As I have for the past seven or eight years, I'm participating in a Fantasy Football league this fall. Well, participating is a bit of a misnomer. Between familial and business commitments, not to mention a recent move, my performance has been somewhat ... lackluster. In fact, I have no idea who I even ran out there the first weekend. Whoever it was, they were good for a forty point thrashing at the hands of some geek in Philadelphia. When I finally bothered to check in a few days ago, I was surprised to see that the automated draft had actually produced a few big-name players for me. Carson Palmer was slinging the rock. LT was toting it. Two of my three starting wide receivers are Pro-Bowlers (for you non football fans, that does not mean that they compete on the professional Rock'N Bowl circuit during the offseason). My kicker had the requisite unpronounceable last name to ensure he was raised to boot an oblong piece of stuffed synthetic pigskin through two yellow poles.
The computer obviously thought enough of the statistical prowess of these players to assemble the motley crew that would come to be known as "Phunk U."
Funny thing about those computers and their data, though. It's the very same mantra you hear from financial guys ad naseum: Past performance does not necessarily dictate future performance.
All of those pretty stats from last season would have made a good starting point, but they are still a year old. A professional athlete's performance may be affected by many things. Health is first and foremost in the order of importance. The stud running back who found the end zone fifteen times last year might have dinged himself up during the preseason and lost a bit from his peak ability. Shoot, he could have hurt his pinky toe playing footsie for that matter. There is also the matter of teammates. Suppose that same running back was following a 275 pound fullback with a head the size of a Prius through the defense last year? If Sir-Blocks-A-Lot took a free agent deal to play elsewhere this season, our boy is going to have to fight a lot harder for the yards that came so easily in the past. Then there is the issue of his contract. What if he was playing in the final year of his contract last season? He played out of his gourd as a man only can when he smells a new deal. Preferably one with more zeroes than you'd find in the Oval Office right now.
Once the man gets paid, he might have a hard time recapturing that lightning in a bottle.
So where is the rather flimsy analogy amidst Paul's Guide to Fantasy Football Futility? Aside from the evident truth that Carson Palmer is about as worthless as sanity at Gary Busey's beach house, it is this simple message to sellers:
GET YOUR HEADS OUT OF 2005
Trust me, I know the house across the street went for $575,000 a couple of years ago. I sold it.
I know what the house a couple blocks over fetched a year ago. I sold it, too.
As difficult as it is to let go of the high water mark, let go of it we must. Properties that sold six months ago, let alone two to three years ago, are obsolete. Just as you wouldn't have accepted the premise of pulling sale comps from 2004 during the height of 2005, when the month to month appreciation rates were staggering, you simply cannot base your current market value on yesterday's statistics.
Trust me, I wish we could.
Every time values fall, we agents take a pay cut. We don't like that.
So when I, or one of my esteemed colleagues, break out the recent data to discuss your home's present value, please be aware that we know all too well about the Carstons next door. Same for the Richardsons down the street. Those sales aren't just stale, they're hockey pucks.
I could nod my head and allow myself to be persuaded, but I'd be a lousy agent if I let my potential clients sell me on value. This is what I do. All day, every day. In a difficult market, I will not waste your time, nor my own, inflating your head with a Disneyland expectation, only to produce state fair results.
My pledge to you is complete and total honesty in not only providing a reality-based professional opinion of value, but in everything I do. Seems odd to need to say that, but I wish more would.
Time for me to go set my lineup for tomorrow's games now. LaDainian Tomlinson is questionable with an injury, and just doesn't appear to be the same running back without Lorenzo Neal blocking for him.
Hmm ... he did run, catch and throw for a touchdown in the same game back in 2005, though. Tough call.
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Paul, market value is what market value is. Sellers just have to get it. If they don't they don't sell. Pure and simple.
Gary - Fortunately, most do, at least in my recent experience. There are still a few holdouts who somehow think that their home is special. Protected by a magical bubble of desirability or something. It's these folks that I hope to reach here. This is no time for delusion. I know of too many sellers who set the bar way too high in the beginning, hoping for that miracle homerun to solve all of their financial woes, only to fall behind on payments while struggling to carry it. They either lose the house ultimately, or fire sale it. Taking the preventative dose of reality up front is always the way to go.
I wish there were a higher amount of appraisal eduction required to obtain a real estate license in TX. This would help in many ways. Granted, we have one cheesy class and a couple of state exam questions. You can still get a license if you do not answer them correctly.
Mel - It should be heavily emphasized, I agree. Of course, then the board of appraisers jumps up and down that we are horning in on their turf, yada, yada, yada. I get tired of such petty nonsense. Anything that would improve the level of professionalism throughout the industry should be embraced. Funny, but we always hear about the Justice Dept. espousing increased competition as the tonic for antitrust concerns. I'm here to tell you that opening the floodgates to any buffoon who provides "cheap" gets us the reputation we deserve as an industry. Why is "cheap" what is always thought of for protecting the interests of consumers? Whatever happened to quality control? That's a post in and of itself.
Paul - I am participating in a fantasy football league for the first time this year. We started after the official beginning of the season, but I lost my first matchup (it was close). I ended up with Tom Brady, which seemed like a great choice a couple of weeks ago. :( Thankfully, my backup was Eli Manning. This is a great analogy of the market and current perception.
Thanks for saying so, Jason. Thought it was a bit thin myself ;)
Great information for sellers to "play" with Paul - It is frustrating to hear sellers tell you how much more than market value the house should be. Have a great Sunday.
Paul I love the analogy of sport tied to Real Estate. There are many that want to live in the past with both venues!
Paul what a great analogy for me. I will definately use it. Somedays I get so down and I am not a down person. Since I work with sellers, I have to deliver bad news and it takes it's toll. When sellers who were buyers a year ago, decide to move and they can't sell for what they owe or payed it is discouraging.
Those that listen to what the data is, right before their eyes and list where I say list, do sell. My last two sold in 2 weeks, but so few want to accept the truth.
The most difficult task for listing agents is to help the home onwer understand value. Some home owners don't want to understand. Some can't understand. Some agents are not skillful in explaining value.
Some home owners are just down right stubborn.
Some home owners believe that their home is not a part of the real estate market.
Our job is communication and if we understand the market we should be able t6o explain it to the home owner.
I didn't say it was easy, just necessary.
Hi Paul - I don't watch football but I liked & agreed w/your post. Getting sellers to comprehend what you are saying to them is one thing & showing them on paper the FACTS is another. Still after that some take time to let it sink way in (into the depths of their being) before admitting you are indeed correct. You are right, it's not about being RIGHT it's about being honest & providing them w/the facts. If they want to sell, they need to listen, simple as that. We have had sellers take weeks to agree to a price before putting it up. KM
There are sellers who still think 2005 pricing is in play? Good grief.
I don't know the athletes you've mentioned, but I recognize the sellers from a mile away. I'm fortunate that the majority of the time my sellers listen to me and follow my lead.
Paddy - It certainly can be. Everyone knows their home is worth a little less, but there is plenty of denial as to how much.
Bill - I agree wholeheartedly. Kind of like Al Bundy talking about the four touchdowns he scored in one game back in high school.
Missy - It is never easy to be the bearer of bad news. You almost have to detach from the information provided like a therapist. We are not responsible for the sales data, but it is not the most fun part of an agent's day at present.
Lenn - That is the crux of it all, isn't it? Those who truly understand and work this market will have the requisite confidence to provide accurate analysis. I know some agents who are in and out of listing presentations in twenty minutes, but I think this is a mistake. They think more about keeping the seller's attention, not bogging them down with minutia, to secure the business. I take the other tact. Some sellers have needed to pry me out of their house, because the most important part of listing a home happens before it ever hits the market. It is the correct determination of value and advice for prepping the home for the market that is the bedrock upon which all subsequent efforts are based. You can do the staging, marketing, etc, but without competently assigning value and demonstrating it to the client, the former is an exercise in futility.
Kristin - The days of "We can always adjust if we are too high" are behind us. You can be spot on the mark right now, and still have difficulty selling due to the tough climate. You might have to adjust from "good price" to "great price." Trying to go from "absurd price" to "reasonably okay price" is an exercise in futility. What is a "good" price today may be a not so good price 30 days from now. Sellers need to stay ahead of the curve to rise above the din.
Amanda - The conversation usually goes like this, "I know the market is not what it was, but the Johnston's sold for $675,000 a year and a half ago ..." The next likely step is to knock some arbitrary, and minuscule, number off that price and call it a day. Doesn't work. If I have five sales within the same subdivision, same builder, same size, in the past three months, those are the only comps that matter.
Man...you came roaring back with a vengence! One helmet to the knee can abbreviate or end a promising running back's career. I understand the mindset if we are talking 6 months back in a semi-stable market but two years? Hmmm... the x-ray reveals:
2005? I'm looking at prices rolling back to 2003 or 2004.