RE: Re: realtors and markets
From: Rob Sandelin (floriferousmsn.com)
Date: Fri, 6 Sep 2002 16:24:11 -0600 (MDT)
We had a foreclosure once upon a time and the property ended up in the hands
of a loan shark type person, who put it up on the market, at a market
inflated  price, with a traditional realtor who was outright unfriendly
towards the community. Since the community owns the common elements, we put
a brochure board right in front of the house for sale detailing the
community aspects. It drove away all the buyers this realtor came up with
and after 3 months, the realtor dropped the contract. The second realtor was
very friendly, offered to split the commission if we found a buyer. Two
weeks later we did.

The second and more recent experience with a realtor was not successful for
the owner. The realtor apparently did understand  the community aspect
involved in the house, and found no interest, at the original asking price,
which the realtor based upon an appraisal. The owner dropped the contract
and has been trying to sell on his own ever since, dropping the price three
time now. Another house came up for sale a couple weeks ago, and sold
already.

It has been interesting to watch how things have gone here recently. Real
estate appraisers have come in with some amazing values here, but they are
not supported by the actual market. One seller, who tried to sell and then
rented instead was given an appraisal of $400,000, but could not find a
buyer at $325,000. They decided to not sell the house at this time because
they could not get what the house was worth. Same deal for the house
currently on the market, the appraisal was very high, the market has not
supported the price. And of course, high appraisals would mean high profits
for owners, which they become  attached to.

The house that sold quickly, sold at almost $100,000 below the appraised
value. The owners were smart enough to recognize that appraisals do not
account for the community limitations in the marketplace but are based upon
outside market conditions. They also did not have inflated ideas about how
much profit they could get, and instead sold at a very modest mark up (10%
more than they paid for it five years ago).

There is an interesting dynamic going on with this, unique I think to
Sharingwood. Since we are custom family homes on lots, the "market" is
booming and prices for such homes outside of community are high. The logic
then extends value beyond appraisal because of community amenities are value
added in theory. However, relative to the overall housing market, few people
are in the market for community living, and there are lots of cohousing
homes for sale in the Seattle area. Since we are very expensive, and located
well outside the city, and have a rural feel and look, we are finding that
competition from other cohousing units is keeping interest here low. It has
also been interesting (and disappointing) that apparently since we are so
different, other groups trying to sell units have discouraged people from
even coming out to see us. One woman who came on a tour, told me two days
ago that she was told not to come out to Sharingwood, we were "not a
cohousing community, and that we were all rich people living in isolated
mansions". An interesting perspective, but not one supported by reality.
Obviously this kind of message  from another cohousing group does not help
us.

So between unrealistic owner desires for high housing equity profits, low
demand, and high competition, we are not selling units, or even finding
renters for rental spaces that were once extremely competitive.

As more homes come up for sale in the future, it will be interesting to see
how owners grapple with a reality of value and market. It will also be
interesting to see the effect of not being able to sell at high prices does
to buyers, who come in with the notion of free markets and discover that
buying a high priced house here may mean they later might have to sell later
at no profit, or even (gasp!) a loss.

One of the economic fears about cohousing for buyers is: can I sell this
place I live in if it does not work out or I have to move? The reality here
now seems to be, yes, but don't expect a huge profit.

Rob Sandelin
Sharingwood  two places for rent, one for sale
www.sharingwood.org

-----Original Message-----
From: cohousing-l-admin [at] cohousing.org
[mailto:cohousing-l-admin [at] cohousing.org]On Behalf Of Lynn Nadeau
Sent: Tuesday, September 03, 2002 3:12 PM
To: cohousing L
Subject: [C-L]_Re: realtors


In Port Townsend Washington we have a local title company that has
handled all the paperwork for both project-to-first-owner sales, and
owner-to-buyer direct resales. Plus the buyers did their own arrangements
with financing. It has seemed to work fine.

Some resales have used realtors. Observations:

House #1 was sold some years back via realtor on behalf of an estate.
This led to problems. The family thought elderly mom was a kook and
disapproved of her. After she died, the family members padlocked the
house and then later sold it overnight, at a dropped price, via a realtor
who knew nothing about cohousing. Though the RoseWind documents are
attached to the deed, the buyer had not come to us seeking community and
hadn't met any of us personally. She gave it a try, but it was not a good
match. After a period of nonparticipation and upsets, she re-sold, using
the same realtor, who once again wasn't being told how wonderful
cohousing was. Again, the realtor majorly downplayed the cohousing
aspect. Fortunately, we got lucky and the next buyer tried us out and is
now an active participant. Lesson: Those who are selling are sometimes
the least likely to extoll what a great experience cohousing is, and some
realtors want to sell and it matters not to whom.

House # 3 is for sale currently. The owner was not unhappy, just wanted
to move to a farm with horses, which she did. The realtor is someone who
is more familiar with RoseWind and thinks it's great. The owner made a
deal with the realtor that if a contact came via cohousing connections,
we would get a cut of the commission. I have noted, however, that even
when dealing with people we sent her, the realtor has shown them a bunch
of other properties in town, as well. If they come directly to us, we
only show them what's here.

House # 4 is the second one for sale currently. The sellers chose - for
unrelated reasons - the same realtor who sold house #1. Even with these
sellers, who have good things to say about cohousing, the realtor's
publicity rather downplays it.

We do of course meet and greet and orient potential buyers, whether they
show up via realtors or personal or cohousing connections. Some of those
who come via realtors ask questions like, "They don't tell you what to
do, do they?" "What's the minimum amount of participation?" I do my best
to cheerfully tell them it's wonderful, but a lot of work, and that
though we don't require participation, we definitely *expect that each
person will pitch in with some regularity. And that to join *despite the
community aspect would be paying extra for no useful purpose.

Other houses and lots have been sold via our own Outreach team, matching
inquirers with properties that are, or become available.

So the jury's still out here, on using realtors, but we've seen some
drawbacks.
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  • Re: realtors Lynn Nadeau, September 3 2002
    • RE: Re: realtors and markets Rob Sandelin, September 6 2002

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