The Market
Mark Bisnow: Where do you think we are in the real estate market? Is it going down? Is it flat?
Karen Briscoe: I know the buyers are buying because I lost two contracts in the last two days in a bidding war! If you look at January, February and March, we’re pretty neck and neck with last year on the number of houses that have gone under contract in those three months. But what’s different is that we have huge inventory and so buyers can be much more selective.
Bisnow: So days on the market is longer than a year ago?
Briscoe: Double what it was last year.
Bisnow: Jonathan, how is DC looking?
Taylor: We’re seeing a tremendous improvement in March with properties going under contract.
Bisnow: How about all the condos that have poured into the market? Would you say the condo market looks overheated and overbuilt?
Taylor: It appears that way. Although March was really up in condo sales. It was the second-highest condo sale month in the history of DC.
Bisnow: What about single-family houses in DC?
Taylor: In the last month I have seen a huge increase in townhouse sales in Dupont, Kalorama, Columbia triangle and Adams Morgan. These townhouses in the $1.5 million to $2 million range have been selling quite quickly. We just sold one on the 1700 block on R Street listed at $2.25 million.
Bisnow: How about the other areas of Northwest?
Taylor: It is definitely a little sluggish and very price sensitive. People aren’t afraid if they go away and don’t make an offer on the house that it won’t be there.
Bisnow: Melinda, what are you seeing in terms of current trends?
Estridge: Houses are staying on the market longer – we have a glut of new homes in the $1.5 to 2 million range in Bethesda where builders are not able to sell them because there are so many choices. If it is slightly above market then you might find the right buyer within 30 days. I tell the seller if you have eight qualified people for your property than there should be a buyer for your property and those statistics work over and over again.
Bisnow: Are you seeing differences in the high end between Chevy Chase, Bethesda and Potomac?
Estridge: Not so much. Inventory in Chevy Chase is pretty low for certain kinds of product, so if you have something that comes on the market that is a special home buyers are all over it with multiple contracts.
The Price is Right
Bisnow: How do you arrive at the price for a client’s property? And how do you persuade them if they don’t agree?
Briscoe: I would have to say a lot of it is viewing properties. I see as much as I can – it is a little bit of gut reaction. You have to know what your wildcard is on a property. Does it sit on a lot? Is it close to the street? A busy street? How updated is it? Everybody knows it is a buyers market… price is everything. If it is priced right it is going to sell. If people understand pricing strategies they are much more likely to price where they need to be.
Bisnow: Do you have a formula that you wait a certain amount of time if something doesn’t sell before you have your heart to heart with the client?
Briscoe: If I know if it is overpriced then I try to do it within one week.
Taylor: Get feedback on why buyers aren’t making offers. Sometimes it works and the seller gets it, and although they wanted a certain price they realize it’s not going to happen. One of the lines I hear a lot (from sellers) is ‘let them make an offer’. Well, they aren’t making offers. People are far less prone to make offers now.
Briscoe: We are out there in the market and know what buyers want. It’s a gut thing. If 20 people come to the open house with agents and they are serious buyers and they haven’t come back for a second time, then we know.
Bisnow: So if a qualified buyer doesn’t come back for a second time…
Briscoe: We haven’t made their cut list and that tells us something.
Bisnow: So it’s telling you to talk to the client about pricing.
Briscoe: Right. Then we will do comparables to try and show them what their house compares to and what other houses our selling for. If they are really trying to sell they will adjust.
Bisnow: So you can smoke them out and tell if there serious.
Taylor: Right. And nothing is carved out in stone about what a house will sell for. So every now and then you take a chance. Then you can evaluate the feedback.
Bisnow: Do you lose valuable time and momentum if you price wrong at the beginning?
Taylor: Absolutely.
Estridge: People are competing. A perfect example is a home on Bradley Boulevard we priced at 1.2 million and then dropped to one million. It opened up a whole new price range of buyers and had three contracts that drove the price up to 1.1 million.
Bisnow: Do you ask other agents to drop by a house and fill out a form and let you know what they think about a home’s value and do you tend to get a consensus about a particular house?
Briscoe: You have to ask the right persons.
Taylor: We just did that in-house last week and we were asking people from other companies too… people who are professionals in the market generally see eye to eye on this. A good agent will trust a lot of other agents to come in assist pricing it.
Bisnow: What about sellers who won’t budge?
Briscoe: Sometimes you have to question people. If someone tells me their house is worth a lot more than I have to say why is that? If you put all the information (appraisals and comparables) in front of people they may tell you what they think they want, but they know deep down what it’s worth.
Curb Appeal
Bisnow: Suppose you are thinking about putting your house on the market for 1.5 million and above. What things are reasonable for you to do to maximize the appeal of your house?
Taylor: It depends on what your daily maintenance patterns are with your house. For some people it is virtually nothing; for most people it’s a lot of work cleaning up and putting clutter away.
Bisnow: Should you take out 50 percent of the things from you house?
Estridge: That’s a very good idea for some people. Sometimes it’s 90 percent – including furniture. Just move it on out.
Briscoe: That’s what Pods are made for. Drag it away.
Bisnow: Would you paint it, automatically, if it hasn’t been painted for five years?
Taylor: Yes. Or if the colors are outrageous.
Estridge: I have used interior decorators to help clients understand what they need to do. They meet with the clients to introduce some cleaning and paint colors. It’s worth it to get that perspective on everything.
Bisnow: Would you hire a handyman for a month to go around and fix everything little thing in the house?
Estridge: We do pre-inspections and get a pretty good idea of what is wrong with the property. Then you choose what to fix and what not to fix so you essentially have an asset sale.
Bisnow: If your front lawn has lots of weeds but you’re going to put it on the market in a couple of months would you dig up the lawn and put in sod? Just go to that sort of trouble so that it has immediate curb appeal?
Taylor: Makes a difference. Curb appeal is critical.
Estridge: If you price it low enough they might overlook weeds.
Briscoe: Yeah but if you are in a $1 – $2 million price range I don’t see how it would be acceptable to have a house with weeds.
Taylor: You’re selling a lifestyle as well as the property
Briscoe: People want to see themselves living there.
Estridge: And it needs to be sexy
Bisnow: What about updating interior features like dated kitchens and baths?
Taylor: It’s worthwhile if at the end of the renovation your house is worth that investment plus a substantial profit.
Bisnow: If it’s a really high-priced house would you advise against renovating because the people who can buy that particular house would have their own taste and would end up ripping it out?
Taylor: Yes.
Estridge: I hear more people in that price range say I would rather have nothing done so we could tear it out and do what we want. Kitchens and bathrooms are very particular for people.
Briscoe: If you get a $3.5 million dollar house and it has an amazing kitchen and bathrooms that have been done tastefully then you would pick that over a house that is tired. Renovations take energy and time.
Bisnow: What should people do if they want to live in the house for a year or two and then sell?
Briscoe: Paint, redo floors, new carpet.
Taylor: Proper master bedroom and closet space. A lot of times in some of these renovations they would blow out the kitchen or family room in an older house. Let’s say in Northwest a buyer is looking for that $1.5 million price range. But then it’s got an old master bedroom and a bathroom that two people can’t stand in at one time and it doesn’t work for the person that has the $2 million dollars to spend
Estridge: Proper landscaping. You have to drive up the appeal to make it more inviting.
Bisnow: And if you do the whole redo to perfection then spending all the money pays off?
Taylor: Yes. It’s not that hard to do it tastefully. It’s amazing how many people personalize things too much – it just eliminates others from liking it.
The Closing
Bisnow: Are you seeing many buyers who just have a checkbook and pay all cash on the spur of the moment? We love it and we’re getting this house, or is that kind of yesteryear?
Taylor: Every now and then I get a good one like that.
Briscoe: I think it is a little bit of falling in love. When I’m with a buyer and they love it we have to just figure out how they are going to get it.
Bisnow: You know people like glamour. What’s the highest end thing you’re dealing with? Anything to get excited about?
Taylor: We have some loft-style condos above what used to be City’s Restaurant (now Left Bank in Adams Morgan). The properties are listed for $2.4 and $1.8 million and both of them are being pursued right now. We have a house in Kalorama at 1824 23rd Street that we have a great new price on. It started at $3.85 million and been on the market for about 6 months and just got to $2.995 million. It would have been history if had we started there – as we said high prices diminish the enthusiasm.
Estridge: I have a great town home in Gaithersburg. It’s probably about $1.6 million and is not that huge, but it is a very interesting property because there are not many contemporaries around.
Bisnow: Fantastic, it’s a wrap!!
