Prices Falling, Sellers Denying Worldwide

One of the nicest side-effects of blogging is the people you meet. I’ve “met” a really great Realtor in New Zealand, Rodney Dunn. Somehow he found my blog, and commented here. So in return I visited his blog and found a kindred soul, business-wise. If you ever move to New Zealand, or know someone who’s going there, I’ve got a Realtor there you can trust.

On to the point.

It seems that real estate is falling on hard times worldwide, as prices fall, buyers hesitate and sellers wallow in denial about the value of their home.  Many New Zealanders want to list their home for sale and over price it, hoping the “right buyer” will stumble along and pay waaaay more than the property is worth in this market.

This won’t happen. That’s not a news flash by any stretch. I’m still amazed at the number of potential sellers I speak with who won’t believe me when I try to explain this.

Even if you happened to find the 1 buyer in the world with his (or her) head under a rock for the past 24 months…. and that buyer is willing to overpay for your property…. that buyer will have a lender and an appraiser, or at the very least a Realtor.

You don’t need to find just 1 idiot to sell your house for more than market value. You need several. A fool is born every minute, it’s true. But the chances of finding several fools all in the same place at the same time, being foolish about the exact same thing aren’t good.

You’re better off playing the lottery.

Related Posts

1. Things That Don’t Influence Your Asking Price
2. Price It So You Don’t Lose Money
3. Your Neighbors Are Wrong

Fixing Bad MLS Photos

Remember yesterday’s post about staging the entryway of your home? (OK, so it wasn’t yesterday. I got a little busy.)

A few subtle photo fixing tips can make all the difference in the photos that go in the MLS.

First of all, if your home is priced above about $225,000 or so, your Realtor should hire a professional photographer. A pro’s photos won’t need any of this fixing.

If you’re doing the FSBO thing (for sale by owner, aka Fizzbo) or your Realtor doesn’t hire a professional photographer, at least make sure you or your Realtor do a little minor photo-fixing. I’m not talking about photoshopping in a lush green lawn where it doesn’t exist, or deleting a telephone pole in the middle of your yard, mind you.

Nothing deceptive, just make the photos look as good as the house. See the before and after below. It’s a really minor change. Photo fixing won’t overcome the fact that the seller didn’t spend a couple hundred dollars to fancy up the front entryway, but it helps.

Before

After

More Before and After photos. I used Google’s freeware photo editing software, Picasa. I highly recommend their “Straighten” feature.

Before

After

Before

After

In each case above, the “After” photo has been cropped, straightened and “Sharpened” using Picasa. For the living room shot I also used Picasa’s “Warmify” tool to take out the bluish tinge to the white walls. It all took about 90 seconds.

Will that 90 seconds sell these homes? No, of course not. But in a market that’s as tough as the one we’re in, sellers need every advantage they can get. The “After” photos might get a couple more people to come look in person. A couple more people looking in person might equal 1 offer. And one person making an offer is all you need.

Related Post – Good MLS Photos

Seller’s Stress

If you’re trying to sell your house in the current extreme buyers’ market, sometimes your days feel like this:

Buyers are bargain shopping in the extreme. They know sellers are at a disadvantage in this market.

Here’s some advice for handling those nail-biting weeks (months?) that you’re on the market for sale. It’s by no means a complete list; checkout the Related Posts for more.

A Few Ideas for Handling Seller’s Stress

1. Take up yoga, tai-chi or meditation
2. If your Realtor isn’t giving you a weekly or every-other-week update, ask for one
3. Ignore your neighbors’ asking prices; concentrate on nearby sold prices
4. Enlist the entire family in keeping the house clean for showings
5. Foster your pets out with family, friends and/or neighbors (pets are one of the quickest ways to decrease the value of your home)
6. Invest $20 in a new, cushy outside door mat
7. Slap a fresh coat of paint on everything, especially baseboards and door frames
8. To present the appearance of a clean house in under 5 minutes: wipe down counters, appliance fronts and mirrors with diluted Pine Sol or Windex
9. Remove 1/3 of everything in every closet in the house
10. Do the same with every bookcase
11. Take everything off the kitchen fridge. Buyers aren’t considering buying your five year old’s macaroni craft project so they don’t need to see it.
12. Hide your personal papers, bills, and so forth from the office/desk area (it’s nobody else’s business)
13. Take down family photos from every wall and dresser top
14. Remove the prescriptions from the medicine cabinet and the “marital aides” from the bedroom (people WILL look)
15. Counter every offer you receive, even the ones that make you want to scream profanities at the buyer (and see below about Handling Low Ball Offers)

Related Posts:

• Selling Is Like Joining the Army
• Handling Low Ball Offers
• Top 10 Things that DON’T Affect List Price

The Low Ball Offer

Reposting an oldie but a goodie. And given the current market, this advice is even more topical than when I originally posted it.

You love your house. But you must sell. You primp it, paint it, stage it, hire a brilliant Realtor and list it for sale at a price you think is fair. And then IT happens.

You receive an offer that’s SO LOW that you can’t remember the last time you felt so INSULTED!   (#$&*^%#!!!

Stop. The most important thing to remember in a strong buyer’s market like the Valley’s in right now is this — you MUST counter every offer received (if you can’t accept it outright.) Do NOT reject that insultingly lowball offer out of hand.

The second most important thing to remember is that your Realtor is bound by law to present every offer s/he receives on your behalf. Even the insulting ones. Do not shoot the messenger.

Whatever you need to do to get over being insulted, hurt and angry, go do it. Please! I’m begging you! Go beat up a tree. Scream into your pillow until your throat resembles roadkill. Run a marathon. Take Michael Flatley Lord of the Dance dancing lessons until you finally lose those last pesky 10 pounds. If you must scream at your Realtor, do it.

Whatever it takes, get over your anger. Then, sleep on it, and do what one of my teachers Michael Valenti calls “the head on the pillow” moment. When you lay down that night with your head on the pillow, and it’s just you and your conscience (or possibly a spouse or beloved pet) think about what number will actually give you peace of mind. The lowest number which you could look back on and feel good about 5 or 10 years from now. Imagine the number that will allow you to move on with your life, happily decamping to your new home. Because quality of life is infinitely more important than holding out for the last few dollars on your sale. And 10 or 20 years from now, you will not remember exactly how many dollars you held out for. You’ll only remember the miserable extra months you had to stay in a home which you no longer wanted.

One more important point while your head is on the pillow. STOP thinking about what your neighbor sold for. STOP thinking about what the other neighbor is now asking. STOP thinking about the advice well meaning friends and colleagues have given. STOP thinking about anybody but you and your family and what sale price would allow you to move on with your life and future plans. What your neighbors did or might do, and what your extended family, friends and coworkers think you should do are actually quite immaterial here. This is a moment for you and you alone. Relish the you-ness of it.

The next morning, call your Realtor and apologize for those names you called him/her. Then calmly take pen to paper and write out a counteroffer with the number you imagined last night.

This won’t work every time. Investors look at houses differently than most of us. They have zero emotion tied up in a purchase. Your counter will meet the investor’s bottom line or it won’t. Best case scenario – you’ve got a deal and can go begin the serene new life you imagined last night. Worst case scenario – well, it’s still OK. You’ve imagined the worst that could happen – accepting the lowest offer you can afford, and you still emerged on the other side with a happy image of moving on.

If there’s no deal — I suggest calling your Realtor again. Ask him/her to readjust your list price to a whole lot closer to your newly imagined bottom line. You’ll be calling the movers before you can say “negotiation”.

Staging Tips For Entryways

Staging is vital in making your home as appealing to potential buyers as possible. However, staging effectively can be a challenge in tract houses, which by nature are uninteresting square white boxes. Metro Phoenix is filled to bursting with tract housing, especially in the price ranges in reach of the average working family. Here’s a tip or two for making the entryway in an average house stand out.

Great Entryway!

Put up a really cushy, plush welcome mat. It should be thick enough and large enough that visitors to the house stop for a moment to notice the plushiness of the doormat. Slap a fresh coat of paint on your entryway door while you’re standing there admiring the new doormat.

If the front door has sidelight windows, clean them inside and out so they sparkle. The trick here is to make potential buyers stop for just a few seconds while they notice how lovely your exterior entryway is. If the outside is great, potential buyers will automatically think better of the inside.

Picture Number 1 is is an inviting outside entryway on a 1950’s brick ranch. Number 2? Not so much.  The homes are the same size and about the same floorplan. Granted, someone in home number 1 spent a chunk of change to switch out the front room windows and add landscaping. But the entryway of home number 2 could have been made more appealing with a few simple steps.

Entry Needs Help

First, lose the mobile basketball hoop. It’s tacky. If your kids play with it every single day, you can leave it in the driveway. But at least take 3 minutes to move it out of the photo frame.

Second, go to Target, WallMart or Home Depot and spend $250 on a bench or some chairs for the front door. While there, grab a plastic planter pot and a fern. Better yet, grab a plant that’s flowering. It’ll provide extra punch in the photo. Reds and yellows show up extremely well in online photographs.

Finally, make sure your Realtor zooms in on the front door when taking the photo. Buyers aren’t buying your driveway, so it shouldn’t be the focus of the shot.

Tomorrow – how a little photo fixing can go a long way.

Pricing Houses is Like Buying a Used Car

Here’s a little piece of advice I give to sellers who are struggling to really hear and internalize the pricing advice I’ve given them. (Because in today’s market, it never fails that my advised listing price is less than the sellers hoped for.)

Think about buying a new car. Or a used car. Whatever. You go online, you do your research. You know that the car you really want to buy should cost about $30,000. Or whatever, use any number you like; I’m using $30k because it’s nice and round and easy and complicated math isn’t my bag.

So you’ve budgeted $30,000 for your new car. You’ve found out – online – that there are 2 dealerships nearby offering the exact car you want. One has listed the car at $35,000. The second dealer listed the same car at $50,000. Being the Age of Internet, you can see all this online, easily, without leaving your Barcalounger or changing out of your favorite plushy jammies.

Which dealer are you going to visit? No kidding Sherlock. You’re going to the dealer who’s offering the product at a mere $5,000 above the market value. You’ll make him an offer at $25,000, he’ll come back at $29,000 and you’ll ink the deal.

The hapless, helpless dealer who advertised his $30,000 product at $50,000? He doesn’t even get a look-see.

This is how it is when you’re pricing your home for sale. Don’t just “try it”. Don’t just “wait and see”. Price it right, from Day One, and you will see the rewards. You’ll be one of the 6% of homesellers who actually sell their homes in Metro Phoenix this year. Insist on overpricing? You might as well spend big bucks on one of those TV ads with the deep booming annoucer voice bellowing “Last Chance!” and “Won’t Last Long!” (because it will last long. And long is painful.)

Related Posts:

• Price Your Home So You Don’t Lose Money
• he Temptation of Your Neighbor’s List Price

Please Don’t Kill Your Realtor

On a break this weekend; reposting an oldie but goodie from September 2007. Picture credit to an unknown user at Stock.Exchange

Let’s say you’re a homeowner who needs to sell and you’ve invited several Realtors over to interview them. Many will Oooh and Aaaah, tell you how truly lovely your wall-to-wall orange shag carpeting is and assure you that you really can ask $15,000 more than the competition because you’ve got built-in cabinets in the garage.

Some gutsy Realtor might tell you that while your home has many thoughtful & useful upgrades, the market isn’t great just now. She’ll continue by suggesting that if you really must sell it’s important to price below the asking price of homes currently for sale, and also below the last sold comparable property. What that Realtor said was “price below sold comps.” What you’ll hear is “your home is worth less than your neighbors’ homes are.”

When you hear that, you’re going to experience an unpleasant mix of emotions. It’ll feel like someone just spat all over your hopes and dreams, told you that your home and your entire lifestlye isn’t worth as much as a tin shack on the beach in Guadalajara, called your children ugly and kicked the family dog while she did it.

You’re going to hate that Realtor. Instantly and irrationally, you’re going to wish bodily harm on that Realtor and imagine kicking her out your front door, action-movie style. How dare she imply that my house is worth less than the neighbor’s?!

If you are that home seller, I implore you to fight the urge to get all Dirty Harry on the Realtor who’s just told you the most truthful thing she can. Take a deep breath and remember the dynamics of a declining market.

In a declining market, housing prices fall. As a seller, time is not your friend. Homes that sell six months from now will sell for less than homes that sell this month. This has nothing whatsoever to do with your house, your lifestyle, your children, your intrinsic self-worth, your financial situation, or your need to net a certain amount on this sale so you can move on.

All things being equal, in a declining market houses priced below the most recent sold comps will sell quicker than those priced above the last sold comp. And because homes priced below the competition and the sold comps sell quicker, the sellers will net more money than sellers who overprice and sit on the market for months and months, taking incremental price drops while they chase their competition to the bottom.

Sellers, do yourselves a favor. As long as your gut tells you everything else about that Realtor is OK, hire the one who gathers up her courage and tells you to price beneath the last sold comps.

How To Pick a Listing Price

I’m recycling portions of post from waaaay back in February 2008. Wow! Given the current economic upheaval, February seems like a lifetime ago. Sadly, this advice from back then is still useful today. Maybe even more so.

Sellers, believe me when I tell you that there is a long list of things that do NOT impact how much you can ask for your home for sale. Here’s a short list:

1. How much you paid for the home
2. How much your remodeling or improvements cost
3. How much you “need” to get out of the sale
4. How much you want to get out of the sale
5. How much your next house is going to cost
6. How much your neighbor sold for last year, or even three months ago
7. How much more expensive housing is in the town to which you’re moving
8. How much your friends and co-workers think you should sell for
9. How much your second cousin once removed, who is a part time Realtor, thinks you can get
10. I could go on, but you get the point

Things that impact today’s market value of your home:

1. How much a ready, willing and able buyer is willing to pay for it

Period. It’s really that simple. Buyers are savvy these days, and act very conservatively when it’s their quarter- or half-million dollars being spent. If they don’t see your home as a good value at the asking price, they’ll pass you by.

The temptation for sellers is to think about all the items in list number 1, above, trying to justify a higher asking price.  Just like today’s cat cartoon, sellers want to think of ways to get around market realities. Resist that temptation.

Instead, think about whether or not you really must sell.

If you can come up with at least one really good reason not to sell, then don’t. Stay where you are. Make it work.

If you decide you must move (job change, job loss, divorce, illness, death in the family, the kids really can’t fit another bunk bed in their shared bedroom), then there is no way to get around the essential truth that your home is probably worth less than you’d like to think it is.

In fact, the October Case Shiller report shows metro Phoenix prices down 2.9% in just the month of August.  That was before the really ugly financial news hit the airwaves.

As I said, buyers are savvy. They know real estate prices are still moving downward. They suspect (as most of us do) that prices in the near future will be lower than they are today. Buyers automatically factor in the value of time when figuring out what to offer on a home. Sellers rarely do.

Your asking price needs to factor in the value of time. You do this in two ways:

1. factor in the amount of time it will take to get a offer on the home that turns into a contract, and
2. factor in the expected decline in the value while the home is in escrow.

To point number 1: If your house is priced right, you’ll get a contract in place in about 30 to 60 days. Many most sellers tend to resist this idea. Sellers often say to me, “Why so fast? Can’t we wait to see if the right buyer comes along?”

Erm, no.

Prices are moving down over time. Sell this month? You’re netting more money than if you sell next month. Or the month after. That’s just simple Econ 101.

To point number 2: Most escrows close in about 30 days. While those days pass, the market prices are still moving downward.

Sum it all up: We’ve got 60 to 90 days on the table here. During that time, the market won’t stand still, as Case Shiller’s charts and graphs so eloquently report. If prices are dropping at about 2.9% per month, and we’re going to be on the market and in escrow for 2 to 3 months, your listing price should take into account that future decline in market value. The buyers will. Sellers must.

Finally, please note: These numbers are general! Not every neighborhood is moving down at exactly 2.9% per month. Prices in some parts of Buckeye and Avondale were sliding 5% per month last spring, so I can only imagine the carnage going on out there now. Parts of North Scottsdale and Cave Creek are trending down at only about half of 1% per month. In general, condos price-slide faster than detached homes. In general, close-in areas slide slower than outlying areas, and on and on.

If you must sell, you should consult a Realtor who really knows the data trends in your neighborhood for an exact accounting of how much your home should/could be listed for! You can try my Sunday Stats series for an idea of sales over time in the North Phoenix area.

Image courtesy of I Can Has Cheezeburger

Glossary – Fixtures

My broker Jay Thompson explained “what’s a fixture?” on his real estate FAQ blog, which I’d like to expand on. Normally I think everything Jay does is perfect and no expanding is needed. Buuuut, I’m running a little low in the inspiration department, even lower in the time department, and I realized that I haven’t written a Glossary post in a long while. Plus, some new trendy household items can cause confusion.

Briefly, fixtures are items attached to the house using screws, nails, glue or similar means. Where things get a little tricky lately is with items some of the newer must-have pseudo luxury items, such as:

• satellite dishes
• flat screen TVs
• those fancy new bathroom mirrors that look like art because of their beautiful frames
• the trendy new bathroom cabinets that look like a piece of free-standing antique furniture and often have (expensive) marble tops

Two other possibly confusing items are

• above ground pools (OK, they’re uncommon these days, but not extinct by any means)
• heavy concrete patio benches or garden gnome type decorative items

If you follow the rule of thumb – is it attached using screws, nail or glue – all of the items in the first list are attached, are therefore are fixtures and therefore must stay with the house when it’s sold. Following the rule of thumb again says all the items in the second list aren’t attached and therefore go with the sellers.

If one were of the attorney persuasion, one could make an argument that the antique-look bathroom cabinets aren’t technically attached, it’s the plumbing that’s attached, and so the plumbing stays but the cabinets don’t… and [insert lawyerly babble here].

Court room arguments aside, I’d bet that most sellers with these items in their home expect to take at least some of the items when they move out. In my experience, satellite dishes have become almost disposable and most sellers expect to leave them behind, while most buyers expect them to stay.  So we generally have agreement there.

But sellers often spent lots of time and money tracking down the fancy schmancy bathroom mirrors and expect to take them with, while buyers don’t want to spend said time/money tracking down a replacement and therefore expect the mirror to stay. Many buyers don’t want the above ground pool… but then again many sellers don’t want to take it down and take it with and are secretly hoping the buyers will just take the darn thing and spare them the misery of dealing with it. And so on.

It can put you in a pickle if you assume too much on either side of the deal. Save time and trouble up front! Sellers – it’s best to specify in the listing agreement, and the MLS, and on flyers in the home whether these items go or stay. Better yet, get it out of the house and replace it with something that stays. Buyers – ask your Realtor to specify in the written purchase offer whether you expect these things to go or stay.

Take The Offer

I’ve been meaning for a long while to write a post explaining why sellers are better off taking today’s lowball offer rather than “waiting for a better one”. Turns out I don’t have to write it; my partner Chris Butterworth did.

Sellers, have you received what seems like an insultingly low offer on your home for sale? First, read this. Then read this. Then decide what your goal really is – sell or hang on for many more years.

Once you’ve gone through these steps, your answer is easy. Take the offer or take it off the market.

Related Posts

1. Your Neighbor’s List Price is Wrong
2. Price It So You Don’t Lose Money
3. Things That Do Not Influence Your Asking Price
4. Are You In Denial?

Valley Home for $125 Million???

In the category of yet another reason for sellers to ask for and review a copy of their home’s entry in the MLS, this Chandler home listed for $125,022,524. That’s One Hundred and Twenty-Five Million. One look at the MLS listing shows that obviously it’s a typo. It’s also kinda funny.

But the un-funny part is that these sellers have no hope of selling until the listing is corrected. It’s been like that for a day, so obviously the agent and/or the data entry clerk didn’t catch it.

Buyers who (God love ‘em) have over a hundred mill to drop on a house won’t be impressed by this listing. The folks who are actually looking in the $1.25 million price range won’t ever find this listing online.

Selling real estate is a numbers game. You need a whole lot of people (that’s a technical term of course) to find your home online so you can get a lot of people to look at it in person, so you can hopefully get 1 or 2 to make actual offers.

You can’t drive the numbers you need to look at your home if the numbers on your MLS listing are wrong. Sellers, check your Realtor’s MLS data entry skills!

Do You Have Multiple Photos?

The NAR is fond of publishing their research that shows homes advertised online with multiple photos get viewed 299% more often than those with only 1, or no pictures. We probably didn’t even need formal research to tell us that. Think about how you shop online. Doesn’t matter whether you’re shopping for a home or for a wrench or a pair of shorts. You want multiple pictures. You look at all the pictures available before making a decision about anything, let alone deciding which product to buy.

Why in the world doesn’t every home advertised in the MLS have multiple photos?? I guess we can excuse the lender owned homes. The Realtors working for lenders often don’t have more than a few minutes to photograph a new lender owned listing. Sometimes they don’t even have a key to get inside the house on the day they have to take the photos.

But for non-lender owned homes, there’s really no excuse for not having multiple photos.

I thought I’d just check, out of curiosity, and see how many of the condos and homes near my neighborhood have multiple photos. The dismal results are below.

• Condos & Townhomes, ZIPs 85020 & 85022 – 248 for sale, only 41 (or 16.5%) have more than six photos
• Homes and Patio Homes, same ZIPs – 620 for sale, 127 (or 20.4%) have more than six photos

If you’re thinking about selling your home and you plan to interview more than one Realtor, I’d suggest it’s important to ask how many photos the agent usually places on their MLS listings.

I Am Interviewing For A Job

Found this interesting post over at Bloodhound Blog. Normally I just lurk over there from time to time, skimming and browsing and trying to avoid the flying fur from the commentary wars that erupt all too often.

For those too busy to click over, Greg Swann’s post is simply advice to Realtors that you buy gas with clients in the car. Why? It reminds them that you’re spending your money for their benefit.

Readers. Dear Readers. I’m so glad you’re here! Thank you! I hope you come back often. I hope that you find what you’re looking for. I hope this blog is a useful tool for you and helps you figure out how to handle this topsy-turvy real estate market we’re all living through. I hope that my readers eventually become my clients.

If you don’t find what you’re looking for during your browse, email or call me and ask for it. I’m happy to provide any advice and information I can. That’s what I do, 8 or 10 hours a day, 6 or 7 days a week. You’re not bugging me when you call or email. If you’re in need of advice about real estate, please contact me. Contact me even if you’re “not ready” or “just looking” or “thinking about it”. Contact me even if it’s “your friend” you’re calling about. If I know the answer I’ll tell you, gratis. If I don’t know, I’ll find out for you.

I’m happy to speak with you and provide all the advice I can about your unique situation. But please remember that in every contact we have, I’m auditioning for a job and hoping for a future paycheck.

This is one of the few professions I can think of where all the expense comes out of the practicioner’s pocket up front and there’s no guarantee of payment. You pay your doctor before you leave the office. Lawyers take a retainer to cover out of pocket expenses. Accountants won’t release your taxes unless you pay them. Teachers, fire fighters and police are guaranteed a salary. That salary is lower than it might be, but that’s a topic for a different blog.

Realtors do not get a salary and most make middle-class wages at best. Realtors do not get sick days or vacation days. Most brokerages do not provide a Realtor with any help towards marketing, advertising or buying materials like signs & flyers, toner cartridges and businss cards, lunches and closing gifts. Those expenses all come out of my pocket, up front.

Ultimately, I do not get paid for the work I do unless you acknowledge me as your agent, in writing, when you buy or sell a piece of property. For most people, this seems like a reasonable proposition – I spend a lot of time and expend lots of my expertise to find you a home or sell your current home, and then I get paid at the end of it all. If you’re someone who thinks it’s OK to use someone else for their time and expertise without paying for it at the end of the deal, well then I invite you to keep reading but I implore you not to contact me.

Putting you in my car and driving you around town – at $4.00 a gallon and 112 degrees – is only fun because I know that I’m helping you find The One. I like watching people react to houses, I like finding the perfect home for you, and I genuinely like hearing about your kids, your dogs and your last summer vacation. I’m going to give you the most up to date information about area comps that I can find, and help you negotiate the best possible price and terms on the home of your dreams. I’ll watch your back and make sure you don’t inadvertently get into a situation where someone could sue the pants off you. But I’m also hoping that you’ll buy through me when the time comes, and then I’ll get to pick up that commission check that I worked so hard for.

If I provide you lots and lots of personalized staging advice, a comparative market analysis on your home, and a unique-to-your-house marketing plan, well that’s because I genuinely like spending time analyzing MLS statistics and creating individual marketing programs. But I’m also banking on being able to trust that you’ll list your home with me when you’re ready to sign the listing agreement. Just like you, I need to pay my mortgage, the electric bill, and buy food and clothing.

Plus I must pay the dozens of little invoices associated with my online presence. The Internet is free, except when I have to pay a little fee here and a little fee there to maintain my website, host this blog, network with colleagues so I have an extensive database to which I can market your home, advertise on various websites, continue my lockbox and MLS access, and so on.

Of course things can change while we’re working together and I understand that. Maybe you thought you needed to sell because of a job transfer, and then it didn’t happen. Or maybe you thought it was time to buy but a setback at work or at home shook your confidence, or a promised bonus didn’t come through. Please be honest enough to tell me why you broke up with me (so to speak). Otherwise, I’m left thinking I disappointed you but not knowing how.

If I spend time and money helping you find your way in this crazy real estate world, I’ll only ask for 2 things in return. Please acknowledge the time & money I’ve spent helping you by actually using me as your Realtor when you sign the contract. Then, when it’s all over and the keys are exchanged, please remember to encourage your friends and family to call me too.

Oh, and one more thing which (I admit) is totally selfish: please put me on your email distribution list when you send out pictures of the kids, the house, the dogs and your vacation. Your photo updates always make me smile.

Dear readers, thank you for visiting! Thank you for coming back! Thank you in advance for becoming my client someday when you’re ready to buy or sell! Finally thank you for remembering that I am working for you and no one will pay me if you don’t.

Real Estate Road Signs – “We Pay Off, You Keep”

I’m noticing an uptick in the number of roadside cardboard signs that have something to do with real estate lately. You know the kind – here in Phoenix they’re usually hand-inked, on cardboard or oak tag, stuck in the ground with a stake.

Surely it’s a function of the bad economy, the looming recession, the credit crisis and the housing ‘bubble’.  Whatever, I figured it would make a good blog post or two. Here’s today’s Real Estate Road Sign:

I didn’t call to find out exactly what scam they’re peddling, but rest assured it isn’t as good as it sounds. No one is going to pay off your mortgage out of the goodness of their heart and not expect something for it. Either they’ll refinance you under their own (probably dubious) terms, or they’ll pay off the mortgage and let you stay in it, as a tenant.

There are some instances where it might be beneficial to let someone buy your home from you and then arrange to stay in it as a tenant. But contact a trusted Realtor or mortgage lender to do it. Placing your single largest financial asset into the hands of someone who advertises on roadsides with hand lettered cardboard signs is not in your best interests.

If this is a refinancing “plan” it probably involves people who look and sound a lot like the Sopranos and there are a lot of other, better options for refinancing if you’re facing foreclosure.

If it’s a plan to buy your home and rent it back to you, be very careful. There are a lot of scams out there now that start out this way, and then whack you with huge penalties if your rent is even an hour late. Worse, some of those rent back to owner schemes allow the company you’re dealing with the evict you from your home without notice if you pay late.

If you’re having financial troubles large enough to even think about calling the number on this sign, you’re probably better off contacting someone about a refinance or a short sale.

Related Posts

1. Real Estate Road Signs – Buy A House with $500 Down
2. Hire a Professional Lender, Not Your Buddy Who Does Mortgages Part Time
3. How Your FICO Score Determines Your Mortgage Interest Rate by the XBroker (not light reading but highly worth your time)
4. The AZ Mortgage Guru updates the status of the federal housing assistance bill
5. Try the federal Hope Now campaign designed to help you stay in your home

How to Buy Short Sale Homes, PART 2

photo credit to I Can Has Cheezburger

This is the 2nd in a series of articles about buying metro Phoenix area short sale homes.

Many, many potential buyers in the Phoenix market lately want to look at “short sales”, “foreclosures” or “bank owned homes”. Often they’re not quite sure what these terms mean exactly, but they know the 10 o’clock news (or their brother’s cousin’s baker’s tailor) says short sales are a spanking good deal.

See here for the differences between REOs, bank owned, short sales, foreclosures and preforeclosures. Regardless of type, the secret to buying one of these homes is organization combined with an open mind and a lot of patience.

This article talks about buying short sales. Lender owned homes are a different ballgame and I’ll address those soon.

PATIENCE
One of my buyer clients has been waiting a little over 7 weeks for the bank to answer our offer on their short sale property. One of my sellers waited 2 full months for the bank to answer a Buyer’s offer.

This sounds absurd, right? According to the media, banks are drowning in short sales and foreclosures, making write downs and taking losses like the Titanic took on water. Why in the name of all that’s green and holy would the banks take months to answer offers?!

Sadly, this is not unusual. I’ve heard horror stories of waiting 4 to 6 months for a bank to answer an offer, even if it’s a full price offer.  The media’s right – many banks are awash in properties. But they’re simply not equipped to list and sell homes. They’re equipped to make and service loans. I hear banks are scrambling to hire & train people who can handle their backlog.

I recently had a conversation with a local agent who interviewed for a position as a loss mitigator with a lender. Sadly, the loss mitigators are paid about $30,000 a year salary, and are expected to work between 12 and 14 hours days, 5 days a week, work every other weekend, and are given 4 days of training. Almost none of them have any experience in real estate or mortgages whatsoever. Many are fresh out of college and many last no longer than their first week after training.

One of the first loss mitigators I ever spoke with (in late 2007) told me flat-out, “Honey, my desk is piled high with over 400 files just like yours. The computer shows I got your offer yesterday, but I won’t be able to look at it for at least 6 weeks. Call me then.”  She wasn’t being rude, just truthful. We’ve become phone buddies and share polite chit-chat when I call her once a week to ask (ever so politely) if she’s got to our file yet. I think she’s very nice and I think she liked me, but she still didn’t look at our file for 8 weeks.

But the loss mitigator did verify for me on Day 1 that our file was complete and had all the documents she needed including:

• Tthe Listing Agreement,
• The MLS printout,
• The Authorization for me (the Realtor) to speak with the seller’s lender,
• The Seller’s hardship letter, 2 years of tax returns, 3 months of bank statements and 2 months of paystubs,
• The foreclosure notice from local authorities,
• A letter from me to the seller about marketing activities and recent comps in the area,
• The Purchase Offer,
• The HOA Addendum,
• The Short Sale Addendum, and
• The estimated HUD-1 Settlement Statement from the title officer.

If we hadn’t put all those documents together into 1 submission packet to the lender, we’d have gone to the back of the line. The 8-week waiting period was for sellers and Realtors who got it rightthe first time. Miss a form? You’re going to wait longer.

Buyer Lessons

1. Short sales, lender owned and foreclosure properties are not for you if you must move in by a certain date.
2. Shop short sales and lender owned homes only if you are OK with lengthy periods of uncertainty.
3. It pays to hire a Realtor who’s politely persistent.
4. Make sure your document package is complete from the beginning.

Related Posts:

• How to Buy Short Sales/Lender Owned Homes, Part 1
• How to Buy Short Sales/Lender Owned Homes, Part 3
• How to Buy Short Sales/Lender Owned Homes, Part 4
• I Got a Notice of Trustee’s Sale. Now What?
• The Pitfalls of Short Sales