What Makes a Great Realtor? Part 1 - Knowledge

I imagine that "tips for finding a great REALTOR®" is a fairly common Google search, but I think that the more pertinent question (and one which is asked significantly less often) is, what is a great REALTOR®?

PART 1 - KNOWLEDGE
There are two aspects to address here.  First, you want your REALTOR® to be knowledgeable about real estate.  It may seem ridiculous to think that any REALTOR® is not knowledgeable about real estate, but the reality is that real estate is a finely nuanced process which requires a broad breadth of expertise ranging from sales and marketing, to your legal rights and responsibilities.  Many REALTOR®s are knowledgable in some of these fields but few are appropriately knowledgeable in all of them, and a singular misstep in any of these areas can mean a loss for you.  In addition to asking lots of questions about how the REALTOR® approaches the sales and marketing process, ask them questions about the purchase and sale agreement.  Specifically, ask for details on how they use the agreement to give you greater leverage and more protections within the transaction.  Answers to these questions should be specific, not general, and should immediately indicate just how much (or how little) the REALTOR® truly understands about the purchase or sale process.


The second aspect to address regarding the REALTOR®'s knowledge is their familiarity with your neighborhood.  Chances are they're going to bring you information about recent sales in the neighborhood, but beyond sales, what else do they know?  Can they articulate the specifics of what makes your neighborhood unique?  Do they know what the common upgrades are within the neighborhood that seem to be appealing to recent buyers?  A very common misconception is that a REALTOR® must have previously worked in a specific neighborhood in order to sell effectively there.  The reality is that while it's unnecessary to have previously sold a home in your neighborhood, details about that neighborhood are pertinent knowledge.  A REALTOR® should be able to demonstrate their knowledge about your neighborhood, and this knowledge should go beyond recent sales information.




If you're interested in speaking with me about North Dallas real estate, I'm available 7 days a week, 8am-8pm. Please don't hesitate to email me at kim@kimkoenig.com or give me a call at (214) 415-9221.

If you're moving here from out-of-state, temper your expectations...

Although I have spent the majority of my life living in North Texas, I spent the last several years living in Seattle. When I moved back to Texas in November 2008, I realized very quickly that - at least in terms of real estate - I was still in a "Seattle State of Mind". Much like most of the larger markets in the U.S. (the last couple of years strongly excepted), Seattle generally enjoys a steady and healthy rise in real estate values year to year. But of course as I became reacclimated to Dallas life, I remembered that it's not quite the same for us here.


However, the other day I got to talking with the mother of one of my daughter's classmates, who as it turns out, had recently moved here from California, and it occured to me that she probably had no idea what to expect if she were to buy here. As both a real estate expert and one well-versed in local trends going back nearly 30 years, my expectations as to the very slow rise in Dallas home values have been essentially second nature to me. But if you did not grow up in this environment, and especially if you're coming from a market in which a teeny tiny townhouse is a great deal at $600K, then let me be the first to tell you - temper your expectations.


Through the years - and most especially during the boom years of the mid-2000s - out-of-state investors flocked to Dallas, drawn by our low home prices and great economy. However, most discovered the painful truth - this isn't the market to flip. We don't take $100K dumps and turn them into $500K windfalls by installing hardwoods and granite. Sure, there are some definite exceptions. The "M" Streets neighborhood in the shadow of Downtown Dallas is proof of this. But that area is an extremely rare exception.


Conventional wisdom has always told us that in order to sell without the risk of a loss, you must remain in your home for a minimum of 5 to 7 years, and that timing would generally yield a break-even sale. However, in high-dollar, high-turnover markets, one could realistically expect to be able to make money on a home purchase after owning for just 2-3 years. And it's these buyers which are overwhelmingly starting to flood our own market. For sellers, of course, this is great news. As job and housing markets falter in other cities, the job and housing markets here continue to grow, and that means a larger buyer pool, and higher real estate prices, right?


Not necesserily.


The two reasons why Dallas real estate prices stay painfully steady are 1) property taxes, and 2) sprawl. What many Texans may not realize is that we have the unique distinction of having the highest property taxes in the U.S., on average around 2.5%. A secondary issue to taxes is insurance, which is also extraordinarily high here. For example, our property taxes are 2X higher than those in my former market, Seattle, and insurance is a whopping 5x higher. Since most of us buy based on what we can afford monthly, this means that I could afford approximately $100K more in Seattle than I could in Dallas. And while I might be buying a larger mortgage, the rate of return on my investment there is going to yield me more in return.


Then of course there's the issue of sprawl. As we all know, everything's bigger in Texas, and that includes space. We have seemingly endless land to build on, and that isn't going anywhere anytime soon. Most major cities do not have the excess of land that Dallas has to offer; in fact, it's worth noting that our highest valued cities, places like New York, San Francisco, and Boston, are rarely dealing in new construction. Rather, they're recycling homes and condos which are decades old, but space is a commodity, and therefore, that commodity keeps rising. Here in Dallas, however, when the population rises, we simply spread out further. There is no incentive - from a market perspective - to raise home prices significantly. The market simply would not tolerate it.


This is not to say that buying in Dallas is not advisable. This could not be further from the truth. Buying in this market is not only significantly less expensive than renting, but it acts as a healthy hedge against inflation, which is about the amount of increase you should expect to see in your value from year to year.


Further, there are some significant benefits for those who choose to establish roots and buy in this area. Square footage is one of those tradeoffs. Because of both space and age issues, higher dollar markets tend to offer smaller homes, whereas in Dallas it is possible to find a nicely appointed 3,000 SF home in a brand new community for under $300K. The under $200K market is our largest here, and for that price you can get anything from a condo near Downtown to a 4-bedroom home just 30 minutes outside of the city. There's also the schools - our public schools are some of the best in the country. Dallas also offers strong job growth, a solid infrastructure, a diverse population, and a world-class arts scene.


So for those unfamiliar with our local market, while you should certainly temper your expectations about your home's value growth potential, expect to also be surprised by how different Dallas is from the stereotype - this is a vibrant city with lots to offer. There's a reason why the Dallas real estate market is one of the strongest in the country, and why here real estate is still a safe way to invest for the long-term.





If you're interested in speaking with me about North Dallas real estate, I'm available 7 days a week, 8am-8pm. Please don't hesitate to email me at kim@kimkoenig.com or give me a call at (214) 415-9221.