Most of us who live in Minnesota have always been eager to tell others how we enjoy the changing seasons. Even after a relaxing trip down south to soak up all that sunshine, our conversations seem to point toward how difficult it would be to not have the variety of temperatures and recreational opportunities throughout year. But this year the seasons are changing a little too often for me - and I'm pretty sure I'm not the only one who feels this way.
In our household, I've boxed up the winter clothes twice now and then pulled them back out again. It's not that you need heavy parkas and long underwear, but some boots and mittens are kind of a necessity with a foot of snow showing up each week...along with temperatures back down in the teens. In addition, we brought out the sandals and shorts so we could get a chance to put them on during our spring days that we also seem to get every week.
Today I'm up at Rainy Lake, and it looks pretty much the same as it does around Christmas. The trees are covered in snow and the ice on the lake is still a few feet thick. There is a little bit of open water in areas with the heavier current, but it might be a challenge to get rid of the rest of it by opening of fishing season on May 10th.
Most of the birds seem a little confused up here, not really knowing where to find food or hang out. There were several of them flying around inside Menards, probably because it was a little warmer in there and they had a pallet of bird seed ripe for the picking. I saw a group of robins using a small toy shovel to try to get down a little closer to the worms, only to find out they also needed a toy pick-axe to break through the frozen ground.
I think many of us have the same sense of confusion, not really having a good feel of what month it is or what kinds of activities we should be taking on. Generally, we'd be out raking our yards and maybe doing a little painting or other odd jobs around the house. And a lot of people would be out looking at lake cabins and waterfront homes during the spring market, so that they can move into them before the summer is over.
This definitely has been one of the longest winters I can remember, and some days it makes you wonder if it ever will end. I'm guessing it probably will, and we will have hot summer days sooner or later - just like in years past. Those of us who have lake places will still get plenty of enjoyment from our days around the water, and by fall we'll be talking about how much we enjoy the changing seasons.
So even though this weather seems to be dragging on forever, pull out a few summer photos to help you remember some of the good times that warm weather brings. And if you've been thinking about buying a place on the lake, you can still take advantage of some great values that are currently out there. You may be very glad you did!
Sunday, April 27, 2008
Saturday, April 19, 2008
What If You Were The Only Buyer In The Market?
What a silly question! How could that possibly happen? Is Ollie "The Dog" writing this article, too?
I've been out showing lake cabins all day today around Grand Rapids, Longville, Outing...and tomorrow I'm showing different buyers in Annandale. I know that's a pretty wide ranging area (about 200 miles from one end to the other), but I've been doing that for years. By personally seeing and understanding markets across Minnesota and Western Wisconsin, I can better help waterfront buyers (and assist my agents in helping their buyers) by giving them a perspective of the entire lakeshore market as a whole. And right now the whole market is pretty much there for the taking!
Now, I certainly don't mean that every seller is in dire straits, nor would I ever suggest that every lake property owner will even reduce their price by as much as a dollar, but I would say that prices - in general - have come back to a level that we probably won't see again for a long time. If ever.
Some properties are priced very well - according to the current market - and they will sell for prices at or close to what those sellers are asking. Others are priced too high, and may come down quite a bit to create a transaction. Some won't sell at all, and will get listed with two or three more brokers before they ever get an offer. It's really no different than it ever has been.
It's not easy to take the plunge on an investment as expensive as a lake property when the media hammers on the housing market each day. Subliminally, we are constantly receiving messages telling us to keep our wallets in our pocket because the sky is surely falling. The problem is, we just can't tell for sure when it's going to land!
If I were a potential lakeshore buyer listening to numerous news reporters each day, instead of just a Realtor who has specialized in waterfront real estate for over twenty years, I'd probably believe that the value of most real estate was going to at least zero. Why would anyone want to own anything like that? Penny stocks could be the real answer.
And what if gas goes to $10 per gallon? Who will ever go to the lake then?
One of my agents emailed me this article from Minnesota Public Radio today. It's an accurate depiction of what is going on in many areas across the country right now - and quite severely in Minnesota and Wisconsin.
I will tell you this. I do have - as many of my agents also have - very good buyers who realize that this might be a great time to purchase a lake home or cabin. Those of us who specialize in waterfront property understand the true market, and I believe our buyers will make some great purchases over the next few months because of the extraordinary hype that has gone on about the decreasing values.
By realizing that markets are cyclical, we shouldn't get too overly concerned about tomorrow's real estate news. I'm sure millions of people will see several "for sale" signs on the next "Good Morning America" broadcast, backing up the downward spiraling housing market. More agents will turn their licenses in to the state to avoid paying their ongoing dues so that they can go out and get a steady job driving truck or waiting tables. And many more buyers will put their money in 3% CDs just to have a safe investment.
But, if you take a step back and look at market trends, building costs, realistic values...and the unmeasurable family enjoyment of owning a place on the lake, you too might realize that there may never be a better time to make that purchase. However, if your only goal is to get a ridiculously low price on a property just because you might be able to do that in this market, you may not be real successful...on the good properties. However, there is always plenty of junk available out there that may warrant some hefty discounts!
Even if there were no other buyers but you out in there in the market today, there would obviously still be a limit on the minimum amount most sellers would take for their properties, just based on what they have into them and what they need to move on with the next phase of their lives. Most likey, you would do the same thing.
Obviously, you are never going to be the only buyer out there, but right now you can be one of a small number of them. There's a pretty good chance that the competition will get a little stronger quite soon!
I've been out showing lake cabins all day today around Grand Rapids, Longville, Outing...and tomorrow I'm showing different buyers in Annandale. I know that's a pretty wide ranging area (about 200 miles from one end to the other), but I've been doing that for years. By personally seeing and understanding markets across Minnesota and Western Wisconsin, I can better help waterfront buyers (and assist my agents in helping their buyers) by giving them a perspective of the entire lakeshore market as a whole. And right now the whole market is pretty much there for the taking!
Now, I certainly don't mean that every seller is in dire straits, nor would I ever suggest that every lake property owner will even reduce their price by as much as a dollar, but I would say that prices - in general - have come back to a level that we probably won't see again for a long time. If ever.
Some properties are priced very well - according to the current market - and they will sell for prices at or close to what those sellers are asking. Others are priced too high, and may come down quite a bit to create a transaction. Some won't sell at all, and will get listed with two or three more brokers before they ever get an offer. It's really no different than it ever has been.
It's not easy to take the plunge on an investment as expensive as a lake property when the media hammers on the housing market each day. Subliminally, we are constantly receiving messages telling us to keep our wallets in our pocket because the sky is surely falling. The problem is, we just can't tell for sure when it's going to land!
If I were a potential lakeshore buyer listening to numerous news reporters each day, instead of just a Realtor who has specialized in waterfront real estate for over twenty years, I'd probably believe that the value of most real estate was going to at least zero. Why would anyone want to own anything like that? Penny stocks could be the real answer.
And what if gas goes to $10 per gallon? Who will ever go to the lake then?
One of my agents emailed me this article from Minnesota Public Radio today. It's an accurate depiction of what is going on in many areas across the country right now - and quite severely in Minnesota and Wisconsin.
I will tell you this. I do have - as many of my agents also have - very good buyers who realize that this might be a great time to purchase a lake home or cabin. Those of us who specialize in waterfront property understand the true market, and I believe our buyers will make some great purchases over the next few months because of the extraordinary hype that has gone on about the decreasing values.
By realizing that markets are cyclical, we shouldn't get too overly concerned about tomorrow's real estate news. I'm sure millions of people will see several "for sale" signs on the next "Good Morning America" broadcast, backing up the downward spiraling housing market. More agents will turn their licenses in to the state to avoid paying their ongoing dues so that they can go out and get a steady job driving truck or waiting tables. And many more buyers will put their money in 3% CDs just to have a safe investment.
But, if you take a step back and look at market trends, building costs, realistic values...and the unmeasurable family enjoyment of owning a place on the lake, you too might realize that there may never be a better time to make that purchase. However, if your only goal is to get a ridiculously low price on a property just because you might be able to do that in this market, you may not be real successful...on the good properties. However, there is always plenty of junk available out there that may warrant some hefty discounts!
Even if there were no other buyers but you out in there in the market today, there would obviously still be a limit on the minimum amount most sellers would take for their properties, just based on what they have into them and what they need to move on with the next phase of their lives. Most likey, you would do the same thing.
Obviously, you are never going to be the only buyer out there, but right now you can be one of a small number of them. There's a pretty good chance that the competition will get a little stronger quite soon!
Tuesday, April 15, 2008
Talk From The Dog
I'm always looking for guest articles for this blog, but I was surprised when Ollie told me he would like to submit one. Surprisingly, he has a fairly strong command of the English language. And I think he makes some very valid points on what types of things might be important to the family pet.
Hello, I've never written an article for a blog before...in fact I don't think I've ever written an article at all. But, as a dog who has been around lake properties quite a bit, I have some suggestions for those of you who might be looking for a special place for you and your pet to hang out.
When I was just a little puppy, I used to go up to my grandparents' house in Northern Minnesota on vacation. They lived on a big lake with a big dock and huge pine trees, which gave me and my uncle Charlie the Dog lots of places to hang out. The world just seemed so BIG! I had so much energy back then, and I could just roam around all day.
As I got a little older (it seems like about 7 years older every year), I liked to hang out in the house more often, and Gramma's shag carpet came in handy to keep those old bones from getting too sore. But Gramma always loved dogs - and she believed they should be at least as comfortable as humans - so she put quilts on the floor for me and Uncle Charlie so that we would sleep better. Of course, she had pretty comfortable couches also, and about the time I hit my third birthday I started spending a little more time hanging out on them - mainly to keep my bones and muscles from getting too sore after a long day of chasing squirrels and sniffing animal droppings.
Oh, I love those great memories of Gramma and Grampa's lake home. By the way, they always had really good food - and lots of it. But I digress. I wanted to tell you some things I have seen - and heard - about what other dogs like to do at the lake.
I had several dog relatives that were also around water most of the time. I'll never forget some of the stories the humans would tell about those crazy dogs at night around the fireplace. Uncle Charlie and I didn't get real involved in the conversation, but we would nod once in awhile...and maybe wag our tails.
Probably the king dog of the family was old Grandoggy Chippy. He was around when my dad was a small boy and, apparently, he loved to sail off the dock to chase sticks. He would come running down that 100 foot dock at full speed and just keep going until his belly splatted on the water. Ouch! Now I don't mind retrieving a stick from the water now and then as long as I don't have to go over my waist to get it, but you certainly won't see me taking my life in my own paws like that.
Another real "lake dog" was Ringo. He was my older dog brother, but I never got a chance to meet him in person. He lived at my parents' lake house when the kids in my family were just little. Ringo was a "frogger," and would spend hours chasing frogs along the shoreline. He was also a heck of a fisherdog, and would try to grab the fish off my brother's line as he reeled them in. I guess one day he ended up with hooks in his lip twice, so my dad got a little upset with him and wouldn't let him fish anymore for awhile.
There are plenty of other stories of the ancestral dogs of the family...Granduncle Snowy, Great Grandauntie Ginger...and many others that I could go on about. They all loved being at the lake, wandering around in the woods, laying on the shag carpet, and eating great meals. Some, like Chippy, loved to play, while others just liked to wander around the neighborhood.
I guess us dogs all have our individual traits, just like humans do. Some humans enjoy fishing or boating, and others may just like to curl up with a good book. I certainly don't mind a good boat ride now and then to get the wind blowing through my nose, but if I only had a hard floor to lie on at the end of the day I'm not sure if my time at the lake would be as enjoyable. And from talking to other dogs over the years, they seem to like the same things I do...lots of woods to roam in, no busy roads to get run over by cars, a nice clean swimming area, and plenty of shade to hide out in on those scorching summer days.
Well, thanks for listening to my story. Gramma and Grampa still have real comfortable carpets and couches - and lots of food - although they don't live at the lake anymore. But my parents now have a lake cabin they bring me to, and its the same one Gramma and Grampa used to have as their house. It's great that Uncle Charlie still comes up there to visit me, along with other dogs, and we all still partake in dog stories from days gone by. And with my fifth birthday coming up soon, I'm not sure that life can get any better!
Ollie "The Dog"
Sunday, April 13, 2008
Finding The Elusive Waterfront Buyer...And What It Costs!
It's that time of year again when we will be seeing lots of for sale signs popping up all over the place. Many will be from traditional real estate companies, some will be from discount real estate companies, and still others will be For Sale By Owners. That sign - depending on the quality of it - may cost between $15 and $100 or more, but that's about the least expensive part of getting a home sold.
When considering the best, and most cost effective, method to sell your home, it may be a good idea to look at the most recent statistics from the annual survey conducted by the National Association of Realtors. Each year they compile data from thousands of responses, giving a comprehensive overview of what buyers and sellers are thinking. If you are in the decision making process on your upcoming real estate sale, it may be wise to understand the buyers' mentality as a whole.
So let's talk about the different options when it comes to selling your property, and let's focus on lakeshore real estate specifically, since that is probably why you are on our website in the first place. Lakeshore buyers typically come from a further distance (especially as you leave the metropolitan area), so casting a wide net for the ultimate exposure is very important in trying to attract the right one. I will revisit this at the end of the article.
You will notice that the above survey shows that only 12% of real estate transactions in 2007 were For Sale By Owner...and since 40% of those sales were closely held between family members or friends, the real number was 7%. There is not a good statistic to show how many sellers started out trying to sell the property themselves and then listed it with a real estate broker, but it's probably a fairly large number. These people most likely incurred costs in trying to create exposure for their home or cabin early on, even though they later decided to list it with an agent and pay a commission.
The article goes on to state that this 12% number for For Sale By Owners is at the lowest level since they began tracking it. In 1997, there were a record number of these sales (18%), probably due to a fairly strong real estate market and a more conventional form of advertising at the time. Besides, with many serious buyers now being represented by real estate agents, FSBOs many times end up paying a few percent of the sales price in the form of commission to those brokers to accomplish the sale.
So, in trying to sell your own lake home, you would want to consider how best to get the word out on your property. If you have a waterfront property in Brainerd or Grand Rapids, for example, there is probably over a 90% chance that your buyer will come from somewhere else. They could be from Minneapolis, or they could be from Chicago or Texas, but they are probably not looking in the local newspaper - and most likely not even the Minneapolis paper - to search for possibilities. Running ads in those places can be quite expensive, and sometimes fruitless. And if you try placing ads in the Chicago Tribune or the Denver Post hoping to get seen, be prepared to pay over $500 for a small one day ad. From what I have found, it's not a very effective marketing method!
The one thing I have noticed over the years is that For Sale By Owners tend to get more calls off of their ads than real estate agents typically do. However, that doesn't mean they get more qualified buyers. Like anything else, there are always plenty of vultures out there just looking for someone who isn't aware of the value in their property, and those people will call to find out how you react on the phone and to see if they might be able to pick up a bargain. The sad thing is...sometimes they do!
Your next option is a Discount Real Estate Company, or a minimum service company. A discount company will generally help you through the selling process, but charge you less if you sell the place yourself. You may or may not get much advertising with their services, and you may be able to choose different levels of service based on fees or commissions charged. Minimum Service Real Estate Companies are generally set up to place your property on the local Multiple Listing Service so that other real estate agents can show it and be paid a commission on a successful sale. However, it is up to you to do any advertising beyond that, and to handle the entire transaction yourself - or hire an attorney to take care of it for you. You are pretty much acting as the listing broker, so you now have their job. In 2007, about 18% of sellers used these two types of brokerages to sell their properties. However, in many waterfront markets around Minnesota and Wisconsin, these types of companies may not exist.
When you look at the possibility of using one of these lower priced companies, make sure you understand all the potential costs involved. Some so-called Discount Companies can cost as much, if not more, than Full Service Brokerages, depending on how the transaction takes place. In addition, you may incur some of your own advertising dollars in the process. A Minimum Service Company will cost you whatever you decide to offer out for compensation on the MLS, as an incentive to agents who bring you a qualified buyer...it could be 2%, 3%, 4%, 10%...or any number you choose. Plus, you will pay for any advertising you decide to do.
I know this article is getting quite long, but there is a lot to think about for a prospective lakeshore seller. The last thing I'll touch on is Full Service Real Estate Companies, which are the large majority of brokerages out there today.
The 2006 NAR Survey showed that 83% of sellers who used real estate companies chose the traditional full service model, as opposed to 81% in 2007, so that number has remained fairly strong even with all the other options these days. It's probably also due to the fact that most sellers understand the potential complexities and costs involved in marketing and selling a property. When you hire a Full Service Brokerage, it is their job to handle all the market analyses, advertising, signs, lockboxes, showing appointments, feedback calls, photos, websites, virtual tours, phone calls, paperwork...and most of the problems that arise! Pretty good peace of mind for most sellers.
Last - but not least - is the fact that with 84% of buyers using the Internet to search through available properties (that number is probably quite a bit higher for lake properties because of the distances and higher income levels involved), Full Service Brokerages are able to put their earnings back into expensive websites and a wide variety of Internet marketing techniques to get greater exposure for their listings. Anyone can run an ad in the local newspaper, but not everyone can achieve top search engine results that are needed in today's competitive real estate marketplace.
So when you start thinking about how to walk away with the most money in your pocket after the closing on your lake home or cabin, make sure you look at all the different aspects and costs involved in finding the right buyer. And take a look at a few Google searches that a buyer might use to find properties that fit their needs. Whether it's Minnesota Waterfront Real Estate, Northern Minnesota Lake Property, Minneapolis Lake Property, Duluth Waterfront Real Estate, Brainerd Lakefront, Western Wisconsin Lake Property, Alexandria Lake Property...and hundreds of other water-related searches around Minnesota and Wisconsin, you will probably find Lakehomes.com and our other waterfront websites among the top results. We've already spent the money to get there...so that you won't have to!
When considering the best, and most cost effective, method to sell your home, it may be a good idea to look at the most recent statistics from the annual survey conducted by the National Association of Realtors. Each year they compile data from thousands of responses, giving a comprehensive overview of what buyers and sellers are thinking. If you are in the decision making process on your upcoming real estate sale, it may be wise to understand the buyers' mentality as a whole.
So let's talk about the different options when it comes to selling your property, and let's focus on lakeshore real estate specifically, since that is probably why you are on our website in the first place. Lakeshore buyers typically come from a further distance (especially as you leave the metropolitan area), so casting a wide net for the ultimate exposure is very important in trying to attract the right one. I will revisit this at the end of the article.
You will notice that the above survey shows that only 12% of real estate transactions in 2007 were For Sale By Owner...and since 40% of those sales were closely held between family members or friends, the real number was 7%. There is not a good statistic to show how many sellers started out trying to sell the property themselves and then listed it with a real estate broker, but it's probably a fairly large number. These people most likely incurred costs in trying to create exposure for their home or cabin early on, even though they later decided to list it with an agent and pay a commission.
The article goes on to state that this 12% number for For Sale By Owners is at the lowest level since they began tracking it. In 1997, there were a record number of these sales (18%), probably due to a fairly strong real estate market and a more conventional form of advertising at the time. Besides, with many serious buyers now being represented by real estate agents, FSBOs many times end up paying a few percent of the sales price in the form of commission to those brokers to accomplish the sale.
So, in trying to sell your own lake home, you would want to consider how best to get the word out on your property. If you have a waterfront property in Brainerd or Grand Rapids, for example, there is probably over a 90% chance that your buyer will come from somewhere else. They could be from Minneapolis, or they could be from Chicago or Texas, but they are probably not looking in the local newspaper - and most likely not even the Minneapolis paper - to search for possibilities. Running ads in those places can be quite expensive, and sometimes fruitless. And if you try placing ads in the Chicago Tribune or the Denver Post hoping to get seen, be prepared to pay over $500 for a small one day ad. From what I have found, it's not a very effective marketing method!
The one thing I have noticed over the years is that For Sale By Owners tend to get more calls off of their ads than real estate agents typically do. However, that doesn't mean they get more qualified buyers. Like anything else, there are always plenty of vultures out there just looking for someone who isn't aware of the value in their property, and those people will call to find out how you react on the phone and to see if they might be able to pick up a bargain. The sad thing is...sometimes they do!
Your next option is a Discount Real Estate Company, or a minimum service company. A discount company will generally help you through the selling process, but charge you less if you sell the place yourself. You may or may not get much advertising with their services, and you may be able to choose different levels of service based on fees or commissions charged. Minimum Service Real Estate Companies are generally set up to place your property on the local Multiple Listing Service so that other real estate agents can show it and be paid a commission on a successful sale. However, it is up to you to do any advertising beyond that, and to handle the entire transaction yourself - or hire an attorney to take care of it for you. You are pretty much acting as the listing broker, so you now have their job. In 2007, about 18% of sellers used these two types of brokerages to sell their properties. However, in many waterfront markets around Minnesota and Wisconsin, these types of companies may not exist.
When you look at the possibility of using one of these lower priced companies, make sure you understand all the potential costs involved. Some so-called Discount Companies can cost as much, if not more, than Full Service Brokerages, depending on how the transaction takes place. In addition, you may incur some of your own advertising dollars in the process. A Minimum Service Company will cost you whatever you decide to offer out for compensation on the MLS, as an incentive to agents who bring you a qualified buyer...it could be 2%, 3%, 4%, 10%...or any number you choose. Plus, you will pay for any advertising you decide to do.
I know this article is getting quite long, but there is a lot to think about for a prospective lakeshore seller. The last thing I'll touch on is Full Service Real Estate Companies, which are the large majority of brokerages out there today.
The 2006 NAR Survey showed that 83% of sellers who used real estate companies chose the traditional full service model, as opposed to 81% in 2007, so that number has remained fairly strong even with all the other options these days. It's probably also due to the fact that most sellers understand the potential complexities and costs involved in marketing and selling a property. When you hire a Full Service Brokerage, it is their job to handle all the market analyses, advertising, signs, lockboxes, showing appointments, feedback calls, photos, websites, virtual tours, phone calls, paperwork...and most of the problems that arise! Pretty good peace of mind for most sellers.
Last - but not least - is the fact that with 84% of buyers using the Internet to search through available properties (that number is probably quite a bit higher for lake properties because of the distances and higher income levels involved), Full Service Brokerages are able to put their earnings back into expensive websites and a wide variety of Internet marketing techniques to get greater exposure for their listings. Anyone can run an ad in the local newspaper, but not everyone can achieve top search engine results that are needed in today's competitive real estate marketplace.
So when you start thinking about how to walk away with the most money in your pocket after the closing on your lake home or cabin, make sure you look at all the different aspects and costs involved in finding the right buyer. And take a look at a few Google searches that a buyer might use to find properties that fit their needs. Whether it's Minnesota Waterfront Real Estate, Northern Minnesota Lake Property, Minneapolis Lake Property, Duluth Waterfront Real Estate, Brainerd Lakefront, Western Wisconsin Lake Property, Alexandria Lake Property...and hundreds of other water-related searches around Minnesota and Wisconsin, you will probably find Lakehomes.com and our other waterfront websites among the top results. We've already spent the money to get there...so that you won't have to!
Wednesday, April 9, 2008
Nothing Like Spring!
I apologize for taking a little break from my somewhat regular posts on this blog, but like most everyone else I am a bit tired of the ongoing winter. Even my dog (Ollie) goes and hides when we turn on the Weather Channel now. It used to be his favorite show.
It seems that between the ridiculous weather and the constant bombardment of bad economic news, real estate agents up here in the northern climes are taking it harder than anyone. Just the other day there was a report of an agent jumping out the window of a tall building...although it was only from the first floor. I'm not sure if it was due to these issues, or just a boring continuing education class that he was attending at the time, but I heard the only injury was a severely bent pin on his name badge. All reports are that after a couple weeks of therapy he will be just fine (although the name badge may not be as level as it once was - and probably much more difficult to get pinned).
Interestingly enough, showings have picked up in Northern Minnesota this past week. Maybe people are fighting back by actually going out and viewing lakefront real estate, even with all this snow on the ground and several feet of ice on the lakes. I guess it's kind of a Minnesota thing to only let the weather push you so far.
Well, Ollie just went over and turned on the Weather Channel while I was typing this, so his spirits must be picking up, too. Oh look...it's supposed to be 60 degrees or so by Tuesday. And this is really something...CNBC says the price of gas is going to 99 cents per gallon by early May!
Wednesday, April 2, 2008
Part 6 of Series..."What to Think About When Buying Lakeshore"
Part 6: How Much To Offer
"You can tell that...x#*f~!x/#%...to...!" That's probably not the kind of response you want from the seller if you are trying to buy a lake place you really like.
It's certainly no secret that the real estate market has had a bit of a downturn over the last couple of years. The media has given us all plenty of informative reports on that. But make sure you don't rely entirely on what you read in the paper or see on TV when you find a lake property that you know is the right one for you.
In my last article, I showed average list prices and sale prices for single family waterfront properties throughout all of 2007 in the Northstar MLS. What you will notice is that the actual average sale price ends up being about 95% of the list price most of the time. So when one particular lake cabin stands out from all the others you have seen with your real estate agent, how much should you offer on the initial purchase agreement? The best advice I can give is to put yourself in the seller's shoes. How would you respond to a similar offer on your property?
Let's assume the lake home or cabin you are interested in has been on the market for 123 days, and is priced at $379,000. However, it was originally priced at $399,000, so you know the sellers either are somewhat motivated or they thought the first price they listed it at was a little high. In their minds they have already come down $20,000, so anything you offer less than that is seen as an extra price reduction they are potentially giving - even if it was originally priced higher than it should have been.
The first thing you should consider is how this property compares to others you have seen in this price range. If you have seen a dozen places and this one stands out from the rest based on the quality of the lake, the type of lakeshore, the attributes of the lot, and the integrity of the structure, then you can be assured that other lakeshore buyers will be noticing these same things. You can probably be quite confident that if you aren't willing to pay somewhere near the list price, the seller will probably find someone else who will. If they have a good real estate agent representing them, that agent should be giving them this same advice.
Now that's not to say that you have to offer full price. But if you come in with an offer of $300,000, you probably won't get much of a response...or you might get one similar to the first sentence in this article. Once you insult a seller, it gets quite difficult to get them to want to work with you again, so be careful if you really want to buy their property!
I've seen plenty of buyers end up paying more than they would have had to for a home, just because they insisted on making the initial offer so low that it wasn't even reasonable. When this happens, the seller tends to either not counter the offer at all, or they make a counter-offer that is very close to their list price. Generally, that creates bad blood between both parties. But if the buyer really wants the place - which many times they do - they are oftentimes the ones that end up giving in the most. With a more reasonable offer at the outset, they very well would have ended up with a better price through more friendly negotiations.
Obviously, there are many factors to consider when you decide how much you will pay for any property, and there are plenty of them that are genuinely overpriced. But over the years I've found that lake property owners seem to have a special attraction to their unique parcels, and many times they are willing to wait until someone comes along who seems to appreciate their place as much as they do.
If you have decided that this is the right one for you - and that the price is not too far off already - make sure they don't think you are trying to take them to the cleaners. Otherwise, you might not get another chance at it.
"You can tell that...x#*f~!x/#%...to...!" That's probably not the kind of response you want from the seller if you are trying to buy a lake place you really like.
It's certainly no secret that the real estate market has had a bit of a downturn over the last couple of years. The media has given us all plenty of informative reports on that. But make sure you don't rely entirely on what you read in the paper or see on TV when you find a lake property that you know is the right one for you.
In my last article, I showed average list prices and sale prices for single family waterfront properties throughout all of 2007 in the Northstar MLS. What you will notice is that the actual average sale price ends up being about 95% of the list price most of the time. So when one particular lake cabin stands out from all the others you have seen with your real estate agent, how much should you offer on the initial purchase agreement? The best advice I can give is to put yourself in the seller's shoes. How would you respond to a similar offer on your property?
Let's assume the lake home or cabin you are interested in has been on the market for 123 days, and is priced at $379,000. However, it was originally priced at $399,000, so you know the sellers either are somewhat motivated or they thought the first price they listed it at was a little high. In their minds they have already come down $20,000, so anything you offer less than that is seen as an extra price reduction they are potentially giving - even if it was originally priced higher than it should have been.
The first thing you should consider is how this property compares to others you have seen in this price range. If you have seen a dozen places and this one stands out from the rest based on the quality of the lake, the type of lakeshore, the attributes of the lot, and the integrity of the structure, then you can be assured that other lakeshore buyers will be noticing these same things. You can probably be quite confident that if you aren't willing to pay somewhere near the list price, the seller will probably find someone else who will. If they have a good real estate agent representing them, that agent should be giving them this same advice.
Now that's not to say that you have to offer full price. But if you come in with an offer of $300,000, you probably won't get much of a response...or you might get one similar to the first sentence in this article. Once you insult a seller, it gets quite difficult to get them to want to work with you again, so be careful if you really want to buy their property!
I've seen plenty of buyers end up paying more than they would have had to for a home, just because they insisted on making the initial offer so low that it wasn't even reasonable. When this happens, the seller tends to either not counter the offer at all, or they make a counter-offer that is very close to their list price. Generally, that creates bad blood between both parties. But if the buyer really wants the place - which many times they do - they are oftentimes the ones that end up giving in the most. With a more reasonable offer at the outset, they very well would have ended up with a better price through more friendly negotiations.
Obviously, there are many factors to consider when you decide how much you will pay for any property, and there are plenty of them that are genuinely overpriced. But over the years I've found that lake property owners seem to have a special attraction to their unique parcels, and many times they are willing to wait until someone comes along who seems to appreciate their place as much as they do.
If you have decided that this is the right one for you - and that the price is not too far off already - make sure they don't think you are trying to take them to the cleaners. Otherwise, you might not get another chance at it.
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