DATELINE SANTA FE

Santa Fe Real Estate Blog

The Lost Art of Negotiating

As real estate brokers we basically negotiate in our sleep, its true! As we have our coffee in the morning and talk about our dreams, it often goes like this. “I had a weird dream we were really close to settling the Jones and then the buyer insisted on the fridge.” When it comes to negotiating, the one constant is that we want to win, and that’s not a bad thing or just a guy thing. Think back to those Girl Scout cookie sales and that one girl who always seemed to out sell everyone, and not by a little. It didn’t matter that she had her mother and aunt and a whole army of helpers out selling 24/7, she was a winner.

 

That’s what we want for our clients; we want them to be winners. In order for that to happen the process needs to be artfully crafted. So that brings in our first rule of negotiation, win-win or no deal. This may seem difficult since real estate markets tend to favor either buyers or sellers. In a buyer’s market it would seem unlikely that a seller can come out a winner, but he can. For many sellers, winning usually means price but to become a winner a seller needs to do three things. First, determine motivation. Second, establish the goal and third lay out at least three main elements that support that goal.

 

If a seller is not really motivated it’s impossible to determine a winning solution. In a market where there are eight sellers for every buyer, the seller probably won’t get to the negotiating stage anyway. But if motivation is strong, say to move closer to the grandkids, then the goal of selling your house can have real meaning. Now the elements that support the goal such as price, closing dates, inclusions and concessions become the artful part of the process.

 

Avoid framing any element as winning or losing but simply as an exploration into potential outcomes. For sellers to win in a buyer’s market they must overcome the price objection. Keep in mind that that market value is not the fault of the buyers and for all the showings, these people actually made an offer. Next, when it comes to inspection objections, think outside of the box. If the buyer wants a new cooling unit and you know that the old one is fine, offer a home warranty instead. You won’t have to pay for a new unit and the buyer gets the assurance he won’t be stuck with surprise expenses. Buyers have a list of win items, too, and something as simple as moving a closing date may save them thousands or give them peace of mind so explore ways for both parties to win and don’t be afraid to ask for what you want.

 

The most important way to become a winner is to keep your emotions in check. Emotions are inevitable but they tend to make bad business partners. Never let them affect your mindset or your ability to get to the “win” objective of the deal. When making concessions always keep an eye on the bottom line and have your broker prepare a net-out sheet before submitting your response. More often than not your broker will need to negotiate with you before she can negotiate for you so don’t think she is working against you. She is really trying to help you succeed with your goal. Closing is a natural progression to successful negotiations and if both the buyer and the seller get what they want, isn’t that the best outcome of all?

November 21, 2011 Posted by | Realtor 121 | , , , , , , , , | Leave a Comment

Third Quarter Santa Fe Real Estate

Last month, we went to Austin, Texas for a national real estate conference and met brokers from all over the country. The majority were thoroughly amazed when we spoke of our market, the current difficulties, and the days on market. Most we conversed with had markets with an average 90 days selling period. Sure, they had short sales and foreclosures, too, but their markets were far improved. Since we rely heavily on our feeder markets and Santa Fe was the last to feel the decline, we saw this as a sign that we, too, would be on the mend.

The Santa Fe Association of Realtors recently published their 3rd quarter statistics so it’s time again to look at the numbers. While the summer is believed to be the best to sell real estate, the wildfires kept buyers at bay. Both closed sales and pending sales were down slightly from same time last year but new listings were down, too, with 687 properties listed versus 816. Also improved was days on market at 224 for the 3rd quarter versus 243 for 2010. The average sales price was $453,823 which was a 3.8% increase over the prior year. While the median sales price dropped a fraction 1%, the average sales price tells us that the entire market is recovering.

For the different city areas, the big winner in activity goes to the Southeast city limits with a 54% increase in closed sales and a 34% reduction in overall inventory. Our runner-up was the Airport/Agua Fria district with a 27% increase in closed sales and a 9% reduction in inventory. With 90 homes still available on the market and a median sales price of $183,100 it is no wonder that Santa Fe’s housing affordability index has increased to 107, an all time high.

The Northeast city limits saw a 9% reduction in new listings and an increase in the median sales price year to date (YTD) of $560,000 over $517,500 for 2010. The Southwest city limits saw a reduction in new listings to 315 properties versus 400 for 2010. Here, the median sales price declined to $207,000 from $225,000 from the previous year. The toughest area in the city, Northwest city limits, had a 20% increase in new listings and a 26% drop in closed sales. The median sales price YTD is $266,000 down from $340,000 of 2010.

For the county, the busiest area was Las Campanas with a 76% increase in closed sales YTD. However, the median sales price here has plummeted to $860,000 from $950,000 from the previous year. The areas surrounding Las Campanas had a 26% reduction in new listings but a 7% drop in median sales price to $637,500. Tesuque experienced a 50% increase in closed sales but a 12% decline in median selling price to $695,000 from $792,500 from 2010.

Old Las Vegas Highway and surrounds had a 31% increase in closed sales and a decline in new listings. The median sales price here was $345,000. Highway 285 had a reduction in new listings but a drop in closed sales. The median sales price was $402,000. Eldorado has been consistent in closed sales YTD with a small drop in median price to $319,000. Inventory here hovers around 10 months. The area of Rancho Viejo saw a big drop in new listings and a 16% drop in closed sales. The median sales price increased 4% to $295,000. The Southwest county had a 17% increase in median sales price to $280,950 but the inventory here remains high at 26 months.

It will be worthwhile to look at the numbers again in a couple of months to see how Santa Fe finishes the year. While not all good news, there is certainly evidence that the market is improving and that is the best news!

November 21, 2011 Posted by | Realtor 121 | , , , , , , , | Leave a Comment

   

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