The near future of the real estate market is a significant, if not the most important, concern for the majority of us. Yet, there doesn’t seem to be enough being done about it which could have a more immediate impact.
As a sports fan involved with real estate related marketing and advertising every working day, I continue to see how statistics can be used to make practically any point or argument seem valid. A baseball player could be leading the league in hitting, but if he only gets 2 hits in his last 20 at-bats, reporters will write about how much better other players on the team have done in that same stretch. It is another version of the “half empty – half full” concept which now seems to dominate real estate news.
I saw a story with information from The Warren Group stating that in the Greater Boston area, a total 174 luxury homes (priced $1,000,000 and up) were sold during the 1st quarter of 2009 alone. This should have been a much bigger story. I found this amazing and quite a positive. If more than one “million dollar mansion” per day has been closed, loaned upon, and sold, over a 3 month period in this economy, this shows me that some banks are willing to make significant real estate loans, buyers can qualify for them, and that motivated sellers can move a property at ANY price. After all, these are the toughest properties to find buyers for. To me, this information should be splashed across the front page, used in advertising and marketing materials from the leading real estate companies, and anyone within earshot of the local realty associations should be aware of this.
But, as things go in this “half full half empty” era, the Boston Herald story goes on about how this total is about half of what it was compared with a year ago. Boom. The air goes out of the balloon faster than a speeding bullet and more powerful than a locomotive. Here is the story:
http://www.bostonherald.com/business/real_estate/view.bg?articleid=1172800&srvc=rss
I’m not here to attack the reporter. He is not the only one. But the negative publicity and the lack of fighting against it by people in the industry has got to stop for the sake of the economy. Seeing the number of high end homes that have sold in one part of the country this year should be an “OMG” story. Instead, it is shot down before you finish reading it.
This represents at least $175,000,000 into a regional economy. Realty agents, lenders, title company employees, appraisers, attorneys, and others, have been or are about to receive commissions or payments as a result of this business. The municipalities, counties, and state have generated significant tax dollars. It’s the feel good story of the year.
Instead, this story comes off as if it is another example of a terrible real estate market. Say what??
My home is not on the market right now. If it were, unfortunately for me, it would not be anywhere the million dollar range. Probably less than half of that. And if my home was sitting on the market right now at less than half that, I would be doing some research today. I would be finding out how many million dollar homes have sold in my area this year. If I find out it is averaging better than 1 a day (such as in the Boston area), I would actually be upset. Heck, even if it is 1 sold for every 2 days, that is pretty darn impressive.
Who would I be upset with? My realty agent, that’s who. I would ask her how there could be X number of qualified million dollar home sales during the time she hasn’t sold mine for less than half of that.
If your home is on the market, especially if it has been on the market for some time, a little bit of research could provide you with a lot of ammunition.
Tuesday, May 19, 2009
Wednesday, May 13, 2009
The prize is right? Not so fast............
As much as I encourage creativity in this real estate market, not everything I see quite fits the bill. Even though I applaud the realty agent profiled in this Dallas Morning News article:
http://www.dallasnews.com/sharedcontent/dws/classifieds/news/homecenter/realestate/stories/0508dnbusfreebies.3cce5f4.html
I’m not convinced the prize is right. I completely understand the concept of someone buying a high end home being rewarded with another high end gift. However, the gift should fit.
(For those who did not check the link, the story is about an agent who is offering an expensive car valued at more than $30,000, “free” to the buyer of a million dollar mansion.)
The article goes to the extent of quoting the agent as saying that if someone truly does not need the car she is offering, she would replace it with something else. If there is going to be an incentive of this magnitude (which I encourage), then have the incentive fit the purchase in the first place.
Instead, the article reveals how a local car dealer has donated the expensive car in return for the publicity and the agent admits doing this to call attention to the listing. She doesn’t realize how this could backfire on her.
Chances are either the reporter who wrote the story or some other reporter will do a follow up check in a few weeks. What if the house still hasn’t sold? With the way the media publishes negative real estate statistics all the time, one story about “the house that didn’t sell even with a car given away” would cast that agent, and perhaps the property along with it, in a negative light.
Then suppose somebody buys a $500,000 property through that agent. Don’t think that buyer won’t be asking for a car valued at $15,000 - $20,000 or another major incentive. Heck, let’s be honest. I know I would. If she is giving an incentive for only one listing, it leaves any other buyers she serves with something they would perceive as a lot less.
In addition, I would think that someone who can afford a million dollar plus mansion probably doesn’t need another car at the moment. A car would be a great incentive for a first-time buyer, but that is not economically feasible. My point is that the incentive needs to fit the property and the agent representing it. This does not.
If I needed to sell that million dollars plus property and use a significant incentive to do so, I would make sure the incentive goes with the house and directly benefits the buyer. For example, I would use that $30,000 of incentives toward things like a one-year gardening contract, one-year pool maintenance, a maid/butler or driver service, or for a contractor to help with room changes for the new owner.
This type of incentive not only makes life easier for the buyer, it serves as a one-year “reminder” about what that realty agent did. Face it. Referrals from million dollars plus home buyers go a long way in any economy. And would be a lot more effective than when that buyer is sitting in the auto repair shop waiting for the latest problem with their new car to be fixed.
In addition, this type of incentive could be used by the agent for any property she sells, even with a time limit. Her “June special” could be that you get a one-year maid or cleaning service with a condo purchase. That just might push the buyer on a tight budget to move a few days more quickly when they can save even a couple thousand dollars over the course of the coming year while enhancing their “new” home.
There are better ways to “drive” home sales!
http://www.dallasnews.com/sharedcontent/dws/classifieds/news/homecenter/realestate/stories/0508dnbusfreebies.3cce5f4.html
I’m not convinced the prize is right. I completely understand the concept of someone buying a high end home being rewarded with another high end gift. However, the gift should fit.
(For those who did not check the link, the story is about an agent who is offering an expensive car valued at more than $30,000, “free” to the buyer of a million dollar mansion.)
The article goes to the extent of quoting the agent as saying that if someone truly does not need the car she is offering, she would replace it with something else. If there is going to be an incentive of this magnitude (which I encourage), then have the incentive fit the purchase in the first place.
Instead, the article reveals how a local car dealer has donated the expensive car in return for the publicity and the agent admits doing this to call attention to the listing. She doesn’t realize how this could backfire on her.
Chances are either the reporter who wrote the story or some other reporter will do a follow up check in a few weeks. What if the house still hasn’t sold? With the way the media publishes negative real estate statistics all the time, one story about “the house that didn’t sell even with a car given away” would cast that agent, and perhaps the property along with it, in a negative light.
Then suppose somebody buys a $500,000 property through that agent. Don’t think that buyer won’t be asking for a car valued at $15,000 - $20,000 or another major incentive. Heck, let’s be honest. I know I would. If she is giving an incentive for only one listing, it leaves any other buyers she serves with something they would perceive as a lot less.
In addition, I would think that someone who can afford a million dollar plus mansion probably doesn’t need another car at the moment. A car would be a great incentive for a first-time buyer, but that is not economically feasible. My point is that the incentive needs to fit the property and the agent representing it. This does not.
If I needed to sell that million dollars plus property and use a significant incentive to do so, I would make sure the incentive goes with the house and directly benefits the buyer. For example, I would use that $30,000 of incentives toward things like a one-year gardening contract, one-year pool maintenance, a maid/butler or driver service, or for a contractor to help with room changes for the new owner.
This type of incentive not only makes life easier for the buyer, it serves as a one-year “reminder” about what that realty agent did. Face it. Referrals from million dollars plus home buyers go a long way in any economy. And would be a lot more effective than when that buyer is sitting in the auto repair shop waiting for the latest problem with their new car to be fixed.
In addition, this type of incentive could be used by the agent for any property she sells, even with a time limit. Her “June special” could be that you get a one-year maid or cleaning service with a condo purchase. That just might push the buyer on a tight budget to move a few days more quickly when they can save even a couple thousand dollars over the course of the coming year while enhancing their “new” home.
There are better ways to “drive” home sales!
Sunday, May 10, 2009
How the toddlin' town can do better
The Illinois Association of Realtors released some first quarter 2009 statistics late last week. Like many other local and state realty associations, they released too many. It certainly is not the fault of the realty associations that the real estate market is so challenged, but I again stand by my opinion that their "half empty" approach is not helping matters any.
Borrowing from their just released statistics for the Chicago area, they announced that first quarter home sales dropped more than 26% when compared with a year ago. The median sales price just for the city also dropped more than 26% from last year to this. This information was prominent in the major newspapers and news sources throughout the Chicago area within hours of its being released.
How does this information stimulate activity in the market?
Frankly, it doesn't. Thousands of potential sellers in one of the most important local economies in the USA have just been told the large percentage of a sales reduction compared with a year ago, and could think that those that did manage to sell did so because they sold for a lot less than they had hoped. In most cases, potential sellers also become potential buyers. At least they could be if their motivation wasn't stripped by statistics.
If a news organization or an entity representing another form of large consumer investments (competing for dollars with the real estate market) were to discover and announce this, it would be understandable they would want to discourage people from investing in real estate. But this information, once again, comes from within the industry.
The Illinois Association of Realtors could and should have used their information more strategically than they did. That is their job, rather than pointing out negative statistics just as prominently.
Here is what the Association should have reported, since they have the official statistics to back this up:
"The latest Illinois Association of Realtors statistics, released on Friday, show that 10,306 single family homes and condos were sold in the immediate Chicago area during just the first quarter of 2009. With sales averaging more than 100 homes and condos per day during the January through March period, the median price within the city limits finished the quarter at $216,000. Yet, with suburban homes and condo sales factored in, the area's median price is now at $187,500. The median price is the price at which half of the homes sold for more and half sold for less."
Let me try this again. What the Association actually put out included their statistics about sales and prices dropping more than 26% compared with last year. Not only are those negative and not necessary statistics, but they compare with just over 1 year ago before the economy took its still current turn for the worse.
People looking to buy or sell a home or property don't always care about what happened over a year ago in terms of making decisions today.
Let me add that I am not picking on the Illinois Association of Realtors. Most if not all of the associations have been doing this month after month. Because of the size of the Chicago area, I am merely using this as still another prominent example.
If I were a realty agent, I would be screaming bloody murder to the association(s) I was a member of, demanding to know why negative information keeps getting put out there to a confused public.
Remember the saying - "Good news travels fast". If only the people leading the real estate industry would.
Borrowing from their just released statistics for the Chicago area, they announced that first quarter home sales dropped more than 26% when compared with a year ago. The median sales price just for the city also dropped more than 26% from last year to this. This information was prominent in the major newspapers and news sources throughout the Chicago area within hours of its being released.
How does this information stimulate activity in the market?
Frankly, it doesn't. Thousands of potential sellers in one of the most important local economies in the USA have just been told the large percentage of a sales reduction compared with a year ago, and could think that those that did manage to sell did so because they sold for a lot less than they had hoped. In most cases, potential sellers also become potential buyers. At least they could be if their motivation wasn't stripped by statistics.
If a news organization or an entity representing another form of large consumer investments (competing for dollars with the real estate market) were to discover and announce this, it would be understandable they would want to discourage people from investing in real estate. But this information, once again, comes from within the industry.
The Illinois Association of Realtors could and should have used their information more strategically than they did. That is their job, rather than pointing out negative statistics just as prominently.
Here is what the Association should have reported, since they have the official statistics to back this up:
"The latest Illinois Association of Realtors statistics, released on Friday, show that 10,306 single family homes and condos were sold in the immediate Chicago area during just the first quarter of 2009. With sales averaging more than 100 homes and condos per day during the January through March period, the median price within the city limits finished the quarter at $216,000. Yet, with suburban homes and condo sales factored in, the area's median price is now at $187,500. The median price is the price at which half of the homes sold for more and half sold for less."
Let me try this again. What the Association actually put out included their statistics about sales and prices dropping more than 26% compared with last year. Not only are those negative and not necessary statistics, but they compare with just over 1 year ago before the economy took its still current turn for the worse.
People looking to buy or sell a home or property don't always care about what happened over a year ago in terms of making decisions today.
Let me add that I am not picking on the Illinois Association of Realtors. Most if not all of the associations have been doing this month after month. Because of the size of the Chicago area, I am merely using this as still another prominent example.
If I were a realty agent, I would be screaming bloody murder to the association(s) I was a member of, demanding to know why negative information keeps getting put out there to a confused public.
Remember the saying - "Good news travels fast". If only the people leading the real estate industry would.
Thursday, May 7, 2009
If you could, would you live near Land Shark Stadium?
Imagine seeing an ad for a home for sale “near Land Shark Stadium”. You might not have to anymore.
Land Shark Stadium??? I heard about this and I thought about the hysterical sketch on the early (and funny) days of Saturday Night Live with Chevy Chase knocking on apartment doors and "eating" the residents who opened the door for his "Land Shark" costume. Then I saw this in print, and thought that maybe a reputable news operation had picked up a story from The Onion.
But, silly me. This could happen within hours of writing this. It seems that name is now the name of a beer. This could be the name of the same stadium the Miami Dolphins have played in for years. The stadium I still refer to as Joe Robbie Stadium, since that's how it was introduced and Joe Robbie was the Dolphins' owner who got it built.The same stadium that right now technically isn't named for the team that plays in it (Dolphin Stadium and NOT Dolphins Stadium). The former Underwear Stadium (whatever). The same facility that cuts off beer sales at half-time and had to implement a "family section" so that kids attending a pro football game would have a safe harbor. Let alone that it is not and has never been in Miami.
Next, I thought about how this stadium name will make property and home owners in the area feel. Will it present an added challenge to sell a home or commercial property near Land Shark Stadium?
Think about it. This publicity also begins less than a year after more shark attacks near Florida beaches. While it is hard to name a percentage, it is safe to say a portion of potential home buyers in the Miami – Ft. Lauderdale corridor come from the northern cities as second homes or homes to retire at. The Southeast Florida market has had its share of challenges in today’s real estate market as it is. I have recently spoken with several regional mortgage lenders who tell me they continue to stay away from advertising in and pursuing the Miami area.
Sports fans are the ones who will react in whatever way (humor, sarcasm, etc.) to Land Shark Stadium any minute now. I just don’t see it being a favorable reaction toward the area. Granted, this stadium is actually so isolated from civilization in South Florida it really won’t make that much of a difference, but unless people have actually been there, they don’t realize this. The local government will point out that they receive the tax portion of the millions of dollars paid for the stadium naming rights, and that it will add to the economy. While that may be true, I happen to think this name could take away from the local economy long term as it could negatively impact the local real estate market.
Meanwhile, there is something to be said for picking up a piece of an historical building as the highest bidder. But this is a highly unusual story. It seems that several items from the original Chicago Stock Exchange Building, including a cast and wrought iron elevator enclosure panel and leaded glass ceiling panels with values estimated to be in 5 figures. The Louis Sullivan designed building was completed in 1894.
What makes this unusual? The building was demolished in 1972 in Chicago, yet this auction takes place (on June 2) at The Rockefeller Center in New York City. The Associated Press story quotes an official of Christie’s as saying they could not reveal how the auction house got these items.
Seems to me there is a very interesting news or investigative story in the making. How do in tact parts of a building demolished 37 years earlier suddenly appear for auction? What happens to expensive parts of demolished buildings?
Speaking of demolished buildings, did you see the NBC News report on Tuesday about the demolition of a group of homes in Victorville, CA?
It seems that the city determined it was more economically feasible to bulldoze a group of homes that were not completed rather than spend the money to complete them. The video showed pile after pile of debris. Once everything is cleared (and at who’s expense?), the space could remain a series of empty lots for months if not years.
My first reaction is that city officials didn’t see the story about the Florida investor who purchased several unfinished homes for under half price, and spent a portion of his savings to finish construction, leaving him with a huge profit margin whether he rented or sold the brand new houses.
In other words, the Victorville demolition is another example of the lack of creative thinking about today’s real estate market. You can’t tell me that no one would have shown up if the city officials and others associated with the project held an auction. An investor or investment group could have done the same thing. But start from scratch on a series of vacant lots? It could take several years of waiting, and that is a lot of lost potential revenue for the city – and for those still employed in the real estate community.
Land Shark Stadium??? I heard about this and I thought about the hysterical sketch on the early (and funny) days of Saturday Night Live with Chevy Chase knocking on apartment doors and "eating" the residents who opened the door for his "Land Shark" costume. Then I saw this in print, and thought that maybe a reputable news operation had picked up a story from The Onion.
But, silly me. This could happen within hours of writing this. It seems that name is now the name of a beer. This could be the name of the same stadium the Miami Dolphins have played in for years. The stadium I still refer to as Joe Robbie Stadium, since that's how it was introduced and Joe Robbie was the Dolphins' owner who got it built.The same stadium that right now technically isn't named for the team that plays in it (Dolphin Stadium and NOT Dolphins Stadium). The former Underwear Stadium (whatever). The same facility that cuts off beer sales at half-time and had to implement a "family section" so that kids attending a pro football game would have a safe harbor. Let alone that it is not and has never been in Miami.
Next, I thought about how this stadium name will make property and home owners in the area feel. Will it present an added challenge to sell a home or commercial property near Land Shark Stadium?
Think about it. This publicity also begins less than a year after more shark attacks near Florida beaches. While it is hard to name a percentage, it is safe to say a portion of potential home buyers in the Miami – Ft. Lauderdale corridor come from the northern cities as second homes or homes to retire at. The Southeast Florida market has had its share of challenges in today’s real estate market as it is. I have recently spoken with several regional mortgage lenders who tell me they continue to stay away from advertising in and pursuing the Miami area.
Sports fans are the ones who will react in whatever way (humor, sarcasm, etc.) to Land Shark Stadium any minute now. I just don’t see it being a favorable reaction toward the area. Granted, this stadium is actually so isolated from civilization in South Florida it really won’t make that much of a difference, but unless people have actually been there, they don’t realize this. The local government will point out that they receive the tax portion of the millions of dollars paid for the stadium naming rights, and that it will add to the economy. While that may be true, I happen to think this name could take away from the local economy long term as it could negatively impact the local real estate market.
Meanwhile, there is something to be said for picking up a piece of an historical building as the highest bidder. But this is a highly unusual story. It seems that several items from the original Chicago Stock Exchange Building, including a cast and wrought iron elevator enclosure panel and leaded glass ceiling panels with values estimated to be in 5 figures. The Louis Sullivan designed building was completed in 1894.
What makes this unusual? The building was demolished in 1972 in Chicago, yet this auction takes place (on June 2) at The Rockefeller Center in New York City. The Associated Press story quotes an official of Christie’s as saying they could not reveal how the auction house got these items.
Seems to me there is a very interesting news or investigative story in the making. How do in tact parts of a building demolished 37 years earlier suddenly appear for auction? What happens to expensive parts of demolished buildings?
Speaking of demolished buildings, did you see the NBC News report on Tuesday about the demolition of a group of homes in Victorville, CA?
It seems that the city determined it was more economically feasible to bulldoze a group of homes that were not completed rather than spend the money to complete them. The video showed pile after pile of debris. Once everything is cleared (and at who’s expense?), the space could remain a series of empty lots for months if not years.
My first reaction is that city officials didn’t see the story about the Florida investor who purchased several unfinished homes for under half price, and spent a portion of his savings to finish construction, leaving him with a huge profit margin whether he rented or sold the brand new houses.
In other words, the Victorville demolition is another example of the lack of creative thinking about today’s real estate market. You can’t tell me that no one would have shown up if the city officials and others associated with the project held an auction. An investor or investment group could have done the same thing. But start from scratch on a series of vacant lots? It could take several years of waiting, and that is a lot of lost potential revenue for the city – and for those still employed in the real estate community.
Friday, May 1, 2009
From a billboard to a new home??
Did you ever hear a news story or learn something which catches your attention, only to have a reaction that is totally different from everyone else’s? Well, it happens to me a lot, actually.
I read the recent A P story about an out-of-work professional that spent several thousand dollars for a billboard along a busy Connecticut expressway to promote her “hire me” website, http://www.hirepasha.com/hirepasha.com/Resume.html .
The story went on to detail how she got the idea from someone else who had done a similar thing in the Midwest. I found it a natural that her background has a sales and marketing slant. More importantly from the standpoint of my work in real estate advertising and marketing, the next fact in the story got my attention even more.
This woman went on to reveal that she used the thousands of dollars for the billboard from money she was saving to buy a home. It was as if to say “There goes my chance to buy a home”.
If I was a realty agent in that area, I would have jumped all over that billboard. Why? Because with all of the inventory available in this buyers’ market, I have to believe I could have found her a “rent to buy” situation within a matter of hours. Without needing the big down payment she was saving up for, I could have gotten her into a home, and made one of my sellers (or a colleague’s) very happy.
Next, I would have interviewed her about putting her sales and marketing expertise to work for me. Let consumers respond to her billboard and find out that she has been hired by (name of) Real Estate and already has moved into a new house because of (name of agent)’s expertise.
I would then put her to work generating referral fees for me. Next, I would issue a Press Release that I have hired her to do marketing and generate revenue for my real estate business, and let the community know that she is available to do the same for non-competing businesses. She could work from an office space in her brand new home. And live happily ever after.
It seems as though I am seeing more of these “What he/she is doing to get hired” stories in the media. Those are more inspiring than the negative home sales statistics being released by realty associations.
I read the recent A P story about an out-of-work professional that spent several thousand dollars for a billboard along a busy Connecticut expressway to promote her “hire me” website, http://www.hirepasha.com/hirepasha.com/Resume.html .
The story went on to detail how she got the idea from someone else who had done a similar thing in the Midwest. I found it a natural that her background has a sales and marketing slant. More importantly from the standpoint of my work in real estate advertising and marketing, the next fact in the story got my attention even more.
This woman went on to reveal that she used the thousands of dollars for the billboard from money she was saving to buy a home. It was as if to say “There goes my chance to buy a home”.
If I was a realty agent in that area, I would have jumped all over that billboard. Why? Because with all of the inventory available in this buyers’ market, I have to believe I could have found her a “rent to buy” situation within a matter of hours. Without needing the big down payment she was saving up for, I could have gotten her into a home, and made one of my sellers (or a colleague’s) very happy.
Next, I would have interviewed her about putting her sales and marketing expertise to work for me. Let consumers respond to her billboard and find out that she has been hired by (name of) Real Estate and already has moved into a new house because of (name of agent)’s expertise.
I would then put her to work generating referral fees for me. Next, I would issue a Press Release that I have hired her to do marketing and generate revenue for my real estate business, and let the community know that she is available to do the same for non-competing businesses. She could work from an office space in her brand new home. And live happily ever after.
It seems as though I am seeing more of these “What he/she is doing to get hired” stories in the media. Those are more inspiring than the negative home sales statistics being released by realty associations.
Wednesday, April 29, 2009
The right moves by a buyer and an agency..........
It looks as though creative ideas are finally coming back to the marketplace, and it is certainly much better to comment about some of those instead of the negative statistics being needlessly generated from within the real estate community.
I was glad to see a story about a family in Memphis taking matters into their own hands. As many of you know Memphis has been among the most suffering of real estate markets over the past couple of years. This story is about a family man wishing to purchase a house to live in via an auction and getting a good deal. But he doesn’t need to move, so he would only take a good enough deal or not buy. He realizes it is a buyers’ market.
Why doesn’t he need to buy? Because he already has a house for his family and is meeting the mortgage payments. But he sees the value of buying while the getting is good, which pumps more into the economy and he sees how it would put him in the position of strength.
That is because he knows that he would be able to rent out his current home. There are a ton of people out there who can no longer qualify for a mortgage due to credit problems even though they could likely afford one. This should leave him enough flexibility to rent out his current home for the amount of, or perhaps a slight increase over, his current mortgage.
By doing so, and by purchasing another home to move into at a bargain price, this man will have lowered his monthly mortgage payment, significantly increase his net work (by owning 2 homes), and set himself up nicely for the future. Once the market bounces back, he could potentially make a very nice profit on the home he purchased at a bargain.
He could also offer a “rent to buy” option for the original home and begin the road to a profit ahead of schedule. Based on the scenario I describe above, being able to offer a “rent to buy” could be more beneficial. A rent to buy tenant will take much better care of the home compared with a 6-month or 1 year lease tenant.
This is exactly the type of story we should be seeing a lot more often than it seems like we are.
Here is the link, if you’d like to see for yourself:
http://www.myeyewitnessnews.com/news/local/story/Foreclosed-Homes-Go-Up-For-Auction-In-Memphis-Area/rPi1Vx9-jEiVsVN4bQFkMA.cspx
From the industry side comes another version of an idea that for some reason hasn’t taken off yet. People don’t go shopping for real estate by going to the local realty office. Yet, very few realty offices are in high foot traffic locations. I like what CondoOutlet is doing in the St. Johns Town Center in the Jacksonville Florida area.
They have opened a 10,000 square foot real estate showroom with 2 “life sized” condo models. This is in a major shopping center. (This company is not a client, by the way.) While I am not here to promote a single realty company, I mention this because I applaud their strategy.
Over the years, I have been in literally hundreds of real estate agency offices. But maybe 2 or 3 of them in a location with any degree of significant “walk-in” possibility. With the price of gas being what it is and has been, and open houses seemingly always around the same times, this opportunity to be convenient to the public should not be overlooked any longer. That is, to reach the public that hasn’t already found a way to benefit by the current real estate market!
I was glad to see a story about a family in Memphis taking matters into their own hands. As many of you know Memphis has been among the most suffering of real estate markets over the past couple of years. This story is about a family man wishing to purchase a house to live in via an auction and getting a good deal. But he doesn’t need to move, so he would only take a good enough deal or not buy. He realizes it is a buyers’ market.
Why doesn’t he need to buy? Because he already has a house for his family and is meeting the mortgage payments. But he sees the value of buying while the getting is good, which pumps more into the economy and he sees how it would put him in the position of strength.
That is because he knows that he would be able to rent out his current home. There are a ton of people out there who can no longer qualify for a mortgage due to credit problems even though they could likely afford one. This should leave him enough flexibility to rent out his current home for the amount of, or perhaps a slight increase over, his current mortgage.
By doing so, and by purchasing another home to move into at a bargain price, this man will have lowered his monthly mortgage payment, significantly increase his net work (by owning 2 homes), and set himself up nicely for the future. Once the market bounces back, he could potentially make a very nice profit on the home he purchased at a bargain.
He could also offer a “rent to buy” option for the original home and begin the road to a profit ahead of schedule. Based on the scenario I describe above, being able to offer a “rent to buy” could be more beneficial. A rent to buy tenant will take much better care of the home compared with a 6-month or 1 year lease tenant.
This is exactly the type of story we should be seeing a lot more often than it seems like we are.
Here is the link, if you’d like to see for yourself:
http://www.myeyewitnessnews.com/news/local/story/Foreclosed-Homes-Go-Up-For-Auction-In-Memphis-Area/rPi1Vx9-jEiVsVN4bQFkMA.cspx
From the industry side comes another version of an idea that for some reason hasn’t taken off yet. People don’t go shopping for real estate by going to the local realty office. Yet, very few realty offices are in high foot traffic locations. I like what CondoOutlet is doing in the St. Johns Town Center in the Jacksonville Florida area.
They have opened a 10,000 square foot real estate showroom with 2 “life sized” condo models. This is in a major shopping center. (This company is not a client, by the way.) While I am not here to promote a single realty company, I mention this because I applaud their strategy.
Over the years, I have been in literally hundreds of real estate agency offices. But maybe 2 or 3 of them in a location with any degree of significant “walk-in” possibility. With the price of gas being what it is and has been, and open houses seemingly always around the same times, this opportunity to be convenient to the public should not be overlooked any longer. That is, to reach the public that hasn’t already found a way to benefit by the current real estate market!
Wednesday, April 22, 2009
A true test of local real estate markets
It is a part of just about every day for me to read up about some local real estate markets and get the good, the bad, and the ugly. Mostly, as you can tell by several of my comments over the past few months, I get frustrated at the realty associations pushing out negative statistics while they are supposed to be promoting activity in the market.
Finally, I have found an article that is indicative of what we SHOULD be seeing when it comes to local news real estate reports. It shows me that the reports about how sales have dropped in whatever city compared with last year are spreading negativity, and to a point that the market isn't pie-in-the-sky either.
http://www.coloradoan.com/article/20090421/UPDATES03/90421021/1002/rss
That is the link to an article by a reporter in Ft. Collins, Colorado. It discusses realty agents, buyers, and sellers seeing differences in supply and demand within a few miles of each other. Ft. Collins is not exactly a 'major league' city in terms of size. Yet, a town of this comparably small size is experiencing fluctuation on the local market.
This story represents solid reporting. Even in the era of homes selling before they hit the local MLS, it was location, location, location that made the difference. A few red hot zip codes could reflect desirability and activity over an entire big city.
My point is that if a community the size of Ft. Collins has this much variation in terms of hot and cold buyers and sellers, there are probably thousands of stories along the same lines in the top 50 largest cities around the country.
I wish every realty agent and especially realty association board members and staffers would take note of the above linked story and do some serious digging into the "pockets" in their territory and farm areas.
Let's be able to compare the supply and demand against what is going on right now in other parts of the community - and not making it sound negative by comparing against last year's statistics.
Serious potential buyers, for whatever reason, were likely not looking to buy a year earlier. They probably don't care about home sales statistics from 12 months ago when they are looking now. What they do or would care about is which nearby neighborhood has the best value for them right now.
Local housing information can be used to spur the local real estate market.
Finally, I have found an article that is indicative of what we SHOULD be seeing when it comes to local news real estate reports. It shows me that the reports about how sales have dropped in whatever city compared with last year are spreading negativity, and to a point that the market isn't pie-in-the-sky either.
http://www.coloradoan.com/article/20090421/UPDATES03/90421021/1002/rss
That is the link to an article by a reporter in Ft. Collins, Colorado. It discusses realty agents, buyers, and sellers seeing differences in supply and demand within a few miles of each other. Ft. Collins is not exactly a 'major league' city in terms of size. Yet, a town of this comparably small size is experiencing fluctuation on the local market.
This story represents solid reporting. Even in the era of homes selling before they hit the local MLS, it was location, location, location that made the difference. A few red hot zip codes could reflect desirability and activity over an entire big city.
My point is that if a community the size of Ft. Collins has this much variation in terms of hot and cold buyers and sellers, there are probably thousands of stories along the same lines in the top 50 largest cities around the country.
I wish every realty agent and especially realty association board members and staffers would take note of the above linked story and do some serious digging into the "pockets" in their territory and farm areas.
Let's be able to compare the supply and demand against what is going on right now in other parts of the community - and not making it sound negative by comparing against last year's statistics.
Serious potential buyers, for whatever reason, were likely not looking to buy a year earlier. They probably don't care about home sales statistics from 12 months ago when they are looking now. What they do or would care about is which nearby neighborhood has the best value for them right now.
Local housing information can be used to spur the local real estate market.
Thursday, April 16, 2009
Finding the real estate resources...........
I was having one of those “If only I had…..” moments this morning when catching up on real estate related news. For as much time as I spend feeling like a preacher when talking to current and potential clients about ways to make the current real estate market advantegous, as well as friends and family, I could have been a contender myself.
Looks like it is time to circle back to an idea presented to me just over 20 years ago that didn’t materialize at the time. Maybe this will get you to think about this as well. This will not sound like a real estate marketing idea but stick with me.
Years ago when I had more time to devote to it, I was in a fantasy sports league with a group of 11 other guys aged between 25 and 40. That was back when I would constantly have to explain what a fantasy league is and does. About half of the group had gotten together for lunch one day when one of the guys said he heard about some land nearby that was about to be put up for sale. He went on to wonder to the group about what could happen if 10 of us would each put up $5,000. That would give us $50,000 as a down payment on a million dollar commercial property.
This happened to be around the time I was starting to get involved with a client looking to market a technology feature to real estate offices. (This turned out to be the springboard for what I have been doing ever since!) I thought that was an interesting idea, especially since someone I knew was making his living from managing family owned commercial properties and he had plenty of time to travel and enjoy his life.
As it goes with a group of casual acquaintances, the “group of friends” idea didn’t make it past a first meeting. Even though I have thought about it from time to time, it is a challenge to find enough people trustworthy enough to do this, let alone enough that would have a few thousand dollars to do this.
Personally, one of my investments is in a real estate syndication, but I don’t have any hands-on involvement even though I have seen a small profit in the past couple years. But now I’m kicking myself for not pursuing that sort of thing over 20 years ago, and then looking to move up the ladder. That’s how success in real estate starts. Do something like that and then buy out others in the group, or use the partnership success as a springboard.
Now I fast forward to today. This is totally pie-in-the-sky, but the story from Boston about Normandy Real Estate Partners buying the John Hancock Tower in Boston for $660.6 million dollars. Not that I would have been in a partnership with that much in capital. It’s more what they accomplished than the amount.
Upon further review, it turns out that the John Hancock Tower was about to go into foreclosure, and the property was being auctioned to attempt to prevent that foreclosure. Since much of my time now is being spent looking for single family homes and investment properties to go to auction, it shows the tremendous opportunities that real estate auctions are bringing.
In case you weren’t aware (and I wouldn’t expect anyone to know this off hand!), the Hancock Tower in Boston was sold to the ownership group that avoided foreclosure as recently as 2006. Less than 3 years ago the (now) previous owners bought it. For $1.3 billion dollars. To translate, this real estate partnership bought one of the most significant properties in a major city and “saved” more than a half-billion dollars.
To put it mildly, there’s no way I can kick myself for missing out on that deal. It’s not like I could have written a check and bid a few hundred thousand more for it.
The point is that it got me to think that there must be some lesser scale Hancock Towers out there, if only I and a group of others could be ready when they are found. Those of you with some money to invest might want to think about others you know in the same position and the power of group resources. And those of you in the real estate community might want to think creatively as well. What’s that saying? It’s not what you know, it is WHO you know.”
Looks like it is time to circle back to an idea presented to me just over 20 years ago that didn’t materialize at the time. Maybe this will get you to think about this as well. This will not sound like a real estate marketing idea but stick with me.
Years ago when I had more time to devote to it, I was in a fantasy sports league with a group of 11 other guys aged between 25 and 40. That was back when I would constantly have to explain what a fantasy league is and does. About half of the group had gotten together for lunch one day when one of the guys said he heard about some land nearby that was about to be put up for sale. He went on to wonder to the group about what could happen if 10 of us would each put up $5,000. That would give us $50,000 as a down payment on a million dollar commercial property.
This happened to be around the time I was starting to get involved with a client looking to market a technology feature to real estate offices. (This turned out to be the springboard for what I have been doing ever since!) I thought that was an interesting idea, especially since someone I knew was making his living from managing family owned commercial properties and he had plenty of time to travel and enjoy his life.
As it goes with a group of casual acquaintances, the “group of friends” idea didn’t make it past a first meeting. Even though I have thought about it from time to time, it is a challenge to find enough people trustworthy enough to do this, let alone enough that would have a few thousand dollars to do this.
Personally, one of my investments is in a real estate syndication, but I don’t have any hands-on involvement even though I have seen a small profit in the past couple years. But now I’m kicking myself for not pursuing that sort of thing over 20 years ago, and then looking to move up the ladder. That’s how success in real estate starts. Do something like that and then buy out others in the group, or use the partnership success as a springboard.
Now I fast forward to today. This is totally pie-in-the-sky, but the story from Boston about Normandy Real Estate Partners buying the John Hancock Tower in Boston for $660.6 million dollars. Not that I would have been in a partnership with that much in capital. It’s more what they accomplished than the amount.
Upon further review, it turns out that the John Hancock Tower was about to go into foreclosure, and the property was being auctioned to attempt to prevent that foreclosure. Since much of my time now is being spent looking for single family homes and investment properties to go to auction, it shows the tremendous opportunities that real estate auctions are bringing.
In case you weren’t aware (and I wouldn’t expect anyone to know this off hand!), the Hancock Tower in Boston was sold to the ownership group that avoided foreclosure as recently as 2006. Less than 3 years ago the (now) previous owners bought it. For $1.3 billion dollars. To translate, this real estate partnership bought one of the most significant properties in a major city and “saved” more than a half-billion dollars.
To put it mildly, there’s no way I can kick myself for missing out on that deal. It’s not like I could have written a check and bid a few hundred thousand more for it.
The point is that it got me to think that there must be some lesser scale Hancock Towers out there, if only I and a group of others could be ready when they are found. Those of you with some money to invest might want to think about others you know in the same position and the power of group resources. And those of you in the real estate community might want to think creatively as well. What’s that saying? It’s not what you know, it is WHO you know.”
Thursday, April 2, 2009
Pizza and the real estate market
As much as everyone else, I got a chuckle out of the story from Cincinnati about somebody finding the online promotional code for a free pizza from Domino's and spreading the word to the point where local Domino's wound up giving away more than 600 pizzas in less than one day.
But if you are a realty agent or a mortgage broker/lender, my suggestion is to stop chuckling and start taking action when you hear about something like that in time. In this instance, a Domino's official supposedly got wind of this "not supposed to have been used" code being discovered and they were able to pull it after a few costly hours.
If I were a realty agent and found out about this, I would send out an e-mail to my client base ASAP to alert them to the possibility of a free pizza and which site to go to before it is too late.
Why, you ask?
Think about it. It is really all about marketing. Chances are a percentage of the people you send it to will e-mail you back or call you to thank you for letting them know, and/or to ask how you found out. I am here to tell you that is some valuable information, and it is exclusive to you.
Suppose even one or two people find out in time and GET a free pizza. It is because of you and they will thank you. More importantly, you know that they frequently monitor incoming e-mail and are prepared to act. Think about that when you SELL or even book your next listing. Chances are you will get some "thanks anyway!" responses over the next 24 to 48 hours. Let's say your "immediate client list" has 50 e-mail addresses on it.
Even if your result is, say, 20 (and that's less than half) people responding in some form to your helpful "alert" within a couple of days, you now have a personal and exclusive list of 20 people who will open e-mails from you. Keep that in mind when you have a listing that is hours away from hitting the MLS and being seen online. That is why you ask!
If you are a mortgage broker/lender, having a similar list of people who will definitely check your e-mails can be very handy when rates next take a dip, which seems to be every week of late.
Heck - an agent or lender could offer to take the family out for pizza to review their current situation against the other financial opportunities out there.
Every business day I contact and consult with realty agents and mortgage brokers/lenders looking for low cost ways to attract immediate business. It can be done, whether with cheese or sausage.
But if you are a realty agent or a mortgage broker/lender, my suggestion is to stop chuckling and start taking action when you hear about something like that in time. In this instance, a Domino's official supposedly got wind of this "not supposed to have been used" code being discovered and they were able to pull it after a few costly hours.
If I were a realty agent and found out about this, I would send out an e-mail to my client base ASAP to alert them to the possibility of a free pizza and which site to go to before it is too late.
Why, you ask?
Think about it. It is really all about marketing. Chances are a percentage of the people you send it to will e-mail you back or call you to thank you for letting them know, and/or to ask how you found out. I am here to tell you that is some valuable information, and it is exclusive to you.
Suppose even one or two people find out in time and GET a free pizza. It is because of you and they will thank you. More importantly, you know that they frequently monitor incoming e-mail and are prepared to act. Think about that when you SELL or even book your next listing. Chances are you will get some "thanks anyway!" responses over the next 24 to 48 hours. Let's say your "immediate client list" has 50 e-mail addresses on it.
Even if your result is, say, 20 (and that's less than half) people responding in some form to your helpful "alert" within a couple of days, you now have a personal and exclusive list of 20 people who will open e-mails from you. Keep that in mind when you have a listing that is hours away from hitting the MLS and being seen online. That is why you ask!
If you are a mortgage broker/lender, having a similar list of people who will definitely check your e-mails can be very handy when rates next take a dip, which seems to be every week of late.
Heck - an agent or lender could offer to take the family out for pizza to review their current situation against the other financial opportunities out there.
Every business day I contact and consult with realty agents and mortgage brokers/lenders looking for low cost ways to attract immediate business. It can be done, whether with cheese or sausage.
Tuesday, March 31, 2009
If you didn't refinance yet.............
If you did not yet refinance, and conditions have been such that you would have benefitted in some way, you need to keep some changes in mind if and as you revisit the possibility in the weeks to come.
Fannie and Freddie have added what they call "loan level price adjustments" which take effect on April 1st - no fooling. It looks like the only way to avoid these extra fees is to have a FICO score of at least 740, and that isn't easy in today's economic client.
Yet, it could depend on which lender you would use. It is believed that some lenders (and we don't know how many or how few) already have incorporated these "extra" fees into their costs during the first quarter. While doing so likely cost some borrowers more than it should have, this does mean it is possible that a quote of costs you may have recently received could include these figures.
Thus, if you are planning on contacting one or more lenders about doing a re-fi in the near future, please clarify about the impact on these additional fees. If it could cost you a few hundred dollars more than you anticipated to get a re-fi done, factor it out against your total and actual monthly savings.
I have also heard about some lenders increasing their underwriting and processing fees by as much as $300 to $400. On one hand, I can understand this because many lenders have to work harder to put loans through because of the new credit concerns and restrictions. But on the other hand, the lenders need these loans in order to survive and a reduced profit is a lot better than none at all.
My point is that if the new costs and additional fees were to, for example, result in an additional $1,200 cost, you could look at it that it is really costing you an "additional" $100 per month over the first year. If you are refinancing to save, say, $150 per month, your savings would really be equal to $50 per month for your first year. Is it really worth it?
On the other hand, I have heard too many "I'm going to wait and see what happens" stories from both consumers and lenders over the past few weeks. My fear is that too many people will wait an additional 6 months or so to refinance to THEN start saving a couple hundred dollars per month. But in waiting, they paid the "extra" $200 per month (total $1,200 using this example). Add another $1,200 for the additional fees just described, and a borrower could, in effect, have paid $2,400 more because they waited. Probably not enough to offset the lower rate they waited for.
By all means, check with different lenders and examine everything you are being quoted.
If you are lender, be sure you explain the new fees and their impact on potential borrowers so that you don't leave them disappointed. If you are a realty agent, you might wish to help your client consider the merits of refinancing vs. a downsize or lateral move for greater monthly savings in this economy. Doing that could produce either an immediate or long term sale for you.
Fannie and Freddie have added what they call "loan level price adjustments" which take effect on April 1st - no fooling. It looks like the only way to avoid these extra fees is to have a FICO score of at least 740, and that isn't easy in today's economic client.
Yet, it could depend on which lender you would use. It is believed that some lenders (and we don't know how many or how few) already have incorporated these "extra" fees into their costs during the first quarter. While doing so likely cost some borrowers more than it should have, this does mean it is possible that a quote of costs you may have recently received could include these figures.
Thus, if you are planning on contacting one or more lenders about doing a re-fi in the near future, please clarify about the impact on these additional fees. If it could cost you a few hundred dollars more than you anticipated to get a re-fi done, factor it out against your total and actual monthly savings.
I have also heard about some lenders increasing their underwriting and processing fees by as much as $300 to $400. On one hand, I can understand this because many lenders have to work harder to put loans through because of the new credit concerns and restrictions. But on the other hand, the lenders need these loans in order to survive and a reduced profit is a lot better than none at all.
My point is that if the new costs and additional fees were to, for example, result in an additional $1,200 cost, you could look at it that it is really costing you an "additional" $100 per month over the first year. If you are refinancing to save, say, $150 per month, your savings would really be equal to $50 per month for your first year. Is it really worth it?
On the other hand, I have heard too many "I'm going to wait and see what happens" stories from both consumers and lenders over the past few weeks. My fear is that too many people will wait an additional 6 months or so to refinance to THEN start saving a couple hundred dollars per month. But in waiting, they paid the "extra" $200 per month (total $1,200 using this example). Add another $1,200 for the additional fees just described, and a borrower could, in effect, have paid $2,400 more because they waited. Probably not enough to offset the lower rate they waited for.
By all means, check with different lenders and examine everything you are being quoted.
If you are lender, be sure you explain the new fees and their impact on potential borrowers so that you don't leave them disappointed. If you are a realty agent, you might wish to help your client consider the merits of refinancing vs. a downsize or lateral move for greater monthly savings in this economy. Doing that could produce either an immediate or long term sale for you.
Tuesday, March 24, 2009
Agents and Clients Should Give Feedback
I always encourage my clients who are realty agents to get as much feedback and input from their clients as possible. Yesterday’s post about potential buyers not seeing the vision of making changes or improvements themselves in order to further a good deal on a home drew a couple of nice responses from clients.
One of my clients reminded me that not everybody they work for is as verbal or expressive about their likes and dislikes when it comes to house hunting. I responded that sometimes the agent has to take charge of the situation and ask good questions to get the concerns out. Sometimes it can be done by making a suggestion at a key moment.
A simple “I think that living room would look better with a lighter color” would hopefully spark a “I was thinking the same thing!” or “Actually, I thought the color worked well”. Presto. Now you have a good idea of what color(s) most appeal to your client. And so on.
If you are showing a home to a potential buyer, within minutes of leaving (and before arriving at the next home if it is a multiple showing) you should have as much feedback from the potential buyer, positive or negative, as you can.
Or, if you are looking at homes with your agent, you might also get some feedback from one who knows. I saw nothing wrong with asking my agent questions like, “I liked that sliding door to the patio. Do the other homes we’ll be looking at have that?”. As a buyer, I want the expertise of someone who has seen other homes in the area so that I can compare as well.
To me, the buyer and the realty agent should view each other as an important resource. I have even helped one client to develop a checklist for potential buyers to directly indicate what they like and don’t like about each house they see during the hunt.
The next step is to distinguish between a concern which could be controlled and one which cannot. I wrote yesterday about my wife and I not even wanting to look at a unit next to a power line and with an access road not having a stoplight out onto a very busy road. Even if the unit itself was a bargain and had the features we were looking for, I would have still had those obstacles in the way. Since I can’t remove power lines and build a stoplight, that was out of my control.
Yet, seeing an obvious boys bedroom in a house that would be for girls should not present a challenge. If everything else checks out and the price is right, I wouldn’t let a paint job on a couple of rooms stop me from a purchase.
The potential buyer and the agent need to think this way throughout the process. If you really like a house but estimate you would spend $3,000 to make the changes you want, it might compare favorably against paying $5,000 more for a house you don’t like as much overall.
If you are the buyer, make your decision based on a number of factors. If you are the agent, use good comparisons from your local experience to help make that decision. Maybe we can all work to reduce the “no hurry – the house will be there” approach that is bogging down the market.
One of my clients reminded me that not everybody they work for is as verbal or expressive about their likes and dislikes when it comes to house hunting. I responded that sometimes the agent has to take charge of the situation and ask good questions to get the concerns out. Sometimes it can be done by making a suggestion at a key moment.
A simple “I think that living room would look better with a lighter color” would hopefully spark a “I was thinking the same thing!” or “Actually, I thought the color worked well”. Presto. Now you have a good idea of what color(s) most appeal to your client. And so on.
If you are showing a home to a potential buyer, within minutes of leaving (and before arriving at the next home if it is a multiple showing) you should have as much feedback from the potential buyer, positive or negative, as you can.
Or, if you are looking at homes with your agent, you might also get some feedback from one who knows. I saw nothing wrong with asking my agent questions like, “I liked that sliding door to the patio. Do the other homes we’ll be looking at have that?”. As a buyer, I want the expertise of someone who has seen other homes in the area so that I can compare as well.
To me, the buyer and the realty agent should view each other as an important resource. I have even helped one client to develop a checklist for potential buyers to directly indicate what they like and don’t like about each house they see during the hunt.
The next step is to distinguish between a concern which could be controlled and one which cannot. I wrote yesterday about my wife and I not even wanting to look at a unit next to a power line and with an access road not having a stoplight out onto a very busy road. Even if the unit itself was a bargain and had the features we were looking for, I would have still had those obstacles in the way. Since I can’t remove power lines and build a stoplight, that was out of my control.
Yet, seeing an obvious boys bedroom in a house that would be for girls should not present a challenge. If everything else checks out and the price is right, I wouldn’t let a paint job on a couple of rooms stop me from a purchase.
The potential buyer and the agent need to think this way throughout the process. If you really like a house but estimate you would spend $3,000 to make the changes you want, it might compare favorably against paying $5,000 more for a house you don’t like as much overall.
If you are the buyer, make your decision based on a number of factors. If you are the agent, use good comparisons from your local experience to help make that decision. Maybe we can all work to reduce the “no hurry – the house will be there” approach that is bogging down the market.
Monday, March 23, 2009
Seller Decisions & Their Impact (or lack thereof)
One of the business techniques I have used successfully over the years is to look at a situation from the point of view of everyone involved, no matter what their part or role in a decision being made. I can learn a lot by taking the time to do that, and nowhere is this more true than in all of the real estate related marketing I do.
The story I am about to comment on did not involve anyone I know or represent. It is a good one to apply my theory to, in another attempt to revise the mindset of the current real estate market. I read about a property manager for a residential realty firm in the Midwest. They were representing and managing a long vacant house for sale due to an owner relocating for a new job.
It seems the home had what was considered to be unusual and bright colored carpet in its master bedroom and bright colored paint, including a bright pink for one, in each of the other two bedrooms. The property manager decided to replace the “rare” colored carpeting and have the other two bedrooms repainted with neutral colors. The story says that shortly thereafter, the firm received two offers on the property. Two more than the previous months with the replaced color scheme. This story was, of course, designed to make the listing realty firm look good, and to show how they both maintain and sold a property.
Now comes my theory of looking at this from all points of view – as I see it. If I were the seller, and was told about the paint and carpet jobs (since I’m not sure who actually paid for it!), I would ask why this wasn’t done right after I moved out. The agent is trying to look a hero for making the decision that made a difference and drew offers. So why did this decision take so long to make? I would think my agent would already have this knowledge and input before the house is put up for sale. If that were me, I would expect the cost of the carpet and paint to come out of the commission, since the delay of this “decision” meant a delay in my getting the house sold.
If I were the agent, and hadn’t known to suggest the carpet and paint changes at the outset, I would agree to have the cost of the changes come out of my commission. I would think that now seeing proof that the appearance of details such as paint and carpet make a significant difference in an empty house will make me a lot more in commissions in the future by now knowing to do this.
But now we move on to if I were the buyer. This is where I shoot holes in the whole story. If I liked the house enough and it was priced right, I wouldn’t care if the carpet was purple polka dots. If I wanted it and a reasonable offer was accepted, I would simply get bids and choose carpeting and/or paint jobs that I want, and have that done myself. I feel that I could do better by hiring who I choose and staying on top of it to get it done. Thus, if it is true that people really were not buying this home because of unusual or bright carpet and paint colors, then those early potential buyers may have missed out on a good deal.
When a home is being shown while the sellers still occupy it, potential buyers both know and are reminded that they would have their own furniture in each room and not to judge by what is currently there. Then why should the carpet and paint be treated any differently?
I would also assume that these potential and the eventual buyer had representation by a realty agent. This tells me that either the home wasn’t priced right, and that is the real reason it didn’t sell sooner, or the buyer realty agents missed out on an opportunity for a faster sale by not pointing out that paint and carpet can be done before moving in. I truly hope it was really the price and this “story” was slanted to try to make the realty firm look good, which it shouldn’t.
Going back 3 years to when my wife and I were last looking for our home, I always made it a point to share the good and bad about each home we were shown with our realty agent. There was one unit we drove to and didn’t even go inside because it was right next to a power line tower. Another where the reason we wouldn’t buy is because the only access road into the development fed into and out of an always busy major street, but there was no stoplight. I said if we couldn’t get in and out of there in morning rush hour it wasn’t worth the hassle.
At the home we eventually bought, we talked about what changes and improvements we wanted as soon as we bought. The paint wasn’t one of them, but if there had been a weird color, we would have handled that.
What I am getting to here is that there is a lot of blame for this one property to have taken a long time to sell, considering it went vacant due to a professional move. A potential buyer could have gotten a good deal and had some paint and carpet work done. The property manager wouldn’t have had to wait months to then make a decision that “helps” the sale. The seller doesn’t care what happens to the house as long as the sale is made.
This is not about the one realty firm, however. It is the lack of aggressive thinking and the “How can we make this happen?” attitude. It is not only “the economy” as a prime reason why the housing market is in the shape it is right now. Maybe a brain stimulus would benefit even more than the economic one.
The story I am about to comment on did not involve anyone I know or represent. It is a good one to apply my theory to, in another attempt to revise the mindset of the current real estate market. I read about a property manager for a residential realty firm in the Midwest. They were representing and managing a long vacant house for sale due to an owner relocating for a new job.
It seems the home had what was considered to be unusual and bright colored carpet in its master bedroom and bright colored paint, including a bright pink for one, in each of the other two bedrooms. The property manager decided to replace the “rare” colored carpeting and have the other two bedrooms repainted with neutral colors. The story says that shortly thereafter, the firm received two offers on the property. Two more than the previous months with the replaced color scheme. This story was, of course, designed to make the listing realty firm look good, and to show how they both maintain and sold a property.
Now comes my theory of looking at this from all points of view – as I see it. If I were the seller, and was told about the paint and carpet jobs (since I’m not sure who actually paid for it!), I would ask why this wasn’t done right after I moved out. The agent is trying to look a hero for making the decision that made a difference and drew offers. So why did this decision take so long to make? I would think my agent would already have this knowledge and input before the house is put up for sale. If that were me, I would expect the cost of the carpet and paint to come out of the commission, since the delay of this “decision” meant a delay in my getting the house sold.
If I were the agent, and hadn’t known to suggest the carpet and paint changes at the outset, I would agree to have the cost of the changes come out of my commission. I would think that now seeing proof that the appearance of details such as paint and carpet make a significant difference in an empty house will make me a lot more in commissions in the future by now knowing to do this.
But now we move on to if I were the buyer. This is where I shoot holes in the whole story. If I liked the house enough and it was priced right, I wouldn’t care if the carpet was purple polka dots. If I wanted it and a reasonable offer was accepted, I would simply get bids and choose carpeting and/or paint jobs that I want, and have that done myself. I feel that I could do better by hiring who I choose and staying on top of it to get it done. Thus, if it is true that people really were not buying this home because of unusual or bright carpet and paint colors, then those early potential buyers may have missed out on a good deal.
When a home is being shown while the sellers still occupy it, potential buyers both know and are reminded that they would have their own furniture in each room and not to judge by what is currently there. Then why should the carpet and paint be treated any differently?
I would also assume that these potential and the eventual buyer had representation by a realty agent. This tells me that either the home wasn’t priced right, and that is the real reason it didn’t sell sooner, or the buyer realty agents missed out on an opportunity for a faster sale by not pointing out that paint and carpet can be done before moving in. I truly hope it was really the price and this “story” was slanted to try to make the realty firm look good, which it shouldn’t.
Going back 3 years to when my wife and I were last looking for our home, I always made it a point to share the good and bad about each home we were shown with our realty agent. There was one unit we drove to and didn’t even go inside because it was right next to a power line tower. Another where the reason we wouldn’t buy is because the only access road into the development fed into and out of an always busy major street, but there was no stoplight. I said if we couldn’t get in and out of there in morning rush hour it wasn’t worth the hassle.
At the home we eventually bought, we talked about what changes and improvements we wanted as soon as we bought. The paint wasn’t one of them, but if there had been a weird color, we would have handled that.
What I am getting to here is that there is a lot of blame for this one property to have taken a long time to sell, considering it went vacant due to a professional move. A potential buyer could have gotten a good deal and had some paint and carpet work done. The property manager wouldn’t have had to wait months to then make a decision that “helps” the sale. The seller doesn’t care what happens to the house as long as the sale is made.
This is not about the one realty firm, however. It is the lack of aggressive thinking and the “How can we make this happen?” attitude. It is not only “the economy” as a prime reason why the housing market is in the shape it is right now. Maybe a brain stimulus would benefit even more than the economic one.
Tuesday, March 17, 2009
The new wave - real estate auctions mean quicker sales
I am finally seeing a growing number of properties going to auction. Before you think I'm talking about abandoned, already foreclosed, or distressed properties, guess again.
Auctions are quickly becoming "in". They are not for problem properties, and thankfully, no longer limited to builders, developers, and banks. Individual sellers can do it. Considering that many listed homes are staying on the market for 3 months or longer, the prospect of having an auction for a home or investment property which needs to be sold being just 30 days away has taken on a whole new meaning. A fresh one.
If you have a home to sell, it no longer has to risk being on the market for month after month. As long as it is priced right. Bidders at most property auctions need to be pre-qualified and come with some money in hand. In other words, a potential buyer needs to show both money and some level of commitment before the auction even begins. Face it, that is not likely to happen between 1:00 and 4:00 on Sunday when your front door is loose in anticipation of visitors to an open house.
To me, the most appealing part of this (besides the faster sale) is the possibility of having more than one possible buyer bidding at the same time. The ability to cut into that vicious cycle of calling and running from one buyer to the seller and the other buyer to the seller and back to both buyers and the number of man hours that waste is most welcome.
Having that deadline of minutes or seconds where if a potential buyer doesn't bid right away he or she loses out is a blessing to the seller.
In this challenging marketplace, providing a faster option for motivated home sellers, regardless of mortgage or foreclosure status, is the best thing to come along in years. Personally, I worked on the "Open House Hotline" updates every week for 15 years. The whole idea is to get potential buyers to a property for sale. The possibility of going online or seeing the weekend Real Estate listing of definite auctions for this weekend means that sales will be made. Way better than an open house list where "lookers" can visit and wait three weeks before making a lowball offer.
On the right side you will see links to a couple of sites which provide more details. If you or your client needs to sell quickly, this is totally worth checking out.
Auctions are quickly becoming "in". They are not for problem properties, and thankfully, no longer limited to builders, developers, and banks. Individual sellers can do it. Considering that many listed homes are staying on the market for 3 months or longer, the prospect of having an auction for a home or investment property which needs to be sold being just 30 days away has taken on a whole new meaning. A fresh one.
If you have a home to sell, it no longer has to risk being on the market for month after month. As long as it is priced right. Bidders at most property auctions need to be pre-qualified and come with some money in hand. In other words, a potential buyer needs to show both money and some level of commitment before the auction even begins. Face it, that is not likely to happen between 1:00 and 4:00 on Sunday when your front door is loose in anticipation of visitors to an open house.
To me, the most appealing part of this (besides the faster sale) is the possibility of having more than one possible buyer bidding at the same time. The ability to cut into that vicious cycle of calling and running from one buyer to the seller and the other buyer to the seller and back to both buyers and the number of man hours that waste is most welcome.
Having that deadline of minutes or seconds where if a potential buyer doesn't bid right away he or she loses out is a blessing to the seller.
In this challenging marketplace, providing a faster option for motivated home sellers, regardless of mortgage or foreclosure status, is the best thing to come along in years. Personally, I worked on the "Open House Hotline" updates every week for 15 years. The whole idea is to get potential buyers to a property for sale. The possibility of going online or seeing the weekend Real Estate listing of definite auctions for this weekend means that sales will be made. Way better than an open house list where "lookers" can visit and wait three weeks before making a lowball offer.
On the right side you will see links to a couple of sites which provide more details. If you or your client needs to sell quickly, this is totally worth checking out.
Friday, March 13, 2009
Flood Safety Awareness Week is coming..........
Flood Safety Awareness Week is March 16 through 20. Based on the heavy rain and snow that hit much of the northern part of the country last weekend, this is especially important. I didn’t realize until this week that FEMA reports that 90% of all natural disasters in the country involve flooding. I’ll admit I would have guessed fires and hurricane winds before flooding.
To that point, the National Weather Service has contributed more data and additional resources to increase knowledge of what to do before, during, and after a flood. Especially before. The government web site, www.FloodSmart.gov, has beefed up the information it now provides.
It is worth knowing about, even for those who do not live in a flood threatened area. And once again, if you are a realty agent or a lender, you should let your current and potential clients know about this. If I were an agent or lender and there is a river, lake, or creek in my farm area with any flooding history, I would be alerting nearby homeowners to this site, whether my clients or not. Again, it not only helps the community, but it presents a positive publicity spin.
To that point, the National Weather Service has contributed more data and additional resources to increase knowledge of what to do before, during, and after a flood. Especially before. The government web site, www.FloodSmart.gov, has beefed up the information it now provides.
It is worth knowing about, even for those who do not live in a flood threatened area. And once again, if you are a realty agent or a lender, you should let your current and potential clients know about this. If I were an agent or lender and there is a river, lake, or creek in my farm area with any flooding history, I would be alerting nearby homeowners to this site, whether my clients or not. Again, it not only helps the community, but it presents a positive publicity spin.
Thursday, March 12, 2009
How Supernanny can help lenders and realty agents
I’m going to once again pick up on the theme for industry professionals to be the messenger. More than ever, consumers need to be reminded that you are still in business with each day’s news of some other large company being in financial trouble.
If you are in Milwaukee, Chicago, Madison, or Green Bay (within 100 miles or more of Milwaukee), you have a reason to contact current and potential clients with a large family household within the next few days. ABC-TV show “Supernanny” is having a casting call in, of all places, the Milwaukee area on March 28th at an area restaurant. (Those in that part of the Midwest can contact me for the specifics. I’ll be happy to provide that for you. E-mail me at Dave at firstin.com.
True, this has nothing to do with real estate and won’t lower your mortgage for April. But it could have something to do with some easy self-promotion. Think about it. Even for those families who do not wish to attend, chances are it is news targeting them they would likely spread around to friends and other family members. Followed by the inevitable “How did you hear about this?”.
The person asking that question is not expecting to hear “My mortgage broker told me” or “From my real estate agent” in response. For once, it is a chance to have your name associated with something other than a stalled homes market.
So are home owners who have been waiting to refinance getting spoiled? The 30-year fixed at 80% LTV has been hovering around 5% for weeks now. The constant lowering of the rates that started just before Thanksgiving and continued for 10 consecutive weeks seems to have leveled off. That is still a good thing.
I could certainly understand people waiting to see if and how much the rate would drop “next week” while it was dropping. But now that it has been holding steady, isn’t it time to get the ball rolling? Some lenders have been telling me they have clients who are “still waiting” to refinance.
Some of these same lenders are not telling these potential borrowers that the fees associated with getting these loans are still expected to increase before year’s end. It is possible some lenders might be screwing themselves (and the potential borrowers) by playing the waiting game.
After all, if it would cost a borrower an additional $1,000 to refinance 6 months from now, and you factor in (for example) $200 “extra” per month by not refinancing, it means the borrower has really spent an additional $2,200 to wait that 6 months. And that is if the 30-year fixed rate doesn’t go up. We don’t know for certain that it won’t. If it goes down slightly, it might not be enough to recover $2,200 using this as an example.
Some of the mortgage lenders who are not explaining this to potential clients now might be out on the street themselves by the time those 6 months pass.
Same theory applies when a potential buyer decides to wait on a good deal for a home or investment property. True, the price could drop and the loan rate be lower in 3 months. But the property might not be available at that time either. The creative people are the ones who are succeeding in this market.
If you are in Milwaukee, Chicago, Madison, or Green Bay (within 100 miles or more of Milwaukee), you have a reason to contact current and potential clients with a large family household within the next few days. ABC-TV show “Supernanny” is having a casting call in, of all places, the Milwaukee area on March 28th at an area restaurant. (Those in that part of the Midwest can contact me for the specifics. I’ll be happy to provide that for you. E-mail me at Dave at firstin.com.
True, this has nothing to do with real estate and won’t lower your mortgage for April. But it could have something to do with some easy self-promotion. Think about it. Even for those families who do not wish to attend, chances are it is news targeting them they would likely spread around to friends and other family members. Followed by the inevitable “How did you hear about this?”.
The person asking that question is not expecting to hear “My mortgage broker told me” or “From my real estate agent” in response. For once, it is a chance to have your name associated with something other than a stalled homes market.
So are home owners who have been waiting to refinance getting spoiled? The 30-year fixed at 80% LTV has been hovering around 5% for weeks now. The constant lowering of the rates that started just before Thanksgiving and continued for 10 consecutive weeks seems to have leveled off. That is still a good thing.
I could certainly understand people waiting to see if and how much the rate would drop “next week” while it was dropping. But now that it has been holding steady, isn’t it time to get the ball rolling? Some lenders have been telling me they have clients who are “still waiting” to refinance.
Some of these same lenders are not telling these potential borrowers that the fees associated with getting these loans are still expected to increase before year’s end. It is possible some lenders might be screwing themselves (and the potential borrowers) by playing the waiting game.
After all, if it would cost a borrower an additional $1,000 to refinance 6 months from now, and you factor in (for example) $200 “extra” per month by not refinancing, it means the borrower has really spent an additional $2,200 to wait that 6 months. And that is if the 30-year fixed rate doesn’t go up. We don’t know for certain that it won’t. If it goes down slightly, it might not be enough to recover $2,200 using this as an example.
Some of the mortgage lenders who are not explaining this to potential clients now might be out on the street themselves by the time those 6 months pass.
Same theory applies when a potential buyer decides to wait on a good deal for a home or investment property. True, the price could drop and the loan rate be lower in 3 months. But the property might not be available at that time either. The creative people are the ones who are succeeding in this market.
Thursday, March 5, 2009
A reason to contact current and potential clients
In the past 25 years of my performing a variety of advertising and marketing tasks, I don't recall an idea this good getting such relatively little publicity. Let alone in this economy!
FedEx Kinko's has rather quietly promised an upcoming day to print resumes for those out of work at no cost at hundreds of their locations nationwide. A great idea to generate foot traffic while generating favorable publicity. Yet, I found out about only because a client asked if I had heard anything about this in marketing circles and I took the time to actually look for it.
You are probably wondering what this has to do with the real estate market. And you are right for wondering that, especially since that's what this blog is all about.
To those of you in the industry, whether on the real estate or mortgage lending side, it is about networking with your database of current and potential clients. And, like the header says, this becomes a major "excuse" to contact them.
Unfortunately, most of your current and potential clients know someone who is now out of work and needs some help with finding another job. Granted, printing out a few more professional looking resumes is no guarantee, but presenting the opportunity to people who wouldn't otherwise have known can make you look good.
Frankly, to me this is the sort of thing that realty offices and associations should be promoting as a help to community residents instead of pumping out the "how many fewer properties have sold within the past week" statistics that help keep the market so unsettled.
Rather than wait, I suggest you move on this now, before any late publicity hits on this, and before a competitor of yours does.
The more current and potential clients you have who are gainfully employed, the more opportunities you have for future referrals and sales. Otherwise, you will also need to print resumes.
This link has the details of the "resume day" coming up. Good luck!
http://www.bizjournals.com/memphis/stories/2009/03/02/daily29.html
FedEx Kinko's has rather quietly promised an upcoming day to print resumes for those out of work at no cost at hundreds of their locations nationwide. A great idea to generate foot traffic while generating favorable publicity. Yet, I found out about only because a client asked if I had heard anything about this in marketing circles and I took the time to actually look for it.
You are probably wondering what this has to do with the real estate market. And you are right for wondering that, especially since that's what this blog is all about.
To those of you in the industry, whether on the real estate or mortgage lending side, it is about networking with your database of current and potential clients. And, like the header says, this becomes a major "excuse" to contact them.
Unfortunately, most of your current and potential clients know someone who is now out of work and needs some help with finding another job. Granted, printing out a few more professional looking resumes is no guarantee, but presenting the opportunity to people who wouldn't otherwise have known can make you look good.
Frankly, to me this is the sort of thing that realty offices and associations should be promoting as a help to community residents instead of pumping out the "how many fewer properties have sold within the past week" statistics that help keep the market so unsettled.
Rather than wait, I suggest you move on this now, before any late publicity hits on this, and before a competitor of yours does.
The more current and potential clients you have who are gainfully employed, the more opportunities you have for future referrals and sales. Otherwise, you will also need to print resumes.
This link has the details of the "resume day" coming up. Good luck!
http://www.bizjournals.com/memphis/stories/2009/03/02/daily29.html
Tuesday, March 3, 2009
What about "Rent To Buy"?
I’m looking for innovation in today’s real estate market, and all I keep getting are statistics. I call it the high cost of procrastination.
Maybe it only seems this way, but it is as though everybody is now waiting when it comes to real estate and especially home sales. Therein lies the problem. Everybody is waiting. That means nobody is acting.
Whatever happened to the saying “It takes money to make money”? People used to invest in real estate, but obviously not right now. Many who normally would are waiting to see what happens. People would invest in the stock market, but based on the amount of decline over the past few months, not anymore. Market investors are waiting to see what happens. Others would invest in CD and Money Market accounts, but those no longer pay out enough to make it worthwhile. Potential investors in CD’s are waiting to see what happens.
So while everyone keeps waiting, what happens?
Real estate will always be there. A company might not, a bank or investment company might not, but real estate will always be there. And it provides a chance to deal in the now.
Want to sell your home or a property you own? You think you can’t or won’t because of the market. That is playing the same waiting game everybody else is.
I continue to have mortgage lenders around the country tell me that they are not able to qualify a large percentage of potential buyers because of credit or down payment issues. Many of these lenders tell me they don’t want to advertise their own services because of the marketplace. And some of those same lenders have a disconnected phone number when I try them back a few weeks later to see how they are doing.
Some lenders and realty agents overlook opportunity. In the circumstance described above, it seems to me that the “turned down” potential buyer has credit and/or down payment challenges. That is understandable in today’s economy. Yet, there did not seem to be an issue with them making a monthly mortgage payment if they had better credit and/or enough for a down payment.
To me, that “turn down” could well be turning down business. That same lender and realty agent could have been helping that potential buyer find a house to rent in the range they could afford.
True, I’m making that sound easy. Wait a minute. With thousands of homes listed for month after month in just about every area, it probably is.
That potential buyer should be presented with three simple words. Rent to buy. While that potential buyer is looking to restore or improve their credit rating and/or saving for a down payment, that potential buyer could actually be living in their “new” home. If they are renting to buy, they will surely take better care and do better maintenance when they have a future stake in the home. From the seller’s standpoint, even if they don’t quite get all of their monthly mortgage back, they can move on to a different location. Maybe even downgrade to remain steady with monthly obligations. Perhaps renting elsewhere while maintaining equity in a home costing them little to nothing.
Such a “rent to buy” arrangement could include the lender and realty agent and eventually provide them with commissions. Could be on the rental or for if and when the rental turns into a purchase. This could avert foreclosures and would help the revenue for lenders and realty agents. Significantly, it would not leave potential buyers “waiting” like the rest of the people in the industry.
Maybe it only seems this way, but it is as though everybody is now waiting when it comes to real estate and especially home sales. Therein lies the problem. Everybody is waiting. That means nobody is acting.
Whatever happened to the saying “It takes money to make money”? People used to invest in real estate, but obviously not right now. Many who normally would are waiting to see what happens. People would invest in the stock market, but based on the amount of decline over the past few months, not anymore. Market investors are waiting to see what happens. Others would invest in CD and Money Market accounts, but those no longer pay out enough to make it worthwhile. Potential investors in CD’s are waiting to see what happens.
So while everyone keeps waiting, what happens?
Real estate will always be there. A company might not, a bank or investment company might not, but real estate will always be there. And it provides a chance to deal in the now.
Want to sell your home or a property you own? You think you can’t or won’t because of the market. That is playing the same waiting game everybody else is.
I continue to have mortgage lenders around the country tell me that they are not able to qualify a large percentage of potential buyers because of credit or down payment issues. Many of these lenders tell me they don’t want to advertise their own services because of the marketplace. And some of those same lenders have a disconnected phone number when I try them back a few weeks later to see how they are doing.
Some lenders and realty agents overlook opportunity. In the circumstance described above, it seems to me that the “turned down” potential buyer has credit and/or down payment challenges. That is understandable in today’s economy. Yet, there did not seem to be an issue with them making a monthly mortgage payment if they had better credit and/or enough for a down payment.
To me, that “turn down” could well be turning down business. That same lender and realty agent could have been helping that potential buyer find a house to rent in the range they could afford.
True, I’m making that sound easy. Wait a minute. With thousands of homes listed for month after month in just about every area, it probably is.
That potential buyer should be presented with three simple words. Rent to buy. While that potential buyer is looking to restore or improve their credit rating and/or saving for a down payment, that potential buyer could actually be living in their “new” home. If they are renting to buy, they will surely take better care and do better maintenance when they have a future stake in the home. From the seller’s standpoint, even if they don’t quite get all of their monthly mortgage back, they can move on to a different location. Maybe even downgrade to remain steady with monthly obligations. Perhaps renting elsewhere while maintaining equity in a home costing them little to nothing.
Such a “rent to buy” arrangement could include the lender and realty agent and eventually provide them with commissions. Could be on the rental or for if and when the rental turns into a purchase. This could avert foreclosures and would help the revenue for lenders and realty agents. Significantly, it would not leave potential buyers “waiting” like the rest of the people in the industry.
Friday, February 20, 2009
Carolina On My Mind
No, not the James Taylor song. At least in this instance.
This may serve as the most classic of examples regarding my point over the past few months about how the real estate brokers sometimes shoot themselves in the foot.
Keep in mind that I have seen all of these stories within this week. It's not like conditions have changed since one or the other was written. That is far from being the case.
First, a couple of the stories released within the past few days with help from the very real estate associations that agents pay dues to and support:
http://www.digtriad.com/news/local_state/article.aspx?storyid=119397
http://www.newsobserver.com/business/story/1409013.html
So after reading these, why would an out-of-area (or even local) real estate investor even think of buying there? Some might even put an X through that region on their map and be done with it. Again, those stories above include info provided by the realty association. No one is out to attack the local marketplace.
And then, a national builder's association announces its 15 "best" builders markets around the country. And can you guess which state appears more than once in their Top 15 list?
Very good - it's North Carolina, with the Raleigh area being its highest, showing the top 7. And top 2 nationwide other than the state of Texas:
http://www.builderonline.com/local-markets/the-healthiest-housing-markets-for-2009.aspx?page=10
Right now I wish I had a client that is a builder in any of those areas of North Carolina, but unfortunately I don't. I'd be on them hour after hour to start a campaign showing that the reason the home market is in shambles is because there is so much interest in (name of developments). And show their web site and phone number.
What's that saying? "If you build it, they will come"? Especially in North Carolina. Ouch.
This may serve as the most classic of examples regarding my point over the past few months about how the real estate brokers sometimes shoot themselves in the foot.
Keep in mind that I have seen all of these stories within this week. It's not like conditions have changed since one or the other was written. That is far from being the case.
First, a couple of the stories released within the past few days with help from the very real estate associations that agents pay dues to and support:
http://www.digtriad.com/news/local_state/article.aspx?storyid=119397
http://www.newsobserver.com/business/story/1409013.html
So after reading these, why would an out-of-area (or even local) real estate investor even think of buying there? Some might even put an X through that region on their map and be done with it. Again, those stories above include info provided by the realty association. No one is out to attack the local marketplace.
And then, a national builder's association announces its 15 "best" builders markets around the country. And can you guess which state appears more than once in their Top 15 list?
Very good - it's North Carolina, with the Raleigh area being its highest, showing the top 7. And top 2 nationwide other than the state of Texas:
http://www.builderonline.com/local-markets/the-healthiest-housing-markets-for-2009.aspx?page=10
Right now I wish I had a client that is a builder in any of those areas of North Carolina, but unfortunately I don't. I'd be on them hour after hour to start a campaign showing that the reason the home market is in shambles is because there is so much interest in (name of developments). And show their web site and phone number.
What's that saying? "If you build it, they will come"? Especially in North Carolina. Ouch.
Thursday, February 12, 2009
If you are thinking refinance, think it now!
About half of my work week consists of contacting mortgage lenders and brokers around the country, including current and potential clients. Some appear to be holding the "wait and see" attitude regarding campaigning for business, including refinances. They could lose out, just as consumers could, by not looking into a refi as soon as possible.
Personally, my wife and I took advantage of the quick dip a year ago and reduced our monthly mortgage payment by more than $200 per month while the getting was good. I already know that this latest dip isn't worth it for me, but that's because I have been working with realty agents and mortgage lenders for 20 years. I'm not like most home owners and potential buyers out there.
Lowering the monthly payment is not the only reason for a refi. Just because the amount due is lowered on a refinance, it doesn't have to mean a reduction. Paying the $200 per month (or whatever you save) toward the principal will make a difference in the long run.
Yet, many mortgage lenders are playing the "wait and see" game and it keeps consumers from finding out the advantages of refinancing now if it makes sense. The smart ones have already done so, some at higher rates in late 2008 than what is out there right now.
Freddie Mac reports that U.S. homeowners cashed out over $17 billion (that is BILLION) in home equity through the refinance of prime first-lien mortgages for in the 4th quarter of 2008. That is the lowest amount since the first quarter of 2001. Statistics show that 14% of refinancing homeowners paid in extra money when they refinanced, reducing their mortgage debt. This is the highest cash-in share since the fourth quarter of 2004, when 19 percent of refinancing homeowners put cash into their home equity.
Not only that, but by playing the "wait and see" game, the additional funds being paid each month until or unless you refinance your home are going to add up. In other words, if you wait 6 months to save $300 per month instead of $200, it will in effect cost you an additional $600 by waiting.
In addition, there are no guarantees to home owners that the fees involved with a refinance will not rise between now and six months from now. Using the example in the previous paragraph, if six months from now the lender's fee to refinance increased even $500 from today, your waiting for better rates would actually be an additional $1,100 out of your pocket. (Compare that amount with your current monthly payment!)
This while I talk to homeowners who "figure" the mortgage rates will go down even further this year, and to lenders who want to "wait and see what happens". Seems to me there are a lot of homeowners who should know their mortgage refi options.
Personally, my wife and I took advantage of the quick dip a year ago and reduced our monthly mortgage payment by more than $200 per month while the getting was good. I already know that this latest dip isn't worth it for me, but that's because I have been working with realty agents and mortgage lenders for 20 years. I'm not like most home owners and potential buyers out there.
Lowering the monthly payment is not the only reason for a refi. Just because the amount due is lowered on a refinance, it doesn't have to mean a reduction. Paying the $200 per month (or whatever you save) toward the principal will make a difference in the long run.
Yet, many mortgage lenders are playing the "wait and see" game and it keeps consumers from finding out the advantages of refinancing now if it makes sense. The smart ones have already done so, some at higher rates in late 2008 than what is out there right now.
Freddie Mac reports that U.S. homeowners cashed out over $17 billion (that is BILLION) in home equity through the refinance of prime first-lien mortgages for in the 4th quarter of 2008. That is the lowest amount since the first quarter of 2001. Statistics show that 14% of refinancing homeowners paid in extra money when they refinanced, reducing their mortgage debt. This is the highest cash-in share since the fourth quarter of 2004, when 19 percent of refinancing homeowners put cash into their home equity.
Not only that, but by playing the "wait and see" game, the additional funds being paid each month until or unless you refinance your home are going to add up. In other words, if you wait 6 months to save $300 per month instead of $200, it will in effect cost you an additional $600 by waiting.
In addition, there are no guarantees to home owners that the fees involved with a refinance will not rise between now and six months from now. Using the example in the previous paragraph, if six months from now the lender's fee to refinance increased even $500 from today, your waiting for better rates would actually be an additional $1,100 out of your pocket. (Compare that amount with your current monthly payment!)
This while I talk to homeowners who "figure" the mortgage rates will go down even further this year, and to lenders who want to "wait and see what happens". Seems to me there are a lot of homeowners who should know their mortgage refi options.
Wednesday, February 11, 2009
Too many negative statistics.............
Those of you who have been following my blog for a while know how much I comment on the realty associations spending time and money to publish negative statistics about the local real estate market. Throwing more matches into the fire.
While I don't like seeing anyone put into this position, I will admit I found an element of humor while reading this story today:
http://www.naplesnews.com/news/2009/feb/10/home-resale-office-closes-miromar-outlets/?partner=RSS
Yes - it is true. The realty office of the President of the local Realty Association in Naples has shut down.
Naples thrives on those retiring and relocating from the cold weather cities up north, and here we are in the middle of February of one of the most brutal winters across the country in years. For this guy to have been elected President of the local realty Association, he has to have a great reputation and track record in the area.
But when people around the country, including the areas which have previously drawn home buyers to the Naples area, continue to be pounded with negative statistics, the carry over effect has had a direct impact.
Sure, I'm not going to deny that the economy has impacted many lives and that fewer people are looking at retiring and moving to Florida and/or buying a second home. But you can't tell me there isn't plenty of inventory to be had in south Florida, and probably at the best prices available in quite some time.
However, as people read about the decline in sales compared with previous years, it reflects poorly on the market - and not on the overall economy. My point continues to be that I could have just as easily read that "hundreds of homes sold in the Naples area in what many consider to be a down economy, with the most recent sales including an $800,000 home" or whatever it may have been. That would make someone get online or pick up a phone and seek more information. Reading that sales have dropped in a particular area is a negative reflection.
I don't know how many listings that realty office in Naples had, but now a large group of potential sellers is forced to relist their property simultaneously. While their association continues to pour out the negative statistics.
While I don't like seeing anyone put into this position, I will admit I found an element of humor while reading this story today:
http://www.naplesnews.com/news/2009/feb/10/home-resale-office-closes-miromar-outlets/?partner=RSS
Yes - it is true. The realty office of the President of the local Realty Association in Naples has shut down.
Naples thrives on those retiring and relocating from the cold weather cities up north, and here we are in the middle of February of one of the most brutal winters across the country in years. For this guy to have been elected President of the local realty Association, he has to have a great reputation and track record in the area.
But when people around the country, including the areas which have previously drawn home buyers to the Naples area, continue to be pounded with negative statistics, the carry over effect has had a direct impact.
Sure, I'm not going to deny that the economy has impacted many lives and that fewer people are looking at retiring and moving to Florida and/or buying a second home. But you can't tell me there isn't plenty of inventory to be had in south Florida, and probably at the best prices available in quite some time.
However, as people read about the decline in sales compared with previous years, it reflects poorly on the market - and not on the overall economy. My point continues to be that I could have just as easily read that "hundreds of homes sold in the Naples area in what many consider to be a down economy, with the most recent sales including an $800,000 home" or whatever it may have been. That would make someone get online or pick up a phone and seek more information. Reading that sales have dropped in a particular area is a negative reflection.
I don't know how many listings that realty office in Naples had, but now a large group of potential sellers is forced to relist their property simultaneously. While their association continues to pour out the negative statistics.
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