Archive for April, 2008

Seller’s Loss — A Realtor’s Perspective

I really love my job! I deal with people every day, and when my efforts are successful my clients are happy. I deal with agents every day too (yes, they are people too), and there aren’t so many who are happy these days. Some people who are trying to sell their homes in today’s market aren’t happy either. Everyone wants top dollar for their home and, in their perception, they aren’t getting it. Frustration ensues, and a feeding frenzy of negativity between agents and sellers surrounds them like a huge, dark cloud. It just doesn’t have to be that way.There are several things that sellers can control when placing their home on the market.

  • Timing – Most of the time sellers can control the time of year their property is to be introduced to the market. Some times are better than others.
  • Price – Completely controlled by sellers. Realtors may recommend a range in which to price but the listing price is solely controlled by the owner of the property.
  • Condition – I always recommend areas of improvement when preparing a property to list. Sometimes a home needs paint, sometimes cleaning, sometimes a whole lot more than that, but sellers control the maintenance and condition of the home. If you have a property for sale and it is messy or cluttered, only you can correct that.
  • Terms – When an offer comes in, your tolerance level dictates whether it is acceptable. Most of the time a counter-offer reflects what you really want, but sometimes sellers aren’t ready for what they see. An offer can start a chain of events that takes time, but the events are sometimes consolidated into 24 or 48 hours. Not good! Read on.

There are also a couple of things that are controlled by the market. They are simply beyond a seller’s and agent’s span of control:

  • Competition – Houses are placed on the market every day, and pricing these days is sometimes not reflective of actual market conditions. Nevertheless, it’s out of our control. We don’t decide the prices of other homes. We instead want to use them to your advantage.
  • The Economy – We cannot control interest rates, the media, or general buyer sentiment that results from economic issues.

What do agents control?

  • Promotion – We control how to market your property for sale, where and how to advertise, and use our networks to help get your house sold. My marketing plan is similar in some respects to that of other Realtors, but I am a lot more personal about it. List with me to find out just how aggressive I really am…but I digress…this isn’t about me! I want to write about seller’s loss!

So, out of all of these elements and so many variables between them all, who controls how quickly a house sells? Is it the agent? Sometimes, but he controls only one element of the sale. Is it the seller? Sometimes, but she controls only four of the elements of the sale. Is it the market? Sometimes, but interest rates and the economy wiggle every day. Is that crystal clear to you?

Let’s look at the primary element of any given home sale; the price. If your home is priced right, given all of the other variables in the home sales equation, it will sell. I promise!

Let’s say seller x lists his property at $700,000 when everything comparable to him in his neighborhood is selling for $600,000. Continue reading Seller’s Loss — A Realtor’s Perspective

Liven Up Your Marketing With Floor Plans — For Free!

Looking for a way to set apart your property marketing?  Try adding floor plans!

A few months ago I discovered MetroPix, where you can design floor plans using their FREE online service.  You can pay a bit more for floor plans with color, or in three-dimensions, or with photos, etc., etc.  Thus far, I have only utilized their free service — and then added some color afterwards.

Floor Plan Sample

Do you know of other free floor plan drawing tools?  Let me know!

‘Declining Markets’ and Self-Fulfilling Prophecies

Ken Harney in today’s Washington Post:

Could designations of Zip codes, metropolitan areas and entire states as “declining markets” hinder a real estate recovery and hurt minority groups and moderate-income buyers disproportionately? Growing ranks of critics say yes.

Since late 2007, most lenders, insurers and mortgage investment firms have compiled lists of markets that they regard as higher risks because housing values are dropping. In those areas, borrowers are charged higher rates and loan fees and are required to make bigger down payments — costs that can rise significantly when applicants have credit scores below designated minimum levels.

In some cases, the extra fees can add more than two percentage points to the interest rate and require much more cash up front. At their extreme, declining-market designations remove entire categories of real estate from financing eligibility. Some private mortgage insurers, for instance, won’t touch second homes or rental-home investments anywhere in large swaths of Florida and California.

Industry estimates on affected Zip codes range from 8,000 to more than 12,000 across the country. Many parts of the Washington area are included.

Full story here.

Is Customer Service Being Redefined?

I’m a stickler for customer service, and probably a little tougher than most on what I expect from customer service.  So when I experience service that really goes above and beyond, I want to tell people about it.  In this case, I’ve had two recent situations that really impressed me.

My Very Public Addiction

Hello … my name is Jeremy, and I’m a Twitter addict.  It started innocently enough – a Tweet here, a Tweet there, but then suddenly I needed more.

This is my story, my story of how Twitter became a business tool with a very real Return on Investment.

What’s your story?  Will I see you on Twitter?

Home Sales: A More Holistic Approach

Raw data is…well…raw data and that means if you misread the numbers, read them with bias, or even read them in a vacuum, it’s easy to misconstrue any sort of research. Home sales stats are no different and this realization is one of the driving factors in the renovation of Virginia’s home sales report.

VAR has now formed a strategic partnership with GMU’s Office of Housing Policy Research that adds additional value and context to its home sales reports. The main aim of the partnership is to produce more in depth quarterly accounts of Virginia home sales that view the state’s housing situation from a chronologically broader and more analytical viewpoint, improving on the snapshot analysis that was the former focus of monthly reports. The new report format now includes not only raw data from local associations, but also

• A look at both national and state markets
• Statistics on job growth and other important economic indicators
• Housing affordability analysis and
• Honest interpretation of the facts

In addition to reinventing the report format, VAR and GMU have also renovated its distribution. Members and the general public can still download reports online, however now media have the opportunity to call in and get an in-person perspective from Virginia’s REALTOR(r) leaders and expert researchers.

The Virginia 2008 first quarter home sales report is now available online and its most important messages are implicit: Perspective is critically important and considering context is crucial.

A Few Highlights…

If you’re looking at national stats, recession is likely. If you zoom into Virginia, our economy has continually outperformed the nation, is still experiencing job growth, and these factors and the diversity of industry across the state contribute to a healthy economic outlook.

Nationally households with an average income can afford 47 percent of homes on the market. When you zoom into Virginia you see households with an average income can afford 50-60 percent of homes on the market.

Nationally and in Virginia prices are dropping and in most areas stabilizing. In both cases, this is contributing to an overall housing affordability increase and created market entry opportunities for a new sect of savvy buyers.

It’s no secret that home prices in Northern Virginia are expected to continue to decrease; however, that’s only half the story. In Prince William, one of the hardest hit areas; pending sales have increased from 1,645 in the first quarter of 2007 to 2,341 in the first quarter of 2008. This isn’t surprising with interest rate decreasing and price stabilization, it seems like prospective homeowners are starting to get the message. Now IS a great time to buy.

No one knows exactly what the next stage will be in the life of the imaginary “national” housing market and its also true that unlike 2004-06 not just anyone can be successful in real estate. But for the smart buyers, sellers, and REALTORS(r), there’s a lot of opportunity for wealth building and Virginia is still one of the best places to be in real estate in the nation.

Don’t take my word for it; check out the good, the bad, and the real Virginia perspective on the housing market at www.VARealtor.com/HomeSalesReport today.

Tips on Short Sales, New Economic Development, Help on Helping Sellers

Tips on short sales, getting the VAR publications you need in a click, new economic development in Virginia, and help on helping sellers in Todays market; these are just a few reasons to check out the April edition of Commonwealth Online. Check your mailbox for your customized version or view it online to see it all. Either way, don’t miss this chance to tap into the relevant information you need as your business starts to heat up.

View Commonwealth Online

REALTOR History Cannot be Understood Without Setting the Scene

This post is part of a series covering my journey of discovery through the history of the National Association of REALTORS. As my guide and my inspiration, I am using a book published by NAR, “100 Years in Celebration of The American Dream,” celebrating the Centennial of NAR. The following was inspired by reading just the first ten pages.

The National Association of REALTORS turns 100 years old this year. That is pretty old, as organizations go. It is old enough that there is not one single member of our organization alive today that can remember the birth of NAR. This is both good and bad.

The Good

100 years is a long time. Here is some simple math:

1908 to 2008 = 100 years

1776 to 2008 = 232 years

NAR has been around for ALMOST HALF OF AMERICAN HISTORY!

The people who make up the membership of NAR have lived and worked through many of the significant events in American history.

The fact that our organization is 100 years old is a testament to the vision and hard work of the men who met together in Chicago 100 years ago with the idea of starting a national organization of “real estate men,” as they were then called. As a general rule, bad ideas don’t usually stick around for 100 years (I can think of a few exceptions, but most of them required a war or two for survival). Those men, and all those who have come and gone since, obviously did something right.

The Bad

100 years is a long time. Our culture has changed quite a lot over that time. Attention spans are much shorter, and so are memories. This means that much of what has been learned might have already have been forgotten. This fact is what makes the NAR Centennial book such an important publication. We should always be reminded of those who came before, we should always be willing to learn from their example and from their work. If we fail to do that, then the end result is that all of their hard work will have been in vain. I hope very sincerely that those of us who have chosen to bear the title of REALTOR today, will do our best to honor those without whom our privileges would not be possible.

Let’s Begin at the Beginning

I dare think that the practice of real estate at the turn of the 20th century would be almost completely foreign to REALTORS practicing today. When I say this, I’m not talking about the many technologies that make our daily work life more efficient. I’m talking about the actual cultural, professional, historical, and legal climate that was present 100 years ago for real estate men.

Some things to consider about the world of real estate 100 years ago:

1) Widespread private real estate ownership is brand new. I think it is pretty safe to say that the majority of you reading this post own the home in which you currently live. There is also a pretty good chance that you live in a suburb, or even a rural area (like me). 100 years ago, that was not the case. Most Americans did not own their homes, and the cities held the vast majority of the American population. The concept of the suburb hadn’t even been born yet. It was about this time, however, that many cities and towns were rapidly expanding. This meant that those expanding cities and towns needed a place for people to live, they needed real estate.

2) There were no licensees. 100 years ago, anyone, I mean ANYONE could call themselves a real estate dealer. There were people called “curbstoners.” These unscrupulous individuals would basically set up shop as a real estate dealer on the sidewalk (the curbstone), and bilk or swindle anyone they could. Have you ever been in a city and been approached by people handing out flyers for something, or saying, “psst– come check out these watches and handbags I have. . .” now imagine if those people were peddling real estate. Scary, but it was happening all over.

3) There were no rules or laws governing transactions. We live in a world with RESPA. 100 years ago, however, Real estate transactions were governed by simple contracts common law. All that was needed was an agreement between the buyer and the seller. No mountains of paperwork, no lengthy disclosures, no warrantees, and very little recourse if they whole thing went awry.

These Conditions Warranted A Solution

The ethical practitioners of real estate recognized there were problems. What they didn’t have was a viable way of solving them. They did recognize, however, that the problems were similar all over the country. As the number of real estate practitioners grew, so to did the need for cooperation and collaboration among them if they were to address the issues facing their profession.

It took the leadership and vision of some of the nation’s largest real estate boards at that time to address these issues and launch the organization that would eventually be known as the National Association of REALTORS. We all know, however, what can happen to the best laid plans of mice and men if there is no leadership to guide them.

The necessary leadership would come first from the man who would eventually be the 5th President of NAR. More on him, and the seed that he planted, in my next installment. . .

What Your House Is/Is Not Worth

This is excellent perspective, compiled by Charlottesville Association president Judy Savage and blogged by CAAR’s CEO, Dave Phillips.

What’s in a name? NAR says, it better be the truth.

One of the most controversial Standards of Practice to come from NAR in long time, would have to be the new Standard of Practice 12-12, which became effective January 1, 2008.  Just to refresh your memory, Article 12 is known as the “truth in advertising” article.  We have come a long way from the published newspaper ad.  Years ago, that was pretty much all that was available to REALTORS to spread the word about their new listing.  Now, advertising can be instantaneous thanks to the internet.  In addition to company web-sites, many agents have their own personal website.  Some of the URLs and domain names used can be either dull or attention getters, and sometimes down right misleading.  The new Standard of Practice 12-12 states:  REALTORS shall not:  (1) use URLs or domain names that present less than a true picture, or (2) register URLs or domain names which, if used, would present less than a true picture. 

The new NAR Case Interpretation 12-20 address this new Standard of Practice.  So, here it is–you be the judge–REALTOR A, a residential broker in a major metropolitan city, spent several weeks each year in his cabin in the north woods where he planned to retire one day.  Even while at home in the city, REALTOR A stayed abreast of local news, events, and especially the local real estate market by subscribing to the print and on-line editions of the local newspaper.  He also bookmarked a number of north woods brokers’ websites to stay current with the market and to watch for potential investment opportunities.

One evening while surfing the internet, REALTOR A came across a URL he was unfamiliar with–northwoodsandlakesmls.com.  REALTOR A was pleased to see the MLS serving the area where he vacationed for so many years had created a website accessible to the public.  Clicking on the link, he was surprised to find that the website connected with REALTOR Z’s company website, not an MLS website.  Having had prior dealings with REALTOR Z, REALTOR A spent time carefully scrutinizing the site.  He noted, among other things, that the name of REALTOR Z’s firm did not include the letters MLS.  REALTOR A sent a letter to the association’s EO asking whether REALTOR Z had been authorized to use the name northwoodsandlakesmls.com and whether it presented a true picture as required by Article 12 of the Code of Ethics.  REALTOR Z filed a complaint alleging that when he clicked on what appeared to be a real estate-related URL that included the letteres “MLS” he expected to be connected with a website operated with a multile listing service.  He stated he felt that REALTOR Z’s URL was deceptive and did not meet the true picture test.

At the hearing, REALTOR Z defended his URL on a number of grounds including the fact that he was a participant in good standing in the MLS and he was authroized to display other participants’ listings  on his website under MLS rules.  “If I used `MLS’ in the name of my firm, I could see how that might be perceived as something less than a true picture,” he argued, “but by simply  using MLS in my URL I am telling consumers that they can get MLS-provided information about properties in the north woods from me.  What could be truer than that?”

How do you think the hearing panel ruled?  Do you think REALTOR Z  was found in violation of Article 12?  What do you think of the new Standard of Practice?