AN APRIL PERSPECTIVE – Trilogy at Redmond Ridge
Static Sales – Minimal Inventory – More Dollars
Ten homes were sold in Trilogy at Redmond Ridge during April, eight resells and two new. Eleven were sold In March. Right now, static sales are typical in the Seattle area. Inventory is down from a nine-month supply a year ago to barely 30 days now and that, also, is typical, here and across the country.
But, prices for all properties in King County jumped 14.3 percent in the past year. The average single family home was $330,000 in March 2012. A year later the average buyer paid $392,000. That, also, is a country-wide trend.
Historically, when sales are steady and home prices rise, the banks figure it’s time to make more money. The folks who regulate interest rates say they will hold the prime rate – now pushing half-century lows. It’s a promise that can be kept forever. Interest rates will rise. Prices might not. Inventory is uncertain.
Trendy Or Tricky?
There’s talk about a bidding war trend. It’s true for some exceptional homes in some areas. Elsewhere, usually, it’s peddler’s hype. How about in Trilogy at Redmond Ridge? There are agents trying to exploit all that talk, but they are dealing with a population that increasingly is made up of baby boomers, folks who have navigated their way around many blocks and have too much business savvy to be lured into a bidding war. Elsewhere, there are some buyers, usually younger, who lunge at such bait and become aggressively impatient to seal a deal. Some agents exploit that.
Analyze First
Let’s be specific about Trilogy at Redmond Ridge. Analyze facts before accepting a myth. I had two Union floor plans on the market during March. Both had immediate offers. One, after three days on the market, the other, after four, accepted full-rice offers. That’s hardly a bidding war. It was, in fact, the “elephant” at work.
I don’t believe in bidding wars. It’s that “elephant approach” of mine, I want to price a property right the first time, prepare the house so it justifies the price and then work hard to assure that both buyer and seller are pleased at closing. I’m not an auctioneer. The “elephant approach” is successful. In the last few weeks I have closed home sales I listed in Woodinville, Auburn, Bellevue and even represented a buyer on a condo in Leavenworth.
“You will…”
There’s another trend, one that worries me. It’s a practice that seems to foment bidding wars. It’s when a selling agent tells a buyer “you WILL submit your offer for review” by a particular time on a particular day. It works like this:
Assume a home came on the market on a Friday. The remarks that agents share confidentially state all offers will be reviewed at 5 p.m. Tuesday. There’s no negotiation. You can’t even submit a full price offer for cash to secure the property for yourself. It’s their way or hunt for another property.
The property is offered at 5 to 10 percent below actual value. That lures a lot of prospects and when they are ready to make an offer, a bidding war follows. Very often, the successful bidder is paying significantly more than what was asked. Very often, buyers and their agents spend more time lobbying the selling agent than inspecting what might become their new home.
In the nearly ten years I’ve worked in Trilogy at Redmond Ridge I had not seen that scheme nor heard of the agent trying it until a few days ago. I don’t think she understands that Trilogy at Redmond Ridge is unique and that her dragoon marketing tactics just won’t play well here. I pray I’m right and that we brokers can maintain the highest business ethics in this beautiful, peaceful community.
Money or Heart
It’s not just money, and that also is a trend. Increasingly, a skilled, energetic and sometimes creative buying agent is the difference between moving in or continuing the hunt.
A few weeks ago I sold a home built in Kirkland in 1976. There were six offers. The asking price was $425,000. After recognizing the tactic I explained it to my buyers and urged them to offer $440,000 and include an escalation clause promising to beat any other offer by $1,000 up to $462,000. It worked. They paid $461,000. The appraiser agreed with the price.
The bidding might have continued except the sellers, their children raised, understood that my buyers had a pair of preschoolers who deserved such a special home in that neighborhood with its good schools. The elephant way, money and heart.
The Appraisers?
So far, appraisals support sales. One appraiser told me that he could count on one hand the number of times that his appraisal came in at below value. “We try to find comparable sales that will support the sale. We don’t want to fail the sale,” he said.
STATISTICS
SOLD in Trilogy at Redmond Ridge
- Escrow closed on 8 home resells, down 1 from March.
- State excise tax was paid on 2 new-build houses. I believe this leaves Shea with 11 bare lots left. Then, with nothing left, they leave.
Those resells included a Washington at $375,000, a Sammamish at $420,000, two Bainbridge homes at $472,500 and $482,500, a Whidbey at $478,000, a Cedar by yours truly at $630,000, a Hemlock at $669,950 and a Maryhill at $850,000 which had an asking price of $899,900. It was on the market 125 days. There were no builder spec houses sold during the month of March.
PENDING SALES in Trilogy at Redmond Ridge
As of April 30th, there were 13 pending closings, 4 more awaiting inspection. Two of them were builder spec Chelan houses. That could mean 17 closings for May.
WHAT’S ACTIVE? in Trilogy at Redmond Ridge
The average time on market for Trilogy at Redmond Ridges’ 16 available homes as of May 1 was only 39 days. A couple of long-term listings skewed the average. Shea is advertising four spec houses on the NWMLS, some that won’t be completed until autumn. Shea also advertises one Estate Collection golf course home site saying, “choose from three floor plans,” perhaps a lure for “new build” buyers so Shea can conclude its responsibility for Trilogy.
Many people are learning that Trilogy at Redmond Ridge is exceptional and are poised to take advantage of an offer to sell. They know Trilogy at Redmond Ridge is a special place, an enclave of 1,500+ homes where people enjoy exceptional amenities, a wilderness within and around where they live, a place with sidewalks and trails where they can walk safely and have good times with their grandchildren. Now, they also have a homeowners association they govern.
Sometimes, Well, You Learn All Over Again.
It’s a true partnership, seller and broker. The broker’s commission is for energetic marketing expertise and dollars invested in presenting the property. Sometimes the broker adds elbow grease and dollars to cleaning, repair and upgrade. Last month we mentioned how crucial is pricing.
A lot of folks asked us last month why removed our sign from a particular listing and why other agents put up their sign and soon after, a “sold” sticker. Good for the other agents.
We chose to walk away.
We should have listened to our apprehensive gut in the beginning. The selling couple had an acrimonious relationship. But, Bridgette and I looked at one another and thought that while it would be a challenge, the Good Lord says help everyone, not just the pleasant.
It was the listing we talked about last month, the client we “fired,” a first in my history as a managing broker. The elephant’s team had rolled up its sleeves, used its tools, brought in vendors, written checks for goods and services and spent more to produce top of the line marketing materials. And then, the team spent more money, and very personal elbow grease, to and polish the inside and outside for showing.
We also urged to sellers to heed our advice about the true value of the property. Instead, since that particular model was at the time the only of its kind on the market, we acquiesced and let the seller set the price. They agreed, if it didn’t sell quickly, it would be back to the price we proposed.
Forty days later they wouldn’t budge. By then, instead of one of that model on the market, then there were seven.
We had no choice. We instructed our branch manager to take the property off the market. We could not deal realistically with that couple. There were other issues, especially maintaining that polished look on the inside. Messy, dirty properties can’t compete in a market like Trilogy at Redmond Ridge.
First impressions last.
The new agents listed the property at the price we originally proposed. If the house had been kept to traditional cleanliness standards, we had a buyer at that price long ago.
It’s good the house has been sold. It’s good for everyone. And we feel good about doing the right thing, the “elephant way,” what our symbol represents: Lead by doing it well for the right reasons. That’s the way we did it, the elephant way.
No regrets.
Forecasting…And Conclusions
Banks like bidding wars. It means selling a bigger mortgage and higher offers for a short sale, when the seller asks less than what is owed on the mortgage. I think that in some areas, that will continue.
Brokers like me who have spent as many as ten years working in Trilogy at Redmond Ridge know the price each model can command and how a premium lot and exceptional maintenance and upgrades can augment a property’s value.
Less experienced, sometimes agents working for the first time in Trilogy at Redmond Ridge, often make one of two mistakes. The first is having too much faith in the advertorials, real estate stories written by journalists whose employers pay them to tout a product. The second mistake is a lack of commitment to a client, pricing too low just so they can collect a quick commission or too high because they don’t know the community. Then they leave.
I believe that it won’t get any better if you want to sell. Once everyone figures out Trilogy at Redmond Ridge is a very special place, the market could be flooded.
Supply and demand. The burden of competition shifts from buyers willing to pay less to sellers who have to accept less.
If you plan to sell, do it now. We know your home’s true value. We have a powerhouse marketing program to bring you top dollar in short fashion. Give us a call. We’ll share the details with you and how we can make the “elephant’s approach” unique for your home.
That’s a wrap for April. We’ll see you next month.
If we may serve you in any way, just let us know. I can be reached directly at (425) 501-8424 or [email protected].
Thanks for sharing your time with us. We value it.
Warmest Regards,
Devin & Bridgette
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