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.

Getting Professional Organization Help Prior to Move

The following is a description of why hiring a professional organizer to help you prior to a move, or prior to listing your house can be a good idea. I’d just like to add in advance my note that sometimes we get too “close” to our stuff, and can’t take objective positions on them. There is something very liberating about getting rid of stuff and clutter, and in my experience rarely do I ever miss any object that I get rid of.

Contact me and I will provide you a free half hour consultation with Susanne.

Getting Organized for a House Move

A home free of clutter is everyone’s wish.  For me, when I enter my office, for example, I want to see some blank surfaces where I’ve cleared things away, taken care of business, filed those papers.  Then I feel creative and can work more effectively.
In preparation for a house move, de-cluttering is top priority.  Not only does it lend clarity and peace of mind to an otherwise stressful time, but it saves effort and money.  Your friends and/or the moving company won’t have as much packing to do, and you won’t have to find cabinets and closets for so many things once you arrive at your new home.  What a perfect opportunity to get rid of excess and unused items!  It’s almost worth the cost of moving, just to clear the slate.  It feels good to get rid of those jeans you may never wear, or that wrapping paper that’s been gathering dust for decades, getting moved from house to house.

Clutter bogs us down.  Let’s clear the way for more appreciation for those possessions we do cherish and want to keep.  Let’s dare to reduce our load.  I guarantee you will feel lighter in more ways than one.

Susanne Petermann
Hands-On Organizer

Falling Taxes on Real Estate in Southern Oregon

This is a reply or clarification from my standpoint on the article that came out in today’s (Oct 4, 2011) Mail Tribune as the front page story. I generally like to link to stories that I refer to, but the Mail Tribune decided that they are charging people to read the online version of their stories, and I can’t condone that decision.
The basics of the story are that property taxes should drop for 37% of Jackson County houses. I just went back over my old Blog posts, and realize that I don’t believe I have answered the question about how property taxes work in the state of Oregon.
The county computes 2 different values for a property. There is a value that is the Maximum Assessed Value (MAV), and a 2nd one that is the (theoretical) Real Market Value(RMV) . Now the RMV is generally off 90% of the time. I don’t really know how they come up with that number. The MAV however is what one pays taxes on. That value is fixed at the point in time that the house is constructed, or a major remodel is completed that significantly changes the value of the home. From that point in time, that value can only increase at 3% per year. Now while real estate was appreciating at a rate of greater than 3% a year, there became a pretty wider discrepancy between the MAV and the RMV.
Now that we have just gotten into our 5 straight year of depreciation though, the chances of a house’s RMV being lower than the MAV has become a reality. Especially for homes that were built after 2002.
I’ll give you some examples…
My home has a MAV of $143,500 and a RMV of $206,000. Now if I were to sell it today, I would get probably somewhere over $250,000. So my taxes will not be affected. My house was built in 1948, and it’s MAV will probably never be under the RMV.
On the other hand…after a quick search of the MLS, I found a house in Eagle Point that was built in 2005, sold in the last couple of months as and REO for $299,000. The county shows the MAV is $327,000 and the RMV is 395,000. The buyer of this property should be able to take their sale down to the assessors office, and have the value of that property changed. And that change should reduce their taxes by  close to $300 a year or so.
Now one more example…I am in the process of selling a house at this time that has a MAV $35,000 over what the accepted sales price is. It is a lower end, first time home buyer kind of a house. Now when getting a loan on a house like this, sometimes the ratio of payments to income is close. And the difference of $30 on a monthly payment could be the difference as to whether or not a buyer could get that loan. Under the new price, the taxes on this house should decrease by close to $500 per year. A Realtor who is representing their buyer should know these figures…and if getting the loan would be achieved easier by getting the taxed assessed value to go through…that would be the kind of problem solving that is needed in today’s market.
If it isn’t required for the loan, then at the very least they should recommend to their client to take the steps necessary to reduce their taxes.
It is easy to start. The Assessors office is on the 2nd floor in the County building on Oakdale in Medford. I have managed to have a person there to talk to within a minute every time I have visited that office.
Okay…sorry for the long post…I was trying to get a lot of information across. As always, when looking for property in Jackson County, Medford and Ashland, come talk to me. One of the best reasons to have a Realtor on your side is having someone who has that knowledge base. I sometime go into teacher mode a little strong….but I can certainly help you with the process.

Investors are buying

I was having a conversation with a fellow Handball player yesterday who was visiting for a game. He invests in real estate, and has for a number of years.

What he was telling me was that he couldn’t buy houses fast enough at this time. He’ s been going in with cash, and buying rental properties. His argument was that you could not replace the houses that he is buying for the cost that he gets them. That was what he considered a good investment. Buying something under value while everyone is scared. Don’t I wish this guy lived closer to me? You bet.

Can one be building long term wealth right now? You bet. This is the time that those who have money, get more money. However, the unfortunate downside is those that don’t have the money..things aren’t getting better for them.

Even if you can’t pay all cash for a place, but have some money that you might want to reinvest. Either sitting in a savings account or bond, or perhaps in the stock market.

If I could help you find a place that had a 10% annual return…and you had to borrow at 6% to make it work. You are still making 4% on borrowed money, while some renter is paying off the principle balance. If you can put something like that on a 15 year note, a $30,000 investment on a $150,000 home would be paid off in 15 years. So even with no appreciation, one could own free and clear the home…then all rent coming in would be strictly income. Do that 10 times, with a rent of $1000 a month per house…in 15 years, that could be $10,000 of income a month.

I could retire on that.

Whatever your financial situation is, if you would like to sit and discuss some real estate related financial goals, I would be happy to share some of my knowledge with you.

And as always, if looking for Ashland Oregon Real Estate, don’t forget to visit my website.

Business Tent Cards Designed

I have finished the design of my new business tents. They are like business cards, but because they fold in the middle, they become little tent cards.

I have gotten mixed reviews of them.

Has anyone noticed that when you ask for criticism, that people criticize? I have problems figuring out sometimes if they are just trying to find problems, therefore they do. Of if they really don’t like what you are showing them.

I know that I have a style that is not everyones style, but it is mine. If someone doesn’t like the style, that is okay with me. Those same people would design things that I didn’t like. So now that I have opened myself up to criticism, yet qualified it with I may not listen….let me have it.

So here is the new design, front and back.

Ashland Oregon Real Estate Business Card

Front and Back of Tent Card

Inside of Business Card