March Madness 2012.
Brokers Slow On The Uptake? Finally Discovering Trilogy?
This is not your grandfather’s Oldsmobile/ a little history– When the first Trilogy homes began to reach completion and buyers first closed escrow early in 2002, usually the purchase was made through a member of the builder’s sales staff.
Times have changed.
When I was a part of the builder’s sales team from 2003 until a couple of years ago, many brokers told me that they were reluctant to bring their clients to the tour center for fear the builder would cut them out of the deal. Again, for the sake of clarity, I don’t work for the builder. I am self-employed, which I prefer. I can in no way speak for Shea Homes although, in most aspects, I hold them in very high regard.
In my experience, many more resell brokers were paid than were ever cut out and none were ever told they couldn’t represent a client. The issue was whether they deserved a commission for showing up after all the work was done.
Many resell brokers still tell me that they fear they will not be compensated fairly. Even if they were, they say they’d rather sell a home that is complete instead of waiting six months for a commission on a home for which the builder has not yet poured a foundation.
What’s my point?
Only a few brokers have done the lion’s share of business in Trilogy whether as new construction brokers (Trilogy Community Representatives) or resell brokers like those we know from Preview Properties, Windermere, John L. Scott, and other agencies.
There is a change, and it’s significant/some statistics – During March 2012, there were seven homes sold by seven different selling brokers representing buyers. There were nine new listings of homes for sale with eight different listing brokers.
Get this/more change! – There were 13 homes that went into “pending” status by 11 different listing brokers! New construction sales, primarily, are still sold by new construction brokers (Shea sales people.) However, most of the resell transactions in the past have been orchestrated by four or five brokers with whom we are familiar. Just in March I counted more than 20 different brokers doing business in Trilogy.
What does it all mean? Is it that the word is out that Trilogy is the place to be? I believe it! Trilogy is a fantastic place to be. But, I also believe that there could be something else attracting new brokers to Trilogy.
I am all for an even playing field. That’s why I’m a resell broker. There is plenty of opportunity for all of us. But I’m haunted by the question that your friends and neighbors moving on might inadvertently not be doing the best thing for home values in your community. Why? It will be worth reading “Good Intentioned neighbor; friend or foe?” Before we go there, what do you say we give you the meat and potatoes regarding March sales? They are:
SEVEN HOMES $OLD IN MARCH – March sales were just one shy of the six sold during March 2011, more than double February 2012. Considering that inventory is nearly half what it was a year ago, that’s a very impressive statistic. The average home sold was just 19 days short of being on the market for 6 months! This is proof of what I’ve been touting for years; “When Baby Boomers want something, they are going to buy it, lack of choices or not.”
“”I want what I want and I’m going to have it, darn it. If inventory is low, we’ll just choose our favorite before someone else takes it. We can always fix it up to suit our taste.”
An important point: Potential can be as important as existing.
Two of these sales were “new construction” – These included a Cedar and a Hemlock which had been on the market 168 days and 120 days respectively. Fear of loss creates sales and, ultimately, a rise in sales prices. The end result is good overall for Trilogy home values. Five of these sales were “resells.” These included an ARCH Chelan (affordable housing), a Madison (“short sale”), a Washington, a Union and a Whidbey. Four of five sales were a duplex or “an attached product.” They averaged 167 days on market; nearly half the market time of a “new construction” house.
THIRTEEN HOMES PENDING CLOSE OF ESCROW! – THIS IS CRAZY BIG!
Remember “pending” means a mutually agreed upon contract that has been signed by buyer and seller who now are moving toward closing escrow.
Two of these “Pending Sales” were “new construction” – These included a Vashon which had been on the market 382 days and a Hemlock that spent 204 days on the market for an average of 293 days or nearly 10 months. Lack of Inventory speaks volumes for new home sales too. Let’s hope they quickly close escrow now to reach “sold” status.
Eleven of the homes reported as “Pending Sales” in March were “resells.” These included three “pocket listings.”
Something different/a new term! – A pocket listing is an inside information sale. In most cases, a home owner has let one or more real estate brokers know that they want to sell their home but don’t want to list it officially by signing a contract or placing a sign in the yard. I can’t say for sure but experience tells me we had five of those this month. One of the sellers approached me about selling her home. I spoke with one or more of the brokers who made some of these sales. And, when the home pops up on the brokers’ NWMLS “hot sheet” as a new listing and the next day it’s listed as sold, it’s pretty obvious there was a “pocket listing.”
I believe that a couple of these unusually fast-for Trilogy-sales were because the asking price for these homes was far too low. Perhaps that was because the home was part of an estate and the beneficiaries just wanted emotional and financial closure. Perhaps the seller put too much faith in a broker referral by a friend or relative. This saddens me and hurts the Trilogy community as a whole. Don’t get me wrong. I’d love dozens of brokers to be able to serve Trilogy well but, the truth is that very few- and I mean very few- have the experience to do this.
Think about it. How many 55 plus resort communities are there in Washington? There are two, Trilogy and Shea-owned Jubilee near Lacy. When I accepted the position with Shea almost a decade ago the organization wouldn’t allow me to speak to a walk-in guest until after two solid months of training. Further, despite my strong level of confidence and hard work, I fell short of my first year sales expectations. I believe you get the point. It takes a lot of time walking lots, chatting with heads of construction, meeting with Geo-Tech people, studying blue-prints and much more to know what you’re doing in Trilogy. Again, I want you to remember to read that forthcoming article, “Good Intentioned neighbor; friend or foe?” For now, let’s go back to meat and potatoes.
WHAT IS CURRENTLY AVAILABLE, WHAT’S ACTIVE? – Right now there are 32 homes “Active” or for sale on the market in Trilogy. Of these, 27 are resells and 5 are completed “new construction” or “designer homes. Of the resells, 3 are ARCH homes (A Regional Coalition for Housing) and 1 is a “short sale.” There are no new construction listings.
SUMMARY: Spring traditionally is the market’s most active season. With a reduced new construction standing inventory, a developer tends to build on spec and avoid offering an intangible product, something that’s still just dirt and dreams. Buyers want to stand in the product. It’s easier to sell that way. Once you could count a hundred or more spec or pre-sold homes in our community. That hasn’t been true for years, but there are new homes, and that’s very encouraging, especially as Shea nears completion of its project.
Resells continue to be the best investment as they are priced below what new construction can afford to sell a new home. On some models, new build homes got close but there are only so many two story plans and bad lots. Now, as builder sales agents note that “prices will be going up” because of lack of inventory, it appears standing members who wish to sell are in the driver’s seat.
If family circumstances or work, or perhaps some personal issues place you in a position where you must put your home on the market, DON’T GIVE YOUR HOME AWAY! If you must sell, it does not have to take forever. With strong marketing, the average home should sell in 60 to 90 days or less this time of year. My recommendation is to keep your business to yourself. That means don’t look for sales advice from neighbors or an inexperienced real estate relative. Until the sign goes up, it’s a confidential business negotiation between you and, I sincerely hope, a broker with extensive Trilogy experience. Interview at least two and chose one with exceptional Trilogy experience. As you negotiate, be certain that the agent you retain has a firm and proven plan to spend a good portion of that fee you are being charged on marketing and is committed to putting money in your pocket. If you’d like the straight scoop and would like me to put my money where my mouth is, I like light cream and sugar in my coffee. Let’s talk.
That’s a wrap for March. Hope you enjoyed it. Watch for us next month. And never overlook “potential.”
Devin Sanford is a Managing Broker with Preview Properties Inc. His certifications include Accredited Buyers Representative and Certified Foreclosure Specialist. He Specializes working with home buyers and sellers in North King and South Snohomish Counties and is a local expert on 55+ Active Adult Communities.
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