Saturday, October 20, 2007

"I'm buying real estate...why aren't you?

Don’t just sit there and complain about the market and the over abundance of inventory…buy something!

Yes…that’s right I’m talking to you the real estate professional. Maybe today’s mantra for everyone in the real estate business should be “I’m buying real estate…why aren’t you?” Maybe we ought to lead by example. Maybe we should be buying up the inventory at today’s incredible prices and then be calling on our sphere of influence (SOI). Maybe we should stop asking the tired old question, “do you know of anyone that wants to buy or sell?” and start asking “Guess what I just did?” And tell them that you just closed on a great deal and they can too.

Just imagine for a moment if everyone with a real estate license did this. There are over 95,000 licensees in the state of Arizona right now. OK that’s unrealistic I know but what if one out of ten of us did buy something and through our efforts we made an additional sale or two. Wouldn’t that get things moving again? You do the math. It would be fantastic. What a dramatic impact it would have on the marketplace, inventory and our attitudes.

As long as I’ve been in the business everybody wants a “deal.” Well let me tell you folks there’s nothing but deals out there. The marketplace is full of deals.

Look at agent headlines not newspaper headlines. Internet and print ads written by agents are screaming with opportunity. You know what I'm talking about. You’ve seen the ads. You’ve probably written quite a few… Drastic Reduction! $10,000 below Appraisal! Bonus to Buyer’s Agent! Prices reduced $50,000, $60,000 and &$70,000, Co-op Fees at 5, 6 and even7 percent? Are we staring at these ads, shrugging our shoulders and reinforcing “doom and gloom” or are we staring at one of the best long term investments anyone can make?

The past few years have exposed us to some incredible, profitable, money-making times. What did we do with all the money we made? Why aren’t more of us investing in the very product we tell others to believe in? Why aren’t we telling everyone “I’m buying real estate…why aren’t you?

Friday, October 12, 2007

Department of Justice (DOJ) encourages consumers to be "watch-dogs" of real estate brokerages

You’ve heard it more often than you care to remember… the purchase or sale of real estate is probably the single, most important financial transaction most of us will ever make.

According to DOJ the estimated median commission paid by home sellers in 2006 was $11,672. Some new real estate brokerage models have the potential to reduce that amount by thousands. Similar to the practice in Arizona, some states allow licensees to rebate a portion of their brokerage fees to their respective clients and allow seller’s brokers to offer limited-service packages. This is not the case in all states.

So the anti-trust division of the DOJ has just launched a new website to assist consumers and policymakers with specific aim at competition in the real estate industry.

The site is designed to educate consumers about the potential benefits competition can bring consumers of real estate services as well as barriers that inhibit competition.

Consumers will be able to view maps that identify states with real estate laws that inhibit competition. They will be able to calculate potential savings when brokers pursuing new business models compete for their business. There will be links to additional government resources.

This is information brokers should know about before their clients. Check this address out now.

Wednesday, October 10, 2007

REALTORS® Revolt…don’t sit back and cry about a lousy real estate market…do something about it!

Subprime mess, credit crunch, too much inventory, foreclosures running rampant, the re-emergence of the short sale, daily depressing newspaper headlines, and declining values…haven’t you heard enough?

Certainly I have and quite frankly the more I hear and read the more I am determined to focus on and look for the opportunities this market has to offer. Don’t misunderstand me. In 35 years the ups and downs of real estate cycles have taught me a great deal. Looking for opportunities in a media frenzy of portraying “doom and gloom” and talk of recession in the housing market is more than some old timer wanting to breathe unrealistic optimism into the lungs of his colleagues. Let me explain.

Because of my past experience with short sales in southern California back in the early 90’s I have been invited to participate and take an active role in creating forms, making informal and formal presentations on this subject. In general, imparting the knowledge I have gleaned on the topic of short sales over the years. A subject every REALTOR® should become acquainted with and make an effort to learn.

Knowing something about short sales and the foreclosure process can be a healthy thing for you and your clients. Recognizing the signs and characteristics of someone facing a short sale and/or foreclosure will make you a better counselor. After all isn’t that something we should all excel at doing? Counseling is an acquired skill that manifests itself in one’s ability to learn to listen attentively by placing the interests of the person doing the talking before that of the listener.
So when you see someone facing imminent foreclosure and/or a pre-foreclosure (short sale) situation seize this opportunity and help the client save and keep their primary residence. Tell them to contact their lender immediately and try to work things out. Twenty percent of the borrowers never make contact with their lender during the foreclosure process.

Lenders aren’t there yet but they’re starting to come around to help borrowers with their financial challenges. As a REALTOR® you can help. Assist the distressed homeowner by putting pressure on the lender, especially when the client has had an outstanding past payment history with that lender. Advance remedies and alternative solutions that will change the terms of the loan such as: (1) loan modification (2) Re-payment plans (3) Postponement of payments (4) Refinancing.

Realistically speaking we may not be able to help everyone. But we really won’t know that until we’ve tried real hard. Without a doubt helping a client keep the home you probably sold them is definitely one of the best opportunities I know of in this marketplace…let me know what you think.

Thursday, August 16, 2007

The Short Sale!

An emerging trend that will garner permanence or just another passing fade in today’s marketplace? What do you think? Well whatever your proclivity on the subject it is my firm belief that as professional REALTORS® we owe an obligation to ourselves and the clients that we serve to know something about the subject. There are a number of definitions espoused on what the definition is and my favorite just happens to be: “a sales transaction where a seller’s lender agrees to accept a payoff of less than the balance due on the loan.”

As of August 1, 2007 the Arizona Association of REALTORS® has added two new forms to their arsenal of pre-printed forms. We now have a Short Sale Addendum to the Residential Purchase Contract and an Addendum to the Listing Agreement. Both forms are the result of a perceived notion that we will be experiencing an onslaught of foreclosures and/or pre-foreclosure seller dilemmas in the months ahead. Nationwide predictions of real property foreclosures over the next five years or so are in the millions. A scary thought isn’t it? And in my view it doesn’t look like it’s going get any better, any time soon, based on daily newspaper reports on failed mortgage companies, the “credit crunch,” and the subprime mess.

So what does the best-prepared practitioner do? They prepare for the worst and make sure they become re-aquatinted with the fundamentals of the foreclosure process. They learn to identify the characteristics of a short sale. They recognize the differences between foreclosures and short sales and how to advise their client in each circumstance. They perform a service to the client if they know how and if they don’t they refer their client to someone that has the expertise in this area. In other words they do what’s right by helping their clients through these challenging times and become the proverbial problem-solver.

If you have an interest in doing the right thing and want to learn more about the short sale contact me directly and I’ll send you my 3-page guideline for REALTORS® on the subject of Short Sales.

Monday, August 13, 2007

American Home Mortgage files for bankruptcy

American Home Mortgage Investment Corp., the nation's 10th largest home lender, filed for bankruptcy protection…Yesterday!How do you translate this event into your daily activities as a REALTOR®?

Easy, just imagine for a moment that you’ve just spent 6 tough weeks battling to get your buyer to the closing table with an unconditional loan approval. Yes, it was a long, hard journey; the appraisal; the BINSR; getting all the required documents to the lender; working with a seemingly uncooperative listing agent; you get the picture…but that’s all behind you now…you did it, you made it happen! You’re at escrow feeling good about your efforts. The seller and buyer have signed the papers, the buyers’ down payment and certified funds are in. The buyer can’t wait to transfer the funds from this closing to the purchase of their new home. All that’s needed at this point is for escrow to receive wired funds from the lender. But the funds never come!

Can this happen? Can this conceivably happen to you and your client? Yes it can, and sadly, it happened to many across the country just recently. As a result of AHM’s closure it happened to approximately 4000 transactions nationwide.

So what can you do to avoid this from happening to you? For starters, get to know your lender! Get intimate with the details of the LSR. Make sure it’s completed properly and accompanies your contract. Stay on top of your transaction. Track and monitor the loan process. USE the LSU! Memorize, if you must, all the steps in the loan process. Conduct planned and periodic follow-up on the lender. (The AAR residential purchase contract provides an opportunity for you to do so). Get non-conforming loan commitments in writing. Make sure your buyers have “locks” on their loans with plenty of time to close their transaction.

Remember that the buyer is your client and you have a fiduciary relationship and obligation to them. The lender doesn’t have that same relationship with your client they work for the investor.

Sunday, April 15, 2007

Moving Scams - Something Every Realtor Should Know

How many times has your mover taken unfair advantage of you? Moving you across the country for one estimated fee and before the personal affects and moving items are delivered to your door they call and tell you your bill is almost twice as what they originally estimated?

Every Realtor that has a buyer or seller that moves in-state should know this.

The department of weights and measures believe it or not can help.

Here's how:

1. For example: When the moving van and truck driver call you and let you know they will be arriving in town and that you should have a cashiers check with close to twice the amount originally estimated - cooperate, be patient, and get the cashiers check for the additional amount. Encourage them to meet you when they say they'll be there, but don't be surprised if they show up 4-8 hours later.

2. Call the department of weights and measures, let them know what has occurred.

3. Tell them the moving people want more money than they originally estimated. They'll come and meet the truck driver when he finally arrives. They'll have the truck driver and his load weighed and then return to your property.

4. When they unload the truck and re-weigh the truck to see if the difference is really what they claim it to be, if it is not, the department of weights and measures will have the police standing by and either the truck driver will cooperate and reduce the fee or they will be instructed to arrest the truck driver for fraud.

Did you know this? Share your thoughts with me.