Priced to Sell means You’re too Late (LA 844)
Priced to Sell means You’re too Late (LA 844)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Hello.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk, I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWit, broadcasting from sunny southern California.
Steven Butala: Today Jill and I talk about if it’s priced to sell it means you’re too late, all week this week is infuriating cliches, mostly that real estate agents made up, probably mostly female real estate agents, but we’ll get to that in a second.
Jill DeWit: Why would you say that?
Steven Butala: We’ll get to that in a second.
Jill DeWit: Thanks a lot. Hello … I … I have a lot to say about that. Oh my gosh, I wonder what the number is, you know, I’d like to know the national average of female to male …
Steven Butala: Yeah, during the middle of the show I’ll Google it and find out.
Jill DeWit: Okay, that’d be cool.
Steven Butala: Before we get into it let’s take an investment … lets take a question posted by one of our members on the Landinvestors.com online community. It’s free and as your listening to us, please drop your questions into the comment section below.
Jill DeWit: Greg asks hi, I tried researching an area in Zillow but the numbers don’t seem to make sense at all, why are there similar properties priced so differently? I love this.
Steven Butala: Okay, this is a really really good question, it’s extremely simple, here’s the deal. The only real pricing that matters on this planet is the assessors data, the assessors completed sales.
Jill DeWit: For houses.
Steven Butala: For everything.
Jill DeWit: For everything, but we don’t have a … excuse me, I’m stepping on your toes.
Steven Butala: Oh my gosh, I have … pricing happens to be one of the things I’m actually good at and interested in.
Jill DeWit: Wow.
Steven Butala: Of all the stuff that goes on in these crazy cockamamie companies that we have, pricing and data really matters and it’s something I actually enjoy. It’s the only thing I actually enjoy at this minute.
Jill DeWit: I will be quietly over here in the corner and I will face away, you want me to stand with my nose in the corner until you tell me it’s okay to come back.
Steven Butala: You’re going to get your turn, all right.
Jill DeWit: Yikes, whoa, sorry.
Steven Butala: The problem with assessor data is we don’t have access to it, not everybody has access to it and since the internet, the MLS is completely online, so we have to settle for the MLS, that said. There’s assessor data, number one, MLS data, number two, and then there’s everything else, and Zillow, Land Watch, Land and Farm is all driven by people who input stuff and people are ding-dongs, and so you get ding-dong data. That’s the name of a show.
Jill DeWit: It is. Well …
Steven Butala: So is Zillow, specifically, is truly … Zillow and Trulia and truly ridiculous, I wouldn’t use them to price anything at all ever.
Jill DeWit: You know what I see them as, it’s like Nordstrom, it’s like they’re going to price it top dollar what they hope they can sell it for, we all know in the end it’s going to be on sale in two months and that’s way more realistic. Or Neman Marcus, the Neman Marcus catalog where you get whatever for ten thousand dollars, we really don’t need to spend ten thousand dollars on that.
Steven Butala: Right.
Jill DeWit: So and if you do then there might be something on that you need to check into.
Steven Butala: First place you want to do pricing for rural vacant land is Land and Farm and Land Watch, that’ll cut you right to the chase there. The first place you want to do pricing checks for infill lots and SFR as houses, is Realtor.com because it is directly the MLS and they have 100 percent of the country covered. It’s actually really important and we don’t talk about super simple important stuff often enough on this show.
Jill DeWit: Thank you.
Steven Butala: Today’s topic, priced to sell, means your too late. This is the meat of the show. Priced to sell! You can picture the female real estate agent, what she looks like.
Jill DeWit: Why is it a female?
Steven Butala: Here’s the whole thing.
Jill DeWit: Come on, I know guys that do it too, I know ding-dong guys.
Steven Butala: I’m gonna look this up …
Jill DeWit: I know a lot of ding-dong guys.
Steven Butala: What’s going on with you today?
Jill DeWit: You’re picking on us and I don’t think it’s fair.
Steven Butala: It’s not … it’s real estate agents that I’m picking on, specifically picking on female real estate agents, specifically.
Jill DeWit: That’s where you’re dropping the ball.
Steven Butala: Here’s the thing all kidding aside.
Jill DeWit: That’s not cool.
Steven Butala: Real estate is really important, it should be treated that way, it should be treated with respect. It’s not window treatments that you’re selling, you’re selling a piece of real estate and for the vast majority of the people with houses specifically, that’s the biggest investment they are ever going to make. That’s the vast majority of their retirement money is involved in that, so it’s not … these cliches piss me off quite honestly.
Jill DeWit: Okay.
Steven Butala: So priced to sell, what the hell, oh so everything else on the internet is not priced to sell or on the market?
Jill DeWit: Boy this does get you going.
Steven Butala: It bugs me, this whole week, this whole week of shows.
Jill DeWit: Did you go through and look at sayings or just …
Steven Butala: Oh yeah, absolutely.
Jill DeWit: Okay.
Steven Butala: I did, absolutely.
Jill DeWit: Yeah, it is silly, you’re right. It’s supposed to invoke a sense of urgency, why, you know, I don’t get it. If you’re really priced to sell then just price it that way and don’t say anything.
Steven Butala: Go on Loop Net … exactly, that’s exactly my point, that’s exactly the whole what this is about, price it to sell.
Jill DeWit: If it is priced to sell you don’t need to tell me that, I know it because I look up and I’m trying to figure out why it’s priced so low and then I realize you’re trying to come up with a … get a bidding frenzy going on. There’s nothing wrong with that, I’ve seen people do that and it often works, great, good for you, don’t try to trick me. You know what it is, don’t …
Steven Butala: This isn’t some cute little career.
Jill DeWit: Don’t treat me like I’m silly and I’m trying … that’s the point here.
Steven Butala: Yes.
Jill DeWit: Don’t treat me like I don’t get it and I won’t understand why it’s priced that way, don’t talk down to me and that’s what it sounds like.
Steven Butala: Right.
Jill DeWit: I understand, now that makes sense, what doesn’t make sense is why do you think it’s chicks?
Steven Butala: Well lets go look, here lets check.
Jill DeWit: All right, this is hilarious, all right, we’re going to see … this is awesome. Online, Googling … all right, this is going to be interesting. I’m curious what stat would have the number of female to male licensed real estate agents. This really crack me up … I’m going to go with … gosh I tell you it seems like around here I know more men, I’m going to say it’s dead even.
Steven Butala: It’s 1.65 percent.
Jill DeWit: Look at that, 63 percent are female, so it is more …
Steven Butala: There’s 1.4 million.
Jill DeWit: And the median age is 54.
Steven Butala: Wow.
Jill DeWit: Wow.
Steven Butala: That’s shocking.
Jill DeWit: That’s interesting, I kind of like that. Huh.
Steven Butala: Why?
Jill DeWit: Well I like to think …
Steven Butala: You like that they’re old?
Jill DeWit: Yes. I don’t really want a 22 year old person trying to sell my house, they’ve never bought a house themselves.
Steven Butala: I don’t want a real estate agent to sell anything.
Jill DeWit: Well that too, but I would rather ask somebody …
Steven Butala: That tells me this is going away.
Jill DeWit: With the mean age is 54 …
Steven Butala: The mean age is 54 for a real estate agents.
Jill DeWit: Wow. That’s amazing.
Steven Butala: That means this whole thing is finally going away.
Jill DeWit: Yeah, all the young kids saying I’m going to graduate and get my real estate license. Could you imagine, what if number three came home and said that, dad, I think I picked out a career.
Steven Butala: Oh jeez, could you imagine.
Jill DeWit: Too bad they don’t have the gold jackets anymore because I really wanted one of those.
Steven Butala: Wonder what they’re … there’s a bunch of cliches we’re going to talk about this week.
Jill DeWit: I know, wow. Okay, that’s so interesting, you really think that that’s … I think you’re right, there is some … that could trigger a shift in the industry. Steven, that means we’re doing our job.
Steven Butala: I know, it makes me feel great.
Jill DeWit: This is so great too, this priced to sell thing. This is sparking a lot of good conversations. Where were we talking too the other day about this, about how many people, gosh, just don’t know you can put your own house on the market and someone said well then I have to have an attorney and … to go through the process, I’m like, no you don’t. It’s called escrow, you know, and a good escrow tile agent, they’ll walk you through the whole thing, that stack of forms, they have it all. You don’t have to have an agent.
Steven Butala: Here’s some statistics.
Jill DeWit: They do it.
Steven Butala: If you’re on YouTube you can see it, if you’re listening I’ll read them to you.
Jill DeWit: Okay.
Steven Butala: 5.5 million existing homes were sold in 2017 and 612 thousand were newly constructed in 17. There’s two million active agents in the … active real estate agents in the … estimates, I think it’s closer to 1.4, the research that I did.
Jill DeWit: Oh.
Steven Butala: 86 thousand brokerage firms.
Jill DeWit: Two million … hold on a moment, if they estimate … that’s pretty … I’ve got to say something. That’s too many agents to homes that were sold. I mean that means fighting … that explains fighting over listings.
Steven Butala: Right, oh yeah.
Jill DeWit: Even if it’s one million, say that’s off by a million, say there’s one million active.
Steven Butala: If you’ve ever been in a real estate agent office, all that … they’re competition is against each other, which is another thing that women are famous for, competing with each other versus men, men want to work together and build something.
Jill DeWit: Why is this turning into this, what happened?
Steven Butala: You know what, I don’t know, it just bugs me man.
Jill DeWit: Wow.
Steven Butala: Plus why do they put their faces on their cards, on their business cards, put their faces on everything.
Jill DeWit: They do … they do if they look good and they try to look good.
Steven Butala: See that’s a chick thing too.
Jill DeWit: You know what it is, you know what’s funny about that, actually that brings up something that is funny. It’s like the photo on their card, I hate to say it, or the bench or whatever they put it on, their stationary, is like a … it’s like an online dating photo and then you meet them in person and you’re like that’s not you at all.
Steven Butala: It’s like 12, 20 years ago too.
Jill DeWit: Exactly, it was so touched up and altered, it’s kind of funny. Okay. Uh oh.
Steven Butala: A typical realtor is a 54 year old White female who attended college and whose a home owner.
Jill DeWit: I believe that.
Steven Butala: 63 percent of all realtors are female and the median age is 54.
Jill DeWit: This is like your sister.
Steven Butala: A real … yeah, they usually have 10 years of experience.
Jill DeWit: Yeah.
Steven Butala: Median tenure is four years at a firm, wow, they do stick around.
Jill DeWit: Wow.
Steven Butala: Most realtors work 40 hours a week in 2017, median income was 40 thousand bucks,
Jill DeWit: Wow, okay this is the biggest thing …
Steven Butala: It decreased, go ahead Jill.
Jill DeWit: Okay, I want to say this again, this is the biggest statistic to me and this is why I would never do this, so back in 2016 the gross median income was 42,500 dollars, then last year, 2017, it dropped to 39,800 dollars. There’s a reason to not come home and want to run and be an agent, that’s like school teacher wages.
Steven Butala: Yup.
Jill DeWit: Wow.
Steven Butala: Oh I think it’s worse than that, I think it’s lower.
Jill DeWit: That’s crazy.
Steven Butala: And you can’t … it comes unevenly.
Jill DeWit: Wow. Boy there’s a reason right there to not … man, I wouldn’t want to do that. I love what we’re doing, I love what we’re doing.
Steven Butala: Me too, I can’t imagine doing anything else.
Jill DeWit: It seems like every time you talk to an agent too, what they always say is oh, well the investors make the money, I’m just … I’m an agent kind of thing. I’m like shucks, why aren’t you an investor?
Steven Butala: Then get out of the way.
Jill DeWit: That’s my next thing, lock it all the way, join a club.
Steven Butala: You know how to do a real estate deal, why don’t you buy a piece of property and resell it.
Jill DeWit: Yeah, we have a number of people in our community that are …
Steven Butala: That’s amazing to me.
Jill DeWit: Whole place, we have a number of people in our community that are former agents that did ditch the license, go inactive, not turn it on because when they got into this and realized oh, wait a minute, as an investor that’s where I want to be A and then B, for agents, you have to … there’s so much more reporting and disclosure and things you have to look up and things you have to do, have to disclose and I think there’s even like extra forms and extra you know, things you have to put on your website. You’ve just got to handle the whole transaction differently, which I do not care to do, and finally when I’m talking to a seller, I mean that’s a very common question that our customers ask us, oh, are you an agent. They think that I’m you know, selling the property on behalf of somebody else, I say oh no no, I’m an owner, we can make the decision right now kind of thing and they’re like ah, it’s an immediate. They’re like oh, they get … they relax, they’re like oh this is good, their guard goes down, they like that.
Jill DeWit: That says something right there too.
Steven Butala: Yeah.
Jill DeWit: So if you have not had that conversation yet, the first time you do you’ll get it, you’ll be like oh wow okay, that does make a difference.
Steven Butala: Exactly.
Jill DeWit: I’m not an agent, I can … I’m the owner.
Steven Butala: I’m fascinated by the sum of this, lets go back to it.
Jill DeWit: Okay.
Steven Butala: First time, here’s home buyer statistics. First time buyers, 34 percent, home buyer statistics, first time versus repeat.
Jill DeWit: Wait, can you go slower for me, I missed that one?
Steven Butala: These are home buyer statistics.
Jill DeWit: Okay, firs time home buyers right now …
Steven Butala: Versus repeat buyers. First time home buyers, 34 percent.
Jill DeWit: Okay.
Steven Butala: Median age of the first time buyers, 32.
Jill DeWit: Wow.
Steven Butala: Median age of the repeat buyers, 54, that’s surprising. People don’t buy and sell houses, they just stay there.
Jill DeWit: Median age of repeat …
Steven Butala: Median household income …
Jill DeWit: I wonder if it’s their second … I wonder if it’s their upselling or down selling, or you know what I would think, honestly, this in interesting. I would think at that age at 54, yeah, I think they’re downgrading or buying their second home because now they can afford it too.
Steven Butala: Median household income for first time buyers is 75 grand, and median household income for repeat buyers is 97,000, that’s actually really surprising too.
Jill DeWit: Median household income of repeat buyers, that’s great, hopefully they are downsizing when their incomes up, that’s the best plan I think.
Steven Butala: Yeah, typical home purchase is 1870 square feet and it was built in 91, three bed rooms and two baths, no surprise there at all. It’s a little bit bigger than I thought it would be, we live in tiny Los Angeles.
Jill DeWit: That’s true.
Steven Butala: Among those who financed their home to purchase, typically buyers financed, 90 percent, so 90 percent LTV.
Jill DeWit: Wow.
Steven Butala: That doesn’t surprise me, I thought it would have been 95.
Jill DeWit: But you know, hold on, let me point out that statistic. It’s among those who financed their homes, it’s like … that’s kind of interesting. If you financed you either have the money or you don’t, you know.
Steven Butala: Oh yeah, sure.
Jill DeWit: See, among those who financed it was 90, they financed the whole thing. The other people were paying cash, smart, I love it.
Steven Butala: Listen to this, 87 percent of the buyers who purchase their home, they bought it through a real estate agent or a broker, it’s steadily increased from 69 percent in 2001. That’s shocking.
Jill DeWit: Wow, okay wait a minute, this all ties together, I just figured it out. So the agent income decreased because more people are … there’s more people using agents and there must be more agents out there now sadly, and less to go around.
Steven Butala: So my sister said there’s two kinds of agents, ones that just kill it and make a ton of dough, I mean and truly make half a million bucks a year.
Jill DeWit: Right.
Steven Butala: Like she does and then the vast majority of them never ever sell even one house, they just have an active license.
Jill DeWit: Got it, and they’re trying and it just doesn’t happen.
Steven Butala: Or they’re not, they just don’t know how to do it. They’re not looking at data, if you can get a listing you can be a real estate investor, it’s the same thing.
Jill DeWit: Okay, this is interesting when you get to this part right here, I love this.
Steven Butala: Buyers who would use their agent again and recommend their agent to others, 89 percent, that’s really surprising. That’s shocking.
Jill DeWit: Wish we could say that about title agents.
Steven Butala: Where buyers found their home … yeah, we’re having title agent tragedy right now.
Jill DeWit: As are a lot of our people.
Steven Butala: Jill used the F word for the first time in a really long time about a title agent recently.
Jill DeWit: I was mad.
Steven Butala: I mean you never swear, ever.
Jill DeWit: I was mad. Flipping penny.
Steven Butala: Where buyers found their home that they purchased, on the internet, 51 percent.
Jill DeWit: Okay, why if we’re finding our home on our own on the internet without an agent are we even using an agent?
Steven Butala: I agree.
Jill DeWit: Just checking, go on.
Steven Butala: Buyers who found their home they purchased, real estate agent, 30 percent of them. A yard, a sign, or an open house seven percent, friend or relative six percent, home builder … or their agent, five percent. Directly from the sellers that they knew, two percent, a print news paper advertisement, what the hell is that.
Jill DeWit: I remember.
Steven Butala: My gosh.
Jill DeWit: Do you remember that? I think that’s cool. Remember that, don’t you remember the old days reading the paper, my dad would do that, that’s how you would … you would do all kinds of things in the paper.
Steven Butala: Sure.
Jill DeWit: You’d buy or sell your house in the paper.
Steven Butala: Classified ad.
Jill DeWit: You could build up an investment company.
Steven Butala: Yes.
Jill DeWit: When I was my … I love that story about the [inaudible 00:18:00] savings and loan guy my dad flew around, you know, put an ad in there and found a little old lady with too much money who invested in him to start this bank and it got huge.
Steven Butala: Yup.
Jill DeWit: So from the paper, it was an ad in the paper.
Steven Butala: Here’s a for sale by owner statistics.
Jill DeWit: Okay.
Steven Butala: You know what, let’s save it for tomorrow.
Jill DeWit: Okay.
Steven Butala: We’re going way over.
Jill DeWit: Oh are we, all right, this is fun.
Steven Butala: Well you’ve done it again, you’ve spent another 15 minutes or so listening to the Land Academy Show. Join us next time where we discuss handy man special means bulldozer needed.
Jill DeWit: And we answer you questions posted in our online community, Landinvestors.com, it is free.
Steven Butala: You are not alone in your real estate ambition.
Jill DeWit: Yeah, we went off on a tangent there.
Steven Butala: We really did. We’ve got too much to say about these cliches.
Jill DeWit: These are good.
Steven Butala: They’re all awful.
Jill DeWit: This all ties in.
Steven Butala: They’re all hiding something, if there’s a cliché in a real estate title, they are hiding something.
Jill DeWit: I love it, cozy, I hope that’s coming up. Be sure to hit the subscribe button to stay up to date on our podcast, please like us and comment what you would like to see in future shows and if you’re listening on iTunes, please be sure to rate us there. We are Steve and Jill, inspiration.
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