah. So for him, so my husband is a partner at a small local brokerage and they're well established. And for him, his business has mostly been on agents, like agent business, referral business, working by referral.
Last year, transactions were down significantly as again, the market really pulled back. This year is off to a much stronger start. Also for him, you know, and actually working with him in his business a little bit from a business development perspective because I was like, we need to market and innovate in a new way. We need to innovate in new ways. So he has applications up significantly, but also it's hard to know because he's been doing some things differently to attract business.
But for him, he's been saying for a while that he doesn't think rates are moving, even though people were saying they're going lower. He's really well connected and well respected in the mortgage industry, and he's a really bright guy, and thinks that this is where we're going to be at. And I think for him, he is at an advantage because he has some offerings as a broker. He can broker to a handful of different lending institutions, and he has some offerings that have a lower interest rate.
Rebecca Green (17:54.989)
And when everyone's three and a quarter, you're gonna use the guy you have the relationship with, your friend from college, whatever, because it's not that much of a difference in relationship. Well, if he's six and a quarter and the next guy is seven, well that's a significant saving. So I do hear him conversation after, he can save him $300 a month, $15 ,000 in fees, I mean all the time. So he's actually getting a lot of new business as people are now price shopping more than they did before because...you know, every dollar matters. So he is seeing an increase in the business, but he thinks it's going to stay where it's at. So he has always been a strong advocate of educating buyers. So that's a big piece. So a lot of education. Again, people were really hanging on to rates were going lower. And he kind of telling people, I think at this point, there is no data that is showing that that's going to happen.
So yeah, and along those lines, if there are buyers listening, find a good agent, find an agent who can connect you with all those different mortgage programs and a good agent who understands the value of negotiating an interest rate down. A quick story you mentioned, like what are you seeing on seller's side? I had a listing not too long ago. The buyer came in $30 ,000 less and I went back to the agent and said, my seller will pay $10 ,000 in closing costs, but we want the price to be $30 ,000 higher. What it really ended up resulting in, that $10 ,000 would have saved his buyer almost $300 a month in that price point. And she was really keyed in on the monthly payment. The agent had no idea what I was talking about. The agent was like, no, she wants to buy it for $30 ,000 less. And I was like, well, I understand that.
But you also told me that she was fixated on monthly payment. If we do it like this, the monthly payment for her is $200 to $300 significantly lower. So it took him, we got another offer, sold the townhouse to somebody else. We're getting ready to sign the deal. And he finally came back and said, I talked to the lender. And now I understand what you're talking about. So two things in that situation.
Rebecca Green (20:06.445)
That buyer should have been working with a different broker and shame on that broker for not being educated enough to be able to advocate for his buyer based on what that buyer needed. So when we talk about shifting markets and we talk about fewer transactions, it's those kinds of brokers that hopefully will level up and or leave the business. Yeah. And I think that mostly you need to have the best team. Totally. From home inspectors, mortgage professionals, and everybody. Like you need an A-plus team surrounding you, and it really matters. Great. So in real estate, how to real estate today, I think what we're telling people from a broker's perspective is to educate your buyers and your sellers and from a buyer and seller perspective, you know, pick a strong agent that can really advocate for your overall goals.
Right? And, you know, keep abreast on what's changing in the market and, you know, make sure you're, from a broker's perspective, running your business based on that, and you're educating your clients based on that because the market's fluid. It changes. Totally. Good.