Real Estate Roundtable
Top local Realtors talk shop: how to be a smarter buyer, stop stressing about home values, and get more money out of your house.
At The Table: Steve Anastos, William Raveis Real Estate, Stamford; Stephen Archino, Sotheby’s International Realty, Greenwich; John Cooke, Prudential Connecticut Realty, Greenwich; Wendy Fog, Brotherhood & Higley, New Canaan; Michelle Genovese, Michelle & Co., Westport; Rita Kirby, William Pitt Sotheby’s International Realty, New Canaan; Melanie Smith, Prudential Connecticut Realty, Southport; Rob Vannucchi, William Pitt Sotheby’s International Realty, Stamford; Kate Hogan, editor; Amy Vischio, creative director.
Amy Vischio Do you consider this to be a buyer’s market?
Michelle Genovese Buyers feel like it’s a buyer’s market. They feel we’re at the low. In ’09, they thought, “Oh, we’re going to hold off.” But now the media is helping us with the way they talk about the economy. I know we’re going to have a really good year.
Melanie Smith It is a buyer’s market, most definitely. We still have more inventory than buyers so they have a lot to choose from.
Wendy Fog But we still have buyers out there who think the market is going to drop a little bit. By the time they figure out that it’s the bottom, the market will have already flipped.
Steve Anastos We all have different marketplaces. Even though we’re only separated by five or ten miles, the phrase that all politics are local applies here. In Stamford last year, our unit sales were up nine percent versus 2009, and prices were up five percent. The tax incentive boosted sales of single-family homes.
Michelle Our low-end is doing well. We’ve had more sales under $1 million.
Rita Kirby In the under-$1 million price, if there’s a good property, it goes. The number of single family sales is up 69% (in New Canaan) over 2009. It is still a beautiful time to buy because the average sale price hasn’t gone up. In fact, there’s a pent up demand for inventory. Sellers may soon enjoy a position they haven’t before, due to the chipping away at inventory.
Wendy Sellers have gotten more realistic, and it’s a great time to sell in the respect that they make take less for their house, but they’re also going to be able to buy for less. If someone wants a larger house, now’s the time to trade up.
How accurate is the real estate site Zillow? And Trulia?
Melanie Totally inaccurate.
Wendy It’s not accurate.
Rob Vannucchi It’s more effective in places where the houses are similar.
Steve It’s really not applicable to Fairfield County. I’ve told clients on several occasions, please don’t rely on that. If you’re talking about a subdivision in Dallas where the houses are alike, it might be relevant. But here, where every house is so different, how in the world could they know what’s inside each one?
Michelle We can’t even get assessments that help with the house value, let alone Zillow.
Rita The assessment issue, particularly in New Canaan and Darien, is important. There was an overriding need (for the town) to make up a deficit. To New Canaan’s credit, there was such a huge cry from everyone—50 percent of the town had some objections—and they listened. In many cases, brokers were asked to provide comps, and they did adjust them. That assessment may have nothing to do with improvements or lack of improvements.
Michelle This is why we’re having a hard time with appraisals now. Appraisers are coming in and they’re only going back four months now for comps. That’s really affecting us—the bank assessments.
Rita I agree. When you only have a four-month perspective, you’re not getting a perspective.
Are prices beginning to edge up?
Michelle I would say that we’re finding that homes are moving now, which is the first step toward an improvement in pricing.
John In Greenwich, our last assessment was five years ago, and we’re going through one right now. Our assessor said that since 2005, the average market value has gone down 15 percent. Our last peak year was 2007. But our median price, which I think is the most important, rose five percent last year.
Stephen Archino I think in Greenwich we get affected last and recover first. When it comes to our market, we have 50 square miles. Above the Merritt is not moving, but below the Merritt, mid-country, is doing great. What’s also doing really well are Riverside and Old Greenwich.
John And also waterfront.
Michelle What’s different now are the interest rates. Interest rates weren’t nearly as good in ‘02/03.
Stephen I find that the sellers who come on now are much more realistic and educated.
John And if they’re not realistic, their house won’t sell.
Stephen People know how long houses are on the market. They’re educated, and they’re not going to overpay.
What’s your advice to people getting ready to sell?
Melanie I’ve been advising this for two years: Don’t look at the comps for what is sold. Look at what the competition is now. You need to be better than most in terms of condition and price. Buyers, particularly at the high end, are younger, and they want it to be move-in condition, with the colors they like. So you really have to think about design appeal and what else is on the market.
wendy I think every room in the house has to be defined and staged according to the use of that room. If it’s a bedroom that someone is using as a study, make it a bedroom. Be specific about the usage of the room.
Rita Staging is very important.
Steve You would think staging would be more popular with HGTV and all the examples that show how staging helps. But people tend to get offended when you point out what needs to be done. Decluttering, painting, and cleaning are a must. Some sellers are loathe to spend $5K on staging a house that’s worth a million, but that could deliver a much better selling price.
Rob NAR just came out with a study last week that showed that the return on painting and cleaning is over 600 percent.
Michelle Every one of my homes is staged, and it shows.
Stephen Staging, taking the emotion out of it, it’s all part of what we do.
Melanie I have always said that every drop of paint is worth every penny it costs. Also, less is more. I’ve had people take months to get their houses ready, but it’s worth it. If you take time to put away personal effects and clear clutter in the kitchen, it makes things easier when it’s time to move.
Michelle People need to think about not being on the market but being in the market. You need to look at where the market’s going and where the market is today. The “sold” market tells you where the market is, the active market tells you where the market’s going. Also, I suggest getting three opinions about the value of your house.
What distinguishes you as a Realtor in this market?
John Good, honest information is key. I often talk to a seller who has been with another broker and the house didn’t sell, and nine times out of ten, they’ll say, “I never heard from that broker. People would come in the house, look at the house, people would leave, and I never heard from the broker.” Good communication is very important. I tell clients too, you’re not always going to like what I tell you. Sometimes we’re looking for something we can change—clearing up clutter, or the curb appeal. It can help to sell the house.
Wendy I help clients who are selling their house to understand that they’re now talking about a product. This is their home, something that they have loved. They have memories. So it is an emotional investment. Easing that seller from the emotional to the fact that this is now a product has to be done very carefully. Some sellers have been in their homes for 40 years. To some degree, we all have to do counseling. I have a degree in interior design, landscape design and counseling, and I find I use all three.
Rita This is a roundtable of very successful brokers. We have to have the two Cs: courage and creativity. We have to be courageous, to say, “You have to look at this in terms of what is going on today.” The other C is creativity. We’ve never been in such a challenging market. We have to take a product and convince a very demanding buyers pool, to create a product that has the broadest appeal. There’s not a house without some limitations, so you have to write creatively, analyze the buyer profile, place your marketing budget very carefully, to make the house look better. You can do all of that if the client will listen to you.
Melanie Negotiating has always been a strength of mine. I knock on wood when I say that I haven’t had a deal fall through in 32 years. I do a lengthy analysis, and I really know the comparables. Sometimes I take clients to see them so they can compare and get into the competitive mode. It’s all about good pricing, good negotiating, stick-to-it-iveness and staying on top of every detail. Also, my Web exposure is huge for my clients.
What are the mistakes people make when trying to sell a house?
Steve Not listening to the recommendation of the agent regarding the initial price. If a seller hangs on to a value they dusted off from 2006, they’re going to have trouble. And if you’re going to mark down, you have to do it in a timely fashion. The example I give is a store that has a fur coat for sale in January and it still hasn’t sold by June. If the store wants to mark it down in June, guess what? The market isn’t there for a fur coat anymore.
How long does a property need to sit before a markdown?
Stephen Sixty days.
Rob Forty-five days
Others Three to four weeks.
Michelle It’s not about days on the market, it’s about showings.
John Exactly. It’s about how many times the house has been shown.
Michelle After ten showings, adjust the price. Getting feedback is a critical part of being a good Realtor in this market. That’s how sellers get an understanding of what needs to be done. You need to communicate immediately after those showings, what they’re saying. That feedback will tell why they’re not buying. And that feedback is critical to knowing when to adjust the price.
Steve Appraisals are of concern. Appraisers are coming in from other markets, people coming from Fall River, Mass to Shippan. I better have myself armed not just with the MLS listing, but I need to know that house inside and out.
Michelle You don’t sell a house once; you sell it three times—once to the agent, once to the buyer, once to the bank.
Are the Realtors meeting with the appraisers?
Steve The good ones are.
Rob We want to make the job easier for the appraiser. So we need to meet and provide them with the comparable information and not only “Here’s what 203 Stamford Avenue sold for,” but “Here’s what the printout says, here’s the story with this house.”
Steve It’s a cursory thing they’re looking at, square footage, number of bedrooms. I’m there to explain to the appraiser: At this house they just spent $125K on a stone patio in the back, and there’s a finished basement with sump pumps put in.
Rob It’s also the selection of the comps. And you’ll get some appraisers who are picking inappropriate comparables.
Wendy One of the things we do is meet with appraisers. I have an acquaintance who is not going to be able to buy the house they wanted because the agent did not show the comps to the appraiser. Now the bank has appraised it for less than the agreed purchase price, and they’re not going to be able to get the mortgage.
What are some features home buyers are looking for today that they weren’t five years ago?
Rita There is no compromise today with today’s young buyers. They want to come into a space, they want to see the bathrooms done, the kitchen done, and maybe they will compromise on relationships of rooms. There may be one bathroom that just needs paint, and they can’t get past it.
Michelle They want new construction.
Stephen They want an A house in an A spot. It used to be okay to have an A- house in a C+ plus location. Not anymore.
Steve Kitchens and baths are number one. There are expectations that the basement has its sump pump systems already done. And it really helps if you have a generator. We’ve had so many outages, and people are hearing that their friends have generators.
Stephen People walk in and say, ‘I have to do this,’ and ‘I have to do that,’ and it’s kind of upsetting because people are still living there.
John What I think about just about every day is, Where is that buyer who bought this house, my listing now, five years ago…the house with the steep driveway or no sump pump or one bathroom. Where is that family today? Today’s buyer wants it all.
Rita Some buyers dismiss a house outright, even if it’s just one bathroom that needs to be done. They want to know that the basement is dry, and you can tell right away. The other thing they really want is a relationship between the kitchen and the family room.
All Yes, agree.
Rita With an older house, they’ll sometimes give a little bit because if they like the house— and older houses often don’t have that family room—they’ll at least be amenable to opening up a wall.
Michelle I’m getting more, “Less is more” for square footage.
Rob Square footage is a bad word now.
Wendy It used to be, the more square footage I have, the better I am.
Rob That’s also why valuing on a price per square footage can be very dangerous.
Wendy People are looking at 4,500 to 6,000, three-car garage, open kitchen and family room, freshly painted, everything done.
Stephen It’s almost got to be predictable but classic.
Rob When the market was at its worst, all the builders put tenants in their homes to stop the bleeding. Now those homes are going back on the market. A lot of the wanna-be architects and builders are no longer around and you see it in the quality of the construction; it’s improving.
Rita I’m having clients asking for green features. Those are the buyers who want to know: Are the windows high-efficiency? What about geothermal? These are savvy buyers.
Stephen I would say green is nice to have, but it doesn’t drive the market.
Rob The trend is moving in that direction (green). Five years ago, nobody cared. Now we’re seeing the interest. We’re seeing it from people coming out of the city.
Michelle It’s not always about the price of the home; it’s about how much they’re paying per month. They’re looking at their taxes, their insurance, the cost of living in that space.
Wendy I think all of that drives the square footage search. They no longer want the 10,000-square-foot. How am I going to heat it? How am I going to furnish it? What is the electric bill going to be?
Steve More people have asked me for utility bills in the last year. Even with houses up to $2 million.
Why is 2011 a great time to buy or sell?
Rita You have more realistic pricing and a renewed confidence in the market. Wall Street is saying this is a healthy time. In another eight months, we probably won’t have these low interest rates. There can’t be a more precious time to buy.
Steve Interest rates are still extremely low. Prices are still reasonable. It’s a good opportunity. And the one thing that applies to all of us, We are 35 minutes to Manhattan, and that will never change. We’re adding major employers to this town (Stamford).
Melanie Good loans and good rates make it very attractive. In New York, the market is doing pretty well, so people coming out here from the city are going to do well.
Rob They say the value of a stock is irrelevant unless you’re selling the stock that day. The same thing is true for the value of a piece of real estate. People are trying to time things perfectly, but it doesn’t work that way.
John In Greenwich, the market has already bottomed. It happened in 2009. Last year, we sold 40 percent more house for 40 percent more dollars.
Rita We sold almost twice as much in 2010 as we did in 2009. We did not have a market last January, and we are really active right now. Every sign has it that in 2011, things are looking up.