REAL ESTATE
by Jim Coleman, REALTOR®
CURRRENT REAL ESTATE MARKET PROMPTS CREATIVITY
Some may say, "These are times that try man's [or woman's] souls," speaking of the current real estate market and conditions. They certainly are times to try the efforts, knowledge, skills and staying power of practitioners in the real estate business and related industries.
Much has been said, and is still being said, about the difficult times today for many in real estate, particularly home owners and sellers. Many buyers are having difficulties because of lending constraints while some buyers are "making hay whiles the sun shines" meaning taking advantage of the present market and the deals that can be made.
While traditional real estate agents try to maintain a real estate business applying traditional approaches and methods of agency and representation, a huge number are finding it difficult to make it in the business doing business the way it usually has been done. But the market dynamics are so drastic and severe today with such monumental changes in financing and appraisal, impacted by technology, an agent must work from a base of confidence and competence, but be flexible and adapt sales principles, skills and procedures to the various needs and circumstances of the consumer.
Agents today are not only working with sellers to position their listings for competitive advantage in the marketplace, but also needing to be a bit more creative in marketing as well as using sales techniques. Perhaps one example may be illustrative.
An owner bought a nice two bedroom town house about three years ago as a second home. Unless the reader has been out of the country or hiding under a rock during that time period, one knows there has been a significant increase in value during that period of time. The owner has now had conditions change prompting the desire to dispose of the St George second home property. The property has been on the market for sale for several months, experiencing price adjustments and market position analysis due to recent declines in value. There has been modest activity and interest, with only a couple of offers, neither acceptable to the seller. There are matters relating to the property imposed by the Bylaws and the C.C. & R.'s of the Association that have posed some limitation on exposure and interest of consumers.
Recently, however, a couple looked at the property and liked it very much. The quality of the property and the amenities of the development seemed just right for their needs. But, like many buyers wanting to relocate or investment in a second property in Southern Utah, they would need to sell another property before being able to buy here.
In this instance, having had some prior conversation with the seller, the agent had a pretty good idea the seller might entertain some kind of trade or exchange if it meant getting the property here sold and freeing the seller to move on to other arrangements. The property owned by the interested buyer was a two bedroom condominium located well in Salt Lake City. It was rented, but the lease was due to terminate in the immediate future making it available for a new owner's use.
The thought was entertained by the agent and proposed to the would-be buyer that an offer be made to trade the properties and pay some "boot" (difference in cash, as the buyer's property was less in value) for the St George property. This was to be a direct exchange between the two owners where they would swap or exchange their respective properties with each other, rather than a delayed exchange meaning a type where a seller relinquished a property and placed the proceeds there from in an escrow with an approved 1031 Exchange Accommodator while finding and later acquiring a replacement property. It also meant a change in asset and equity but at a time frame very amenable to the parties.
It was not all that the seller was desirous of, but the proposition offered a couple of important elements. (1) It freed the seller from a property that seemed to be mired a bit in the St George stigma of an overbuilt, inflated market; (2) the property to be acquired was positioned such that the family felt it was located well to be used by the family of the seller and/or it was a property deemed to be priced and located such that it may sell more quickly and effectively than the St George unit.
By gathering facts of the two properties, evaluating financial circumstances and the sale/purchase motivation of the two parties, and using a combination of sales and market knowledge, the agent was able to structure an agreement that made sense for the parties and bring about a successful result in this time of trying market conditions.
In order for such a situation to be successful, it requires (1) a give-and-take attitude by both principals, (2) elements of benefit sufficient to both parties to be willing to go forward with the opportunity, and (3) knowledge and experience among the parties, including the agent, to be able to represent the respective interests and bring settlement of the transaction to the mutual acceptance and good of the parties.
These times are trying, or testing. But it is a day for opportunity. Rules and guidelines are many and must be followed. But if situations and conditions are handled with care and prudent business principles, many are benefiting in today's market of frustration and huge adjustments and struggle for position and security.
St. George REALTORĒ Jim Coleman is Associate Broker and Partner/Owner of ERA Brokers Consolidated. He Specializes in Residential, Investment and Commercial Real Estate, holding National Designations of Accredited Buyers Representative (ABR), Certified Residential Specialist (CRS), Resort and Second Home Property Specialist (RSPS) and Seniors Real Estate Specialist (SRES). You can contact him by e-mail at Jim@RealtorJimC.com. Call: (435) 674-0600; or write: Jim Coleman, 201 East St. George Boulevard, St. George, Utah 84770. This and other columns are available at www.RealtorJimC.com/articles.