I remember meeting with a seller who’s listing with another agent had expired. I asked the seller how the traffic had been. “Great!” the seller exclaimed. “We have had an open house every weekend, and we are getting tons of traffic!”. “How about showings by Realtors?” I asked. The seller looked puzzled. “Well… er… not too many” was the reply. “Okay, so what has the feedback been from the open house traffic?” I inquired. Here comes the puzzled look again. “Well, er, I’m not really sure. I think they all liked it”. “Then why no offers?” I asked. The seller had no answer.

In real estate, not all traffic is equal. Showings from brokers is the best traffic you can get. And Open Houses can be fools gold. They often trick a seller into thinking they are in the game, when in reality they may have no chance of selling. In fact, if you want to get a real read on where your house is in the marketplace, stop doing open houses.

The difference is this. In order to see a home that is for sale but not open on weekends, the potential buyer has to take some action. They have to contact the listing agent, or contact their own agent, or send an email, or take another step to arrange a viewing. And each step is a litmus test for the buyer’s motivation level. So as a seller, when you get a showing from an agent, at least you know there was some effort involved in the decision to see your home.

On the flip side, you don’t need to take any action to see an open house. You don’t even have to be in the market to buy, and many visitors are in fact not buyers. You don’t have to be qualified, have a down payment, or a credit check. Open house visitors can come in, wander around aimlessly looking at pictures, gathering decorating ideas, and just plain kill time. I am convinced that many people who come through open houses are just plain bored, and looking for an excuse to get out of the house. Not the type of viewings that are going to result in an offer any time soon.

The other compelling reason not to do open houses, but rather aggressively seek showings from agents, is that you get far better information and feedback from the agent showing. The listing agent has the opportunity to interact with the showing agent to find out what the buyer thought, what they liked, any concerns or negatives, and in general how your home ranks in the mind of the buyers. This is very valuable information. At open houses, even if you make a determined effort to solicit feedback from visitors as they leave, you are often greeted by blank stares or shrugs, or puzzled looks that seem to ask “why in the world would you care what I think about this house… I have no intention of actually buying this or any other house”. Not the type of market information that has any value. And asking an open house visitor to sign a guest register seems to be like asking them to fill out an IRS form. They scribble down illegible names and fake email addresses. In fact, just last month I discovered to my amazement that “Elvis Presley” and “Jimmy Carter” had recently visited my open house. Funny, I think I would have remembered them.

Okay. By now many of you are saying “yeah, but there are buyers who come through as well”. And you would be correct. However, if they really are buyers, and they have some level of interest in the house, and it is not being held open, they will take another action to set up an appointment to view the house. So they will see the house, and the sellers agent will actually have a chance to extract information and point out the benefits of the house to the potential buyer, either directly or via their agent.

So back to my premise. The seller is probably thinking if you stop doing open houses, you might not have any showings at all. My point exactly. If you are not getting showings from agents, then that is telling you something… namely, buyers are not interested enough in your home to take the minimal steps involved in setting up an appointment to see the home. You probably need to change something… price, condition, staging, etc. You are not getting dozens of visitors, but you are getting a real indication of how your home stacks up in the market. For example, I have a listing that has received 4 offers in the last 2 weeks, and we have not had one open house. I did receive a number of calls from people asking if it was going to be open. And I was able to set up appointments for a private showing with the serious parties, where I had an opportunity to actually show them the house and explain the many features and benefits without being interrupted by some random visitor saying “excuse me, do you know where they got this painting? I LOVE it!”

So if you want to get serious about selling your house, stop doing open houses. Unless of course you want to brag to your neighbors that “Robert Redford” came through.

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The real estate market in Pleasanton CA in July looked a lot like the market in June. The activity level is remarkably steady, though not brisk. Inventory is up slightly, especially in the under $1 million price bracket. But for now the market seems to have settled into a slow but steady pattern. The good news is that there are sales occurring… 45 pending sales in July to be exact, down slightly from 49 pending sales in June. The bad news is that there are now 269 houses on the market, which is up from 243 houses available at the end of June.

For sellers this means you will have to be competitive with other homes on the market. You need to be one of the best values in your price range to attract the attention of buyers, which is no easy task. In fact, buyers today have an attention span seemingly measured in hours or even minutes. “Yes, I kind of like that house” in the morning turns into “It’s okay, but let’s see what else is out there” by mid-day, and by evening they have completely moved on. For buyers, this is a prime opportunity to get a great house in a prime neighborhood for prices well below the peak of 2005. So here is what the market looks like at the end of July (click on graph to enlarge)

In the under $1 million bracket, inventory increased to 146 homes for sale at the end of July, up from 120 at the end of June. There were 33 pending sales in July, which has remained fairly steady (30 in May, 32 in June). There is a 4.4 month supply of homes on the market now at the July sales rate (click on graph to enlarge)

In the $1 million to $2 million bracket, inventory has crept up slightly, with 33 homes on the market at the end of July, up from 32 at the end of June, and 30 at the end of May. However, sales have declined, with 9 pending sales in July, down from 14 in June and 20 in May. (Click on graph to enlarge)

In the luxury home bracket over $2 million, there were 36 homes on the market at the end of July, down from 42 at the end of June. Some of these were the result of price reductions, and some sellers simply decided they no longer wanted to play in this market. There were 3 pending sales in July, which is the same level as May and June. Overall, conditions in this price bracket remain sluggish, and there is currently a 12 month supply of homes at the current level of inventory and sales. (Click on graph to enlarge)

I expect inventory to edge up slightly as we get towards the end of Summer, and sales to remain fairly stable at current levels. Still a great time to buy. And if you are going to sell, you had best price your home to reflect the current market, or be very, very, very, very patient.

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I love this sign, courtesy of the Knoxville News Blog. With so many “bottom feeders” out there posing as buyers, it is refreshing to see someone tell it like it is. I know everyone wants a deal, and I am generally good with that. But it gets annoying getting calls from people asking if the sellers on your home that is listed (correctly, by the way) at $899,000 will take $650,000. Sure, as soon as John Lennon plays his next live tour (Click on image to enlarge)

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So now that everyone has spent the last decade in a frenzy to put in granite counter tops, the New York Times is reporting that there is apparently an elevated risk of radon contamination from some of the granite being used in homes. Great. So my half dozen trips to the granite dealer to pick out the “perfect” slab, the endless discussions about which bull nose edge to use, and the decisions about where to put the seams and whether to do an over-mount or under-mount sink have potentially added to my long (and growing) list of threats to my health?

Somehow, this takes all the joy out of it. For one thing, I think it would be awkward at Thanksgiving trying to carve the Turkey in one of those Haz-Mat suits with the oxygen tanks, and screaming at the top of your lungs “Aunt Phyllis, do you like dark meat or light?”. Or having friends over for a wine and cheese party in your new kitchen, and then promptly treating your departing guests to a Karen Silkwood shower in the foyer before they leave, complete with flashing red lights and sirens. It seems like a lot of work. Maybe I should have just put in tile after all.

Now before you go out and rip out all of your granite, it looks like the risk is relatively low in most cases:

Allegations that granite counter tops may emit dangerous levels of radon and radiation have been raised periodically over the past decade, mostly by makers and distributors of competing counter top materials. The Marble Institute of America has said such claims are ?ludicrous? because although granite is known to contain uranium and other radioactive materials like thorium and potassium, the amounts in counter tops are not enough to pose a health threat.

Indeed, health physicists and radiation experts agree that most granite counter tops emit radiation and radon at extremely low levels. They say these emissions are insignificant compared with so-called background radiation that is constantly raining down from outer space or seeping up from the earth?s crust, not to mention emanating from manmade sources like X-rays, luminous watches and smoke detectors.

Still, if you are unsure, it might be smart to get a radon test if it will help you sleep better. Or line your kitchen walls in lead. But one thing is for sure… granite counters still look the best!

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The big news this week has been the announcement the the Federal government will stand behind Fannie Mae and Freddie Mac, and essentially step in to bail them out if necessary. This is good news for the jittery housing market and certainly the battered mortgage industry. But coming after the Fed-brokered sale (don’t call it a bail out!) of Bear Stearns, it occurred to me that I am starting to get this capitalism thing. It seems now that capitalism can be boiled down to one simple thought… take risk, and make great money when you succeed, and when you fail, the government bails you out.

I want to be the first to go on record as saying we need a federal Realtor bail out plan. Oh sure, you laugh at first, but Realtors do so much more than sell houses. And with all the trouble in the housing market, Realtors are getting out of the business in record numbers, which is having a huge impact on both our economy and our society. Think of all of the things Realtors contribute:

* We send you all kinds of neat recipes in the mail. Who hasn’t been frantically searching for a desert recipe for a party, when suddenly a card arrives in the mail from a Realtor with recipes like “Peggy’s Apple Pie” or “My Favorite Mint Chip Brownies”.

* We drop off pumpkins at Halloween. Talk about a service to society. Nothing says inadequate parenting like failing to buy pumpkins at Halloween. And with gas at $5 per gallon, it seems silly to waste all that gas with a trip to the store. Problem solved, thanks to us Realtors.

* We put flags out for you on 4th of July. Thanks to us, you don’t have to hassle with putting up a flag. We put thousands of them up for you, and every house in the neighborhood gets a cool mini flag in the front yard.

* We purchase ads on those stupid little dividers at the supermarket check out line. Who else is going to do it? I doubt I’ll see a Bear Stearns ad on one anytime soon.

* We keep you in shape. Sure, you could go for a nice relaxing stroll on a Sunday afternoon, but it is far better for your agility and flexibility to have to dodge open house signs on the sidewalk. And since they are about the right size, you might even consider doing some hurdles while you are at it. It seems annoying now, but you will thank us later. Trust me.

* We keep newspapers in business. If it weren’t for real estate advertising, newspapers would be out of business. Who doesn?t appreciate that cute little ad with the overpriced house, the picture of the Realtor with their dog, and that catchy call to action “This One Won’t Last!” (of course it’s been on the market for 7 months) costs an arm and a leg. Sure, I know the public does not look for homes in the newspaper, but we are team players. 40% of a real estate company’s revenue is a small price to pay to keep these papers alive for the greater good of all.

* We provide free education about real estate to the public. How many times have you been treated to an obnoxious, in-depth conversation about real estate by some Realtor in line at Starbucks or the grocery store. At first you think they are talking to you, but then you see that earpiece with the blue light on it, and you realize they are talking on their cell phone. “Yes, I think house prices are going up. Look at the house on Maple Street. It sold in like 4 months!” or “let’s talk about how we can make this deal for you”. The public would have to pay top dollar for this kind of inside information.

* We fund a large portion of the revenue from traffic tickets. Driving while reading MLS printouts, parking on the wrong side of the street, rolling through stop signs because we are late for our open house… the list goes on. Simply put, without Realtors, your taxes would be higher.

* We give you access to your neighbor’s houses. Be honest here, how many times have you gone to an open house in your neighborhood just out of curiosity? How else are you going to snoop around your neighbor?s home without feeling like a voyeur? We provide you with the perfect excuse to be nosy… almost like a Desperate Housewives home tour service.

* We single handedly keep the Success and Coaching industries in business. I get probably 147 invitations to free seminars each week. Without Realtors, these people would starve, causing a massive ripple effect economically, and more importantly to the nations psyche since lately the only positive news is coming from gurus like Tony Robbins, the guy with the big teeth.

These are just a few of the many benefits that Realtors provide to society, and I for one think the Federal Government should immediately implement a program to prop up the Real estate brokerage industry. Since they like acronyms, we could call it the RAP, or Realtor Assistance Program. As a side benefit, I could finally tell my teenage daughter how much I love RAP.

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