Wednesday, April 9, 2008

Relocations Remain Strong in a Soft Market

With the nation reeling over the fallout of the sub-prime lending debacle, one area of the real estate industry remains relatively stable. Relocation.

When someone decides to pick up stakes for a move to a new location - be it a career change, retirement, or perhaps just for a change of scenery - that relocating individual needs to find a home. And, in many cases, needs to sell a home on the outbound side.

The latter is the one area of relocation sometimes negatively affected by a depressed real estate market. During the two years I spent assigning corporate transferees to my relocation-specialist agents, stories varied greatly as to the effect the transferee's hometown market had their transfer and his/her ability to purchase a home here immediately.

In one case, the transferee's home had been on the market for over a year, with many price reductions and no bites. Unable to make an offer here with a home-sale contingency, the buyer had to enter into temporary housing, ultimately commuting once a week to visit his wife and children in Illinois.

The market here in Metro Milwaukee was rife with both buyers and listings. It was a good place for us agents. Ultimately, sellers were indeed in the driver's seat and often scoffed at home-sale contingencies.

Now, because of the deviation in the market and an increase in inventory, sellers are more amenable to contingencies and even will offer to sweeten the pot. Think, "seller incentives."

But, in spite of the losses many have experienced, some things never change. If a home is priced right, is in good condition and happens to be in the right location, competitive offers still occur.

I speak from experience. For over a year and a half, my business partner and I spent time house-hunting with my cousin, his wife and two children. Four out of eight offers we submitted were lost in competition to higher bids.

Keep in mind that this took place in the summer of 2007, when the media began relentlessly reminding us about declining market conditions and the unbelievable bargains that could be found in the new "buyer's market."

Those "deals" escaped my cousin, however. He ended up buying in a completely different community than planned. And, he paid full price for their lovely new home.

Recently, following a six-month stint as the project sales director for a major condominium conversion, I have returned to the sales side of the relocation business. As a relocation specialist, working directly with transferees again, I have witnessed why this remains a lucrative and positive side of the real estate industry.

During my six months at the condo project, I closed 18 units in the building, many of which were sold as second homes and to transferring executives.

In January of this year, a transferee client found her perfect home here on day two of our home search. She listed her downtown Chicago condo that same day and had an accepted offer on it within one week. Hardly a bad experience.

A second relocating executive client, has been working with me on finding a home since early December. He had the pleasure of being able to be choosy in a market loaded with listings in his price range. In mid-April, on his third weekend visit here, he settled on a home in a popular suburb north of Milwaukee.

Meanwhile, his home in Atlanta sits without an offer after several weeks on the market. He does have one advantage, though, and it's yet another benefit of being relocated.

As part of his relocation package, he was given the ability to attempt a 30-day self-marketing listing of his home. If the home doesn't sell within that period, his company purchases the home from him, based on appraised value.

Essentially, he was free to purchase a home on this end without a home-sale contingency. Definitely a plus in what's starting out to be a resurgent spring market here.

Finally, in February I took on a high-end listing on Milwaukee's fashionable East Side. Right out of the chute, we had very positive showing feedback regarding the condition, the updates and the pricing. Several buyers came back for second, third and even fourth showings. The fourth time was the charm! Within six weeks of our listing start date, we had an accepted offer.

Incidentally, my sellers happen to be relocating to Nevada. Coincidentally, the buyer is relocating to Milwaukee from another community.

Ultimately, each of these successful transactions can be attributed in one way or another to a relocation. It's an area of this business that's been good to me, as well as to my clients. It might just be the one segment of the industry that could be called "recession-proof."

All is not doom and gloom in real estate!

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