Last week an agent said to me, “I have had the same 6 or 7 buyers and sellers for the last 4 months.” Reminded me of a waitress who couldn’t “turn a table” because the same people stayed all night long.
I decided to track homebuyer activity to see how many buyers who have been looking at homes for the last 30 days or so, have purchased one. The little blue box on the doors of homes for sale tells us which agents have shown the property. If you take that agent’s code number and plug it into the MLS, you can tell if that agent is involved in a pending or closed transaction in the same period of time. It’s not an exact science, but let’s see what we can find out. As usual, I’m doing this in real time by tracking the agents as I write the post.
I pulled the records of 6 of my listings and the 56 showings by 48 agents they have had in the last 30 days or so. 34 of those 48 buyers have bought nothing. 2 bought my listings. 12 bought other properties (see below). One of my listings in escrow during the same timeframe was purchased by the neighbor, so that pending transaction had no agent showing. I’m not counting the times I showed the property myself or people who came through during an Open House.
Agent #1 showed the property 3 X in 2 days. If you take the code # of the agent and plug it into the system, you will see that two days later that agent opened an escrow on a property that cost $250,000 more on a similar house nearby.
From that we can assume that the buyer of Agent #1 was weighing the choice of buying a fixer or spending $250,000 more for a similar home assessed for only $25,000 more. It’s not unusual for someone to want a home that needs no work. But spending $250,000 more to get one, is not all that common. Especially one that doesn’t have more bedrooms or more bathrooms or much more square footage and is not in a better location.
Agent #3 showed the property twice and then the buyer purchased a newer townhome on the Eastside instead of a fixer single family home in Seattle. This buyer spent $100,000 less.
Agent #5’s buyer bought my listing in Rivertrail in Redmond.
Agent #16’s buyer bought the house behind my listing in Seattle on a 2,800 sf lot vs. a 5,000 sf lot, listed for $6,000 less. The price differential could have been $20,000 at the time. I have to check the date of the showing vs. the date of the price change and the date the home behind it went into escrow.
Agent #19’s buyer bought a single family home in Downtown Kirkland vs. a townhome in Redmond for almost double the price. (This one is more likely a different buyer with the same agent. Most of the agents listed as their buyer buying “Nothing” are agents who sold nothing at all, so it’s easier to be almost positive. Though those 34 buyers could have bought something with a different agent, that’s not likely given the short timeframe tracked.
Agent #21s buyer went further south and bought a single family home instead of a condo for about $20,000 more.
Agent #22s buyer bought an “income qualified affordable ARCH” condo. $20,000 more for twice the size and 1 additional bedroom.
Agent #24s. buyer bought a new townhome instead of an older craftsman that needed updating.
Agent #25s buyer spent $100,000 more and bought a house that needed less work.
Agent @26s buyer bought a condo in Capitol Hill vs. a fixer home in Green Lake.
Agent #28s buyer bought a newer home further away from Microsoft for $25,000 more (Newcastle)
Agent #36s buyer bought a new townhome (instead of an older SFH) further north in Seattle for $100,000 less.
Agent #37s buyer went to Shoreline vs. Green Lake and spent $100,000 less for a house that needed less or no work.
Agent #40s buyer bought my listing in Bellevue.
While I don’t intend to replace OBEO as “the expert in buyer behavior”, being able to track what buyers are actually doing, is a useful tool. This ability is only recent, as NWMLS just added the “selling agent” code ID to the data entered when registering a pending or closed sale. It was the first (and only) thing I complained about back in 2004, and the change took place in June or July of 2008. Many could not see the need to post the Buyer Agent info when recording a sale.
This feature offers an enormous advantage to our seller clients, who can now track via their listing agent, what the buyer did or didn’t do after seeing their home.
For listing agents, just write down the LAG# (agent code) of agents who show your listings. Then you can track to see if they are putting anything at all into escrow…or not. By seeing what the buyer chooses, you can determine if you need a price change, or if you need to make some condition improvements to your current listings. There’s not much you can do if people don’t want a fixer and choose a new townhome instead. So before reducing the price based simply on time on market, assess the actual situation as carefully as possible.
Interesting side issues:
1) Three of the agents are no longer agents at all, so I can no longer track them. Showed my listing and then quit the business altogether 🙂
One of the agents’ buyers bought a Downtown Condo that had been on market for 4 1/2 months with no price reductions. Knowing WHY buyers are not choosing the property, by tracking their movements, can help owners decide whether you need to wait it out at the same price, or reduce the price.
Don’t buy into an automatic reverse auction of reducing the price every X days. Track what those buyers are doing, and plan and change your strategy accordingly. A lower price isn’t going to turn a fixer craftsman into a new townhome. Sometimes waiting longer for the right buyer IS the answer. But if people are buying similar homes nearby for less…then a price reduction is in order.