On this week’s show, Karl is joined in studio by Alexis Weigand of Alexis Weigand Real Estate Group. She shares some of her insights and gives some great tips on ways to sell your home for top dollar.
Karl Eggerss: Hey, good morning everybody, welcome to The Eggerss Report, it’s your investing playbook. My name is Karl Eggerss, President/CEO of Eggerss Capital Management. We are a registered investment advisor, and we do this podcast every week to keep you up-to-date on what’s going on in the markets, to educate you, and to bring you guests from time to time in different fields, experts we believe in these particular fields.
Karl Eggerss: Today we do have a guest, which we will get to in just a minute that is here in studio. And it’s in the residential real estate area, so we’re going to be talking about things that you really should look for when you’re looking for a realtor from the selling side of things, and, so, we’re going to have Alexis Weigand in here who is head of Alexis Weigand Real Estate Group. Just a few minutes for that.
Karl Eggerss: First let’s get to what’s been moving the markets this week, because it’s been a real drag, the last couple of weeks especially with the Dow Jones. We had this eight-day losing streak. Look the bottom line to this stuff, we’re going to get to what are some of the movers this week, but the bottom line is, we are still seeing an overhang from a second round of tariffs kind of going to the next level.
Karl Eggerss: We hared Steven Mnuchin a few weeks ago saying, “It’s just a spat and no big deal,” and then all of a sudden … and we also heard that China was conceding on some things, and then all of a sudden it seems like something went awry, because there was this back and forth like a tennis match, 50 billion here, 200 billion here, “we’ll up your 50, we’ll see you 200,” that type of mentality. Therefore, the stock market has sold off because of that.
Karl Eggerss: Remember a lot of these tariffs still have not been implemented, this is still negotiation. However, it’s negotiation that we are seeing out in front of us and nobody likes it, of doing the hard thing, and, so, this is really no different than what we saw really a few months ago, except it feels like we haven’t made any progress. It felt like we were making progress and now we’ve reverted back a little bit and kind of gone backwards.
Karl Eggerss: I think the stock market and investors are going, “We don’t want this.” Let’s see how we get through this, but, of course, the Dow did have this losing streak and that was really kind of the dominant theme for most of the week. We did see on Friday, of course, the OPEC meeting. We heard about that the OPEC ministers did agree to a deal, they’re going to be likely adding 600,000-800,000 more barrels a day to the market, so production hike. It must have been less than what the market was expecting, because we did see oil jump on that, and oil ended up having a pretty good week after really selling off the last few weeks.
Karl Eggerss: We’re kind of neutral on oil. We have some energy stocks in our dividend plus strategy. We did have an E&P ETF, exploration and production ETF for a long, long time that we exited a few weeks ago in our aggressive strategy. We’re probably neutral on energy at this particular time.
Karl Eggerss: I did talk to one hedge fund manager this week, who specifically trades in the energy markets, and he said, “Look, this is a buy the dip market until this big IP out of Saudi Arabia,” which maybe that’s in 2019, we’ll see.
Karl Eggerss: There’s still a bullish tone to the market, but we did have a pretty good pullback in the last few weeks with energy, and some of those stocks pulled back, as well. One of the big moves is the Dow Jones composition changed a bit. We wrote an article on eggersscapital.com, which, if you want to go to our blog go to ggersscapital.com, should’ve given that out at the beginning of the show. Our telephone number, of course, is 210-526-0057, but if you go to our website there’s a blog button, there’s also a financial education button. Basically, both go to the same place, which is, everything there that we are doing, in terms of articles, podcasts, any video, it’s all put on that page.
Karl Eggerss: There’s an article we wrote called What Were They Thinking? Basically, S&P Dow Jones Indices, who makes these changes announced on Tuesday that General Electric was going to be removed from the Dow Jones. Now, full disclosure, we own General Electric in our dividend-plus strategy.
Karl Eggerss: It’s no secret that GE’s been struggling, so this was known for a while, or at least people thought that they would probably get removed for a while. It’s the last remaining original member of the Dow Jones. It was kind of a big deal, but effective June 26th, Walgreens, Boots’ alliance, which is Walgreens, will replace GE.
Karl Eggerss: I didn’t have a problem with that, okay? The Dow Jones has been in existence since 1897, it’s really made up of 30 industrial companies that are meant to represent the economy, represent the stock market, and, for the most part, it does a pretty good job of doing that.
Karl Eggerss: If you look at the holdings in there, it has a little bit of everything in there. However, the article we wrote goes on to say that, number one, if you own GE don’t freak out that it’s being removed, because the last four stocks, we did some research, the last four stocks that have been removed from the Dow Jones have averaged over a 51% gain the following 12 months.
Karl Eggerss: If you look over even after the next three months, the average gain was almost 18%. A lot of the companies that have been replaced, they tend to go up and become that selling pressure, it’s kind of the last capitulation is when they get removed out of the Dow Jones.
Karl Eggerss: Some companies have been removed because they’ve gone bankrupt, or they merge, or whatever the case, but the last four were just a swapping out. I didn’t have a problem with that, and both companies, by the way, GE and Walgreens will go on with their corporate lives, they will move along. Neither one will be really impacted by this, but, again, I would give the edge to GE, given history, in terms of it being maybe an outperformer.
Karl Eggerss: Here’s the deal, I didn’t have a problem with that. What I did have a problem with was the fact that they took out GE and put in Walgreens. Now, Walgreens is actually an interesting company, probably undervalued, but the majority of the revenues is in the prescription business, and we know that’s kind of up in the air, especially, with Amazon coming in and maybe disrupting that area, but, why didn’t they put Amazon in the Dow Jones?
Karl Eggerss: Are you telling me out of the 30 companies that represent the economy, and the stock market, are you telling me that Amazon didn’t … didn’t warrant being in the Dow Jones? Of course, it did, it’s thee dominant retailers. Wal-Mart’s in there, whose probably the second dominant retailer, but Amazon’s in there, it’s a diversified company, by the way. They got video, they have distribution, they have all kinds of things they’re doing, not just retail. Why didn’t they get put in there? It’s because of the way the Dow Jones is calculated.
Karl Eggerss: The Dow Jones is a price-weighted index, which is completely silly. Basically, if you have a high-priced stock you can’t get in there, because you’re going to control too much of the day-to-day movement on the Dow Jones. So, Amazon’s stock, around $1,700 is too big. What’s silly about this is all they had to do is a 10 for one split, and they could’ve been included in there. It wouldn’t have changed the value of Amazon, but it would have been a more balanced approach. Isn’t that silly that all they had to do was do that?
Karl Eggerss: This point-weighted system is silly. If you want to look for things like market-weighted even makes more sense, that’s still a popularity contest, in terms of having this weighting. I like equal weight or some fundamental bent, but, having said that, the Dow Jones point-weighted has been there all along, I don’t think they’re going to change it. But because they don’t I don’t think they’re getting a true representation. Again, it’s not bad, but it could be a little better.
Karl Eggerss: I think Walgreens didn’t make sense to put in there versus putting in something like Amazon, but they simply couldn’t do it. That was kind of … That was one of the bigger things this week.
Karl Eggerss: We did see energy, of course, most of that coming on Friday outperform this week. We saw some of the things like Russia, and even some of the steel stocks bounce towards the end of the week, but, for the most part, energy … You still have the safe trade, utilities and some of those areas. Retail is at a new high. Retail has been really, really strong. Remember, the death of retail, which was overstated, and now, money has come back into that sector in the stock market.
Karl Eggerss: Biotech’s been another interesting area. I wouldn’t look at it today, but it’s been in the up-channel for a long, long time. We had it for a while, we made good money, sold it, and it’s still moving higher. Watch biotech, maybe the next leg down would be interesting to look at.
Karl Eggerss: Kind of some things that got beat up, of course, cryptocurrency’s still getting beat up. We had copper, uranium, semiconductor stocks, which look vulnerable to me, that they may be forming some type of top here, so watch semiconductor stocks. They’ve been taking a grandfather phrase “hot as a pistol,” but they’ve been kind of stuck. If you look at the SMH, which is the VanEck semiconductor ETF, it’s been stuck kind of around this 110 area for a while, 110, 108, and so it’s been there about three or four times. It may be starting the process of rolling over, so watch that, because that’s a big deal.
Karl Eggerss: When you start looking at the companies in there, and you start looking at how strong they are. Technology has just been a real outperformer for various reasons. I kind of feel like we’re in the dot com 2.0, not to the extreme, but we really are seeing people paying for growth at whatever price.
Karl Eggerss: Instead of growth at a reasonable price, which you’ve heard of before, this seems to be growth at whatever price. That will come back to bite people. If the growth slows down those stocks will get slammed. On the flip side, the companies that are a good deal right now continue to be a good deal and aren’t getting rewarded. The way to play that probably is to have a balance of one of each, some of each, but the safer route is to, yes, buy those value companies.
Karl Eggerss: Again, maybe balance it out, but that is the big divergence going on right now, is still this growth versus value. We’re still seeing the international markets because of the dollar, because of the tariff talk get hit, that is still a cheap market, cheap markets, but they’ve broken down a little bit. You’re going to have to have patience with the international markets, but I still firmly believe that it offers a better, safer deal than the U.S.
Karl Eggerss: It doesn’t mean that we don’t want the U.S., it doesn’t mean we don’t own the U.S., it doesn’t mean that the U.S. isn’t going to continue to outperform for a while, but if you stand back and look at this, international is still a better deal, but there’s some overhang, right? We have Brexit, which you’re hearing a lot more about now again, you have all these international markets with the tariffs and so forth, and so those things, and the dollar going up. Those things have really hurt international stocks, but, again, this is the time for me to … If you are in some type of asset allocation to take some off the table from U.S. and keep buying international, keep plugging away at international. I think you will be rewarded over the long-term. Not over the next month, not over the next three months even, but over the next several months and years. I think you will be rewarded.
Karl Eggerss: I also feel that way about commodities in general. I think commodities will go on a run again. We’ve had a big dollar move, and, so, because of that we’ve seen that commodities have stalled a little bit. They’ve held up pretty well, given the move in the dollar, and they’ve been kind of in an uptrend since the middle of last year, so for about a year. They’re on the lower end, so take a look at commodities. There’s lots of different ways to play that as a diversifier.
Karl Eggerss: Just keep in mind that if you go the ETF route, do you want to get a K1? Do you want to get a 1099? How big in each area are these commodities? Are you overweighted to oil or gold? Really do your homework on which commodities ETF to own, and own a sliver of them for diversification. That’s a great way to diversify I think in this market.
Karl Eggerss: As I mentioned, we have in the studio today, Alexis Weigand, and she’s the Founder and CEO of Alexis Weigand Real Estate.
Karl Eggerss: … Weigand. She’s the founder and CEO of Alexis Weigand Real Estate Group and Associate Broker of Keller Williams. Welcome to the podcast.
Alexis Weigand: Thank you.
Karl Eggerss: I think this is your first podcast, isn’t it?
Alexis Weigand: It is.
Karl Eggerss: We’re going to have you back for a few more, because I have personal experience with your work, and I wanted to bring you on, because I’ve had all different types of people in the studio. I’ve had CPAs, I’ve had Estate Planning Attorneys, I’ve had Real Estate Investors, but I’ve never had somebody that sells real estate and does it, and is pretty much from my vantage point, is at the top of their game. I know you deal in not just the South Texas area, but a lot of different areas. What I want to talk to people today about is really some tips on nowadays with the internet, with technology, and with TV Shows, people believe they can do it themselves, and I think some people can.
Karl Eggerss: I wanted to talk to you about, today, what’s the purpose or the point in using a realtor when we can all go look online. We can kind of see the market, what’s going on. Again, we’ll get into my personal situation, which I like to share. I’m pretty transparent with my audience about my personal situation, because I think it was an interesting transaction, because I had some experiences in the past that weren’t so great. Then once we kind of transitioned and did this with you guys, I saw a different process. We’re going to get into the process of what makes your group different, but the for the audience out there, let’s talk about first, again you can go do for sale by owner, we see the signs in the yard.
Alexis Weigand: Yep.
Karl Eggerss: Then we see some that just say “Hey, list it with us, it’s a flat fee, and we get it on MLS.” What’s the difference of going on MLS with you versus MLS with just some group that you pay a flat fee?
Alexis Weigand: Yeah, that’s a great question. I think that if you go online, statistics say that over 86% of people that actually try for sale by owner actually end up hiring an agent. When you’re looking, a lot of people that try and do the for sale by owner, they’re thinking about the transaction in terms of the commission paid out. Which if you’re going to look at a standard percentage, a lot of times that could be 6% or 7%, depending on your area. Usually it’s halved by who brings the buyer and then who’s representing the seller.
Alexis Weigand: Really, if they’re a for sale by owner, they’re still going to want to pay out half of that commission. They’re only going to be saving half of it. Let’s just talk in round numbers. If that say 3%, really, that person who’s going to be knocking on your door seeing that for sale by owner yard in your sign, they’re going to be expecting a discount, right? They’re not going to be willing to pay retail. Both of you can’t have that savings, the buyer.
Karl Eggerss: Do you think those homes get kind of blackballed? I mean, when realtors drive by and they see that for sale by owner, are you thinking, “We’re not going to play ball with that homeowner?”
Alexis Weigand: It’s a couple things. Sometimes it’s liability as well and a lot of times it’s just attracting the buyer that is just looking for an absolute discount. It’s not really the qualified motivated buyers that you’re wanting to work with.
Karl Eggerss: Yeah. Yeah, and it’s … I think, as I learned, and probably doesn’t know, but I recently went through a home transaction. I lived in a home for 11 years and then recently moved. I went through the transaction, I’ve been through transactions before buying and selling homes, but it was a good reminder of all those steps that it takes to sell a home, and I think people aren’t reminded of that until they … If they’re doing for sale by owner, it can be a difficult transaction. Sometimes it can be easy, let’s face it. I mean, cash buyer, whatever the case. But for the most part, you’re going to have to market your home, but going through that process of all these steps and layers of inspections and you name it.
Karl Eggerss: Your company did an unbelievable job of keeping us up to date on what those next steps would be, so it was kind of giving us crumbs so it wasn’t so overwhelming. It was like, “Okay. In the next two days, expect this. Even when you move, make sure you don’t do this or you do that.” That was really helpful and I think when you do for sale by owner you miss that. But I think even going back to what you were talking about earlier, yes, people do that to save money. I mean, that’s why they are doing for sale by owner. They don’t want to pay the commission. But I guess it’s sometimes, you get what you pay for. I mean, when you talk about home price, what you’re selling it for, what you’re asking for, where to price it, that’s probably a huge help from a realtor.
Alexis Weigand: Pricing is extremely important. Even though you can go on Zillow and get the Zestimate, which I think statistics say can be up to on average 18% wrong. We have the technology and the tools that we pay for that give us access to even more data to help consult our sellers on a price of which will cause the house to sell at top dollar. Our goal is to net our clients the most amount of money. Similar to your business, our business is primarily from repeat referrals, so we are always focused on that client experience so that we earn the opportunity. We’re always in a position of, like you said, educating on what happens next. When you do choose to hire a realtor, the average agent, per National Association of Realtors, closes only five deals a year, so let’s be real.
Karl Eggerss: You’re basically saying the difference between for sale by owner, flat fee listing, doing it yourself, and a bad realtor is really negligible.
Alexis Weigand: Yep.
Karl Eggerss: But it’s the difference between a good realtor or a good real estate firm, versus that other option. That’s really what we’re comparing.
Alexis Weigand: Yeah. I mean, you’re going to want to go out and find a really high octane, high producing agent with an administrative staff, a sale’s team, an inside sale’s team. You want to ensure that they’re capable of taking you through what we call the pre-list all the way to going active, to negotiating, to contract to close, and to post-close, because you still have a liability after closing and funding. We’ve got a staff attorney. We’ve got someone in place throughout the entire transaction and afterwards.
Karl Eggerss: Yeah. Again, I saw that during this process that I went through and I think it’s interesting, because … This is just me. This may not be your experience, but my experience from the layperson’s standpoint of dealing with realtors, is it feels like many realtors get into the field as almost a part-time job. I’ve heard that. I’ve heard people say, “Yeah, I think I’m going to go back and get my real estate license,” as if it’s just, “I’m just going to go take an online course and I’m just going to go sell real estate.” It’s not that easy. I know your schedule and I know how many employees you have, because you’re the CEO of this firm.
Karl Eggerss: It’s not a part-time gig, but I think it reflects that, because when it is what feels like a part-time gig, you do get the stale listing on MLS that just sits there. That’s been my experience. It just sits there and it’s kind of like, “Hey, I could’ve put it on MLS as well.” What’s your answer to that in terms of how you guys do it? Because I’ve seen the difference, but our audience hasn’t necessarily. I want them to be able to distinguish between a good realtor and a bad realtor, so maybe some questions they would ask. Like you said, you’re looking for this high octane, high producing realtor.
Alexis Weigand: Sure. Okay. Questions on when interviewing the right agent, so-
Karl Eggerss: Yeah.
Alexis Weigand: Let’s say you go and you pick three people you want to interview. We typically find that they’re being referred to somebody, by a friend, or a neighbor who has sold their house, and then maybe they’re receiving postcards from another agent, and then maybe they have a friend or a family member in the business. I would say, go interview all of them, at least three or four. The questions I would ask, it’s … You want it to run like a business, so they need to know their numbers. Ask them what their sale’s price to list price ratio is. They should know that.
Karl Eggerss: Slow down on that. Sale’s price to list price, so basically you’re saying, you have to look and say, if somebody’s selling the home, if they list it, and they only sell … Their average sale’s price is, let’s say, 85% of the list price, that means they priced it wrong from the beginning and they had to chase the market down to eventually sell it, or they took too low of an offer, right?
Alexis Weigand: Actually, I would say they’re a poor negotiator, because the price at which causes the offers to come in, that next step is the ratio I’m looking at. If I can get offers on the table, and typically we can … Through our process, we’re able to get at least one or two, at that point you’re looking at how strong of a negotiator your agent is, because the marketing and the price procure the offer. Now let’s see … Because everyone’s going to start probably somewhere between 8 to 10% off the list price.
Karl Eggerss: Sure, yeah.
Alexis Weigand: We want to see what processes are in place, or how good of a negotiator is your agent. We’re at 98.7. We’re pretty proud of that, because really let’s round that to 99%, our sellers are only giving up 1%.
Karl Eggerss: Let’s just round it to 100. I mean, come on. Let’s just-
Karl Eggerss: Well, that’s … Honestly, that’s why I had you on because I’ve dealt with that, and I’ve seen the good, the bad, and the ugly of real estate, and we basically did break a record for the type of home we were selling in our particular area, which we have listeners, Houston, Dallas, some of them out of the country. In this particular area, we broke a record for a home without a pool. It was a larger home, it didn’t have a pool, and yet we were able to get almost full price and all cash, but it didn’t stop there.
Karl Eggerss: Because, to me, the rest of the negotiating was not having people come in and ask for a bunch of stuff, because that’s another little ploy, right? Let’s get it under … Let’s get the price in, but yeah, the price may look good, but then you look and go, “Is this a clean offer or not?” It may not be clean, because it has all kinds of stuff in there they want you to do, whether through inspections. I know you were very bold in saying, “This price is kind of as-is,” and that’s what ended up happening. There was a few little things, but nothing major.
Alexis Weigand: What we like to do with our sellers is we did a case study on our own clients and they were giving up 1 to 3% of the purchase price in lieu of repairs, because we don’t ever want our sellers to touch repairs. It’s too big of a liability. I said, “How can I put that money back into my seller’s pocket?” An inspection typically takes … Your cost, about $500. In Texas, the buyer comes in, they purchase the option period from the seller, usually it’s 100 to $500, and then they get this 35-40 page inspection report that’s a lot of times overwhelming to both the buyer agent, who let’s remember only does about five deals a year, and to the buyer.
Alexis Weigand: They come back and they submit an amendment asking either for a ton of repairs and we say, “No, we’ll have them do a lump sum of money in lieu of.” Now, just like you experienced, you do a pre-inspection and then we disclose that, so from a negotiating stance and a marketing stance, we’re selling the house as-is, which really just saves you money during that option period. It saves you time. You don’t have the hassle of getting estimates to [crosstalk 00:25:42]-
Karl Eggerss: That was something new to me, having a pre-inspection that we paid for was new to me. We did that and it was full transparency, full disclosure. Here you go, this is what’s wrong with the house, which was very little, but these are a few things that are wrong with the house or need to be changed and they’re free to … Once they’re making their offer, they know what the deal is. They can see it.
Alexis Weigand: Yeah. I mean, we have some sellers that kind of fight back and go, “Well, why should I pay for it when the buyer’s going to?” Then in the end, just like you experienced, it’s a total time saver and money saver for the seller.
Karl Eggerss: No, that’s an excellent tip. Obviously, this ratio, you talked about this list to sale’s price ratio. You’re number one in our area and maybe more broad area, I don’t know. But, [crosstalk 00:26:27] so what about … I mean, I think pricing it is accurate. Take me through the pricing of a home, because we spent probably a good hour looking at not just comps, but really dissecting with pools, without pools, trying to get a real good feel for where the market was. Because most of us think our homes are worth more than they are, right?
Alexis Weigand: Yes, it’s true.
Karl Eggerss: I see you giggling. Most of us do. But the truth is, the numbers don’t lie. Even though, I would’ve loved to have even more, I was realistic in looking at the numbers. Tell me about-
Alexis Weigand: We did set a record.
Karl Eggerss: Tell me about that … We did set a record. I know, but I’m greedy, I want to break even a bigger record. Tell me about what that process looks like. Obviously, people can’t see your spreadsheet and the way you do it, but kind of walk us through what your analysis looks at first.
Alexis Weigand: Sure, so-
Karl Eggerss: Because again, we got … Listen, our audience, and you’re not real familiar with the audience, are a bunch of people that are … Probably most of them are near retirement, and so they’re thinking about, “Do I downsize? Do I move?” They have equity in their homes, so they’re thinking about that. To get their wheels spinning, what does that look like to get a market analysis?
Alexis Weigand: A lot of times online you’ll see a, “Hey, click here for a free market analysis.” I have that on my website as well. Full transparency that is an algorithm that spits out a number based on what the appraisal district has. If the sale has been recorded, they have it.
Karl Eggerss: Yeah.
Alexis Weigand: Right? But what an algorithm and technology can’t do-
Alexis Weigand: Right? So, but what an algorithm and technology can’t do is come in and account for how well you’ve maintained the house. Have you added a pool? Have you redone, put $100,000.00 into the kitchen? You really want an agent to come out there and do an on-site consultation with you because what we also know is that you may see that a house sold for half a million, but what you don’t know is they had to give up $26,000.00 in seller concessions. There’s a whole backstory that, again, we have access to that data that the general public doesn’t.
Alexis Weigand: When I came to your house, I sat down with you and your wife, and you’re right, we spent about an hour going over it, because I brought my laptop and I wanted you to visually see the other homes that have sold in the area, and also I wanted you to see the backstory. So really make sure that your agent’s educating you so that you can make an educated decision, not just to give you their opinion.
Karl Eggerss: Well, and I think it seems like sometimes the seller drives the ship because they may put a ridiculous price, but they have very hungry agents out there that want a listing so they will oftentimes … The seller’s dictating the price, and it may not be realistic, but the agent doesn’t doesn’t want to lose the listing so they go ahead and put it on the market knowing full well that they’re going to have to drive that price down.
Alexis Weigand: You’re exactly right. We’ll also have a conversation with … Okay, if this is the price that you choose and the market doesn’t support that price, how many weeks do we wait and at what point do we make a price reduction and how much? I will tell you, it doesn’t take you longer than three weeks for a buyer, whether they’re in Houston, or whether they’re local and [inaudible 00:29:42] market, to get out to the property if they are motivated and qualified.
Karl Eggerss: Yeah.
Alexis Weigand: So we’re typically, if a house … I mean, for our metrics in this current market, we are listing we should see somewhere between 10 and 15 showings in the first three weeks. If a property is closer to only two showings, we know that they’re eight to 12% off.
Karl Eggerss: Mm-hmm (affirmative).
Alexis Weigand: If they’re getting consistent showings, meaning that 10, 15, 20 and no offers, we’re generally five to seven percent off. So, we have an absolute plan for our sellers in place shall that price not provide the offers that we expect so there is no second guessing when you hire us of what those next steps are.
Karl Eggerss: Yeah, and that’s important. That’s another little step. Another tip is number one, you’ve got this list to sales ratio with probably people don’t want to publish it if it’s not favorable to them. Yours is very high. But also, coming through and looking at these numbers and having realistic … and I think that number … what did you say, eight to 10 showings? Is that what you said?
Alexis Weigand: For the first two weeks-
Karl Eggerss: Yeah.
Alexis Weigand: About 10 to 15 for the first three weeks. After that, after you’ve hit the third week on the market your showings will pretty much bottom out-
Karl Eggerss: Right.
Alexis Weigand: And you only get looky-loos, but nothing … It’s like expecting different results and not doing anything to change the results.
Karl Eggerss: Yeah, and unfortunately, or fortunately, price dictates … Price is the ultimate determinate. I mean, if you’re not priced correctly, you may get somebody that just falls in love with your house but for the most part, dropping that price is going to get the buyers. That’s just it. You do tend to see this kind of tapering off when you get a bunch of showings, and of course, as a seller, it’s very exciting. “Oh my gosh, we got six showings the first day.”
Karl Eggerss: Well, it’s because it’s the first day, usually. It’s not because your house is the greatest thing ever, but you think that because it’s your house. Then it tapers off and you’re like, “Hey, what’s wrong with our house?” You know? But it is generally priced. I think for us, we started ours a little higher, but it sold, but there’s a lot of factors involved.
Karl Eggerss: They talk about location, location, location, and it’s true. I mean, my house looks different than my neighbors, so you can’t go off comps, right, because their house may be terribly outdated, and our house may have a fresh renovation, or whatever the case may be. So you can’t just look at the comps or the appraisal district, like you said, and run an algorithm.
Karl Eggerss: You know, that’s a nice place to start, but you have to have an agent literally walk through and say, “I see what you did here,” and spend some time there and not just go … Let’s look at it per square foot. So those are two really good tips as far as if you’re not getting those showings the first few days. Something is wrong.
Alexis Weigand: Yeah, so definitely ask your agent what their plan of action is if the house doesn’t sell and you don’t get an offer in the first couple of weeks, because we sold your house within the first four weeks.
Karl Eggerss: Right.
Alexis Weigand: We never had to do a price reduction, but what I find typically with … because we take over a lot of houses that have been on the market, they’ve expired, maybe they used a friend or family member, and then they go do their research, they call us, and the sellers would have been willing to drop the price, yet the agent never spoke up.
Karl Eggerss: Mm-hmm (affirmative).
Alexis Weigand: Sometimes the agent will say no out of fear for losing the listing-
Karl Eggerss: Sure.
Alexis Weigand: And say, “No, you’re priced right. You’re priced right,” and really it’s just our fiduciary duties to our sellers.
Karl Eggerss: What’s the deal with the days on the market? Is it true that a listing expires or goes off, somebody waits three or six months, goes back on with a new realtor. Does it show one day on the market, or doesn’t it keep accumulative?
Alexis Weigand: Yeah, I think our San Antonio Board of Realty now has a rule that you have to be out of MLS, and maybe [inaudible 00:33:24], but I think it’s for a full year-
Karl Eggerss: Okay.
Alexis Weigand: Because people would try and just jump brokerages to get the days on market to start over-
Karl Eggerss: Right.
Alexis Weigand: So there’s two things that we see. We see a days on market with that brokerage, and then right next to it we see accumulative days on market.
Karl Eggerss: Okay, yeah that’s important because you see these homes that are sitting there and say, 365 days on the market, it’s like there’s a backstory there. I think generally it is somebody’s reluctant to drop price. They’re not motivated. You probably hear that all the time, “Well, I don’t have to sell,” and at the end of the day you put your house on the market for the reason, but yeah, you may not have to but you really want to. Going through all those showings and keeping it clean and doing all that is kind of a pain in the butt.
Alexis Weigand: It is.
Karl Eggerss: So people do want to sell it, and unfortunately or fortunately, price is the determining factor.
Alexis Weigand: Yeah, there’s a lot of details, too. If you think about … You and I both live in Fair Oaks, and there are different subsets of Fair Oaks. We’ve got places like the Dominion, where you’ve got the garden homes, and then … let’s just talk about Fair Oaks, you’ve got those on the golf course, and Raintree Woods. All of these other areas, if I were to have put your house on MLS, which then syndicates to over 500 websites and I had listed Fair Oaks Golf Course, or something specific, you would not have popped up in search results.
Karl Eggerss: Correct.
Alexis Weigand: A lot of agents don’t realize kind of the backend tricks. So, there’re little things in the MLS sheet that we can do to get you massive exposure by making sure those things are correct. We see mistakes like that all the time.
Karl Eggerss: I have seen that too, where people say, “I’m not getting the showings. I’m not getting the listings,” and then you look on there and there’s some word that has really filtered it down, and it is not getting the eyeballs, or people may think it’s in a different area, so when they look at it they say, “I don’t want to live in that area,” because it’s described incorrectly on the MLS. I think that’s … yeah, that’s a really important tip.
Karl Eggerss: As we kind of wrap this up, can you tell me about basically if somebody is going into a real estate office and let’s say the listing appointment went fairly well, but they want to go see the realtor’s office, which I would suggest you do, it’s not just about the realtor coming to your house, you go see what their staff looks like, what kind of support they have, because there’s a lot … I know this for a fact, there’s a lot of communication back and forth during that transaction.
Alexis Weigand: Sure.
Karl Eggerss: Tell me what should they be looking for when they go in there? I mean, not just a lot of people running around, but what are they looking for in terms of infrastructure?
Alexis Weigand: Okay.
Karl Eggerss: Because you have it-
Alexis Weigand: Yeah.
Karl Eggerss: That’s why I’m asking you.
Alexis Weigand: Yeah.
Karl Eggerss: It’s a little bit of a loaded question, but I do. Again, I see a lot of these realtors that almost just work out of their house kind of, and I just don’t think you’re getting the full attention to your home.
Alexis Weigand: Yeah, great question. When you ask the first question on the sales price/list price ratio, ask what their average days on market are, and then the third best question I think you can ask is, “Tell me about your staff.” That would … For me, I think the most important thing is make sure they’ve got an administrative staff, because as a sales agent my job is to constantly be meeting with my existing sellers and seeking new business, my new sellers and buyers.
Alexis Weigand: That brings me out of the office, so our administrative staff, we’ve got seven right now, that work from 7:30 a.m. to 4:30 p.m. and that’s the marketing team that can talk to close team. There’re people there that if you call and I’m in an appointment, you’re not just getting my voice mail, which typically would happen with, let’s say, part-time agents. You’ve got someone to make edits to contracts, to get you whatever you need while your sales agents are out in the field.
Karl Eggerss: Specialists.
Alexis Weigand: Yes.
Karl Eggerss: Yeah, and real quick, where do you see … and again, we’ve been talking about kind of localized, but let’s branch out from San Antonio, the Bernie area, the Hill Country, let’s go to Houston and Dallas. Let’s call it Texas. Market’s really good right now. So for those people that are kind of sitting on the fence, we’ve been thinking about downsize, we’ve been thinking about moving. I would imagine it’s an awesome to be a seller right now.
Alexis Weigand: Yeah, as you just experienced, we are at the top of a seller’s market. We haven’t been in such a strong seller’s market since 2007. Obviously, we [crosstalk 00:37:52]-
Karl Eggerss: Does that concern you?
Alexis Weigand: We’ve been at the top of the market for a while, so we’re going to make hay while the sun shines, and I recommend the same to anyone whose thinking about selling. And, the reality is we can’t stay there forever at the top.
Karl Eggerss: Yeah.
Alexis Weigand: So, we’re expecting to see some type of either slow down, or … we already are starting to see a slight uptake in days on market, where you’ve seen the fed raise the interest rates once already, so if you’re thinking about selling … from a timing perspective, you haven’t been in a better situation since 2007.
Karl Eggerss: Yeah, the good news is even though the feds raised rates, long-term rates, which affect mortgages, they’ve creeped up a little bit, but they’re still … it’s the short-term rates that have gone up. Long-term rates are still within reason, so that’s good. But yeah, I think as the economy continues to expand you’re going to see rates continue to tick up a little bit.
Karl Eggerss: I did want to tell people about your website. WeigandRealEstate.com. It’s Alexis Weigand. Her real estate group. You’re going to see a bunch of cool stuff on there, and I would encourage also go on there … she also had a video blog. You can sign up for it, it’s free. Like she mentioned, you can see what your home’s worth within reason.
Karl Eggerss: I think a better way is to obviously contact her. But you can see her video blog on there where she’s got a lot of tips that come up. Probably every couple of weeks you’re going to get a video email that real short, a couple to three minutes, will give you some of these tips we talked about today. So it’s been really helpful. Thank you very much. We’re going to have you back on soon to talk about something else regarding real estate. Alexis Weigand, I appreciate it.
Karl Eggerss: All right, so that’s a wrap. We appreciate you joining us this week, as always. On the Eggerss Report, it’s been your investing playbook. Hey, if you want to get more information, EggerssCapital.com is our website. Our telephone number is 210-526-0057. Just a reminder, we are a fee-only registered investment advisor, helping you with everything from financial planning, social security analysis, Roth conversion analysis.
Karl Eggerss: We do help with estate planning to a certain degree, taxes to a certain degree. We don’t do people’s taxes, we don’t do full blown documents of estate plan, we do consult in those areas and we bring the experts in to physically write those documents or to physically do your taxes. So we do a little of all of that, and of course, we do investment management as well if you need help in that area with IRAs, trusts, joint accounts, family-limited partnerships, anything in that realm, old 401Ks, etc.
Karl Eggerss: All right, folks. Have a wonderful weekend. We’ll see you right back here next week on The Eggerss Report, your investing playbook.
Alexis Weigand: This show is for entertainment only, and information provided by the hosts, guests and this station should not be deemed as advice. Your investment decision should be based on your own specific needs. You should do your own research before you make those decisions. As President and CEO of Eggerss Capital Management, Karl Eggerss may hold securities mentioned in the show for himself, and his clients. Just don’t buy or sell anything based on what you get from radio or TV. Use your own judgment or get yourself a trusted advisor.