President’s Message

It’s Time for Spring Cleaning!

It’s beautiful outside today and spring is definitely in the air! This is why I love our valley so much. The sun is out, there are rows of trees with pink blossoms, the hills are blanketed with soft green grass, birds are frolicking in the fountain in my backyard, and I’ve just cancelled a listing!

I got up early last Saturday, reorganized the growing mess that I call my workbench, cleaned out the garden shed, took a couple of bags of my daughter’s old clothes to the Salvation Army, and turned down an unrealistic, over-priced seller who wanted me to sell their home.

Ah…the joys of spring!

Before you think I’ve gone off the deep end under the pressure of meeting my deadline for this month’s article, let me explain. There’s nothing that says “spring is here” more than the ritualistic reawakening we all go through after a long hard winter (work with me here!) and I think that’s exactly what we’ve been through for the last ten months or so. Now I do realize that we live in Silicon Valley not Nome, Alaska, but my illustration is still appropriate.

You see, we have built ourselves quite a storm here. We have a growing inventory of homes for sale in our valley. You’ve seen the “for sale” signs pop up like tulip bulbs after the ground has thawed. It doesn’t take too long to figure out that some of these signs have been around for quite a while. A short stroll through some neighborhoods will yield a bushel or two of those dreaded hanging posts, and nary a one with a “Sold!” rider attached. Fortunately though, this is a storm that we may have some control over.

Yes, it’s time for a good old-fashioned spring cleaning of the real estate market. The newspapers love to quote statistics on how this market is the “worst ever” in Silicon Valley. They publish statistics that reference the growing inventory and the declining number of sales. They calculate percentage of homes under contract compared to the rising number of homes languishing on the market with little or no activity.

We complain that they are reporting only “negative” housing news and are biased against our industry. If this is true, we are guilty of “aiding and abetting the enemy” and I believe it’s time for us to stand up and take responsibility for our role in the storm. I know quite a few REALTORS® who have a lot of tired, over-priced, unrealistic sellers that are like dandelions in my lawn – unwanted and unwilling to go away on their own.

The role we all play in the health of our industry is no small role. I believe that we all have a responsibility to present all clients with a true and realistic picture of the value of their homes. I believe that we should avoid exaggeration, misrepresentation, and concealment of pertinent facts (remember Article 2 of the Code of Ethics!) when we are asked to come up with a fair market price of a potential listing. I also believe that we have an obligation to tell our sellers when they have “missed the market” (Article 11 of that darned old Code again!). Let’s be honest, price adjustments are a part of every market. What you may have thought was a reasonable asking price has since proved to be off the mark. You need to tell your seller that their expectations are unrealistic and need to be adjusted downward. If a price adjustment out of fantasy land and into reality is not what they would like to do, then tell them that you are not the right REALTOR® for them. You can not help them because the buying public (and the lending world) is not interested in over paying for real estate right now. Encourage them to wait for a more favorable market to achieve their goals. You’ll be there to help them when that time comes. After all, you’re a professional. A professional always tells the truth and is not attached to the outcome.

You might be wondering what exactly I am asking you to do. I am asking for our entire family of REALTORS® to take charge of this growing inventory market and “clean house” before it’s too late. You see, I’ve been through the 10,000 plus inventory markets before. I read, with amazement, the articles about the tens of thousands of homes for sale in the Phoenix and Las Vegas markets.

We are a far cry from those markets I know. But I still see REALTORS® “buy” listings at prices they know they will never be able to achieve for their clients, yet they take the listing because it means they have a real live listing to work on. I believe that those homes should not be on the market and I hope you feel the same. When they don’t sell and their consecutive days-on-market hits the stratosphere, it contributes to the negative housing numbers that the press loves to quote.

So why take the listing in the first place? If you think I’m off the mark here just ask your broker. I’m sure they have an opinion of the actual costs associated to marketing a home that doesn’t have a snowball’s chance of actually selling. If you have a listing that’s been languishing on the market for a substantial amount of time, go to your seller and tell them the truth about what price it is going to take to attract a buyer. If they can’t accept that number, ask them to go off the market. It’s spring! It’s time to face the new realities of 2008 and move our entire market toward a healthy tomorrow, before the dandelions take over!

Dave Walsh
2008 SCCAOR President