In a recent articly by Real Trends, "Best time to buy a house in 4 years" they have made a very bold claim…  Does it resonate, or even sound the least bit familiar?

Read on and see what your thoughts are… 

Real Trends latest article:

Best time to buy a house in 4 years

It may be the best time to buy a house in more than four years. Home prices have dropped so quickly and so far that valuations - the difference between what a home should cost and its actual price - are the lowest they’ve been since 2004, according to a report.   The Cleveland-based bank National City Corp., together with financial analysis firm Global Insight, revealed this week that more than 88 percent of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007.  "Housing valuations are almost back to long-term norms," said   There are still 21 housing markets, or six percent of those surveyed, that are severely over-valued, including Atlantic City (NJ) and Madera (CA). That’s down from 56 over-valued markets at the peak of the housing bubble in 2006.  The report compares actual median home prices with what the authors determine are proper home values based on population density, relative income levels and interest rates, as well as historically observed market premiums or discounts, to determine whether markets are over- or under-valued. The report also factors in market intangibles that make some areas more desirable places to live, and more expensive.

National City’s chief economist, Richard DeKaser. He called current affordability "the best in the past four years."

Now with that said… what do you think?  Who do you know that currently owns a home and would like to move up?  Now might be a great time to introduce me to your family, friends, co-workers and neighbors. 

Thank you for your continued time, attention and your support!  Have fun!

For months, I have been stating the fact!  This market is natural, it’s part of a cycle that has to play itself out.  Inventory will continue to come on the market due to the liquidity challenges that the Mortgage market faces.

When will the bottom hit?  Who really knows… did we know that 2005 was going to be the peak?  I surely didn’t.  While I personally saw problems with overpricing, bidding wars and all kinds of "unrealistic" loans that enticed even the most educated buyers into making unjustified decisions… I would have never stated the correction would have happen as fast as it has! 

If you know me by now… the next question is what is the positive?  I believe that there is a lot of "opportunity" in today’s market and there will be "opportunities" to come.  With the Interest rates hitting what could be called an all time historic low, I know that this is a very limited window!  With short sales & foreclosures increasing, the market will continue to be flooded with new "opportunities". 

Buyers will continue to be able to negotiate will the Sellers and Builder direct in the form of incentives, closing cost, concessions, discounted loan rates and more.  What will it take for you to move in todays market?  Motivation!  Smart Pricing!  Marketing!  A Consultant that is truly in touch with the market, one who can Negotiate, Consult, and Oversee all the Transactional Details in order to help you reach your goals… 

You could wait for the bottom… the only problem with that… when the bottom does hit, chances are you will be 6 months past, interest rates will have made their adjustments and sellers will be in the drivers seat… driving up the prices all over again.  Face it, it’s not a matter of if but a matter of when. 

So why now?  I can’t say… I don’t know your short term, long term real estate goals, your financial plan or your personal situation.  If you are thinking about it, sitting on the fence, waiting, wishing, hoping… whatever it may be, my advise might be to listen to the Nike commercials and "just do it" , it might even be wait. 

What would it take for you to take advantage of the "opportunities" in today’s changing real estate market?  When would you like to get together for a consultation, where I can ask you a few thought provoking questions, in order to help you clarify your core goals, so that you can make better, easier decisions?  You do want to make better decisions, do you not? 

Remember… I’m here to help you any way that I can.  Just give me a call and we can schedule an initial consultation.  Until then, thank you for your time and attention.

With Sincere Appreciation-

Jeff-

P.S.  Who do you know that is thinking about make a move in today’s changing real estate market?  With 87% of all my business coming from the referrals of family, friends, co-workers and neighbors, your endorsement is very important to me…  I am totally committed to providing you, my client a world-class level of real estate service that is above and beyond expectation in professionalism, service and quality!

Editor - As a real estate educator, I give advice to clients, students and professional advisers on making good real estate choices.

My recommendation is for advisers and the media to be more direct and less accommodating on the topic of selling a home in today’s market. ("For a quick sale, make your home stand out," Jan. 20.)

Selling a home is 90 percent pricing and 10 percent marketing (staging, advertising, broker tours, etc.).

A buyer will not pay more for a property than it is worth because of marketing. In fact, great marketing will quickly kill an overpriced listing. But a home properly priced will sell.

Pricing solves all shortcomings and issues. Sellers today should consider setting price based on current pending and sold listing data, and much less on active and expired listing data.

Serious sellers price their home to sell. Sellers who are not serious about pricing strategy should stay out of the market and reduce the clutter of listings. The opportunity for learning from today’s real estate market is that - without exception - all asset classes (including real estate) are cyclical. Remembering this should help families and individuals make better choices in the future.

RICH ARZAGA

Instructor, UC Berkeley,

UC Santa Cruz

Monday, Dec. 31 2007
Steve McLinden
Bankrate.com
Heading into 2008, the market just isn’t turning around as so many predicted. The industry, it seems, has been caught up in a game of "projecting," to use a psycho-speak term. Meanwhile, this pesky subprime headache lingers on as we start to draw a clearer picture of how recklessly this shaky housing-market foundation was laid. It’s a hangover that will last well beyond New Year’s Day. 

In contrast to the billions in risky ARM loans that were advanced to questionable borrowers toward the end of the boom years, many credit-worthy buyers are now getting a different kind of arm — a straight-arm — when they seek out mortgages amidst a backdrop of spiraling foreclosures and plummeting prices.

My blanket advice for would-be sellers: Stay put. Ride this out where you’re sitting if possible, because values will stabilize again. If current circumstances dictate otherwise, then you’ll have to ratchet up your marketing plan a notch to adjust to the times. As for buyers: Well, you’re "in your element" and the getting is good.

Here are eight strategies for buyers and sellers who want to make a housing move in ‘08:

1. Understand what "market value" means.
It’s not what your friend sold his house for two years ago or even two months ago. It’s not the value your latest tax assessment was based on or what an appraiser said the house was worth a year ago. It is exactly what someone is willing to pay for your house today. Hence, price realistically and broaden incentives, such as closing costs and throw-ins like appliances, flat-screen televisions, etc. There is an old saying: "There’s nothing wrong with a home that the right price can’t fix."

2. Don’t be an as-is seller. That is, unless you absolutely have to be one. Potential homebuyers aren’t looking for fixer-uppers in the current market unless they are rock-bottom, bargain-basement priced. Large volumes of foreclosed homes are already being sold in poor condition at auction.

3. Hire a top performer. These days, you need an agent who outshines the others and routinely posts better-than-average sales numbers year after year. Agencies may try to steer you toward less-seasoned agents, but if you’re paying the commission, then the hire should be your call. The best agents have an innate sense for that right price and right marketing plan. They can suggest the necessary repairs and tweaks while targeting your home to the right buying group. Caveat: In selecting an agent, the percentage of listings sold is generally a better performance barometer than a high volume of sales.

4. Know your market’s nuances. No two markets are exactly alike. Yes, most sellers are now swimming upstream. But there are always counter currents to consider. In many areas, modestly priced homes have bigger buying pools because tighter mortgage qualifications are keeping buyers out of more expensive homes. A little research and a savvy agent can give you an edge and an education.

5. Use the Internet. According to compete.com, total time spent online rose 24.3 percent from the fall of 2006 to the fall of 2007. Yes, people are still scoping out newspaper classified ads and real estate listing magazines, but more and more Americans have been wired to at least start their home shopping online.

6. Use other people’s money. You don’t have to sell for a big loss to get out from under your rising mortgage payments. If you can, rent out your home for a sum that covers your house payments, insurance, taxes and maintenance costs. Do try to roll in a slight buffer to cover unanticipated expenses. And realize you’ll need capital to refresh the place when the market stabilizes and you take off your landlord hat to prep the home for sale again. Or consider offering lease-to-own terms to your renter and you may not have to worry about the future sale.

7. Become a "lender." Tough times call for unconventional measures. Consider carrying part of the buyer’s note with interest, secured by an asset belonging to the buyer. Do so only after a thorough credit check and only if you can afford to wait for the balance of the purchase price. This, by the way, is not a game for the faint of heart.

8. Simplify and neutralize. In this sales environment, you’ve probably already been told to focus on curb appeal, add fresh landscaping and de-clutter the house by removing family photos and heirlooms or other items you don’t need or use on a daily basis.

But let’s take it a step further. Paint your rooms neutral colors. Hire a redesign or home-staging firm to help you present your home in optimal condition and give potential buyers a chance to envision their possibilities there. And while you’re at it, get a pre-listing inspection, which will reveal any defects your home has and allow you time to make repairs. Then provide a copy of the report to buyers, attaching a list of the fixes you made.

Buyers are in an enviable position, with plenty of homes on the market, and sellers who are willing to bargain. Here are eight tips for buyers. 

1. Negotiate, negotiate. There’s a glut of homes on the market — more than twice the average inventory in some markets. Yet there are fewer prospective buyers with whom to compete, and considerably more room for after-the-purchase value appreciation than a few years ago. Sellers are fixing up their places like never before in hopes one serious buyer will come along. Your chance to pick up a quality home for a big discount may never be better than the present. Keep those counter-offers coming. And let the seller pay all the commissions! Remember, virtually everything in a real estate transaction is negotiable.

2. Think local. I’ve said it before: All real estate is local. Employ the standard strategy of examining recent sales prices of local comparable, or "comp" houses. But take it a step further. Ask your agent for the original listing prices of comp houses and compare them to the actual sales prices. Many Internet sites also have this information. This data will give you the clearest picture of what sellers were willing to accept for their homes in your neighborhood and can help you determine just how low you can go on your offer.

3. Don’t bank on further market drops. If you have the means, pounce on that oh-so-sweet deal. This cycle appears to be at or near the bottom. You can’t confidently count on the market sinking any lower, even though it may.

4. Keep resale potential in mind. Sure, you always seek out properties with that at-home feel. But if you can find homey in or near a growing medical district, growing university or other vibrant employment center, your resale universe down the road will always be larger than the market average.

5. Look beyond cosmetics. A tired-looking house in a great area may be a much better bargain in the overall scheme of things than a sprightly, higher-priced home in the same area. Yet many of these slightly worn homes, lest they be on the foreclosure auction block, are getting roundly ignored. There are some diamonds in the rough out there now!

6. Consider off-peak sales seasons. Yeah, there’ll still be bargains aplenty come the prime spring and summer selling season and plenty of inventory to peruse. But fall and winter can be the time of especially acute seller discontent. Sellers may be more motivated to take your lowball offer then — especially if it’s the only one they get!

7. Use your buying leverage. Ask the seller’s agent when the seller bought the home, how much he paid for it, and why he’s selling. In a seller’s market, the seller would likely thumb his nose at you upon such a request. Now, they may give it a thumbs up instead.

8. Ask for contingencies. When you’ve agreed on a sales price, make your offer contingent on the home appraising at that sum, on passing the buyer’s inspection and on you obtaining financing. Work in as much legal wiggle-room as you can so you’ll be able to back out without risking your earnest money should things go sour or another opportunity arise.

Right off the pages of MORTGAGE 101!

digg del.icio.us TRACK TOP
By Jeffrey Simons | Filed in Uncategorized | No comments yet.

Real Estate News

Get started on the house hunt


Tips on choosing best agents, financing

Wednesday, December 26, 2007

Mortgage interest rates dropped recently and home prices have moderated in many areas, making it a good time to buy. If you’ve never bought a home before or if you currently own a home but have never bought and sold at the same time, the process can seem intimidating.

You can ease your anxiety by formulating a game plan and by assembling the best team of professionals you can find, including a mortgage person; a real estate agent or two if you’re buying and selling in different locations; inspectors; an insurance agent; a closing agent or escrow officer; and an attorney, depending on where you’re buying.

The two key players on your team are the mortgage person and the real estate agent. Once you have these selected, they can help you line up the additional help you need. The best recommendations for real estate professionals are from acquaintances who recently had a good experience buying in your area. Be sure to ask if they would use their agent or mortgage person again.

The first step is to find out how much you can afford. Most buyers need a mortgage in order to complete a home purchase. A lender will qualify you for a certain loan amount depending on how much cash you have available for a down payment and closing costs — the various fees associated with buying or selling a home.

Other relevant factors are your credit score, your verifiable income and what type mortgage you decide to use for your purchase. There are a lot of different mortgage options: 30-year fixed-rate mortgages, 15-year fixed, interest-only, as well as various types of adjustable-rate mortgages.

HOUSE HUNTING TIP: You can work with a mortgage broker who will shop the mortgage market for you and place your loan package with the lender that offers the best deal. Or, you can work directly with a lender, such as Bank of America or Citibank. Just make sure that you understand what kind of loan is being offered. You might want to consult with an independent party like your accountant or financial advisor to determine which kind of financing is best for you.

Once you know how much you can afford, ask your mortgage broker or lender to have you preapproved for the financing you need. This requires that you complete a loan application and have your credit checked. This will put you in a good bargaining position with the seller.

While you’re checking on financing, you should also find a real estate agent. If you’ve never bought a home before, you should use an agent who is a good communicator and who will take the time to explain the process. Also, keep in mind that your agent will be interfacing with the other parties in the transaction. You want someone you trust and who you are sure will represent you professionally and work diligent on your behalf.

Repeat home buyers who will be selling and buying using the same agent will also want to make sure that the agent has good marketing skills. It’s a benefit if the agent is organized and has good resources.

A good seller’s agent can help you get ready to sell your home by creating a task list of the things that need to be done before your home goes on the market. Your listing agent should be able to give you the names of reputable people who can assist you with cleaning, painting, hauling, storing, inspections, staging, landscaping and whatever else you need to prepare your home for a profitable sale.

THE CLOSING: With this ground work completed, you are ready to seriously hunt for a home.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer’s Guide," Chronicle Books.

***

Introduction December 20, 2007, 5:00PM EST

Where Things Are Headed in 2008

That mistake looms larger now that the dollar is sliding, the U.S. economy is soft, and global growth is robust. This is the time to bone up on foreign securities and reallocate that 401(k). Also: Stash money in Treasury inflation-protected securities in case inflation accelerates.

Challenging times favor investors who focus on companies with abundant free cash flow. Such companies can survive even if debt markets shut down and no one wants to buy their equity. Seek stocks whose prices are justified by solid, ongoing businesses rather than market speculation about riches to come. William W. Priest, CEO of New York’s Epoch Investment Partners (EPHC), says stockpickers have to understand companies’ competitive positions, not just how they stack up by accounting metrics. More than ever, "a business analyst is worth a lot more than a financial analyst," says Priest.

Financial leverage has gone from being the key to wealth to a big fat mistake. When lending was still lush, investors accepted thin premiums for buying the securities of riskier firms. They rationalized that they could sell out whenever they needed to. What’s clear now is that "liquidity that looks great on Monday can be gone on Wednesday," says Marc D. Stern, chief investment officer of Bessemer Trust in New York. Stern considers the current retrenchment "a healthy correction to a period of a great deal of excess." His picks include health-care stocks, tech firms that have a big share of their sales abroad, and Asian markets such as Singapore, South Korea, Malaysia, and Japan that do business with booming China and India but have lower p-e’s than those of the twin giants.

ONLY WAY IS UP?

Still, there’s a bullish case to be made for U.S. stocks in 2008, if the economy manages to dodge a recession. For one, strong growth abroad could help prop up earnings. 3M (MMM), for example, forecast on Dec. 12 that its earnings per share in 2008 would rise by 10%, thanks in part to emerging markets.

Meanwhile, the Federal Reserve will probably cut rates further if the U.S. economy continues to weaken, which could give stocks a shot in the arm.

There could be more fiscal stimulus, too, if the White House tries to amp up growth ahead of the 2008 Presidential election. Here’s a bit of trivia: According to Stock Trader’s Almanac 2008, the Standard & Poor’s 500-stock index has risen in the final seven months of every election year since 1950 except one.

And optimists dispute the notion that U.S. consumers are bound to quit in 2008. "When Americans are happy, they spend money. When they are depressed, they spend even more money, as long as they aren’t losing their jobs," writes economist Edward Yardeni, the president of Yardeni Research.

For some stock market bulls, the best news for the market is investor pessimism. The p-e ratio for the S&P 500 based on trailing 12-month earnings is just over 18, vs. well over 25 in 1999 and 2000. That means that on average, investors are paying moderate prices for companies generating respectable profits. The UBS (UBS) Index of Investor Optimism plunged 26 points in November, to 44, which was the lowest since right after Hurricane Katrina. Once everyone has capitulated, the contrarians figure, there’s no one left to bail out, and stocks have nowhere to go but up.

If you buy the bullish case, you might consider buying beaten-down banking stocks, which offer attractive dividend yields at current prices. The trick is figuring out which banks have already come clean on their loan losses and which ones haven’t.

Still, no one knows how much farther the housing market will fall, and this factor will determine how much damage the financial sector and the economy are going to have to absorb. Under these conditions, betting on the stock market is a high-risk proposition. It’s hard to get too excited about the 2008 outlook when the most positive thing you can say about the year is that (to quote the contrarians) everyone has given up on it.

Back to Investment Outlook 2008 Table of Contents               null

null

Coy is BusinessWeek’s Economics editor.

It’s that most wonderful time of the year, when everyone starts Christmas shopping, drinking wassail and dragging themselves from one holiday party to the next.

House hunting? Hiring inspectors? Making an offer on that dream home?

Not so much — at least according to conventional wisdom.

So what’s a homeowner supposed to do if she’s ready to put her house on the market just when the entire living room floor is covered in pine needles and Christmas wrapping paper?

Take heart. Homes do sell during the holidays.

So if you’re considering putting your home up for sale, real estate professionals have a variety of holiday advice, gift-wrapped based on your particular situation.

Consider your motivation

Alan Cooper, president of Wakefield Realtors, says the biggest question for potential Christmastime home sellers is this: Do you need to sell fast?

"I guess the first question I would ask the person is, ‘What is your motivation to sell? Do you have to be out of the house by a certain deadline or are you just thinking about selling?’" Cooper asks.

An impending job transfer to another city is a great reason to go ahead and put your home on the market, he said.

Phil Thompson, broker and owner of RT Realty, also said that if you have an urgent reason to sell a home, it doesn’t matter what time of year it is. Waiting will not help.

"If someone is relocating and has a deadline, they need to go ahead and list," Thompson said. "You can’t just put it off even though it’s not the ideal time."

But people listing their home now should be ready to push the Christmas clutter aside and to show their home when someone calls and wants to see it.

"Are you prepared to be inconvenienced for the next six to eight weeks?" Cooper asks. "You don’t want to put it on the market and then refuse showings because you’re baking a turkey or making candy."

Similarly, any out-of-town guests need to understand that the home is on the market and may need to be shown.

"Tell your family and friends," Thompson said. "You need to be flexible."

Serious buyers

Don’t expect a parade of people to march into your home if it goes on the market between Thanksgiving and New Year’s Day.

But the people who do look at your house will be serious about making an offer if they are missing out on the sale at Macy’s in order to check out your kitchen remodel.

"You’ll see very little activity from Nov. 15 to early January," Cooper said. "That being said, the activity will be good activity. It will be people who will need to buy a home. You won’t have tire kickers. You have motivated buyers at this time of year."

Only the most serious clients bother with house hunting this time of year, said Mike Armstrong of Keller Williams Realty Heritage, which makes it a good time to price your house aggressively — perhaps just below comparable homes on the market.

"Everybody is worried about the holidays, but the buyers who are looking are serious," Armstrong said. "They may be coming for a job change or a military move. I would say if you price the house right at anytime of the year, it will sell."

Homes show better

Many real estate agents think people make a mistake by waiting until January or February to list a home for sale.

Why?

Because they look so nice when they’re decorated for Christmas, said Cyndi Broschat of Keller Williams Realty.

"It’s kind of like staging a house," she said. "It’s a more homey feel."

Also, she swears that people keep their houses cleaner this time of year.

"People clean before they decorate," Broschat said. "The houses are usually in better shape."

But don’t overdo the interior decorations because they can make your house look smaller, she said.

Similarly, you don’t need to decorate outside, but a nice wreath on the front door will make a house look inviting. That’s important because many home buyers will drive by homes first, never giving the inside a chance if the exterior looks shabby.

Once you get a potential buyer inside your house, be sure that the house smells like Christmas. Use a plug-in that smells like pine or bake something. Broschat thinks buyers are more emotional this time of year, and that setting the mood will help them connect with a house.

"Definitely play the Christmas music when you do showings," Broschat said. "You need to create the atmosphere."

Little competition

Many home sellers wait until February or after to put their homes on the market, hoping to catch the annual spring and summer real estate shopping spree.

But because so few homes go on the market this time of year and the inventory usually is lower than it will be by springtime, Thompson says that your house may have a great chance of standing out from the pack.

"There’s a built in hesitance to list a home," Thompson said. "Not a lot of people are listing, so you won’t have the competition. And if you wait until January or February, you’ll lose six to eight weeks."

By January, more and more homes will be coming onto the market, Broschat said.

"Serious buyers have fewer houses to choose from right now," she said. "There will be more competition in January."

That being said, many agents still recommend waiting until January of February to list a home, if possible.

If you don’t have a pressing need to sell a home now, Cooper recommends spending the next 60 days decluttering your house so you can hit the market in late January.

And Broschat has been working with two clients who want to list their homes in the spring, but are spending the next few months cleaning up, decluttering and taking care of needed maintenance projects.

Still, three years ago, one of Cooper’s listings went under contract on Christmas Eve. A few days later, he wrote a contract on another house for a client on New Year’s Eve.

"You never know what can happen," he said.

Simply Put, Well Written! I Like it! Read on ;-)

digg del.icio.us TRACK TOP
By Jeffrey Simons | Filed in Uncategorized | No comments yet.

The Cost of the Unsold Listing

By Scott Einbinder

RISMEDIA, November 28, 2007–What are we paid to do? If you ask that question to 100 real estate professionals you will get 100 different answers. That is both the blessing and the curse of the real estate industry. One can carve out their own answer and create a unique and individual value proposition. There is however a common denominator regardless of what business model you work under. A common thread, that when you look objectively, binds all real estate firms, agents, and models together in one giant pool; and that is the cost of the unsold listing.

It’s funny, with all the different business models, all different commission options, all different marketing concepts and all different fonts and logos, the unsold listing defines not only your business model but business sense. It defines if you are authentic and have the skills and integrity to see the business not as just a brokerage relationship but that of a “partner to your seller.” A partner who invests in their seller. A partner who makes a business decision to take a listing because there is a shared benefit between you and the seller. A partner who takes the listing because you are working for a successful result. And what is that result I refer to? My definition is, “Did you sell the home, manage the transaction successfully, and mitigate risk to your seller, while both you and your partner earned a healthy return on your respective investments?”

There is not a real estate office I have been to in the last year where inventory levels have never been higher. Pages and pages of flyer’s, open house books, and price reduction signs litter the office. Online brokers have page after page of virtual tours and panoramic views. Countless amounts of listings where the agent signed the listing agreement, knowing it would never sell at that price, but thought in time, the seller would “see the light” or “need to reduce.” The agent thought, “If I don’t take it, my competitor will and I will lose it.” And like clockwork we have thousands of listings that are getting reduced, but unfortunately it is too late, as the sellers lag behind the market. The streets are lined with properties for sale, open house balloons flap in the wind and agents sit in homes on Sunday afternoon with sign-in sheets and Yankee candles burning in the foyer.

The culture of our business has been built to believe that an unsold listing bears some fruit. It brings buyers of other homes we can sell. It provides a legal billboard to promote our name. It provides a vehicle to advertise who we are in traditional print. After all, an unsold listing, if played right, is like chum on a blue fishing boat–it’s great bait!

This thought process represents everything wrong with our industry, yet provides the greatest opportunity to separate yourself from the competition, get more listings, be efficient with your resources and earn a higher revenue per sold unit.

The agent with the real estate partner mentality recognizes the cost of the unsold listing and knows how to articulate that to a seller. The unsold listing costs the seller and the real estate professional significant money, and here’s how:

The partner mentality understands that for many home sellers, time is a tangible commodity. The real estate partner, shares with their seller partner that buyers today are extremely aware of ‘Days on Market.’ Today, one of the first questions buyers ask is, “How long has the house been on the market?” The overpriced listing reduces our sellers’ negotiating power as time degrades their strength. Once a listing has gone unsold, this is information in the public domain. Real estate partners who have real value to their clients, never allow their partners to be placed in a position of weakness.

The partner mentality knows the unsold listing carries other significant costs. One of the most misleading statistics agents often promote is their list-to-price ratio. In the recent 2007 NAR Report on Buyers and Sellers it states that “sellers sold their homes for 97% of list price.” Is this true? Is this another smoke and mirror statistic? I wonder if that NAR Survey reflected a number that was derived off the original list price or was it 97% of the three price reductions that took place before it sold. I ask, did the unsold listing ever have a chance? Did the agent who took it ever allow the marketplace to even see it? The partner mentality knows the statistic that counts the most is not list to price ratio but list to close ratio. The partner mentality takes 20 listings a year and sells 19. Their list-to-close ratio is always the highest because they have learned how to say no to an unrealistic expectation. They know the cost to an unrealized result and mismanaged expectation is just way too high. My favorite agent promotes their list-to-close ratio at 100% and a list-to-price ratio of 124%.

Simply put, they sell what they list, reject what will not sell and they price their listings at the lowest pricing spectrum to create a bidding war so the true market price will be realized. Sellers never interview this agent; she interviews them! Sellers beg for her to consider their home. These sellers are taught the value of the greatest partnership investment, called truth.

The highest cost of the unsold listing is far more than that classified ad, broker open house lunch and professional staging services you invested in. After all, you may have even received some leads from them to defer the cost. The highest cost however is to one’s reputation. The partner mentality does not blame the seller for an overpriced listing, because they never take it. The partner mentality knows that if the listing does not sell in this market it is because it was not positioned in a place to sell. It was not priced in a place that made it a sound business decision for both the real estate professional and the seller. ‘The New Professionals’ of today do not gamble with their reputations and would never gamble with a seller’s money. These agents are not into “giving it a shot.”

The agents making the real money today make more commissions per unit and obtain more listings because they have deviated from the conventional thinking that listings are assets. Listings are liabilities until they close. They embrace the ability to say no. They have the courage to reject an unsuccessful result. This is what the public needs. Do you have the courage and vision to deliver? Imagine if agents were required to “purchase” a listing opportunity from a seller. An agent who had to invest their own cash and put their opinions of market value on the line? Imagine a seller that demanded the upfront payment of $1,000 for the right to sell his house. My gut tells me that many real estate professionals would learn very quickly to reject the listing if the seller was not realistic on price. I asked this question at one of my recent seminars and there were lots of laughs and most of the room said, if it comes to that I am out of this business. I then asked the room, “Who here thinks the value they give to a home seller is less than $1,000 and please stand up.” There was silence but worse, there was confusion. The real estate partner mentality invests much more. They see their investment as just as tangible if not more tangible as the $1,000 out of their checking account.

Do you want to turn your career around? Think and act like your seller’s partner.

In life and in business the largest costs are often the ones you don’t see or do not directly feel. Challenge yourself to reach beyond conventional approach. You will find once there, it’s where most of your competition has yet arrive.

Scott Einbinder is a national real estate sales trainer and motivational strategist specifically to the real estate industry.

Please let me know what you think when you have a minute.  Does this sound like your business model regardless of what your business is?

The biggest challenge that sellers face today is the abundance of standing inventory, whether it be from the unmotivated seller to someone that is just testing the market.  If you are truly interested in selling your home in a buyers market, the key is price! 

Check out this great article found in the L.A. Times last week that I believe you will find value in!

AS SEEN IN:

Motivated folks only
More realty agents are refusing to cater to stubbor
n sellers and looky-loo buyers.

By Ann Brenoff
Los Angeles Times Staff Writer

October 28, 2007

ATTENTION, you picky buyers who think you have all the time in the world to house hunt before you ink an offer. (And this goes double for those of you who think that a listing price is just some silly number pulled from the air and that you can offer 30% less.) Listen up: Agents are mad as hell and aren’t going to take you anymore. 

And sellers — those of you who don’t believe that your palace won’t fetch what the shack up the street sold for a year ago — you aren’t making any agent’s short list of whom to call back today.

Here’s the realization that some agents and brokers are taking to heart: They have neither the time nor the money to waste on a lot of us.  They are done spending days driving buyers around who want to leisurely ponder whether House A’s carpet is the right shade of beige or House B’s basketball hoop will leave marks when the sellers take it down. And the real estate profession’s once-popular practice of treating listings as a land grab — get as many as you can as quickly as you can because they pretty much sell themselves — has fallen by the wayside. Advertising those listings costs agents money, and payday doesn’t come until the sale closes. Do the math: No sale, no payday. And who has thousands to throw away on homes that will never sell at the prices their owners think they are worth?

Walter Sanford — a top-producing realty sales agent for more than 20 years and today a sales-coaching guru — is brutally blunt on the topic. In a down market like this, he tells agents, dump the buyers and spend your time and budget cultivating more listings of motivated sellers and only motivated sellers. It’s a way for agents to avoid financial ruin.

"Buyers take longer to make decisions, they ‘nibble’ more, and they will actually eradicate your net profit if you continue to work buyers as a major part of your income flow," Sanford says. 

He adds: Nothing saps an agent’s time and energy or cuts into potential income like showing unmotivated buyers house, after house, after house, and still not making a sale. "So don’t do it, is what I tell them."

Them’s fightin’ words.

Valerie Van De Zilver, broker-owner of the Zilver Realty Group in Tustin, shares the sentiment. If a buyer doesn’t commit after being shown available properties, he or she is enrolled in Van De Zilver’s automatic e-mail program. Those buyers receive instant messages about new listings on the market, price drops and changes of listing circumstance. This enables buyers to keep current on the sales inventory and ensures they won’t miss out on a property they have their sights on. It also means they won’t tie up Van De Zilver’s time.

"If they see something they like," she says, "they call me." She has dozens of buyers on her e-mail program. "And it’s working just fine." 

Sanford has a multi-step process to help realty agents separate the serious buyers from the looky-loos. Only he doesn’t call them "steps;" he prefers "hoops" — and he expects buyers to jump through them.

The first hoop is a 35-question form that begins with a version of "How long have you been looking and why haven’t you bought yet?" He builds up to requiring that buyers get pre-qualified for a loan — not pre-approved, which he says is just a meaningless letter from a mortgage broker saying everything looks rosy — but actually pre-qualified with a lender’s commitment. If a buyer’s credit is in need of repair, Sanford enrolls him or her in a budgeting or credit repair program with his lender. And somewhere along the way, he insists on a loyalty agreement, restricting the buyer from agent-hopping.

Sellers too — at least the unrealistic ones — are getting the same tough-love treatment.

"Sometimes," Van De Zilver says, "I have to tell a client that he just isn’t going to be able to meet his price goal in this market and that maybe he should think about holding off on his plans to sell." 

Other agents are turning down potential listings if they sense that the seller is inflexible in price.

"You can’t waste time with cement-head sellers," is how Sanford, formerly of Long Beach and now based in Kankakee, Ill., puts it.  Sanford advises his disciples to do their best to talk current-market sense into the seller, but should the asking price remain unrealistic, he says, agents should lateral the listing to a newbie agent in the office, politely explaining to the seller that the new agent will have more time to try to help him or her meet those goals. And, he adds, the original agent will get a referral commission in the unlikely event that lightning strikes and the house actually sells.

By his estimates, 30% of experienced agents are walking away from overpriced listings. Florida Realtor Magazine reported that some sales associates said in the last year they’ve regularly refused one out of three listings because they believed them to be out of the ballpark. 

Many agents entered the business during the flush times when listings flew off the shelves, Van De Zilver says, and they functioned pretty much as order takers. 

"Now, you really need an agent who knows what it takes to get the home sold," she says. "And if a seller doesn’t want to hear it, there isn’t much point in taking the listing because it won’t sell."

Occasionally, she says, she’ll take an overpriced listing anyway because she wants to put out Valerie Van De Zilver, broker-owner of the Zilver Realty Group in Tustin, shares the sentiment. If a buyer doesn’t commit after being shown available properties, he or she is enrolled in Van De Zilver’s automatic e-mail program. Those buyers receive instant messages about new listings on the market, price drops and changes of listing circumstance. This enables buyers to keep current on the sales inventory and ensures they won’t miss out on a property they have their sights on. It also means they won’t tie up Van De Z
ilver’s time.

She recently declined to list a property when the owner wanted to put it on the market at 100,000 more than what he paid for it in January. He had painted the property and made minor cosmetic repairs. "I told him that this was perhaps not the best time to list the house if getting that price was his goal," she says. Another agent took over the listing; it remains unsold. 

Lonnie Maples, who has been selling real estate for 29 years in inventory-saturated Riverside, says he too has turned down listings. Over the summer, he had a listing appointment with a seller whose property had been in the Multiple Listing Service for more than a year. The owner had made several price reductions from it’s original $1,095,000, and he was now ready to list at $895,000. 

"I knew it wouldn’t sell for even that," Maples says. "That house, in this market . . . $750,000 was more like it. I declined the listing because I didn’t want to waste my time and money."

Maples says it would have cost him $100 a week just to advertise the listing in the local newspaper. Beyond that, there are fliers to have printed, lock boxes to install, mailings to send out.

"It all adds up to a big zero if the house doesn’t sell," Maples says, adding that he would rather "catch the listing" on the second or third round, once it expires from its initial agreement. "Sellers get more realistic then."

Some agents are tempering the touchy situation by compromising. They’ll agree to take a listing at the seller’s desired price for 10 to 21 days if the seller agrees in advance to drop the price if it doesn’t sell in that time frame. And then there are those who say they never walk away from a potential listing. 

Anthony Marguleas, broker with Amalfi Estates in Pacific Palisades, says he and his agents never turn down listings. Period. The onus, he says, is on the agent to educate the client. "If all the comps show a house is worth $1 million and the seller wants $2 million for it, it’s the agent’s job to explain to him why that’s not possible. We won’t give up. We show the seller market analysis, comps of recent sales; we
show him what else is currently on the market. It’s our job to not let him make a mistake."

As for agents who sideline buyers if the buyers don’t want to commit, Marguleas says that behavior is just plain "lazy."  "It’s actually more than lazy; it’s insulting," he says. "Buying a home is the largest investment of someone’s life, and an agent doesn’t have the patience or time to show them homes anymore? That’s not right."

Marguleas says he’s shown some clients more than 100 homes before they’ve made a successful offer.  "Some buyers look at five houses; others need to see more. That’s what we agents do: show them houses."

I saw this video in a presentation a few weeks back and it just made me feel good.  I hope that you enjoy it!  Have a great day!