Joe Polaneczky

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With the market being so crazy right now, and prices all over the place, it is only natural to wonder about the value of your home, especially if you thinking about selling. Intuition is more than likely telling you that there has been some kind of shift in value in the recent past. Intuition also tells you that if you need to get an accurate assessment, then a solid appraiser will be able to help you evaluate your investment. However, as counterintuitive as it may seems, most folks don't need to get an appraisal if they are considering marketing their home. Here's why.

The Athens Regional Area has its share of unique properties (and people!), but most of us live in areas where the properties immediately around us will become the homes used to determine the value of our own. These "comps" are easy to source through a realtor, whose job it is to know the market, have access to raw data, and establish an accurate value. This is a service associated with our overall service of getting your investment sold. A good agent knows the market, and in fairly homogenous neighborhoods, establishing value is something we do every day, and unlike an appraisal, we do it at no additional charge to you.

An Example:

The Athens Area has hundreds of subdivisions. If I get a call from a prospective client in a living situation such as this, I ask all sorts of questions, take notes, visit the property to establish a strong understanding of the "product" to be marketed, and then I crunch numbers.

I look at recent sales, and I look at sales trends in the neighborhood. Is the neighborhood trending up, down, staying stable? I look at price per square foot and see how far the prices hold before they start to flatten out for homes with more square footage. Ultimately I want to focus in on a more select group of comparable homes to really establish which homes within the neighborhood truly compare to my "subject" property.

I then will use a list of specifics about the subject property as points of comparison to establish value. A good agent is often already familiar with the comps because these comps were recent sales, and we watch properties and know the products on market. Often we've actually shown or pre-viewed the property back when it was on the market. This kind of experience is invaluable. The whole process is fairly involved (and fun...for a geek like me, anyway).

A Note of Caution

In a rapidly evolving market, like the one we are currently experiencing, it is critical that the comps are as recent as possible since inaccurate valuation can lead to all kinds of headaches and possible financial loss. A good agent will be aware of this and go back in increments (3 months, 6 months, a year, 18 months, etc.) to establish if/when the market shifted in your immediate area. We will also know the market well enough to assess if the shift is merely a discount in a strong area that will likely rebound because the neighborhood story is still sound. This is important because if you are not in a rush to sell, you can wait the market out. And if you are in a rush to sell, then you will need to consider the relative loss you will be looking at. Imagine, though, that the analysis is faulty and you think you are waiting the market out only to find that the area is actually trending down! This is where strong agents earns their money. We know the area, and that intimate knowledge is critical.

When Should I Consider Getting an Appraisal?

When you can't look out your window (or close to it) and see your comps. When you own a 10,000 square foot, turn-of-the-century barn that has been converted into a gallery-like luxury living space on ten acres right on the Clarke/Oconee County line.

When you are trying to sell your unique log cabin/horse farm on a 14 acre tract but you are only selling five acres with the property, and the home was designed to accommodate your family heirloom furniture and over-sized sculpture collection while little but little consideration was given to resale.

Back to intuition. If you live in a unique setting, you will know when you need an appraisal. If you live in a subdivision or an area of town with similar homes, and you consider your new chef's kitchen to be the unique aspect that warrants an appraisal, hold off and talk to a realtor. The money you spend on an appraisal can be put to good use elsewhere. But make sure you work with an agent who does a professional analysis for you. If an realtor rolls in, armed with what's in his/her head, he/she is being a little too cavalier. Agents shouldn't be made to show you solid numbers to back up a bottom line; they should come with those numbers tucked under an arm.

JP

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This is the first Ask the Professor we've posted, and each post will feature a question posed to John Killens, the man who has forgotten more about real estate than most of us will ever know. In each installment, he and I will talk a little bit (mostly I will listen), and then I paraphrase his answer. Since John is now retired (even though he still wears dry cleaned everything, including pajamas), to ask him to contribute his knowledge is about the most for which I feel comfortable asking him, so I'll handle the writing part.

QUESTION: John, why do Athens area listings have such noticeably high average days on market? I was in Philadelphia recently, and I read a piece in the local paper where the writer was lamenting the fact that DOM in the Delaware Valley had increased from 60 to 76 days over the last year. I couldn't believe what I was reading since the average DOM in the Athens area usually hovers in the 180's and new construction in Oconee has been in the 190's. Most realtors here tell their clients it has to do with the Athens buying season starting and ending early because of UGA's yearly schedule. If you ignore the supposed UGA effect and list later than April and you don't sell before the end of July, the theory goes, then you are stuck with the property on the market all through winter and early Spring, resulting in a high DOM figure. How accurate is that?

ANSWER: The professor began with a few necessary comments about people and real estate. First, he explained that there are three things that determine whether a house will sell or sit: Price, Location, and Condition. Two of these, he said, are mutable, and one is not. Also, people seem to think they can expect a return on their investment even if they lived in a house for ten years and basically did nothing to improve or even maintain it. This idea of seller entitlement has always perplexed the professor.

Pricing also dovetails with condition: If you have a seller who feels entitled to top dollar for a house with no updates/improvements and lots of deferred maintenance, then the price will be too high. The entitled seller will also more than likely "anchor" to that inflated price or close to it. You can see where the professor is going with all this. The result is a house that will sit and jack up the DOM averages. If the location is questionable (see the neighborhood cycles post), and the seller is clueless, then DOM will go even higher. Too many DOM results in a stigma on the property and the DOM go higher still.

So where are the realtors during all this? If we are getting DOM stats from our MLS system, then surely realtors are listing these homes. Aren't they having the necessary conversations to serve their clients and move properties? The professor says the answer is no. Before further explanation, it is important to note that John is a true Southern gentleman, so he can say what he said to me. Southerners are by nature non-confrontational people. They don't like uncomfortable situations and uncomfortable conversations. You could say they are this way to a fault since the result is real estate clients not being properly served. The pain associated with telling a client they are off their rocker is too painful for some realtors, so they accept the listing exactly with the terms set by the seller, never suggesting that the price is too high, the condition is too poor, and the location is too questionable.

The result is an overpriced product on the market and it sits. The professor used my experience in Philly to further explain. In the North, he says, people tell it like it is, and realtors there probably are more hesitant (read: willing to walk away from a listing) to take on an unrealistic client just for the sake of getting a listing. The result is more realistic pricing based on condition and location realities.

The professor went on to explain that many homes sell much more quickly here than the average DOM would suggest because there are realistic sellers working with trustworthy professionals who confidently know the market and know that deep down, everyone respects the truth.

So the university has nothing to do with DOM numbers? Apparently not, according to the professor. It's a regional thing that has to do with a disproportionate number of realtors who are telling clients what they want to hear or just not telling the clients anything and simply going on a marketing call to discuss the ways he/she will market a poorly maintained, overly priced property.

Everyone likes to make money on an in vestment, and everyone enjoys being right, but if you really want to sell your house, maybe finding a market-confident and candid realtor is the way to go. It doesn't help that realtors are about as trusted as used car salesman, so find one you can trust, tell them you expect them to be straight with you about price, condition, and location, and hang on for the truth. Just don't shoot the messenger. Thanks, John! JP

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Yet another installment of the things you want to know about our wonderful city. As I read over this post, I realize there is so much more in Athens, Georgia, that these posts can become quite habit-forming.

Forecast Calls for Thunderstorms Every Afternoon During the Summer. It doesn't always happen, but the weather person seems to err on the side of caution. They are correct a lot of the time though. Some of the best thunderstorms I've ever witnessed were here in Athens. They are more fun to watch when you don't own a home, especially after you log a couple personal instances of knowing folks whose houses got nailed.

You Will See Litter. No question about it, folks around here litter more than in other areas of the country, and Athens has a seedier side by some accounts. It's kind of sad to see it, but you can do your part to keep ATH beautiful. As far as seedy goes, I told you in an earlier post that my goal is to be honest. I will also honestly say that I lived in some areas of California that were a little too crisp and perfect, and I think those places were a little out of sync with reality, and ATH is much preferable.

Lots of People Telecommute from Athens. This seems to be a trend around here. Folks move here from out of state, get a nice house in a nice area of town and settle in to a very cool lifestyle.

Strangers Talk to One Another. It is not out of loneliness, just friendliness. Don't be shy. Put yourself out there and you won't be rebuffed like you would be elsewhere. It's a habit forming need for more and more, and you will grow to thrive in this kind of environment. The good news is that most strangers you meet around here are pretty darn brilliant and interesting.

Dinner Parties Abound. Professional, intelligent, travel-savvy residents who love to cook and converse. What could possibly be a better evening?

While Athens is Home to Some Truly Brilliant People, it is also Home to Folks who will Awe You with their Stupidity. Two words come to mind as I write this: Crime Blotter. Featured once on NPR's This American Life, the Athens Banner Herald Crime Blotter reads like no other. A woman knocks her husband out with a potato; a guest is busted by his host trying to have relations with the family dog; a woman reports her leather jacket was stolen when she went to buy crack at an abandoned house. All three stories are true and just come to mind. The blotter serves it up everyday in its own cheeky way, and while it is humorous to read at times, you have to stop and remind yourself that while you are at a red light, the guy behind you may have recently been in the blotter. Perhaps this is really just the stuff of the human drama writ large because it is such a small town. More than likely the cops in NYC could shame our blotter, I'm sure.

This is a Small Town. Yes, it feels big at times, but it is tiny. If you don't like constantly seeing people you know, this might not be the town for you. I personally like it. Word to the wise: If you are the kind of person that lashes out at people at Lowe's, demands the royal treatment every where you go, or is just generally a stick in the mud, don't move here unless you like being known as that kind of person.

This Town Talks. And as well it should when you are mean spirited or a crooked business person. The corollary is also true: Faster than folks will point out a rapscallion, they will point out the best people that Athens has to offer. Be the latter person , and your life will be better than you could ever imagine.

Winters are Usually Wetter than other Seasons, and You Don't Necessarily have to Put Up Your Summer Clothes in Storage. There is always that little stretch where the weather feels fall like and don't be surprised if you are Christmas shopping in a t-shirt downtown.

Man, I could keep going. More Later...

JP

This is Part II of what I guess is going to now be longer than two parts about thing to know about ATH. Again, I welcome your comments by clicking the comments button at the end of this post. And again, Things to know about Oconee County is coming soon. JP

We are a Town of Subdivisions. Once you get out of the downtown area (called In-Town here), you are in the land of many subdivisions. The tell-tale bricked and landscaped entry way will alert you to the fact that down that seemingly small side street might lay 200 or more single family homes built somewhere between the 1950's and the present. As you get farther away from town, the entry ways get more grandiose. I don't care how long you live here, you will always be discovering a new subdivision that has been here longer than you.

Folks are Moving Back to Athens from Surrounding Areas. While the surrounding counties have been luring families away from Athens with the promise of better education, safer neighborhoods, and better real estate investments, there is a reverse movement taking place. With the cost of everything going up, proximity to town is getting more attractive. From my informal inquiries, it seems people are also deciding they want to be a little closer to the cultural hub that Athens is.

Volunteerism is Big in Athens. Not sure where it comes from, but it is an indisputable fact. And why not? This town is home many intelligent people who are at the top of their professions, and they bring this expertise to their community in a variety of ways. The sense of duty to community and others is palpable here. If you are considering a move, consider volunteering, and you will make lasting friendships right away and in a most noble way.

Many People in Athens Live at or Below the Poverty Level. I don't know the exact place in the national rankings, but we're up there with regard to per capita living at or below the poverty level. It's no joke. We're talking generational poverty. Everyone knows it, and the community has lately been taking very vocal steps to address this glaring reality. Partners for a Prosperous Athens is trying to address root causes while attempting to serve more immediate needs. Like all groups trying to address social issues, they have their supporters and their critics. Why does Athens have so much poverty? Athens and poverty seem to go way back, and I could expound with an interesting historical analysis, but I will save it for another post.

There is Nothing Like Athens in the Springtime. The Indigo Girls said it best and it's true. Athens in Spring is rivaled only slightly by Athens in the Mid Fall. Dogwoods will blow your mind. They bloom and bloom and bloom, creating a greenish light under their canopies. Oak Leaf Hydrangeas with flower clusters the size of a poodle's head. Warm days and cool evenings. And the best news? It is not unusual for Spring to spring by mid-February, resulting in a season that is so romantically protracted. Yes, the dog days of summer follow, but those few months in the year when things are moderately uncomfortable are sandwiched between two glorious seasons.

People Drive Differently Here Than Elsewhere in the United States. Say what you want about the slow pace of the South, but once you get ensconced here, the pace in other areas seems downright nutty. Wait until the following scenario happens to you, and you will see what I mean. You are reading a map while at a red light only to look up and find the cars in front of you are now far through the intersection. You, and you alone, are holding up traffic! You look in the rear-view mirror, and the line of cars behind you is just patiently waiting. And I mean patiently. No horns. Twilight Zone? No. The South. You will grow to love this kind of gesture, and the next time a car in front of you is slow to move, you will more than likely think twice about laying on the horn, and you should. Also, Athenians rarely wear watches. No kidding.