## Statistic Geeking – How Low is Too Low

Every once in a while, I fall down a statistical rabbit hole. And today was one of those days.

I had another agent who was trying to figure out how to explain to their client about why the low offer they wanted to submit was not really a good use of anyone’s time. As a buyer’s agent, I am always wanting to get the best deal I can for my clients…and will negotiate my tuckus off to do the best I can for them.

However, after years of experience and a knowledge of statistics, I know that some offers are just too low to even get a response. So the buyer wastes time, their agent wastes time, the seller’s agent wastes time, and the seller is insulted and has their time wasted.

So today I ran some actual statistical probabilities on what the chances are a low offer will be accepted. Using mean, standard deviation, T-tables and the internets….this was my conclusion.  Of course this can change as the market changes…so this is for Josephine County for July of 2018. Sample size of 119 sales…so significant.

Sellers mindset in our market is they have to decide to lower the price, they don’t accept low offers.

So the average sales price to list price was 96.98%. However the sales price to original list price was 94.61%.

There is a 33% chance that an offer at 96.98% will be accepted, but only a 9% chance that an offer of 94.61% would be accepted. Even though that is the average overall from the original listing price.

So deeper down the hole.  Here are the probabilities.

At 92% of asking price the odds of acceptance are 4.5%

At 87% of asking price the odds of acceptance are .27%

at 82% of asking price the odds of acceptance are .006%

at 78% of asking price the odds of acceptance are .0001%

So when looking to make an offer anywhere below 90% of asking price, the odds are so long!!!!!

As I council my clients….I want them to know that it isn’t me who wants them to pay more for the house. The best deal I can get them is what I want. But when I say an offer is too low to be considered, I now have some statistical background and facts to back that up.

Thanks for falling down my rabbit hole if you got this far.

## Talent, Oregon- Not So Hidden Gem Anymore

Used to be that when one couldn’t afford Ashland, that they went to Talent…so they were close to Ashland. While it is cheaper, it is hard to find a house there. And anymore, it just isn’t that much cheaper.

Looking at statistics in Talent, Oregon. There are currently 13 houses for sale with a median asking price of \$335,000. 19 houses are under contract with a median price of \$298,500. And in the last year, 76 houses have sold with a median sales price of \$289,000.

My interpretation of those number is a market that is rapidly appreciating. Or that sellers are feeling the market is hot, and testing the prices.  When you have a day on market of less than one month, and only 2 months worth of housing stock available, it is the logical conclusion to see what the market will really bear.

Those ratios show a market that is short on listings.

Of the 13 houses on the market, over half of them have been on less than a month. So it is a little early to tell if the sellers will be getting their increased asking prices or not.

This is just one of the many micro-economic areas in the Rogue Valley.

I specialize in analyzing property values.

So right now if you are looking to sell a home, if it is priced right we should be able to sell it pretty quickly for a fair market price.

## Resolved to Living More Sustainably?

While we are on the subject of resolutions, if you are resolved (see what I did there?) to make your home a more green and sustainable one, there’s no better time to incorporate energy-saving measures than during the cold months. Here are five simple things you can do to make your house more efficient…

#1 Install a Programmable Thermostat
The advice is usually to turn down the temperature during the winter, but wouldn’t it be nice to wake up to a warm house?

Programmable thermostats let you pre-set temperatures and schedule when the furnace goes on and off. If you use them correctly you could see up to \$180 in savings each year.  More sophisticated devices like the Nest learn your daily routine an automatically adjust temperatures based on your habits. We got a NEST at our house a couple of years ago. I like it, even though it turns the heat on about 30 minutes too early in the morning for me. It wants the house to be of a comfortable temperature for when I get out of bed, but makes the room too warm to sleep in.  Maybe some day I’ll figure out how to fix that.

#2 Install Ceiling Fans
Fans move cool and hot air around your living space, allowing you to turn the temperature down in winter and raise it during summer. During the wintertime, you can reverse the fan’s direction to clockwise to keep the warm air moving down. Plus you can hang your clothes on them for a winter air dry. (Okay…that was a joke)

#3 Eliminate Air Leaks
Use a door draft stopper and caulk and weatherstrip doors and windows to cut down on the cold air coming in.  I actually have the worst door ever for this. I’ve got to get someone out to fix it. We took the weatherstripping off when we had our house painted. However, the weatherstrip was installed wrong because the door jam need to be completely re-done. I just talked to a contractor today get him on the schedule to come fix that.

#4 Use Power Strips
Did you know that many of your appliances use electricity whether they are on or not?Standby power is electricity that’s being used by things like TVs, computers, appliances, and phone chargers, even when the devices are in stand-by mode or even off.

Plug electronics, chargers, and appliances into power strips and switch them off when you’re not using the devices. You could save up to \$200 per year! Or you can buy outlets with a remote control that allows you to turn the whole outlet off.

If you change your filters monthly, you may lower your energy bills by 5 to 15 percent. Plus stop that annoying wheezing sound they make when they get dirty.

Simply put, dirty, clogged filters make the HVAC system work harder.
The savings can be substantial if you keep your filters clean as the average household spends approximately \$2,200 on heating and cooling costs every year. Getting the HVAC system regular yearly maintenance is also beneficial.

## Sales to List Price in Southern Oregon

Different areas in the country have different ways of negotiating sales prices.

For example, in the Bay Area recently, the listing prices have been artificially low to encourage bidding wars. So List to Sales price can be way over 100%

I have heard of other areas that list the houses high, knowing it isn’t uncommon to take 75% of the list price.

So it is important to know the area and the norms when working on negotiating.  So your expectations are set appropriately.

Our market typically sees all home sales occurring between 95-100% of asking price.

The breakdown for 2017 for houses in Jackson County between \$200-400,000 is this:

0-30 days         99.36%        1450 houses sold
31-60 days       98.06%         337  houses sold
61-90 days       97.78%         180  houses sold
91-120 days     97.74%         122  houses sold
120+ days        97.39%          169  houses sold

Note that in that price range, almost 65% of the houses sold in the first 30 days.  So in a competitive price point, one needs to be ready to make an offer quickly. Which might get you thinking about what it looks like on the upper end of the market.  Interestingly enough there is statistically more negotiation rooms in the upper price ranges.  This is how it breaks down for houses priced over \$800,000

0-30 days         98.16%         31 houses sold
31-60 days       97.97%          5  houses sold
61-90 days       98.58%          5  houses sold
91-120 days     92.09%          7  houses sold
120+ days
94.00%         24  houses sold

A house priced at \$300,000 that has been on the market for 100 days statistically will sell at \$293,000 or \$7,000 less than asking price.

A house prices at \$1,000,000 that has been on the market for 100 days statistically will sell at \$921,000 or \$79,000 less than asking price.

And just because I recently ran the numbers, one more set of stats.

Ashland between \$300-500,000 sales price.  Or the “affordable” Ashland homes.

0-30 days          99.02%       62 houses sold
31-60 days        98.39%       25 houses sold
61-90 days        98.49%      16 houses sold
91-120 days      99.43%      12 houses sold
120+ days         99.34%       20 houses sold

## Winter, When the Serious Shoppers Come Out

While it is true that many home shoppers stop looking during the winter, many shoppers still are active.

In the Rogue Valley, we usually do not have to deal with snow or slick roads to hamper home shopping.  The biggest issue I usually face in the winter is having enough daylight to show properties to those people who work full time jobs. Starting right about now, by the time it is 6 O’clock, it is hard to see outside. And that will only continue to be a smaller window of time as we approach Winter Solstice.

Reasons why shopping in the winter is tricky

• It gets dark early
• Don’t want to change schools for children mid-year

• Fewer homes on the market than in the spring
• Properties are looking their “worst”

Advantages to shopping in the winter

• Houses look their worst…they only get better from there
• Sellers may be more motivated
• Less competition from other buyers
• Might be more likely to take contingency offer
• Home inspections more likely to find bad gutters or water in the crawlspace

## Short Sales in Southern Oregon

 Short Sales:The brief definition of a “short sale” is when the owner of a house owes more to the bank(s) than the house can be sold for, and therefor a sale requires the bank to release the lien for less than full value.My House is Worth Less Than I own on it. What can I do?The comforting thing to know if you are a homeowner that owes more on your loan then your house is currently worth is that you are not alone. An estimated 22% of homeowners across the country are underwater. If you can make your payment and want to stay in the house you live in, then it really is something that you might just not think about.But what do you do if you can’t make the payment…or if you need to move for some reason (job change, divorce, etc…?)Well, maybe a short sale is right for you.I have been working with people both buying and selling short sales for a number of years now. And what I can tell you is the process is much easier to get through now than it was 3-4 years ago. If you, or someone you know could benefit from getting out from under an underwater mortgage…let me know and I will see what I can do to help. EMAIL ME HERE Your contact with me will be kept strictly confidential. The professional consultation is free. No matter how fun or depressing you may find your real estate situation at this time, it is my goal to not only provide the best advice possible, but to also make you laugh in the process. Because a key to happiness is to be able to laugh in the bad times as well as the good times. www.AgentInAKilt.com is the home for information on the Ashland Real Estate Market.

One of the things I notice from the number of houses I visit, plus the house I own is the accumulation of moss on the roofs in our area. This happens most often on the north side of a house, or if there is a tree that is shading a portion of the roof. The moss is a slow growing organism that will over time cause enough damage to considerable shorten the life of the roof.

I recommend the following:

• Inspecting the roof annually
• Remove the accumulated moss
• Copper and Zinc can inhibit future moss growth

Now since I am not a contractor (roofing, or otherwise) here are a couple of links to some articles about moss removal.

This Old House (video about installing Zinc Strips. I like the idea, but would prefer to use copper if accessible and affordable. Later in the video, they recommend using a bleach solution to kill existing moss, most sites I saw recommended against using bleach)

Non-bleach moss killer

Or Ace Hardware shows online that they sell a moss removal spray for \$20 and that they have zinc strips for about \$20 for 30 feet (although they show they are sold out at this time).

ZincShield online shows that they sell a 50 foot roll for \$36.50.

I could not find affordable copper strips.

## Banks are working hard at workouts

It seems that as the economic situation in this country is still a bit on the scary side, more and more people, media, companies and politicians recognize that the housing market is the key to a stable economy.

Houses are an investment that people can really relate to them. You can touch a house, you can clean a house, you can demolish a house. Unless you are Bear Stearn, it isn’t quite so easy to demolish a stock.

So Fannie and Freddy are getting presure put on them, and in turn are pressuring companies such as Wells Fargo to make deal with homeowners to keep them in their homes. The latest article I read today was that they were looking at doing loan workouts that dropped the monthly payments of properties to 38% of the property owners income. That is historically where the banks wanted payments to be in order to loan money.

How this is really going to work is anyones guess. What happens if the homeowner is one of the thousands of people who have lost their jobs? 38% of nothing is ?????? nothing?

The good news is that the banks/politicicans recognize the problem. They are listening to the Realtor association about what us professionals have found to be the kinks in how they are trying to solve problems.

If you are a homeowner at this point who is having problems paying your mortgage…hang in there. There look to be some workout options around the corner.

## Top Ten Rules When Buying a Home Part 2

Number Two: Money matters. If you’re considering a mortgage, shore up your credit and get a copy of

This was the MOST important thing you could do to secure credit 2 years ago. A good credit score could get you a loan. Now, it is just one of the things you need to do. It is very important that your credit score is accurate, and decent.

However, this is not the only important issue as it once was. What you need to consider, (as you alway had) is if you can afford the payments you need to make with the income you have. However, not only do you need to be comfortable with the payment the banks want to make sure that you can make the payment as well. Seems logical, but a couple of years ago, the banks didn’t really care if you could make the payments. They just wanted a good credit score.

But as opposed to a few years ago,
To buy a house today, you need

1. 1. a downpayment (there are some exceptions to this, but they have been dwindling),
2. 2. a verifiable job or income source,
3. 3. and good credit.

Gone are the days where you could buy a house for nothing. Can you believe these bankers, just because of a few billion dollars are now wanting the home buyers of America to have have money, and some skin in the game?  Ridiculous!!

Stay tuned for part 3….and I have a feeling it will be a long one.

1. Make a commitment. Commit yourself to your new home for at least a couple of years
2. Money matters. If you’re considering a mortgage, shore up your credit and get a copy of
3. Get pre-approved. Save yourself the time and grief of looking at houses you can’t afford.
4. Determine how large your mortgage can be. Explore different loan options to determine
what is best for you.
5. Decide what (and where) you want to buy. Prioritize your needs (i.e., location, schools,
amenities).
6. Consider your re-sale value. Even if you don’t have school-aged kids, a strong school
district is a good thing.
7. Do your homework. Bid based on sales trends of similar homes in the neighborhood.
8. Calculate the hidden costs. Property taxes, insurance, maintenance and association
fees can impact your wallet over time.
9. Don’t be house poor. Double and triple check to be sure you haven’t maxed yourself out
on the cost of your home and left nothing for maintenance, etc.
10. Get help. Hire a REALTOR® to get the most for your money. It pays to have
someone looking out for your interests. (note: when it says Hire a Realtor, make sure you sign a buyers service contract with the Realtor that spells out the Realtor’s responsibilities to you.)