David Sobotta

I have been fortunate to be involved in a number of endeavors over the years which have taught me some lessons that I will never forget.

One things that I have learned is that when you are in a tough spot, you often have to invent new ways to achieve success. The tougher the spot the more likely it will require significant innovation before you can recover and move forward.

I am completely convinced real estate is in a very challenging period in Carteret County. However, I am also convinced that our challenges are not necessarily the challenges faced by other areas in the country.

For example we have relatively few foreclosures in our market. With the disruption that these few foreclosures cause, I can only imagine how tough it is in areas where foreclosures are the rule rather than exception.

I actually think the problems facing Carteret County are more challenging than foreclosures. Foreclosures eventually get purchased and go away.

For years our market has depended on people coming here to vacation and eventually deciding to retire here or purchase a second home in the area.

Not surprisingly the retirement and second home market is changing. The retirement market is changing because retirment is changing. Many people are less willing to put a large chunk of their retirement money into housing. They are more willing to buy smaller homes, but this market has shown them that they can get a lot of value for their dollar.

Consequently these folks are looking for smaller homes with better designs for retirement living. Just any old house plan will not do these days. I have visited a retirement community near Chapel Hill recently and have been impressed with some of the unique home features designed to attract retirees. It is up to builders to be smart and figure out plans that match the market sooner rather than later. The ones that do not will be punished by the market.

Secondly many of these new retirees are looking for places to live where they can have part time jobs during their retirement. Much of the retirement thinking now is that staying busy is better for your mind and certainly any dollars earned protect your retirement savings.

On top of all this many retirement areas are actively trying to attract retirees. Here in Carteret County we do a really good job getting the word out to people who might want to vacation in the area. However, I have not seen a coordinated push to attract retirees.

The days of word of mouth being enough to promote an area are gone. People search the Internet for everything. If an area is serious about attracting new people especially retirees, they need to go after that market in a professional manner with a long term plan.

In addition to working to attract jobs which might interest retirees, our governments, and real estate companies need to do more have a coordinated voice that can be heard on the Internet.

I have dedicated a lot of hours to a website that talks about what a great place Carteret County is to live. Unfortunately real estate agents are so fearful of losing an advantage by cooperating with other agents that they often cannot see a real opportunity even when it is staring them in the face.

I would like to see the city and county governments work together with interested parties to address any area shortcomings and to put together a strong marketing plan to establish Carteret County as one of the premier retirement communities on the east coast.

I certain think it qualifies as one of the best places to live, but I think relatively few people think of the area as a great retirment location. If we just sit back and wait for the real estate slump to end, we might be very surprised at how much the market has changed and aggressive other areas have become at recruiting retirees.

Today world is far different from the world of 2005 when everything was great in the world of real estate. Thinking that we can get back to those days without coming up with some new ideas that can entice new buyers to the area is just wishful thinking.

We will have to work together to attract buyers and make certain we have what today's buyers want. That includes the right houses, the right job and business climate, the right services, and a reputation that will attract buyers with enough money to buy homes in the area.

Much of our reputation for being a good place to retire has been based on recreational opportunities like fishing. Yet the government ignores the devastation being done by gill nets. Yesterday I heard someone questioning the worth of buying a fishing license. He had fished all morning, caught nothing, and watched as a net was pulled to shore by a tractor. After collecting their catch the "fishermen" threw back in the smaller fish which by that time were dead.

In this new world which values green living, not figuring out how to have a sustainable recreational fishery along side a healthy commercial one could be devastating. Who will want to live in an area where recreational fishing is declining?

We live in a great area, but we need to promote it with one unified voice, protect it, and to make certain the area becomes an even more attractive a place to live.

There are certainly plenty of great reasons to live here.

The idea that because you have X number of dollars, that your favorite home is worth X number of dollars just does not work.

I have been on both sides of this wrong headed approach to deciding the value of a home. That is I have had buyers insisting on making an offer that I know will go nowhere because it ignores the value of the home, and I have represented sellers who are receiving offers that are not even worth putting on paper.

Most of us try very hard to show clients property in their price range. I work at making sure buyers have seen enough property that is on the market along with some recently closed properties to give them an idea of what a property is worth. I also typically put together a spreadsheet in an effort to establish a value range for a property. That is all done before an offer is made.

Sometimes best efforts do not work. Clients take the money they have and assume that it will cover the property they want.

I have seen two cases recently where people have made the assumption that just because a property is on market, the owner must be willing to lose tens of thousands of dollars just so the buyer can get their favorite property to fit their budget.

Now if you are in situation where the buyer is desperate to sell, then maybe you will be lucky and make that work. More likely if your agent tells you that they want to do a verbal offer, you have a pretty good clue that the agent expects the offer to be rejected and is not worth doing the paperwork.

If a property is in foreclosure, and you want to make a really low offer, more power to you and good luck.

However, if you and your agent have figured out that my client has a small mortgage on a property and is in no rush to sell, then why make an offer on a property at 40% off of the tax value and way below the asking price?

Sometimes tax value means nothing, but in this particular case I had worked hard to get my client to price their property right. It was well below tax value, but it certainly was not 40% below tax value.

When you get one of these lowball offers, I am perfectly happy for my clients to present their best price as a take or leave it option.

In this particular case, the buyer wanted some specific features that I know are not available in our area at the price that was offered. I know they could not buy a lot, build, and come anywhere near the price that they offered.

Actually I figure the buyer looked at some foreclosure prices that were in a particular subdivision a few miles away and added some dollars for the location of my client's home.

The problem with this kind of math is that all those foreclosures are long gone and under contract. To buy a home in that subdivision where the foreclosures are would now cost more than the buyer offered for my client's house. Then there is still the location and feature differential.

In the end we all know there are plenty of properties around that are over-priced. They do not sell and most of them do not get offers.

Why people have decided to low ball reasonably priced homes is beyond me? It just ticks off the seller.

My advice to buyers is to pay attention to the local market and stick within your budget. Do not assume that everyone who has their home on the market has to sell their property like it is a foreclosure. If you want to buy a property, you have to find someone willing to take your offer.

If you are shopping for unique features or locations and find a property that fits, it is likely the seller realizes he has those features and other properties do not. There is value to those features. The seller paid for them and likely wants some compensation for them.

In the end a property is only worth what the seller is willing to take and a buyer is willing to pay. That changes over time, but unless the property has been on the market a long time and the seller is desperate, a low ball offer that just happens to match your budget might not be your best way to get your dream property.

As I like to say "Sparkling waters have value."

While I am generally pretty trusting of clients that I have dealt with over an extended period of time, I might have to get back to some rules that served me well when we saw more potential clients.

I have been very lenient about taking my online customers on a neighborhood tour of our area in the hopes that they could make a quick decision as to whether we are the right area for them or not. In general it has worked well. Most like what they see and end up buying in our area.

Recently I had a visit from a couple with whom I had been working for over eighteen months. There was a fair amount of communication that went back and forth over that time. I was well informed when the closing for their home got postponed.

When they finally stored their stuff and made the long drive down from the northeast, they were good about getting in touch with me. They ended up staying in another village about 45 minues from our area. They apparently had relatives in the village.

I agreed to show them our area one afternoon. One of the first questions I asked was why they were not locating close to their relatives. I was told that there was no way they would locate there because there was nothing to do there, and their son would be terribly bored.

So I took them on a trip of a few hours through our area. I showed them enough neighborhoods to get an idea what they liked, and at the end I showed them one unoccupied house so they could be familiar with a typical home in the area. It seemed like we had got along well, and I did not sense any problems. They appeared in no rush. They told me they wanted to be careful since this might be their last home.

I was pretty busying working on two closings so when they called to see some homes, I quickly agreed without my normal "if I am going to spend this much time with you, we need to have an agency agreement speech.

They got real serious about what they wanted and over the space of a couple of days, I found them two homes which they really liked. They liked them enough to get the name of a banker from me and get pre-qualified. They wanted to do some serious thinking before making an offer so we agreed to talk the first of the next week.

My wife and I were going to be out of town for the weekend so I made arrangements with the two sellers' agents in our company who had the listings to show the homes if my buyers had any questions or wanted to see them again. I was a little surprised they did not take me up on the offer.

I called to check on them during the weekend, and I was told that things were still on track, and they were just trying to decide which house.

One of the homes is a particular favorite of mine and the other is just across the street from where I live.

When I got back in town, I called to see if a decision had been made. I was told that neighter home excited them now, and they were considering a job in another state. I was certainly surprised, but this is real estate and anything can happen with today's buyers.

They asked me to call them back in a week or two, and what they were doing might be a little clearer.

The fact that they all of sudden stopped loving these two homes smelled like a red herring to me. I was very suspicious as to what was happening.

When I called back in a week, I missed them. The wife called back and said they had decided to buy a home down the street from their relatives, and they were taking a job out of state. It would work well for them.

I was happy to have the honesty from them, but it was a good reminder that I should never put someone in the car for serious looking unless they have signed an exclusive buyer agency agreement with me.

The reality is that when yoiu smell a red herring, something is likely rotten.

I would rather Carpe beach diem than waste my time with someone who is going to buy in another area.

If you are from North Carolina like my wife and I are, you have likely heard the old description of North Carolina as "the valley of humility between two mountains of conceit." The two mountains of conceit are Virginia and South Carolina. North Carolina developed a little later because its well-protected coast line was harder for ships to penetrate. Until the last century North Carolina was considered a backwoods area by its neighbors.

Sometimes dealing with buyers and sellers, I often see people who think they really know the real estate market. Their only reason for using a real estate agent is to get some marketing support or some help getting into the houses that they have already picked.

Conceit according to dictionary.com means- "an excessively favorable opinion of one's own ability." It is rare to find a seller who can separate their emotion from the decision of what to price their property. Most will listen to your pricing suggestions, and then go with their own number anyway. I have even taken people to see homes that have sold quickly so that they can get an idea of what features and prices are important to buyers. While that helps, I have seen people pretend to not like just the features that are selling homes today. It seems that the only cure for sellers who want to overprice their homes and lots is for the property to sit on the market forever.

When it comes to buyers, one of the great challenges is getting over their assumption that the dollars they want to spend will get them exactly what they want. Our biggest problem is that buyers assume that the three or four hundred thousand dollars they have budgeted for their waterfront home will actually get them a waterfront home.

Even after seeing the challenges of waterfront properties in those price ranges, they continue with the thought that the next foreclosure or short sale might be just the ticket.

Actually of the two groups, buyers usually end up figuring it out first. Eventually when time after time they see homes that do not meet their standards, they figure out they are either going to have to pay more money or settle for less.

Back in the spring I took a listing that was overpriced. It was against my better judgment, but the family seemed to eager to work with me, and made a commitment to lower their price should the house not move. The husband was one of the strangest sellers that I have met. Eventually he convinced himself the property was not in MLS in spite of there being MLS flyers in a box in his front yard.

I suspect they were very puzzled as to why I was so happy when getting them to sign a cacellation of their listing agreeement, nine months early. When another seller dropped his lawn service and turned off his air conditioning. I started working towards cancelling the listing.

Buyers are hard enough to find without getting them into a house with grass that is 12-18 inches high.

Perhaps it is just the market that causes the weird behavior. While buyers can certainly be excused for thinking they might find a deal in this market, sellers should know better.

Sellers have to be hiding under a rock to not know that real estate is down in price a lot. As we have seen homes go for 25 to 30 percent less than asking price, some sellers have figured ii out and are putting their homes on the market at recommended prices. Those homes are now moving quickly.

As the market stabilizes I am hoping our two mountains of conceit become molehills that are a little easier to help.

I am fortunate to have worked with great buyers and sellers over the last few months. Having a great experience with someone makes it a lot easier to take the tough ones.

Great clients are always a safe harbor when times are tough. I was happy to see the safe harbor of Bluewater Cove pictured at the top of the post. My morning kayaking trip which had started out with calm waters had ended with gusty winds and large swells which are not very reassuring in a kayak.

Just as it was a good thing to get back to Bluewater Cove, I think it will be very positive to get back to a market which reinforces reasonable expections.

I came to the real estate world long after computers had infested society. In fact with my twenty years at Apple, I could rightly be accused of helping spread those computers.

So almost all of my real estate clients have been computer users to some degree. I had a buyer last summer who did not use a computer. I ended up printing pictures and sending them to him.

The convenience of email is really hard to argue. It is immediate and more often than not you can accomplish a lot of business using email.

Recently I had another computerless buyer come to me. This one really likes to do old fashioned on the ground neighborhood searches. Yet she is also very appreciative of all the extra homes and information that computers can bring to the table.

It occured to me that perhaps this was the way real estate agents and clients operated before so much real estate information made it to the web.

We have actually worked very well together. By my client bringing me neighborhoods that interest her, I have been able to get a good read on what works for her. As somone with interior design experience, she has been clear during showings about the homes she likes and the ones that do not work.

We are close to finding the right spot for her.

Often when I am working with very computer literate clients who really hang their hats on their online findings, it takes a while to get them back to earth. They are often disappointed when seeing some of their favorite online listings because they have only seen homes online and not in the context of their neighborhoods.

It often takes half a day to get them familiarized with area neighborhoods. Usually then their computer searches are much more effective. It almost seems like without some neighborhood context, computer searches are close to shots in the dark.

Of course as people who live and breath real estate, we agents have known that what you see on the computer is only part of the picture.

Recently I have run into some "potential buyers" who seem so stuck on computer information that they never get to the point of actually seeing neighborhoods or homes. They are the virtual tire kickers of the real estate world, those folks who enjoy looking at automated emails from MLS, but rarely ever get to the point of buying something.

Fortunately they are in the minority of people who contact me.

I have never been afraid of having too much information on the web.

In fact I am a big believer in getting as much information on the web as possible. It helps potential clients, and it helps me. If someone calls, I can go to my website advertising a listing like this new construction in Bluewater Cove and have all the information at my finger tips. It is far easier than trying to pull out a piece of paper.

I still do not see computer search replacing real estate agents, but I do think we have to work to make sure that we add value to the technology. If we are just printing pages off and handing them to the clients, we are not in a sustainable position.