January 12, 2007

FOR IMMEDIATE RELEASE

(For more information contact Sean A. McAleavey at 303/693-4653)

            DENVER - Help-U-Sell, the nation's leading "Set-Fee" real estate services  

company, has launched a new, informative magazine highlighting the firm's listings in  

south metro Denver, including Highlands Ranch, southeast Aurora and areas of  

Centennial.  The monthly publication, titled "In the Neighborhood," will reach over  

40,000 area households, distributed by Direct Mail and as a monthly insert in the  

Highlands Ranch Herald. 

            In the Neighborhood provides valuable insight into the areas serviced by

Help-U-Sell Colorado Homefront offices, and encompasses market statistics such as a complete  

list of recently sold homes in the area with square-footage, number of bedrooms and  

baths, and sold prices.  The magazine also showcases Help-U-Sell's exclusive listings in  

the area, with a brief description including pricing, a color photograph, and property  

address. 

            "In the Neighborhood is another vehicle that allows Help-U-Sell to place valuable  

information about the market, the industry, and our company in front of a highly relevant  

audience," said Keith Dudley, Broker/Owner of Help-U-Sell Colorado Homefront and  

Help-U-Sell Colorado Regional Owner.  "In addition to information on our own listings,  

the publication features stories ranging from ‘How to Reduce Clutter' and tips to protect  

your assets in case of a family emergency or crisis, to home decorating hints, ‘Facts about  

Fixer-Uppers,' and storage solutions."

            Additional features in the January issue of Help-U-Sell Colorado's "In the  

Neighborhood" include mortgage information from top, local mortgage industry  

professionals, as well as stories addressing the "Reasons Why Homes Don't Sell," and  

Home Safety.

"In short, In the Neighborhood is a great publication whether your selling your  

home, looking to purchase a new home, or just interested in real estate or even the  

booming home improvement industry," Dudley said.  "Regardless of whether you enlist a  

Help-U-Sell Broker or a traditional, full commission firm to market your home or to help 

you find a new one, In the Neighborhood is worth looking through, and it's our pleasure 

to bring it to you."

Help-U-Sell's innovative, full service, "Set-Fee" approach to the home selling  

process can be credited for the firm's growth in Colorado and across the nation.  Help-U-Sell

charges a set fee for its services, regardless of the selling price of the home.  This  

unique way of doing business results in thousands of dollars in savings versus a  

traditional real estate commission structure. 

Sellers have the choice to partner with their Help-U-Sell team on several aspects  

of the sale, such as showing the home to prospective buyers or conducting Open  

Houses.  The more involved the seller is the more they can save.   Help-U-Sell Brokers

carry out all the complex aspects of the transaction,  including extensive marketing

encompassing direct mail and high-profile print and  Internet advertising, as well as

finance, contracts, negotiations and closing details.  The company charges a set fee for its

menu of services, allowing the seller to be involved in as little or as much of the process

as they desire. 

For information on Help-U-Sell, contact Keith Dudley at 303/797-7283 or visit the company's comprehensive real estate website at http://www.coloradohomefront.com/

 To view a complete copy of the issue online click on the image below:

Homeowners who purchased their residence within the last several years and are now in a position where they need to sell their home for financial reasons, relocation, or any number of other life events may find themselves in a "Short Sale." A "Short Sale" is when the market will not support a price that is equal to or higher than the current owners debt on the property plus any Realtor fees, taxes, and closing costs. In other words, the seller will have to bring money to closing in order to sell the home. Many homeowners who find themselves in this position feel they have no way out of this property and will be forced to allow the mortgagor or trustee to foreclose. Fortunately, there are ways to avoid foreclosure and reduce the damage to their credit ratings.

First, lets expand on the "Short Sale" concept with an example:

Mr. and Mrs. Smith purchased their home in November of 2005 for $400,000. They obtained 100% financing with an interest only payment for 5 years. One year later, November 2006, they are notified that Mr. Smith has lost his job and they can no longer afford the payments. Mr. and Mrs. Smith decide that selling is the best option for them, so they meet with a Realtor and discover the identical homes in their neighborhood are selling for only $369,000. If they were to sell the home for that amount, they would have to make up the difference between the sales price and their mortgage, or $31,000. In addition, they would also be responsible for paying taxes, closing costs, and Realtors commissions; approximately $23,000* more for a total of approximately $54,000. The Smiths do not have the money to pay for this shortage; they are in a "Short Sale" situation.

In this example, this couple is experiencing a financial hardship that will create an inability to maintain their monthly mortgage payments. There are steps they should take in order to make an informed and financially correct decision.

Get Qualified Financial and Legal Advice

The first step the Smiths should take is to contact an accountant or Enrolled Agent (EA); a professional accountant or EA will assist them in evaluating their financial situation and creating a true picture of their financial health. Without this true picture, they are not basing their decisions on accurate information and can not truly incorporate any tax consequences into their decision making process.

The accountant will include all liabilities such as short and long term debt as well as assets such as retirement funds, other properties, and personal property in the evaluation of their financial condition. They should then evaluate the tax and overall financial consequences of a short sale with the Smiths and make recommendations on an appropriate course of action. This information will also be necessary for the lien holders to evaluate the potential for a short sale.

Next, the Smiths should speak to a credit professional. There are lawyers and non-profit agencies that specialize in credit issues. The Smiths need to understand the ramifications of a short sale with regard to their credit file and rating.

If, after analyzing the risks, consequences, and benefits, the Smiths decide they should still investigate the potential of a short sale, they should continue by contacting additional professionals to assist them.

Speak to a Realtor who is familiar with Short Sale Situations

There are many options when choosing a Realtor, from fee structures and advertising methods to levels of experience and specialties. In this case, their decision must be based on several factors. First, they need to find a Realtor who is willing to accept less than the traditional 6% commission, because in a short sale situation the mortgage holder will most likely require that as part of their terms for accepting less than agreed to in the terms of the note. Choosing a company that employs a set fee model, such as Help-U-Sell, will allow them to have the benefit of a full service real estate firm, while reducing the amount of potential financial liabilities.

In order to get the best service available, they should also choose a Realtor with experience in dealing with short sales. As the real estate market has seen record growth over the last several years, it may be difficult to find a Realtor who has experience in this area. As we progress further into deteriorating market conditions, many more will be faced with the opportunity to assist in the coordination of such a sale. The Smiths should ensure the agent they choose has done so or has access to a team leader, supervisor, or broker who has.

Coordinate with Lien holders

The Smiths lien holders must be contacted prior to placing the home on the market. A thorough analysis of whether or not the Smiths are candidates for a short sale approval will be done and that decision must be made before the home is offered for sale. If the lien holders refuse to entertain accepting a short sale, the owners could be placed in a situation where they would be held liable for the difference between the sales price and amount owed at closing. In this example, the Smiths would not be able to do that and could possibly be in default of the sales agreement. Confirming the lien holder will entertain a short sale does not guarantee they will accept the offer to purchase; they are not obligated to do so.

Many Lenders have established "Short Sale Departments" to assist sellers with the process. All offers will have to be submitted to the lender for approval before the contract is fully ratified. In order to protect the Smiths, their Realtor should ensure that all offers include a "Third Party Approval" contingency for the sellers. In doing so, if the lender ultimately rejects the terms of the offer or denies the short sale entirely, the Smiths are protected from defaulting on the sales agreement.

Attract the Right Buyers

The contract process for a short sale can be time consuming; not all buyers have the liberty to endure the elongated time line associated with it. In most cases, the sellers lien holders will have to approve the contract, as they will be "taking a loss." This can sometimes take 30 days or more. The lien holders will evaluate the sellers overall financial situation in their decision process. Until they approve or reject the contract, the buyers will be waiting to move forward on locating another property, unless other wise specified in their offer. Most buyers have defined time periods for locating and closing on a home. This may preclude them from meeting those deadlines and therefore from purchasing the property.

Often one of the first ideas a seller in this position has is to locate an investor. The myth is investors like to purchase properties where the owners are "desperate." Although that may be true, in a short sale the offer price still has to be satisfactory to the lien holders. An investor certainly would have the tolerance for the time involved, but the margin of profit would most likely not be adequate. If we return to the Smiths example, a desirable sales price for the investor would be well below market value, in this case $369,000. Lets assume the investor wants a 20% return, his offer price would be around $295,000. After fees and commissions, the bank would net approximately $277,000 or $123,000 less than the Smiths owe; the lien holders will most likely not accept an offer with those, or similar, terms.

Although it can be difficult to attract buyers of this nature, the sellers and their Realtor should clearly state the fact this is a short sale and requires third party approval to all interested parties. Doing so will avoid that surprise for otherwise qualified buyers as the negotiations progress. Explaining how the process will transpire to any prospective buyers allows them to plan ahead and evaluate whether or not their timeline allows their participation. In addition, the buyers Realtor may also have to accept less than traditional commission for the lien holder to accept the offer.

Closing an Offer

Throughout the ratification and closing process, all parties will need to stay well informed and up to date on all aspects of the transaction. This includes the lien holders, closing company, sellers, buyers, and agents. After ratification and lien holder acceptance, the seller should once again meet with their professional financial advisor to recalculate potential tax consequences with the actual amounts in the transaction. It is likely there will be tax issues that need to be addressed and it is beneficial to begin that process early.

*Assumes a real estate commission of 6%. Commissions are negotiable and not set by law. Costs are approximate based on average expenses. Does not include buyers closing costs.

**Nothing is this article should be construed as legal or financial advice. For legal/financial questions, seek a the advice of a professional advisor.

If you have had your home on the market for several months and haven't seen much activity or any offers, chances are that one or more of the reasons below are to blame.

Your price is too high
No doubt about it, the most common reason for a home not selling is that the asking price has been set too high. The reasons for setting your price too high to begin with are many. Ranging from over enthusiastic listing agents to unrealistic seller expectations. Regardless of the reason though, if you've priced your home too high, you've set yourself up for a number of obstacles to selling your home. Even if you do get an offer for the overly high asking price, the deal may fall apart before closing because the buyer may have problems financing at too high a price. Look at other homes for sale, ones as similar and as close to yours as possible. If they are going for less than you are asking, you may be priced too high. The fact is, your home is competing against those other homes, and what buyers are willing to pay is what will determine final sales prices.

The condition of your home

There is a lot of competition out there to sell homes. Your home has to compete against other similar homes for sale, as well as competing against shiny brand new homes. The more you can do to make your home look appealing to a buyer, the better your chances for a quick sale. Look at your home with a critical eye - put yourself in the buyers position. A buyer doesn't want to have to do anything except move in. Your best "bang for the buck" in improving the condition of your home are paint and flooring. Make sure that all of the paint is in great condition, both inside and out. Repainting doesn't cost too much, and will usually make the biggest impact on buyers. Make sure all of the flooring looks good too. You may want to consider putting in new carpet. Again, it's not that expensive but it sure does make an impact on buyers coming to look at your home.

Location, location, location

It's the oldest cliché in the world, but it's true. When it comes to real estate, it's all about location! When it comes to homes, things like how good the schools are, crime rates, visual appeal of the neighborhood and noise or the smell of pollution can all effect how desirable the location is. If you're in a bad location, a good real estate agent may help to minimize some of the impact by suggesting improvements to the house. But the only really reliable way to overcome a bad location is with a lower price. Simply put, an identical home in a bad location won't sell for as much as the same home in a better location.

The market is slow

You'll hear it described as a slow market, or a buyers market, or maybe a cold market. But it all means the same thing. That home sales in the local area, or market, are slow. That there are too many homes for sale and not enough active buyers. There are several things you can do to combat a slow market. The most effective strategy is to sell at a lower price. Buyers are expecting to find bargains during a slow market. You can also help yourself by offering to pay some concessions to help a buyer that might not have a lot of cash. The ultimate way to beat a slow market is to simply wait it out. But that's not always an option for many sellers.

Your home isn't easily accessible

To get your home sold quickly, it's important that other agents in the area show it to as many potential buyers as possible. When a busy agent is compiling a list of homes to show a buyer, the agent will naturally tend to show those houses that are easiest to gain access to first. Many homes on the market have "lock boxes" on them. The lock box is a device which holds a key to the home, that only qualified local agents can access. Homes that are listed as being "lock box, no appointment needed" will get shown more often than homes listed as "agent has key, call for appointment". If at all possible, you should let your agent put a lock box on your home for easier showing. If not, you should do anything else you can to make it as convenient as possible for agents to show your home.

Reprint with permission from our Publisher - In The Neighborhood - Highlands Ranch edition (C) 2007 

The Five Forces Of Your Market

Real estate markets across the country are becoming increasingly tough for sellers and if you live in California, Florida or the Washington D.C./Northern Virginia metro area you've probably seen the biggest turn in the market. But, regardless of where you live, being an educated seller is crucial to making the right decisions about pricing and negotiating. Michael Porter, the renowned Harvard Business School professor developed a model for analyzing competition within an industry. That same model can be adapted and used by sellers to help them understand their market dynamics and put them in a position to make the best decision regarding the sale of their home.

Supplier Power is a force exerted by new home builders. Home sales are their business and they have to keep inventory moving. They also have significantly higher equity positions in the homes they are selling which gives them greater flexibility in pricing. They can also lure buyers with upgrades galore, which they can provide at a fraction of the cost a typical home seller can. Sellers should know what prices builders are selling new homes for comparable to their own. In the information age, buyers can too easily compare prices and value on the Internet and if you aren't competitive, you won't even get a nibble let alone a bite.

Substitutes are the second market force. As prices adjust, you must know not only what comps are selling for but what substitutes are selling for as well. In my area, I'm seeing a compression of prices in that single family home prices have come down significantly more than townhouses so even though there are more buyers in the lower, but many times over-priced townhouse market, many of them are changing their sites to single family houses because the prices have compressed to reflect a much higher value in the SFH than the townhouse.

Buyer Power seems to be increasing every week. As more and more sellers reach "motivated" and "bring all offers" states, buyers know they can ask for the world in a contract and if they don't get close to what they want, are willing to move on to the next motivated seller, who in my market is right around the corner. Buyers also have the power of market knowledge. The Internet give buyers the ability to compare all their options in a relatively short period of time and believe it or not, they probably know the market and inventory better than most sellers. They should, they're actively in the market whereas many sellers put their house up for sale and sit back and hope a buyer comes by who is willing to pay too much for it. If you are getting lots of traffic (in the house, not just taking flyers) and haven't seen an offer, there is a very good chance your value proposition (what you are giving a buyer for his/her money) isn't competitive in the market and they are finding a better deal someplace else. Every house will sell at one price or another.

Barriers to Entry applies mainly to new home buyers but to second and third time buyers as well. The market run-up of the last few years was driven mainly by two things - low interest rates and more demand than supply. Now we have the exact opposite, interest rates have gone up which decreased the buying power of the entire country. Since there is a lag it the market, homes continued to be listed at the high prices and inventory has built for the last 6 months. So, what do you do with this information? Be open to price and don't get offended with a low offer. The buyer is offering what it is worth to him, not what it is worth to you. And remember, buyers set prices, not sellers.

 Finally, there is the internal competition of what the seller needs, what he wants and what he thinks he deserves. This is the most difficult force to understand and manage because it is charged with emotion. Just because your neighbor sold last year for $50,000 more than you, doesn't mean a thing. Good for him. All that matters is what it will take to get you to your goals. The market is what it is and we all have to deal with these five competitive forces as they are exerted on sellers. Sellers as individuals cannot change the market so holding on to a price is nothing short of foolish. Consider your bigger financial picture of what it costs to own the home every month it is on the market - mortgage, insurance, taxes, utilities, HOA and Condo fees and maintenance.